Case#1 De Mesa vs. Pepsi Cola Products, G.R. No.

153063-70 (2005)
FIRST DIVISION

[G.R. Nos. 153063-70. August 19, 2005]

AMELIA D. DE MESA, ARACELI ADATO, RODRIGO ALVARAN, AIDA CASTRO, BALTAZAR

ESTRELLES, ANTONIO A. FERRER, DANILO GARCIA, JULIO M. GONZALES, MARRIETA A.
JOSE, PEPITA JUNTADO, EDUARDO U. LAGO, NESTOR RODA, JAIME SANCHEZ and
JUANITA SANCHEZ, petitioners, vs. PEPSI COLA PRODUCTS PHILS., INC. and PEPSICO
INC., respondents.
RESOLUTION
QUISUMBING, J.:
For review on certiorari is the Order,[1] dated April 18, 2002, of the Regional Trial Court of Makati
City, Branch 142 in Civil Cases Nos. 94-2414 to 94-2421. In the said Order, the RTC granted herein
respondents motion to dismiss the complaints filed by petitioners herein based on the principle of stare
decisis.
The instant case arose from the same set of facts as (1) Mendoza v. Pepsi-Cola Products
Philippines, Inc., et al., G.R. No. 153183 promulgated on July 24, 2002 [2] affirming the Court of
Appeals Decision, dated April 16, 2002, in CA-G.R. CV No. 53860; [3] and (2) Rodrigo v. Pepsi Cola
Products (Phils.), Inc. and Pepsico, Inc.,G.R. No. 149411, dated October 1, 2001, which also affirmed the
Court of Appeals Decision of May 21, 2001 in CA-G.R. CV No. 62837.[4]
The facts are culled from the aforesaid Decisions of the Court of Appeals as affirmed by this Court.
Petitioners are holders of soft drink bottle caps bearing the number 349, allegedly a winning
combination in a contest sponsored by respondents Pepsi Cola Products Phils., Inc. (PCPPI) and
PEPSICO, Inc. (PI).
Respondent PCPPI is a domestic corporation engaged in the production, bottling, and distribution of
carbonated drinks, while respondent PI is a foreign corporation licensed to do business in the Philippines
and is the major stockholder of PCPPI.
D.G. Consultores, a Mexican consulting firm that handled similar promotions in other countries, was
tasked to randomly pre-select the winning numbers and send to respondents a list of the 60 winning
numbers with their corresponding security codes. The process of selecting the winning numbers was
implemented with the approval of the Department of Trade and Industry (DTI).
During the initial promotion period, from February 17 to May 8, 1992, respondents seeded 1000
numbers, 60 of which were winning numbers, 510 non-winning numbers, while the remaining 430 were
unused. To ensure that the winning numbers would not be tampered, the DTI required respondents to
submit the list of winning numbers including their security codes which was then deposited in a safety
deposit box in a bank.[5]
Owing to the promotional campaigns success, respondents extended the Number Fever by five more
weeks, from May 10 to June 12, 1992. Pepsi again tapped D.G. Consultores to predetermine the 25
additional winning numbers from the list of unused numbers.
On May 25, 1992, respondents announced 349 as the winning number for the May 26 draw. Later
the same night, Quintin Gomez, Jr., then PCPPIs Marketing Services Manager called DTI Director

Madarang informing her that due to some security code problems a mistake had been made in the
announcement of number 349 as the winning number.[6]
Numerous holders of the supposedly winning 349 crowns were not honored and paid by
respondents, which led these rejected crown holders to file separate complaints for specific performance
and damages.
Civil Case No. 93-68351 was originally filed before the Regional Trial Court of Manila, Branch 16, but
the plaintiffs in the said case withdrew their complaint, leaving Gerson Mendoza as the sole plaintiff
in Gerson M. Mendoza v. Pepsi-Cola Products Phils., Inc. and Pepsico, Inc.[7] The other plaintiffs re-filed
their complaints before the Regional Trial Court of Manila, Branch 50, entitled Romulo Rodrigo, et al. v.
Pepsi Cola Products Philippines, Inc., et al., docketed as Civil Case No. 94-71403.[8]
For their part, petitioners herein filed their separate complaints, docketed as Civil Cases Nos. 942414 to 94-2421, before the Regional Trial Court of Makati, Branch 142.
In the Mendoza case, the RTC dismissed the complaint filed against herein respondents for specific
performance and damages in connection with the Number Fever fiasco. [9] Mendoza appealed to the Court
of Appeals, in CA-G.R. CV No. 53860, which was dismissed for lack of merit. [10] Unfazed, Mendoza filed
with this Court a petition for review, which was denied for failure to sufficiently show that the Court of
Appeals committed any reversible error.[11]
In the Rodrigo case, the RTC likewise dismissed the complaint against herein respondents for
specific performance and damages arising from the said promotion. [12] On appeal, docketed as CA-G.R.
CV No. 62837, the Court of Appeals affirmed the RTC decision. [13] A petition for review was subsequently
filed with this Court, which was denied for failure to show that a reversible error was committed by the
appellate court. The motion for reconsideration was also denied with finality [14] and entry of judgment was
made.[15]
However, prior to the resolution of the Mendoza and Rodrigo cases, herein petitioners filed with the
RTC, on December 11, 2000, a motion for leave [16] to (1) adopt the previous testimonial and documentary
evidence in the Mendoza and Rodrigo cases; or (2) archive the case until final resolution of the said two
cases, which were then pending with the Court of Appeals. The RTC granted the said motion on January
8, 2001 and the case was accordingly archived.[17]
Meantime, the Rodrigo case became final and executory on February 5, 2002 in view of our denial of
therein petitioners petition for review on certiorari and motion for reconsideration.
Hence, on February 20, 2002, herein respondents filed with the RTC a motion to dismiss [18] the
complaints filed by petitioners herein invoking the principle of stare decisis. The RTC, in its assailed
Order,[19] granted the motion to dismiss ratiocinating as follows:
The Court finds the instant motion meritorious under the principle of stare decisis. The said doctrine embodies the
legal maxim that a principle or rule of law which has been established by the decision of a court of controlling
jurisdiction will be followed in other cases involving similar situation. It is founded on the necessity for securing
certainty and stability in the law and does not require identity or privy of parties. This is explicitly ordained in
Article 8 of the Civil Code which provides that decisions applying or interpreting the laws or the Constitution shall
form part of the legal system. Such decisions assume the same authority as the statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations
not only of those called upon to abide thereby but also of those in duty bound to enforce obedience thereto
(Kilosbayan, Inc. et al. vs. Manuel Morato, G.R. No. 118910, July 17, 1995).
In the instant cases as well as in Civil Case No. 93-68351 (the Mendoza case), not only are the legal rights and
relations of the parties substantially the same as those passed upon in Civil Case No. 94-71403 (the Rodrigo case),
but the facts, the applicable laws, the causes of action, the issues, and the testimonial and documentary evidence are
identical such that a ruling in one case, i.e. the Rodrigo case in Civil Case No. 94-71403, under the rule
of stare decisis, is a bar to any attempt to relitigate the same issue.[20]

Petitioners now come to us in this petition for review claiming that (1) the principle of res
judicata does not apply; and (2) the dismissal of the complaint was premature as petitioners motion to
archive the case and the grant thereof was based on the condition that there be a final resolution in
the Mendoza and Rodrigo cases.[21]
Simply put, the sole issue is whether the present case is barred by this Courts ruling in
the Mendoza andRodrigo cases.
Petitioners contend that res judicata does not apply as there is no identity of parties to begin with.
Moreover, they argue that stare decisis is not a hard and fast rule. They insist another review should be
taken on the cause of action in this case because the Court of Appeals, in
the Mendoza and Rodrigo cases, erred in ruling that the security code determines the real winning
crowns. They claim that the trial courts dismissal of their complaint was premature. Lastly, petitioners
posit that there was a breached contract between the parties; therefore, respondents should be made to
perform their contractual obligation.
For their part, respondents counter that the RTC correctly dismissed petitioners complaint on the
ground ofres judicata. Respondents contend that, like the Mendoza and Rodrigo cases, the civil cases
filed by petitioners arose from the conduct of respondents Number Fever promotion. Petitioners causes of
action, testimonial and documentary evidence, are the same as those in the Mendoza and Rodrigo cases.
Lastly, respondents point out that the findings of fact in the said two cases are also the same, i.e.: (i)
Respondents did not breach any contract since the 349 crowns with security code L-2560-FQ are not
winning crowns; and (ii) Respondents were not negligent in the conduct of their promotion and they
exerted efforts to ensure the integrity and smooth conduct of the same.
The instant petition must be denied.
The principle of stare decisis et non quieta movere [22] is entrenched in Article 8 of the Civil Code, to
wit:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system
of the Philippines.
It enjoins adherence to judicial precedents. It requires our courts to follow a rule already established
in a final decision of the Supreme Court. That decision becomes a judicial precedent to be followed in
subsequent cases by all courts in the land. The doctrine of stare decisis is based on the principle that
once a question of law has been examined and decided, it should be deemed settled and closed to
further argument.[23]
In the instant case, the legal rights and relations of the parties, the facts, the applicable laws, the
causes of action, the issues, and the evidence are exactly the same as those in the decided cases
of Mendoza andRodrigo, supra. Hence, nothing is left to be argued. The issue has been settled and this
Courts final decision in the said cases must be respected. This Courts hands are now tied by the finality
of the said judgments. We have no recourse but to deny the instant petition.
WHEREFORE, the instant petition is hereby DENIED. The assailed Order of the Regional Trial Court
of Makati City, Branch 142, in Civil Cases Nos. 94-2414 to 94-2421, is AFFIRMED. Costs against
petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

[1]

Rollo, pp. 29-30.

[2]

Id. at 190.

[3]

Id. at 153-168.

[4]

Id. at 315.

[5]

Id. at 304.

[6]

Id. at 306.

[7]

Id. at 143-152.

[8]

Id. at 289-300.

[9]

Id. at 143-152.

[10]

Id. at 153-168.

[11]

Id. at 190.

[12]

Id. at 289-300.

[13]

Id. at 301-314.

[14]

Id. at 316.

[15]

Id. at 317.

[16]

Records, Vol. 2, pp. 896-899.

[17]

Id. at 909-910.

[18]

Id. at 1015-1020.

[19]

Rollo, pp. 29-30.

[20]

Ibid.

[21]

Id. at 11.

[22]

To adhere to precedents and not to unsettle things which are established.

[23]

Castillo v. Sandiganbayan, G.R. No. 138231, 21 February 2002, 377 SCRA 509, 515.

Case#2 Lambino vs. COMELEC, G.R. No. 174153 (2006) [Only the dissenting
opinion of J. Puno]
DISSENTING OPINION
CORONA, J.:
The life of the law is not logic but experience. 1 Our collective experience as a nation breathes life to our
system of laws, especially to the Constitution. These cases promise to significantly contribute to our
collective experience as a nation. Fealty to the primary constitutional principle that the Philippines is not
merely a republican State but a democratic one as well behooves this Court to affirm the right of the
people to participate directly in the process of introducing changes to their fundamental law. These
petitions present such an opportunity. Thus, this is an opportune time for this Court to uphold the
sovereign rights of the people.
I agree with the opinion of Mr. Justice Reynato Puno who has sufficiently explained the rationale for
upholding the peoples initiative. However, I wish to share my own thoughts on certain matters I deem
material and significant.
Santiago Does Not Apply to This Case But Only to the 1997 Delfin Petition
The COMELEC denied the petition for initiative filed by petitioners purportedly on the basis of this Courts
ruling in Santiago v. COMELEC2 that: (1) RA 6753 was inadequate to cover the system of initiative
regarding amendments to the Constitution and (2) the COMELEC was permanently enjoined from
entertaining or taking cognizance of any petition for initiative regarding amendments to the Constitution
until a sufficient law was validly enacted to provide for the implementation of the initiative provision.
However, Santiago should not apply to this case but only to the petition of Delfin in 1997. It would be
unreasonable to make it apply to all petitions which were yet unforeseen in 1997. The fact is
that Santiago was focused on the Delfin petition alone.
Those who oppose the exercise of the peoples right to initiate changes to the Constitution via initiative
claim that Santiago barred any and all future petitions for initiative by virtue of the doctrines of stare
decisis and res judicata. The argument is flawed.
The ponencia of Mr. Justice Puno has amply discussed the arguments relating to stare decisis. Hence, I
will address the argument from the viewpoint of res judicata.
Res judicata is the rule that a final judgment rendered by a court of competent jurisdiction on the merits is
conclusive as to the rights of the parties and their privies and, as to them, constitutes an absolute bar to a
subsequent action involving the same claim, demand or cause of action. 3 It has the following requisites:
(1) the former judgment or order must be final; (2) it must have been rendered by a court having
jurisdiction of the subject matter and of the parties; (3) it must be a judgment or order on the merits and

(4) there must be identity of parties, of subject matter, and of cause of action between the first and second
actions.4
There is no identity of parties in Santiago and the instant case. While the COMELEC was also the
respondent in Santiago, the petitioners in that case and those in this case are different. More significantly,
there is no identity of causes of action in the two cases. Santiago involved amendments to Sections 4 and
7 of Article VI, Section 4 of Article VII and Section 8 of Article X of the Constitution while the present
petition seeks to amend Sections 1to 7 of Article VI and Sections 1 to 4 of the 1987 Constitution. Clearly,
therefore, the COMELEC committed grave abuse of discretion when it ruled that the present petition for
initiative was barred by Santiagoand, on that ground, dismissed the petition.
The present petition and that in Santiago are materially different from each other. They are not based on
the same facts. There is thus no cogent reason to frustrate and defeat the present direct action of the
people to exercise their sovereignty by proposing changes to their fundamental law.
Peoples
Be Subjected to Conditions

Initiative

Should

Not

Peoples initiative is an option reserved by the people for themselves exclusively. Neither Congress nor
the COMELEC has the power to curtail or defeat this exclusive power of the people to change the
Constitution. Neither should the exercise of this power be made subject to any conditions, as some would
have us accept.
Oppositors to the peoples initiative point out that this Court ruled in Santiago that RA 6735 was
inadequate to cover the system of initiative on amendments to the Constitution and, thus, no law existed
to enable the people to directly propose changes to the Constitution. This reasoning is seriously
objectionable.
The pronouncement on the insufficiency of RA 6735 was, to my mind, out of place. It was unprecedented
and dangerously transgressed the domain reserved to the legislature.
While the legislature is authorized to establish procedures for determining the validity and sufficiency of a
petition to amend the constitution,5 that procedure cannot unnecessarily restrict the initiative privilege. 6 In
the same vein, this Court cannot unnecessarily and unreasonably restrain the peoples right to directly
propose changes to the Constitution by declaring a law inadequate simply for lack of a sub-heading and
other grammatical but insignificant omissions. Otherwise, the constitutional intent to empower the people
will be severely emasculated, if not rendered illusory.
Peoples Right and Power to Propose Changes to the Constitution Directly Should not be
Unreasonably Curtailed
If Congress and a constitutional convention, both of which are mere representative bodies, can propose
changes to the Constitution, there is no reason why the supreme body politic itselfthe peoplemay not
do so directly.

Resort to initiative to amend the constitution or enact a statute is an exercise of direct democracy as
opposed to representative democracy. The system of initiative allows citizens to directly propose
constitutional amendments for the general electorate to adopt or reject at the polls, particularly in a
plebiscite. While representative government was envisioned to refine and enlarge the public views, by
passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true
interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to
temporary or partial considerations,7 the exercise of direct democracy through initiative reserves direct
lawmaking power to the people by providing them a method to make new laws via the constitution, or
alternatively by enacting statutes. 8 Efforts of the represented to control their representatives through
initiative have been described as curing the problems of democracy with more democracy. 9
The Constitution celebrates the sovereign right of the people and declares that sovereignty resides in the
people and all government authority emanates from them. 10 Unless the present petition is granted, this
constitutional principle will be nothing but empty rhetoric, devoid of substance for those whom it seeks to
empower.
The right of the people to pass legislation and to introduce changes to the Constitution is a fundamental
right and must be jealously guarded. 11 The people should be allowed to directly seek redress of the
problems of society and representative democracy with the constitutional tools they have reserved for
their use alone.
Accordingly, I vote to GRANT the petition in G.R. No. 174513.

RENATO C. CORONA
Associate Justice

Notes:
1

Abrams v. United States, 250 U.S. 616.

336 Phil. 848 (1997).
Santos v. Court of Appeals, G.R. No. 134787, 15 November 2005, 475 SCRA 1.
Feria and Noche, Civil Procedure Annotated, vol. I, 2001 edition, p. 419.

Sec. 30, Petitions and initiatives by the people, 16 Am Jur 2d 380, citing State ex rel. Stenberg v.
Beermann, 240 Neb. 754, 485 N.W. 2d 151 (1992).
5

Id. citing Coalition for Political Honesty v. State Board of Elections, 83 Ill. 2d 236, 47 Ill. Dec. 363, 415
N.E. 2d 368 (1980).
6

Balitzer, Alfred, The Initiative and Referendum: A Study and Evaluation of Direct Legislation, The
California Roundtable 13 (1981). The American Founding Fathers recognized that direct democracy
posed a profound threat to individual rights and liberty. The U.S. Constitution was designed to provide a
system of government that would prevent either a tyranny of the majority or a tyranny of the few. James
Madison warned against the power of a majority or a minority of the population united and actuated by
some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the
permanent and aggregate interest of the community.
7

Gilbert Hahn & Steven C. Morton, Initiative and Referendum Do They Encourage or Impair Better
State Government? 5 FLA. ST. U. L. REV. 925, 927 (1977).
8

Florida Advisory Council on Intergovernmental Relations, Initiatives and Referenda: Issues in Citizen
Lawmaking (1986).
9

10

11

Sec. 1, Article II, Constitution.

In re Initiative Petition No. 362 State Question 669, 899 P.2d 1145 (Okla. 1995).

Case#4 Ebralinag vs. Division Superintendent of Schools of Cebu, G.R. No. 95770
(1993)

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 95770 March 1, 1993

ROEL EBRALINAG, EMILY EBRALINAG, represented by their parents MR. & MRS. LEONARDO
EBRALINAG, JUSTINIANA TANTOG, represented by her father AMOS TANTOG; JEMILOYAO &
JOEL OYAO, represented by their parents MR. & MRS. ELIEZER OYAO; JANETH DIAMOS &
JEREMIAS DIAMOS, represented by parents MR. & MRS. GODOFREDO DIAMOS; SARA OSTIA &
JONATHAN OSTIA, represented by their parents MR. & MRS. FAUTO OSTIA; IRVIN SEQUINO &
RENAN SEQUINO, represented by their parents MR. & MRS. LYDIO SEQUINO; NAPTHALE
TANACAO, represented by his parents MR. & MRS. MANUEL TANACAO; PRECILA PINO,
represented by her parents MR. & MRS. FELIPE PINO; MARICRIS ALFAR, RUWINA ALFAR,
represented by their parents MR. & MRS. HERMINIGILDO ALFAR; FREDESMINDA ALFAR &
GUMERSINDO ALFAR, represented by their parents ABDON ALFAR; ALBERTO ALFAR & ARISTIO
ALFAR, represented by their parents MR. & MRS. GENEROSO ALFAR; MARTINO VILLAR,
represented by his parents MR. & MRS. GENARO VILLAR; PERGEBRIEL GUINITA & CHAREN
GUINITA, represented by their parents MR. & MRS. CESAR GUINITA; ALVIN DOOP, represented by
his parents MR. & MRS. LEONIDES DOOP; RHILYN LAUDE, represented by her parents MR. &
MRS. RENE LAUDE; LEOREMINDA MONARES, represented by her parents, MR. & MRS.
FLORENCIO MONARES; MERCY MONTECILLO, represented by her parents MR. & MRS. MANUEL
MONTECILLO; ROBERTO TANGAHA, represented by his parent ILUMINADA TANGAHA; EVELYN,
MARIA & FLORA TANGAHA, represented by their parents MR. & MRS. ALBERTO TANGAHA;
MAXIMO EBRALINAG, represented by his parents, MR. & MRS. PAQUITO EBRALINAG; JUTA
CUMON, GIDEON CUMON & JONATHAN CUMON, represented by their father RAFAEL CUMON;
EVIE LUMAKANG & JUNAR LUMAKANG, represented by their parents MR. & MRS. LUMAKANG;
EMILIO SARSOZO, PAZ AMOR SARSOZO & IGNA MARIE SARSOZO, represented by their parents
MR. & MRS. VIRGILIO SARSOZO; MICHAEL JOSEPH & HENRY JOSEPH, represented by parent
ANNIE JOSEPH; EMERSON TABLASON & MASTERLOU TABLASON, represented by their parent
EMERLITO TABLASON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, respondent.
G.R. No. 95887 March 1, 1993
MAY AMOLO, represented by her parents MR. & MRS. ISAIAS AMOLO; REDFORD ALSADO,
JOEBERT ALSADO & RUDYARD ALSADO, represented by their parents MR. & MRS. ABELARDO
ALSADO; NELIA ALSADO, REU ALSADO & LILIBETH ALSADO, represented by their parents MR. &
MRS. ROLANDO ALSADO; SUZETTE NAPOLES, represented by her parents ISMAILITO NAPOLES
& OPHELIA NAPOLES; JESICA CARMELOTES, represented by her parents MR. & MRS. SERGIO
CARMELOTES; BABY JEAN MACAPAS, represented by her parents MR. & MRS. TORIBIO
MACAPAS; GERALDINE ALSADO, represented by her parents MR. & MRS. JOEL ALSADO;
RAQUEL DEMOTOR & LEAH DEMOTOR, represented by their parents MR. & MRS. LEONARDO

DEMOTOR; JURELL VILLA & MELONEY VILLA, represented by their parents MR. & MRS.
JOVENIANO VILLA; JONELL HOPE MAHINAY, MARY GRACE MAHINAY and MAGDALENE
MAHINAY, represented by their parents MR. & MRS. FELIX MAHINAY; JONALYN ANTIOLA and
JERWIN ANTIOLA, represented by their parents FELIFE ANTIOLA and ANECITA ANTIOLA; MARIA
CONCEPCION CABUYAO, represented by her parents WENIFREDO CABUYAO and ESTRELLITA
CABUYAO, NOEMI TURNO represented by her parents MANUEL TURNO and VEVENCIA TURNO;
SOLOMON PALATULON, SALMERO PALATULON and ROSALINDA PALATULON, represented by
their parents MARTILLANO PALATULON and CARMILA PALATULON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU and ANTONIO A. SANGUTAN,
respondents.
Felino M. Ganal for petitioners.
The Solicitor General for respondents.

GRIO-AQUINO, J.:
These two special civil actions for certiorari, Mandamus and Prohibition were consolidated
because they raise essentially the same issue: whether school children who are members or a
religious sect known as Jehovah's Witnesses may be expelled from school (both public and
private), for refusing, on account of their religious beliefs, to take part in the flag ceremony which
includes playing (by a band) or singing the Philippine national anthem, saluting the Philippine flag
and reciting the patriotic pledge.
In G.R. No. 95770 "Roel Ebralinag, et al. vs. Division Superintendent of Schools of Cebu and
Manuel F. Biongcog, Cebu District Supervisor," the petitioners are 43 high school and elementary
school students in the towns of Daan Bantayan, Pinamungajan, Carcar, and Taburan Cebu
province. All minors, they are assisted by their parents who belong to the religious group known
as Jehovah's Witnesses which claims some 100,000 "baptized publishers" in the Philippines.
In G.R. No. 95887, "May Amolo, et al. vs. Division Superintendent of Schools of Cebu and Antonio
A. Sangutan," the petitioners are 25 high school and grade school students enrolled in public
schools in Asturias, Cebu, whose parents are Jehovah's Witnesses. Both petitions were prepared
by the same counsel, Attorney Felino M. Ganal.
All the petitioners in these two cases were expelled from their classes by the public school
authorities in Cebu for refusing to salute the flag, sing the national anthem and recite the patriotic
pledge as required by Republic Act No. 1265 of July 11, 1955, and by Department Order No. 8
dated July 21, 1955 of the Department of Education, Culture and Sports (DECS) making the flag
ceremony compulsory in all educational institutions. Republic Act No. 1265 provides:
Sec. 1. All educational institutions shall henceforth observe daily flag ceremony,
which shall be simple and dignified and shall include the playing or singing of the
Philippine National anthem.

Sec. 2. The Secretary of Education is hereby authorized and directed to issue or

cause to be issued rules and regulations for the proper conduct of the flag
ceremony herein provided.
Sec. 3. Failure or refusal to observe the flag ceremony provided by this Act and in
accordance with rules and regulations issued by the Secretary of Education, after
proper notice and hearing, shall subject the educational institution concerned and
its head to public censure as an administrative punishment which shall be
published at least once in a newspaper of general circulation.
In case of failure to observe for the second time the flag-ceremony provided by
this Act, the Secretary of Education, after proper notice and hearing, shall cause
the cancellation of the recognition or permit of the private educational institution
responsible for such failure.
The implementing rules and regulations in Department Order No. 8 provide:
RULES AND REGULATIONS FOR CONDUCTING THE FLAG CEREMONY IN ALL
EDUCATIONAL INSTITUTIONS.
1. The Filipino Flag shall be displayed by all educational institutions, public and
private, every school day throughout the year. It shall be raised at sunrise and
lowered at sunset. The flag-staff must be straight, slightly and gently tapering at
the end, and of such height as would give the Flag a commanding position in front
of the building or within the compound.
2. Every public and private educational institution shall hold a flag-raising
ceremony every morning except when it is raining, in which event the ceremony
may be conducted indoors in the best way possible. A retreat shall be held in the
afternoon of the same day. The flag-raising ceremony in the morning shall be
conducted in the following manner:
a. Pupils and teachers or students and faculty members who are in
school and its premises shall assemble in formation facing the flag.
At command, books shall be put away or held in the left hand
and everybody shall come to attention. Those with hats shall
uncover. No one shall enter or leave the school grounds during the
ceremony.
b. The assembly shall sing the Philippine National
Anthem accompanied by the school band or without the
accompaniment if it has none; or the anthem may be played by the
school band alone. At the first note of the Anthem, the flag shall be
raised briskly. While the flag is being raised, all persons present
shall stand at attention and execute a salute. Boys and men with
hats shall salute by placing the hat over the heart. Those without
hat may stand with their arms and hands down and straight at the
sides. Those in military or Boy Scout uniform shall give the salute

prescribed by their regulations. The salute shall be started as the

Flag rises, and completed upon last note of the anthem.
c. Immediately following the singing of the Anthem, the assembly
shall recite in unison the following patriotic pledge (English or
vernacular version), which may bring the ceremony to a close. This
is required of all public schools and of private schools which are
intended for Filipino students or whose population is predominantly
Filipino.
English Version
I love the Philippines.
It is the land of my birth;
It is the home of my people.
It protects me and helps me to be, strong, happy and useful.
In return, I will heed the counsel of my parents;
I will obey the rules of my school;
I will perform the duties of a patriotic, law-abiding citizen;
I will serve my country unselfishly and faithfully;
I will be a true, Filipino in thought, in word, in deed.
xxx xxx xxx
Jehovah's Witnesses admittedly teach their children not to salute the flag, sing the national
anthem, and recite the patriotic pledge for they believe that those are "acts of worship" or
"religious devotion" (p. 10,Rollo) which they "cannot conscientiously give . . . to anyone or
anything except God" (p. 8, Rollo). They feel bound by the Bible's command to "guard ourselves
from
idols 1 John 5:21" (p. 9, Rollo). They consider the flag as an image or idol representing the
State (p. 10, Rollo). They think the action of the local authorities in compelling the flag salute and
pledge transcends constitutional limitations on the State's power and invades the sphere of the
intellect and spirit which the Constitution protect against official control (p. 10, Rollo).
This is not the first time that the question, of whether the children of Jehovah's Witnesses may be
expelled from school for disobedience of R.A. No. 1265 and Department Order No. 8, series of
1955, has been raised before this Court.
The same issue was raised in 1959 in Gerona, et al. vs. Secretary of Education, et al., 106 Phil. 2
(1959) and Balbuna, et al. vs. Secretary of Education, 110 Phil. 150 (1960). This Court in the Gerona
case upheld the expulsion of the students, thus:
The flag is not an image but a symbol of the Republic of the Philippines, an
emblem of national sovereignty, of national unity and cohesion and of freedom and
liberty which it and the Constitution guarantee and protect. Under a system of
complete separation of church and state in the government, the flag is utterly
devoid of any religious significance. Saluting the flag does not involve any
religious ceremony. The flag salute is no more a religious ceremony than the

taking of an oath of office by a public official or by a candidate for admission to the

bar.
In requiring school pupils to participate in the flag salute, the State thru the
Secretary of Education is not imposing a religion or religious belief or a religious
test on said students. It is merely enforcing a
non-discriminatory school regulation applicable to all alike whether Christian,
Moslem, Protestant or Jehovah's Witness. The State is merely carrying out the
duty imposed upon it by the Constitution which charges it with supervision over
and regulation of all educational institutions, to establish and maintain a complete
and adequate system of public education, and see to it that all schools aim to
develop, among other things, civic conscience and teach the duties of citizenship.
The children of Jehovah's Witnesses cannot be exempted from participation in the
flag ceremony. They have no valid right to such exemption. Moreover, exemption to
the requirement will disrupt school discipline and demoralize the rest of the school
population which by far constitutes the great majority.
The freedom of religious belief guaranteed by the Constitution does not and
cannot mean exemption from or non-compliance with reasonable and nondiscriminatory laws, rules and regulations promulgated by competent authority.
(pp. 2-3).
Gerona was reiterated in Balbuna, as follows:
The Secretary of Education was duly authorized by the Legislature thru Republic
Act 1265 to promulgate said Department Order, and its provisions requiring the
observance of the flag salute, not being a religious ceremony but an act and
profession of love and allegiance and pledge of loyalty to the fatherland which the
flag stands for, does not violate the constitutional provision on freedom of religion.
(Balbuna, et al. vs. Secretary of Education, et al., 110 Phil. 150).
Republic Act No. 1265 and the ruling in Gerona have been incorporated in Section 28, Title VI,
Chapter 9 of the Administrative Code of 1987 (Executive Order No. 292) which took effect on
September 21, 1988 (one year after its publication in the Official Gazette, Vol. 63, No. 38 of
September 21, 1987). Paragraph 5 of Section 28 gives legislative cachet to the ruling in Gerona,
thus:
5. Any teacher or student or pupil who refuses to join or participate in the flag
ceremony may be dismissed after due investigation.
However, the petitioners herein have not raised in issue the constitutionality of the above
provision of the new Administrative Code of 1987. They have targeted only Republic Act No. 1265
and the implementing orders of the DECS.
In 1989, the DECS Regional Office in Cebu received complaints about teachers and pupils
belonging to the Jehovah's Witnesses, and enrolled in various public and private schools, who
refused to sing the Philippine national anthem, salute the Philippine flag and recite the patriotic

pledge. Division Superintendent of Schools, Susana B. Cabahug of the Cebu Division of DECS,
and Dr. Atty. Marcelo M. Bacalso, Assistant Division Superintendent, recalling this Court's
decision in Gerona, issued Division Memorandum No. 108, dated November 17, 1989 (pp. 147148, Rollo of G.R. No. 95770) directing District Supervisors, High School Principals and Heads of
Private Educational institutions as follows:
1. Reports reaching this Office disclose that there are a number of teachers, pupils,
students, and school employees in public schools who refuse to salute the
Philippine flag or participate in the daily flag ceremony because of some religious
belief.
2. Such refusal not only undermines Republic Act No. 1265 and the DECS
Department Order No. 8, Series of 1955 (Implementing Rules and Regulations) but
also strikes at the heart of the DECS sustained effort to inculcate patriotism and
nationalism.
3. Let it be stressed that any belief that considers the flag as an image is not in any
manner whatever a justification for not saluting the Philippine flag or not
participating in flag ceremony. Thus, the Supreme Court of the Philippine says:
The flag is not an image but a symbol of the Republic of the
Philippines, an emblem of national sovereignty, of national unity
and cohesion and freedom and liberty which it and the Constitution
guarantee and protect. (Gerona, et al. vs. Sec. of Education, et al.,
106 Phil. 11.)
4. As regards the claim for freedom of belief, which an objectionist may advance,
the Supreme Court asserts:
But between the freedom of belief and the exercise of said belief,
there is quite a stretch of road to travel. If the exercise of said
religious belief clashes with the established institutions of society
and with the law, then the former must yield and give way to the
latter. (Gerona, et al. vs. Sec. of Education, et al., 106 Phil. 11.)
5. Accordingly, teachers and school employees who choose not to participate in
the daily flag ceremony or to obey the flag salute regulation spelled out in
Department Order No. 8, Series of 1955, shall be considered removed from the
service after due process.
6. In strong language about pupils and students who do the same the Supreme
Court has this to say:
If they choose not to obey the flag salute regulation, they merely
lost the benefits of public education being maintained at the
expense of their fellow Citizens, nothing more. According to a
popular expression, they could take it or leave it! Having elected not
to comply with the regulation about the flag salute they forfeited

their right to attend public schools. (Gerona, et al. vs. Sec. of

Education, et al., 106 Phil. 15.)
7. School administrators shall therefore submit to this Office a report on those who
choose not to participate in flag ceremony or salute the Philippine flag. (pp. 147148, Rollo of G.R. No. 95770; Emphasis supplied).
Cebu school officials resorted to a number of ways to persuade the children of Jehovah's
Witnesses to obey the memorandum. In the Buenavista Elementary School, the children were
asked to sign an Agreement (Kasabutan) in the Cebuano dialect promising to sing the national
anthem, place their right hand on their breast until the end of the song and recite the pledge of
allegiance to the flag (Annex D, p. 46, Rollo of G.R. No. 95770 and p. 48, Rollo of G.R. No. 95887),
but they refused to sign the "Kasabutan" (p. 20, Rollo of G.R. No. 95770).
In Tubigmanok Elementary School, the Teacher-In-Charge, Antonio A. Sangutan, met with the
Jehovah's Witnesses' parents, as disclosed in his letter of October 17, 1990, excerpts from which
reveal the following:
After two (2) fruitless confrontation meetings with the Jehovah's Witnesses'
parents on October 2, 1990 and yesterday due to their firm stand not to salute the
flag of the Republic of the Philippines during Flag Ceremony and other occasions,
as mandated by law specifically Republic Act No. 1265, this Office hereby orders
the dropping from the list in the School Register (BPS Form I) of all teachers, all
Jehovah Witness pupils from Grade I up to Grade VI effective today.
xxx xxx xxx
This order is in compliance with Division Memorandum No. 108 s. 1989 dated
November 17, 1989 by virtue of Department Order No. 8 s. 1955 dated July 21, 1955
in accordance with Republic Act No. 1265 and Supreme Court Decision of a case
"Genaro Gerona, et al., Petitioners and Appellants vs. The Honorable Secretary of
Education, et al., Respondents and Appellees' dated August 12, 1959 against their
favor. (p. 149, Rollo of G.R. No. 95770.)
In the Daan Bantayan District, the District Supervisor, Manuel F. Biongcog, ordered the "dropping
from the rolls" of students who "opted to follow their religious belief which is against the Flag
Salute Law" on the theory that "they forfeited their right to attend public schools." (p. 47, Rollo of
G.R. No. 95770.)
1st Indorsement
DAANBANTAYAN DISTRICT II
Daanbantayan, Cebu, July 24, 1990.
Respectfully returned to Mrs. Alicia A. Diaz, School In Charge [sic], Agujo
Elementary School with the information that this office is sad to order the
dropping of Jeremias Diamos and Jeaneth Diamos, Grades III and IV pupils
respectively from the roll since they opted to follow their religious belief which is
against the Flag Salute Law (R.A. 1265) and DECS Order No. 8, series of 1955,

having elected not to comply with the regulation about the flag salute they forfeited
their right to attend public schools (Gerona, et al. vs. Sec. of Education, et al., 106
Philippines 15). However, should they change their mind to respect and follow the
Flag Salute Law they may be re-accepted.
(Sgd.) MANUEL F. BIONGCOG
District Supervisor
(p. 47, Rollo of G.R. No. 95770.)
The expulsion as of October 23, 1990 of the 43 petitioning students of the Daanbantayan National
High School, Agujo Elementary School, Calape Barangay National High School, Pinamungajan
Provincial High School, Tabuelan Central School, Canasojan Elementary School, Liboron
Elementary School, Tagaytay Primary School, San Juan Primary School and Northern Central
Elementary School of San Fernando, Cebu, upon order of then Acting Division Superintendent
Marcelo Bacalso, prompted some Jehovah's Witnesses in Cebu to appeal to the Secretary of
Education Isidro Cario but the latter did not answer their letter. (p. 21, Rollo.)
The petition in G.R. No. 95887 was filed by 25 students who were similarly expelled because Dr.
Pablo Antopina, who succeeded Susana Cabahug as Division Superintendent of Schools, would
not recall the expulsion orders of his predecessor. Instead, he verbally caused the expulsion of
some more children of Jehovah's Witnesses.
On October 31, 1990, the students and their parents filed these special civil actions
for Mandamus,Certiorari and Prohibition alleging that the public respondents acted without or in
excess of their jurisdiction and with grave abuse of discretion (1) in ordering their expulsion
without prior notice and hearing, hence, in violation of their right to due process, their right to free
public education, and their right to freedom of speech, religion and worship (p. 23, Rollo). The
petitioners pray that:
c. Judgment be rendered:
i. declaring null and void the expulsion or dropping from the rolls of
herein petitioners from their respective schools;
ii. prohibiting and enjoining respondent from further barring the
petitioners from their classes or otherwise implementing the
expulsion ordered on petitioners; and
iii. compelling the respondent and all persons acting for him to
admit and order the re-admission of petitioners to their respective
schools. (p. 41, Rollo.)
and that pending the determination of the merits of these cases, a temporary restraining order be
issued enjoining the respondents from enforcing the expulsion of the petitioners and to re-admit
them to their respective classes.

On November 27, 1990, the Court issued a temporary restraining order and a writ of preliminary
mandatory injunction commanding the respondents to immediately re-admit the petitioners to
their respective classes until further orders from this Court (p. 57, Rollo).
The Court also ordered the Secretary of Education and Cebu District Supervisor Manuel F.
Biongcog to be impleaded as respondents in these cases.
On May 13, 1991, the Solicitor General filed a consolidated comment to the petitions (p. 98, Rollo)
defending the expulsion orders issued by the public respondents on the grounds that:
1. Bizarre religious practices of the Jehovah's Witnesses produce rebellious and
anti-social school children and consequently disloyal and mutant Filipino citizens.
2. There are no new and valid grounds to sustain the charges of the Jehovah's
Witnesses that the DECS' rules and regulations on the flag salute ceremonies are
violative of their freedom of religion and worship.
3. The flag salute is devoid of any religious significance; instead, it inculcates
respect and love of country, for which the flag stands.
4. The State's compelling interests being pursued by the DECS' lawful regulations
in question do not warrant exemption of the school children of the Jehovah's
Witnesses from the flag salute ceremonies on the basis of their own self-perceived
religious convictions.
5. The issue is not freedom of speech but enforcement of law and jurisprudence.
6. State's power to regulate repressive and unlawful religious practices justified,
besides having scriptural basis.
7. The penalty of expulsion is legal and valid, more so with the enactment of
Executive Order No. 292 (The Administrative Code of 1987).
Our task here is extremely difficult, for the 30-year old decision of this court in Gerona upholding
the flag salute law and approving the expulsion of students who refuse to obey it, is not lightly to
be trifled with.
It is somewhat ironic however, that after the Gerona ruling had received legislative cachet by its in
corporation in the Administrative Code of 1987, the present Court believes that the time has come
to re-examine it. The idea that one may be compelled to salute the flag, sing the national anthem,
and recite the patriotic pledge, during a flag ceremony on pain of being dismissed from one's job
or of being expelled from school, is alien to the conscience of the present generation of Filipinos
who cut their teeth on the Bill of Rights which guarantees their rights to free speech ** and the
free exercise of religious profession and worship (Sec. 5, Article III, 1987 Constitution; Article IV,
Section 8, 1973 Constitution; Article III, Section 1[7], 1935 Constitution).

Religious freedom is a fundamental right which is entitled to the highest priority and the amplest
protection among human rights, for it involves the relationship of man to his Creator (Chief
Justice Enrique M. Fernando's separate opinion in German vs. Barangan, 135 SCRA 514, 530-531).
The right to religious profession and worship has a two-fold aspect, vis., freedom
to believe and freedom to act on one's belief. The first is absolute as long as the
belief is confined within the realm of thought. The second is subject to regulation
where the belief is translated into external acts that affect the public welfare (J.
Cruz, Constitutional Law, 1991 Ed., pp. 176-177).
Petitioners stress, however, that while they do not take part in the compulsory flag ceremony, they
do not engage in "external acts" or behavior that would offend their countrymen who believe in
expressing their love of country through the observance of the flag ceremony. They quietly stand
at attention during the flag ceremony to show their respect for the right of those who choose to
participate in the solemn proceedings (Annex F, Rollo of G.R. No. 95887, p. 50 and Rollo of G.R.
No. 95770, p. 48). Since they do not engage in disruptive behavior, there is no warrant for their
expulsion.
The sole justification for a prior restraint or limitation on the exercise of religious
freedom (according to the late Chief Justice Claudio Teehankee in his dissenting
opinion in German vs. Barangan, 135 SCRA 514, 517) is the existence of a grave
and present danger of a character both grave and imminent, of a serious evil to
public safety, public morals, public health or any other legitimate public interest,
that the State has a right (and duty) to prevent." Absent such a threat to public
safety, the expulsion of the petitioners from the schools is not justified.
The situation that the Court directly predicted in Gerona that:
The flag ceremony will become a thing of the past or perhaps conducted with very
few participants, and the time will come when we would have citizens untaught and
uninculcated in and not imbued with reverence for the flag and love of country,
admiration for national heroes, and patriotism a pathetic, even tragic situation,
and all because a small portion of the school population imposed its will,
demanded and was granted an exemption. (Gerona, p. 24.)
has not come to pass. We are not persuaded that by exempting the Jehovah's Witnesses from
saluting the flag, singing the national anthem and reciting the patriotic pledge, this religious
group which admittedly comprises a "small portion of the school population" will shake up our
part of the globe and suddenly produce a nation "untaught and uninculcated in and unimbued
with reverence for the flag, patriotism, love of country and admiration for national heroes"
(Gerona vs. Sec. of Education, 106 Phil. 2, 24). After all, what the petitioners seek only is
exemption from the flag ceremony, not exclusion from the public schools where they may study
the Constitution, the democratic way of life and form of government, and learn not only the arts,
sciences, Philippine history and culture but also receive training for a vocation of profession and
be taught the virtues of "patriotism, respect for human rights, appreciation for national heroes,
the rights and duties of citizenship, and moral and spiritual values (Sec. 3[2], Art. XIV, 1987
Constitution) as part of the curricula. Expelling or banning the petitioners from Philippine schools
will bring about the very situation that this Court had feared in Gerona. Forcing a small religious

group, through the iron hand of the law, to participate in a ceremony that violates their religious
beliefs, will hardly be conducive to love of country or respect for dully constituted authorities.
As Mr. Justice Jackson remarked in West Virginia vs. Barnette, 319 U.S. 624 (1943):
. . . To believe that patriotism will not flourish if patriotic ceremonies are voluntary
and spontaneous instead of a compulsory routine is to make an unflattering
estimate of the appeal of our institutions to free minds. . . . When they [diversity]
are so harmless to others or to the State as those we deal with here, the price is
not too great. But freedom to differ is not limited to things that do not matter much.
That would be a mere shadow of freedom. The test of its substance is the right to
differ as to things that touch the heart of the existing order.
Furthermore, let it be noted that coerced unity and loyalty even to the country, . . .
assuming that such unity and loyalty can be attained through coercion is not
a goal that is constitutionally obtainable at the expense of religious liberty. A
desirable end cannot be promoted by prohibited means. (Meyer vs. Nebraska, 262
U.S. 390, 67 L. ed. 1042, 1046.)
Moreover, the expulsion of members of Jehovah's Witnesses from the schools where they are
enrolled will violate their right as Philippine citizens, under the 1987 Constitution, to receive free
education, for it is the duty of the State to "protect and promote the right of all citizens to quality
education . . . and to make such education accessible to all (Sec. 1, Art. XIV).
In Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, 72-75, we upheld the exemption of
members of the Iglesia ni Cristo, from the coverage of a closed shop agreement between their
employer and a union because it would violate the teaching of their church not to join any labor
group:
. . . It is certain that not every conscience can be accommodated by all the laws of
the land; but when general laws conflict with scruples of conscience, exemptions
ought to be granted unless some "compelling state interests" intervenes. (Sherbert
vs. Berner, 374 U.S. 398, 10 L. Ed. 2d 965, 970, 83 S. Ct. 1790.)
We hold that a similar exemption may be accorded to the Jehovah's Witnesses with regard to the
observance of the flag ceremony out of respect for their religious beliefs, however "bizarre" those
beliefs may seem to others. Nevertheless, their right not to participate in the flag ceremony does
not give them a right to disrupt such patriotic exercises. Paraphrasing the warning cited by this
Court in Non vs. DamesII, 185 SCRA 523, 535, while the highest regard must be afforded their right
to the free exercise of their religion, "this should not be taken to mean that school authorities are
powerless to discipline them" if they should commit breaches of the peace by actions that offend
the sensibilities, both religious and patriotic, of other persons. If they quietly stand at attention
during the flag ceremony while their classmates and teachers salute the flag, sing the national
anthem and recite the patriotic pledge, we do not see how such conduct may possibly disturb the
peace, or pose "a grave and present danger of a serious evil to public safety, public morals, public
health or any other legitimate public interest that the State has a right (and duty) to prevent
(German vs. Barangan, 135 SCRA 514, 517).

Before we close this decision, it is appropriate to recall the Japanese occupation of our country in
1942-1944 when every Filipino, regardless of religious persuasion, in fear of the invader, saluted
the Japanese flag and bowed before every Japanese soldier. Perhaps, if petitioners had lived
through that dark period of our history, they would not quibble now about saluting the Philippine
flag. For when liberation came in 1944 and our own flag was proudly hoisted aloft again, it was a
beautiful sight to behold that made our hearts pound with pride and joy over the newly-regained
freedom and sovereignty of our nation.
Although the Court upholds in this decision the petitioners' right under our Constitution to refuse
to salute the Philippine flag on account of their religious beliefs, we hope, nevertheless, that
another foreign invasion of our country will not be necessary in order for our countrymen to
appreciate and cherish the Philippine flag.
WHEREFORE, the petition for certiorari and prohibition is GRANTED. The expulsion orders issued
by the public respondents against the petitioners are hereby ANNULLED AND SET ASIDE. The
temporary restraining order which was issued by this Court is hereby made permanent.
SO ORDERED.
Narvasa, C.J., Feliciano, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo and
Campos, Jr., JJ., concur.
Quiason, J., took no part.
Gutierrez, Jr., J., is on leave.

Separate Opinions

CRUZ, J., concurring:

I am happy to concur with Mme. Justice Carolina Grio-Aquino in her quietly eloquent affirmation
of a vital postulate of freedom. I would only add my brief observations concerning Gerona v.
Secretary of Education.
In my humble view, Gerona was based on an erroneous assumption. The Court that promulgated
it was apparently laboring under the conviction that the State had the right to determine what was
religious and what was not and to dictate to the individual what he could and could not worship.
In pronouncing that the flag was not a religious image but a symbol of the nation, it
was implying that no one had the right to worship it or as the petitioners insisted not to

worship it. This was no different from saying that the cult that reveres Rizal as a divinity should
not and cannot do so because he is only a civic figure deserving honor but not veneration.
It seems to me that every individual is entitled to choose for himself whom or what to worship or
whether to worship at all. This is a personal decision he alone can make. The individual may
worship a spirit or a person or a beast or a tree (or a flag), and the State cannot prevent him from
doing so. For that matter, neither can it compel him to do so. As long as his beliefs are not
externalized in acts that offend the public interest, he cannot be prohibited from harboring them
or punished for doing so.
In requiring the herein petitioners to participate in the flag ceremony, the State has declared ex
cathedrathat they are not violating the Bible by saluting the flag. This is to me an unwarranted
intrusion into their religious beliefs, which tell them the opposite. The State cannot interpret the
Bible for them; only they can read it as they see fit. Right or wrong, the meaning they derive from
it cannot be revised or reversed except perhaps by their own acknowledged superiors. But
certainly not the State. It has no competence in this matter. Religion is forbidden territory that the
State, for all its power and authority, cannot invade.
I am not unaware of Justice Frankfurter's admonition that "the constitutional protection of
religious freedom terminated disabilities, it did not create new privileges. It gave religious
equality, not civil immunity. Its essence is freedom from conformity to religious dogma, not
freedom from conformity to law because of religious dogma."
But in the case at bar, the law to which the petitioners are made to conform clashes with their own
understanding of their religious obligations. Significantly, as the ponencia notes, their
intransigence does not disturb the peaceful atmosphere of the school or otherwise prejudice the
public order. Their refusal to salute the flag and recite the patriotic pledge does not disrupt the
flag ceremony. They neither mock nor disdain it. The petitioners simply stand at attention and
keep quiet "to show their respect for the right of those who choose to participate in the solemn
proceedings." It is for this innocuous conduct that, pursuant to the challenged law and
regulations, the teachers have been dismissed and the students excelled.
Freedom of speech includes the right to be silent. Aptly has it been said that the Bill of Rights that
guarantees to the individual the liberty to utter what is in his mind also guarantees to him the
liberty not to utter what is not in his mind. The salute is a symbolic manner of communication that
conveys its message as clearly as the written or spoken word. As a valid form of expression, it
cannot be compelled any more than it can be prohibited in the face of valid religious objections
like those raised in this petition. To impose it on the petitioners is to deny them the right not to
speak when their religion bids them to be silent. This coercion of conscience has no place in the
free society.
The democratic system provides for the accommodation of diverse ideas, including the
unconventional and even the bizarre or eccentric. The will of the majority prevails, but it cannot
regiment thought by prescribing the recitation by rote of its opinions or proscribing the assertion
of unorthodox or unpopular views as in this case. The conscientious objections of the petitioners,
no less than the impatience of those who disagree with them, are protected by the Constitution.
The State cannot make the individual speak when the soul within rebels.

PADILLA, J., concurring:

I concur in the Court's decision penned by Madame Justice Carolina C. Grio-Aquino that school
teachers and students who cannot salute the flag, sing the national anthem and recite the pledge
of loyalty to the country, on grounds of religious belief or conviction, may not on this ground
alone be dismissed from the service or expelled from the school.
At the same time, I am really concerned with what could be the
far-reaching consequences of our ruling in that, we may in effect be sanctioning
a privileged or eliteclass of teachers and students who will hereafter be exempt from
participating, even when they are in the school premises, in the flag ceremony in deference to
their religious scruples. What happens, for instance, if some citizens, based also on their religious
beliefs, were to refuse to pay taxes and license fees to the government? Perhaps problems of this
nature should not be anticipated. They will be resolved when and if they ever arise. But with
today's decision, we may have created more problems than we have solved.
It cannot also be denied that the State has the right and even the duty to promote among its
citizens, especially the youth, love and country, respect for the flag and reverence for its national
heroes. It cannot also be disputed that the State has the right to adopt reasonable means by
which these laudable objectives can be effectively pursued and achieved. The flag ceremony is
one such device intended to inspire patriotism and evoke the finest sentiments of love of country
and people.
In fine, the flag ceremony is a legitimate means to achieve legitimate (and noble) ends. For
a select fewto be exempt from the flag ceremony and all that it represent seven if the exemption is
predicated on respect for religious scruples, could be divisive in its impact on the school
population or community.
I would therefore submit that, henceforth, teachers and students who because of religious
scruples or beliefs cannot actively participate in the flag ceremony conducted in the school
premises should be excluded beforehand from such ceremony. Instead of allowing the religious
objector to attend the flag ceremony and display therein his inability to salute the flag, sing the
national anthem and recite the pledge of loyalty to the Republic, he or she should remain in the
classroom while honors to the flag are conducted and manifested in the "quadrangle" or
equivalent place within school premises; or if the flag ceremony must be held in a hall, the
religious objector must take his or her place at the rear of (or outside) the hall while those who
actively participate in the ceremony must take the front places. This arrangement can, in my view,
achieve an accommodation and, to a certain extent, harmonization of a citizen's constitutional
right to freedom of religion and a valid exercise of the State's fundamental and legitimate authority
to require homage and honor to the flag as the symbol of the Nation.

# Separate Opinions
CRUZ, J., concurring:

I am happy to concur with Mme. Justice Carolina Grio-Aquino in her quietly eloquent affirmation
of a vital postulate of freedom. I would only add my brief observations concerning Gerona v.
Secretary of Education.
In my humble view, Gerona was based on an erroneous assumption. The Court that promulgated
it was apparently laboring under the conviction that the State had the right to determine what was
religious and what was not and to dictate to the individual what he could and could not worship.
In pronouncing that the flag was not a religious image but a symbol of the nation, it
was implying that no one had the right to worship it or as the petitioners insisted not to
worship it. This was no different from saying that the cult that reveres Rizal as a divinity should
not and cannot do so because he is only a civic figure deserving honor but not veneration.
It seems to me that every individual is entitled to choose for himself whom or what to worship or
whether to worship at all. This is a personal decision he alone can make. The individual may
worship a spirit or a person or a beast or a tree (or a flag), and the State cannot prevent him from
doing so. For that matter, neither can it compel him to do so. As long as his beliefs are not
externalized in acts that offend the public interest, he cannot be prohibited from harboring them
or punished for doing so.
In requiring the herein petitioners to participate in the flag ceremony, the State has declared ex
cathedrathat they are not violating the Bible by saluting the flag. This is to me an unwarranted
intrusion into their religious beliefs, which tell them the opposite. The State cannot interpret the
Bible for them; only they can read it as they see fit. Right or wrong, the meaning they derive from
it cannot be revised or reversed except perhaps by their own acknowledged superiors. But
certainly not the State. It has no competence in this matter. Religion is forbidden territory that the
State, for all its power and authority, cannot invade.
I am not unaware of Justice Frankfurter's admonition that "the constitutional protection of
religious freedom terminated disabilities, it did not create new privileges. It gave religious
equality, not civil immunity. Its essence is freedom from conformity to religious dogma, not
freedom from conformity to law because of religious dogma."
But in the case at bar, the law to which the petitioners are made to conform clashes with their own
understanding of their religious obligations. Significantly, as the ponencia notes, their
intransigence does not disturb the peaceful atmosphere of the school or otherwise prejudice the
public order. Their refusal to salute the flag and recite the patriotic pledge does not disrupt the
flag ceremony. They neither mock nor disdain it. The petitioners simply stand at attention and
keep quiet "to show their respect for the right of those who choose to participate in the solemn
proceedings." It is for this innocuous conduct that, pursuant to the challenged law and
regulations, the teachers have been dismissed and the students excelled.
Freedom of speech includes the right to be silent. Aptly has it been said that the Bill of Rights that
guarantees to the individual the liberty to utter what is in his mind also guarantees to him the
liberty not to utter what is not in his mind. The salute is a symbolic manner of communication that
conveys its message as clearly as the written or spoken word. As a valid form of expression, it
cannot be compelled any more than it can be prohibited in the face of valid religious objections
like those raised in this petition. To impose it on the petitioners is to deny them the right not to

speak when their religion bids them to be silent. This coercion of conscience has no place in the
free society.
The democratic system provides for the accommodation of diverse ideas, including the
unconventional and even the bizarre or eccentric. The will of the majority prevails, but it cannot
regiment thought by prescribing the recitation by rote of its opinions or proscribing the assertion
of unorthodox or unpopular views as in this case. The conscientious objections of the petitioners,
no less than the impatience of those who disagree with them, are protected by the Constitution.
The State cannot make the individual speak when the soul within rebels.
PADILLA, J., concurring:
I concur in the Court's decision penned by Madame Justice Carolina C. Grio-Aquino that school
teachers and students who cannot salute the flag, sing the national anthem and recite the pledge
of loyalty to the country, on grounds of religious belief or conviction, may not on this ground
alone be dismissed from the service or expelled from the school.
At the same time, I am really concerned with what could be the
far-reaching consequences of our ruling in that, we may in effect be sanctioning
a privileged or eliteclass of teachers and students who will hereafter be exempt from
participating, even when they are in the school premises, in the flag ceremony in deference to
their religious scruples. What happens, for instance, if some citizens, based also on their religious
beliefs, were to refuse to pay taxes and license fees to the government? Perhaps problems of this
nature should not be anticipated. They will be resolved when and if they ever arise. But with
today's decision, we may have created more problems than we have solved.
It cannot also be denied that the State has the right and even the duty to promote among its
citizens, especially the youth, love and country, respect for the flag and reverence for its national
heroes. It cannot also be disputed that the State has the right to adopt reasonable means by
which these laudable objectives can be effectively pursued and achieved. The flag ceremony is
one such device intended to inspire patriotism and evoke the finest sentiments of love of country
and people.
In fine, the flag ceremony is a legitimate means to achieve legitimate (and noble) ends. For
a select fewto be exempt from the flag ceremony and all that it represent seven if the exemption is
predicated on respect for religious scruples, could be divisive in its impact on the school
population or community.
I would therefore submit that, henceforth, teachers and students who because of religious
scruples or beliefs cannot actively participate in the flag ceremony conducted in the school
premises should be excluded beforehand from such ceremony. Instead of allowing the religious
objector to attend the flag ceremony and display therein his inability to salute the flag, sing the
national anthem and recite the pledge of loyalty to the Republic, he or she should remain in the
classroom while honors to the flag are conducted and manifested in the "quadrangle" or
equivalent place within school premises; or if the flag ceremony must be held in a hall, the
religious objector must take his or her place at the rear of (or outside) the hall while those who
actively participate in the ceremony must take the front places. This arrangement can, in my view,
achieve an accommodation and, to a certain extent, harmonization of a citizen's constitutional

right to freedom of religion and a valid exercise of the State's fundamental and legitimate authority
to require homage and honor to the flag as the symbol of the Nation.
# Footnotes
** The flag salute, singing the national anthem and reciting the patriotic pledge are
all forms of utterances.

Case#5 Ayala Corporation vs. Rosa Diana Realty Corporation, G.R. No. 134284
(2000)
SECOND DIVISION

[G.R. No. 134284. December 1, 2000]

AYALA

CORPORATION, petitioner,
vs. ROSA-DIANA
DEVELOPMENTCORPORATION, respondent.

REALTY

AND

DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari seeking the reversal of a decision rendered by the
Court of Appeals in C.A. G.R. C.V. No. 4598 entitled, Ayala Corporation vs. Rosa-Diana Realty and
Development Corporation, dismissing Ayala Corporations petition for lack of merit.

The facts of the case are not in dispute:

Petitioner Ayala Corporation (hereinafter referred to as Ayala) was the registered owner of a parcel of
land located in Alfaro Street, Salcedo Village, Makati City with an area of 840 square meters, more or less
and covered by Transfer Certificate of Title (TCT) No. 233435 of the Register of Deeds of Rizal.
On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po and Sy Ka Kieng married to
Rosa Chan. The Deed of Sale executed between Ayala and the buyers contained Special Conditions of
Sale and Deed Restrictions. Among the Special Conditions of Sale were:
a) the vendees shall build on the lot and submit the building plans to the vendor before
September 30, 1976 for the latters approval
b) the construction of the building shall start on or before March 30, 1977 and completed before
1979. Before such completion, neither the deed of sale shall be registered nor the title
released even if the purchase price shall have been fully paid
c) there shall be no resale of the property
The Deed Restrictions, on the other hand, contained the stipulation that the gross floor area of the
building to be constructed shall not be more than five (5) times the lot area and the total height shall not
exceed forty two (42) meters. The restrictions were to expire in the year 2025.
Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the Special Conditions of
Sale.Notwithstanding the violation, Manuel Sy and Sy Ka Kieng, in April 1989, were able to sell the lot to
respondent Rosa-Diana Realty and Development Corporation (hereinafter referred to as Rosa-Diana)
with Ayalas approval.As a consideration for Ayala to release the Certificate of Title of the subject property,
Rosa-Diana, on July 27, 1989 executed an Undertaking promising to abide by said special conditions of
sale executed between Ayala and the original vendees. Upon the submission of the Undertaking, together
with the building plans for a condominium project, known as The Peak, Ayala released title to the lot,
thereby enabling Rosa-Diana to register the deed of sale in its favor and obtain Certificate of Title No.
165720 in its name. The title carried as encumbrances the special conditions of sale and the deed
restrictions. Rosa-Dianas building plans as approved by Ayala were subject to strict compliance of
cautionary notices appearing on the building plans and to the restrictions encumbering the Lot regarding
the use and occupancy of the same.
Thereafter, Rosa-Diana submitted to the building official of Makati another set of building plans for
The Peak which were substantially different from those that it earlier submitted to Ayala for
approval. While the building plans which Rosa-Diana submitted to Ayala for approval envisioned a 24meter high, seven (7) storey condominium project with a gross floor area of 3,968.56 square meters, the
building plans which Rosa-Diana submitted to the building official of Makati, contemplated a 91.65 meter
high, 38 storey condominium building with a gross floor area of 23,305.09 square meters. [1] Needless to
say, while the first set of building plans complied with the deed restrictions, the latter set exceeded the
same.
During the construction of Rosa-Dianas condominium project, Ayala filed an action with the Regional
Trial Court (RTC) of Makati, Branch 139 for specific performance, with application for a writ of preliminary
injunction/temporary restraining order against Rosa-Diana Realty seeking to compel the latter to comply
with the contractual obligations under the deed of restrictions annotated on its title as well as with the
building plans it submitted to the latter. In the alternative, Ayala prayed for rescission of the sale of the
subject lot to Rosa- Diana Realty.
The lower court denied Ayalas prayer for injunctive relief, thus enabling Rosa-Diana to complete the
construction of the building. Undeterred, Ayala tried to cause the annotation of a notice of lis pendens on
Rosa-Dianas title. The Register of Deeds of Makati, however, refused registration of the notice of lis
pendens on the ground that the case pending before the trial court, being an action for specific
performance and/or rescission,is an action in personam which does not involve the title, use or
possession of the property.[2] The Land Registration Authority (LRA) reversed the ruling of the Register of
Deeds saying that an action for specific performance or rescission may be classified as a proceeding of
any kind in court directly affecting title to the land or the use or occupation thereof for which a notice of lis

pendens may be held proper.[3] The decision of the LRA, however, was overturned by the Court of
Appeals in C.A. G.R. S.P. No. 29157. In G.R. No. 112774, We affirmed the ruling of the CA on February
16, 1994 saying
We agree with respondent court that the notice of lis pendens is not proper in this instance. The case
before the trial court is a personal action since the cause of action thereof arises primarily from the
alleged violation of the Deed of Restrictions.
In the meantime, Ayala completed its presentation of evidence before the trial court. Rosa-Diana filed
a Demurrer to Evidence averring that Ayala failed to establish its right to the relief sought inasmuch as (a)
Ayala admittedly does not enforce the deed restrictions uniformly and strictly (b) Ayala has lost its
right/power to enforce the restrictions due to its own acts and omissions; and (c) the deed restrictions are
no longer valid and effective against lot buyers in Ayalas controlled subdivision.
The trial court sustained Rosa-Dianas Demurrer to Evidence saying that Ayala was guilty of
abandonment and/or estoppel due to its failure to enforce the terms of deed of restrictions and special
conditions of sale against Manuel Sy and Sy Ka Kieng. The trial court noted that notwithstanding the
violation of the special conditions of sale, Manuel Sy and Sy Ka Kieng were able to transfer the title to
Rosa-Diana with the approval of Ayala. The trial court added that Ayalas failure to enforce the restrictions
with respect to Trafalgar, Shellhouse, Eurovilla, LPL Plaza, Parc Regent, LPL Mansion and Leronville
which are located within Salcedo Village,shows that Ayala discriminated against those which it wants to
have the obligation enforced. The trial court then concluded that for Ayala to discriminately choose which
obligor would be made to follow certain conditions and which should not, did not seem fair and legal.
The Court of Appeals affirmed the ruling of the trial court saying that the appeal is sealed by the
doctrine of the law of the case in C.A. G.R. S.P. No. 29157 where it was stated that
]x x x Ayala is barred from enforcing the Deed of Restrictions in question pursuant to the doctrine of
waiver and estoppel. Under the terms of the deed of sale, the vendee Sy Ka Kieng assumed faithful
compliance with the special conditions of sale and with the Salcedo Village Deed of Restrictions. One of
the conditions was that a building would be constructed within one year. However, Sy Ka Kieng failed to
construct the building as required under the Deed of Sale. Ayala did nothing to enforce the terms of the
contract. In fact, it even agreed to the sale of the lot by Sy Ka Kieng in favor of petitioner Realty in 1989
or thirteen (13) years later. We, therefore, see no justifiable reason for Ayala to attempt to enforce the
terms of the conditions of sale against the petitioner.
xxx
The Court of Appeals also cited C.A. G.R. C.V. No. 46488 entitled, Ayala Corporation vs. Ray Burton
Development Corporation which relied on C.A. G.R. S.P. No. 29157 in ruling that Ayala is barred from
enforcing the deed restrictions in dispute. Upon a motion for reconsideration filed by herein petitioner, the
Court of Appeals clarified that the citation of the decision in Ayala Corporation vs. Ray Burton
Development Corporation, C.A. G.R. C.V. No. 46488, February 27, 1996, was made not because said
decision is res judicata to the case at bar but rather because it is precedential under the doctrine of stare
decisis.
Upon denial of said motion for reconsideration, Ayala filed the present appeal.
Ayala contends that the pronouncement of the Court of Appeals in C.A. G.R. S.P. No. 29157 that it is
estopped from enforcing the deed restrictions is merely obiter dicta inasmuch as the only issue raised in
the aforesaid case was the propriety of a lis pendens annotation on Rosa-Dianas certificate of title.
Ayala avers that Rosa-Diana presented no evidence whatsoever on Ayalas supposed waiver or
estoppel in C.A. G.R. S.P. No. 29157. Ayala likewise pointed out that at the time C.A. G.R. S.P. No. 29157
was on appeal, the issues of the validity and continued viability of the deed of restrictions and their
enforceability by Ayala were joined and then being tried before the trial court.

Petitioners assignment of errors in the present appeal may essentially be summarized as follows:
I. The Court of Appeals acted in a manner not in accord with law and the applicable decisions of
the Supreme Court in holding that the doctrine of the law of the case, or stare decisis,
operated to dismiss Ayalas appeal.
II. The Court of Appeals erred as a matter of law and departed from the accepted and usual
course of judicial proceedings when it failed to expressly pass upon the specific errors
assigned in Ayalas appeal.
A discussion on the distinctions between law of the case, stare decisis and obiter dicta is in order.
The doctrine of the law of the case has certain affinities with, but is clearly distinguishable from, the
doctrines of res judicata and stare decisis, principally on the ground that the rule of the law of the
case operates only in the particular case and only as a rule of policy and not as one of law. [4] At
variance with the doctrine ofstare decisis, the ruling adhered to in the particular case under the doctrine of
the law of the case need not be followed as a precedent in subsequent litigation between other parties,
neither by the appellate court which made the decision followed on a subsequent appeal in the same
case, nor by any other court. The ruling covered by the doctrine of the law of the case is adhered to in the
single case where it arises, but is not carried into other cases as a precedent. [5] On the other hand, under
the doctrine of stare decisis, once a point of law has been established by the court, that point of law will,
generally, be followed by the same court and by all courts of lower rank in subsequent cases where the
same legal issue is raised.[6] Stare decisis proceeds from the first principle of justice that, absent powerful
countervailing considerations, like cases ought to be decided alike. [7]
The Court of Appeals, in ruling against petitioner Ayala Corporation stated that the appeal is sealed
by the doctrine of the law of the case, referring to G.R. No. 112774 entitled Ayala
Corporation, petitioner vs. Court of Appeals, et al., respondents. The Court of Appeals likewise made
reference to C.A. G.R. C.V. No. 46488 entitled, Ayala Corporation vs. Ray Burton Development
Corporation, Inc. in ruling against petitioner saying that it is jurisprudential under the doctrine of stare
decisis.
It must be pointed out that the only issue that was raised before the Court of Appeals in C.A. G.R.
S.P. No. 29157 was whether or not the annotation of lis pendens is proper. The Court of Appeals, in its
decision, in fact stated the principal issue to be resolved is: whether or not an action for specific
performance, or in the alternative, rescission of deed of sale to enforce the deed of restrictions governing
the use of property, is a real or personal action, or one that affects title thereto and its use or occupation
thereof."[8]
In the aforesaid decision, the Court of Appeals even justified the cancellation of the notice of lis
pendens on the ground that Ayala had ample protection should it succeed in proving its allegations
regarding the violation of the deed of restrictions, without unduly curtailing the right of the petitioner to fully
enjoy its property in the meantime that there is as yet no decision by the trial court. [9]
From the foregoing, it is clear that the Court of Appeals was aware that the issue as to whether
petitioner is estopped from enforcing the deed of restrictions has yet to be resolved by the trial
court. Though it did make a pronouncement that the petitioner is estopped from enforcing the deed of
restrictions, it also mentioned at the same time that this particular issue has yet to be resolved by the trial
court. Notably, upon appeal to this Court, We have affirmed the ruling of the Court of Appeals only as
regards the particular issue of the propriety of the cancellation of the notice of lis pendens.
We see no reason then, how the law of the case or stare decisis can be held to be applicable in the
case at bench. If at all, the pronouncement made by the Court of Appeals that petitioner Ayala is barred
from enforcing the deed of restrictions can only be considered as obiter dicta. As earlier mentioned, the
only issue before the Court of Appeals at the time was the propriety of the annotation of the lis
pendens. The additional pronouncement of the Court of Appeals that Ayala is estopped from enforcing the
deed of restrictions even as it recognized that this said issue is being tried before the trial court was not
necessary to dispose of the issue as to the propriety of the annotation of the lis pendens. A dictum is an
opinion of a judge which does not embody the resolution or determination of the court, and made without

argument, or full consideration of the point, not the proffered deliberate opinion of the judge himself. [10] It is
not necessarily limited to issues essential to the decision but may also include expressions of opinion
which are not necessary to support the decision reached by the court. Mere dicta are not binding under
the doctrine of stare decisis.[11]
While the Court of Appeals did not err in ruling that the present petition is not barred by C.A. G.R.
C.V. No. 46488 entitled Ayala Corporation vs. Ray Burton Development Inc. under the doctrine of res
judicata, neither, however, can the latter case be cited as precedential under the doctrine of stare
decisis. It must be pointed out that at the time the assailed decision was rendered, C.A. G.R. C.V. No.
46488 was on appeal with this Court.Significantly, in the decision We have rendered in Ayala Corporation
vs. Ray Burton Development Corporation [12] which became final and executory on July 5, 1999 we have
clearly stated that An examination of the decision in the said Rosa-Diana case reveals that the sole issue
raised before the appellate court was the propriety of the lis pendens annotation. However, the appellate
court went beyond the sole issue and made factual findings bereft of any basis in the record to
inappropriately rule that AYALA is in estoppel and has waived its right to enforce the subject
restrictions. Such ruling was immaterial to the resolution of the issue of the propriety of the annotation of
the lis pendens. The finding of estoppel was thus improper and made in excess of jurisdiction.
Coming now to the merits of the case, petitioner avers that the Court of Appeals departed from the
usual course of judicial proceedings when it failed to expressly pass upon the specific errors assigned in
its appeal.Petitioner reiterates its contention that the trial courts findings that Ayala has waived its right to
enforce the deed of restrictions is not supported by law and evidence.
We find merit in the petition.
It is basic that findings of fact of the trial court and the Court of Appeals are conclusive upon the
Supreme Court when supported by substantial evidence. [13] We are constrained, however, to review the
trial courts findings of fact, which the Court of Appeals chose not to pass upon, inasmuch as there is
ample evidence on record to show that certain facts were overlooked which would affect the disposition of
the case.
In its assailed decision of February 4, 1994, the trial court, ruled in favor of respondent Rosa-Diana
Realty on the ground that Ayala had not acted fairly when it did not institute an action against the original
vendees despite the latters violation of the Special Conditions of Sale but chose instead to file an action
against herein respondent Rosa-Diana. The trial court added that although the 38 storey building of RosaDiana is beyond the total height restriction, it was not violative of the National Building Code. According to
the trial court the construction of the 38 storey building known as The Peak has not been shown to have
been prohibited by law and neither is it against public policy.
It bears emphasis that as complainant, Ayala had the prerogative to initiate an action against
violators of the deed restrictions. That Rosa-Diana had acted in bad faith is manifested by the fact that it
submitted two sets of building plans, one which was in conformity with the deed restrictions submitted to
Ayala and MACEA, and the other, which exceeded the height requirement in the deed restrictions to the
Makati building official for the purpose of procuring a building permit from the latter. Moreover, the
violation of the deed restrictions committed by respondent can hardly be denominated as a minor
violation. It should be pointed out that the original building plan which was submitted to and approved by
petitioner Ayala Corporation, envisioned a twenty four (24) meter high, seven (7) storey condominium
whereas the respondents building plan which was submitted to and approved by the building official of
Makati is that of a thirty eight (38) storey, 91.65 meters high, building. At present, the Peak building of
respondent which actually stands at 133.65 meters with a total gross floor area of 23,305.09 square
meters, seriously violates the dimensions indicated in the building plans submitted by Rosa-Diana to
petitioner Ayala for approval inasmuch as the Peak building exceeds the approved height limit by about
109 meters and the allowable gross floor area under the applicable deed restrictions by about 19,105
square meters. Clearly, there was a gross violation of the deed restrictions and evident bad faith by the
respondent.
It may not be amiss to mention that the deed restrictions were revised in a general membership
meeting of the association of lot owners in Makati Central Business District the Makati Commercial Estate

Association, Inc. (MACEA) whereby direct height restrictions were abolished in lieu of floor area
limits. Respondent, however, did not vote for the approval of this revision during the General Membership
meeting which was held on July 11, 1990 at the Manila Polo Club Pavilion, Makati, Metro Manila and
again on July 12, 1990 at the Hotel Mandarin Oriental, Makati, Metro Manila. Hence, respondent
continues to be bound by the original deed restrictions applicable to Lot 7, Block 1 and annotated on its
title to said lot. In any event, assuming arguendo that respondent voted for the approval of direct height
restrictions in lieu of floor area limits, the total floor area of its Peak building would still be violative of the
floor area limits to the extent of about 9,865 square meters of allowable floor area under the MACEA
revised restrictions.
Respondent Rosa-Diana avers that there is nothing illegal or unlawful in the building plans which it
used in the construction of the Peak condominium inasmuch as it bears the imprimatur of the building
official of Makati, who is tasked to determine whether building and construction plans are in accordance
with the law, notably, the National Building Code.
Respondent Rosa-Diana, however, misses the point inasmuch as it has freely consented to be
bound by the deed restrictions when it entered into a contract of sale with spouses Manuel Sy and Sy Ka
Kieng. While respondent claims that it was under the impression that the deed restrictions were no longer
being enforced by Ayala, the Undertaking[14] it executed belies this same claim. In said Undertaking,
respondent agreed to construct and complete the construction of the house on said lot as required under
the special condition of sale. Respondent likewise bound itself to abide and comply with x x x the
condition of the rescission of the sale by Ayala Land, Inc. on the grounds therein stated x x x.
Contractual obligations between parties have the force of law between them and absent any
allegation that the same are contrary to law, morals, good customs, public order or public policy, they
must be complied with in good faith. Hence, Article 1159 of the New Civil Code provides
Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith.
Respondent Rosa-Diana insists that the trial court had already ruled that the Undertaking executed
by its Chairman and President cannot validly bind Rosa-Diana and hence, it should not be held bound by
the deed restrictions.
We agree with petitioner Ayalas observation that respondent Rosa-Dianas special and affirmative
defenses before the trial court never mentioned any allegation that its president and chairman were not
authorized to execute the Undertaking. It was inappropriate therefore for the trial court to rule that in the
absence of any authority or confirmation from the Board of Directors of respondent Rosa-Diana, its
Chairman and the President cannot validly enter into an undertaking relative to the construction of the
building on the lot within one year from July 27, 1989 and in accordance with the deed
restrictions. Curiously, while the trial court stated that it cannot be presumed that the Chairman and the
President can validly bind respondent Rosa-Diana to enter into the aforesaid Undertaking in the absence
of any authority or confirmation from the Board of Directors, the trial court held that the ordinary
presumption of regularity of business transactions is applicable as regards the Deed of Sale which was
executed by Manuel Sy and Sy Ka Kieng and respondent Rosa-Diana. In the light of the fact that
respondent Rosa-Diana never alleged in its Answer that its president and chairman were not authorized
to execute the Undertaking, the aforesaid ruling of the trial court is without factual and legal basis and
surprising to say the least.
The fact alone that respondent Rosa-Diana conveniently prepared two sets of building plans - with
one set which fully conformed to the Deed Restrictions and another in gross violation of the same - should
have cautioned the trial court to conclude that respondent Rosa-Diana was under the erroneous
impression that the Deed Restrictions were no longer enforceable and that it never intended to be bound
by the Undertaking signed by its President and Chairman. We reiterate that contractual obligations have
the force of law between parties and unless the same are contrary to public policy morals and good
customs, they must be complied by the parties in good faith.
Petitioner, in its Petition, prays that judgment be rendered:

a) ordering Rosa-Diana Realty and Development Corporation to comply with its contractual
obligations in the construction of the Peak by removing, or closing down and prohibiting
Rosa-Diana from using, selling, leasing or otherwise disposing of, the portions of areas
thereof constructed beyond or in excess of the approved height, as shown by the building
plans submitted to, and approved by, Ayala, including any other portion of the building
constructed not in accordance with the said building plans, during the effectivity of the Deed
Restrictions;
b) Alternatively, in the event specific performance has become impossible:
(1)Ordering the cancellation and rescission of the April 20, 1976 Deed of Sale by Ayala
in favor of the original vendees thereof as well as the subsequent Deed of Sale
executed by such original vendees in favor of Rosa-Diana, and ordering RosaDiana to return to Ayala Lot 7, Block 1 of Salcedo Village;
(2)ordering the cancellation of Transfer Certificate of Title No. 165720 (in the name of
Rosa-Diana) and directing the office of the Register of Deeds of Makati to issue a
new title over the lot in the name of Ayala; and
(3)ordering Rosa-Diana to pay Ayala attorneys fees in the amount of P500,000.00,
exemplary damages in the amount of P5,000,000.00 and the costs of suit.
It must be noted that during the trial respondent Rosa-Diana was able to complete the construction
of The Peak as a building with a height of thirty eight (38) floors or 133.65 meters and with a total gross
floor area of 23,305.09 square meters. Having been completed for a number of years already, it would be
reasonable to assume that it is now fully tenanted. Consequently, the remedy of specific performance by
respondent is no longer feasible. However, neither can we grant petitioners prayer for the cancellation
and rescission of the April 20, 1976 Deed of Sale by petitioner Ayala in favor of the original vendees
thereof as well as the subsequent Deed of Sale executed by the original vendees in favor of respondent
Rosa-Diana inasmuch as the original vendees were not even made parties in the case at bar. Moreover,
petitioner Ayala, having agreed to the resale of the property by the original vendees, spouses Manuel Sy
and Sy Ka Kieng, to respondent Rosa-Diana despite the failure of Manuel Sy and Sy Ka Kieng to comply
with their obligation to construct a building within one year from April 20, 1976, has effectively waived its
right to rescind the sale of the subject lot to the original vendees.
Faced with the same question as to the proper remedy available to petitioner in the case of Ayala
Corporation vs. Ray Burton Development Inc., a case which is on all fours with the case at bench, we
ruled therein that the party guilty of violating the deed restrictions may only be held alternatively liable for
substitute performance of its obligation, that is, for the payment of damages. In the aforesaid case it was
observed that the Consolidated and Revised Deed Restrictions (CRDR) imposed development charges
on constructions which exceed the estimated Gross Limits permitted under the original Deed Restrictions
but which are within the limits of the CRDRs.
The pertinent portion of the Deed of Restrictions reads:
3. DEVELOPMENT CHARGE
For any building construction within the Gross Floor Area limits defined under Paragraphs C-2.1 to C-2.4
above, but which will result in a Gross Floor Area exceeding certain standards defined in Paragraphs C3.1-C below, the OWNER shall pay MACEA, prior to the construction of any new building, a
DEVELOPMENT CHARGE as a contribution to a trust fund to be administered by MACEA. This trust fund
shall be used to improve facilities and utilities in Makati Central District.
3.1. The amount of the development charge that shall be due from the OWNER shall be computed as
follows:
DEVELOPMENT CHARGE = A x (B-C-D)

where:
A is equal to the Area Assessment which shall be set at Five Hundred Pesos (P500.00) until December
31,1990. Each January 1st thereafter, such amount shall increase by ten percent (10%) over the Area
Assessment charged in the immediately preceding year; provided that beginning 1995 and at the end of
every successive five-year period thereafter, the increase in the Area Assessment shall be reviewed and
adjusted by the VENDOR to correspond to the accumulated increase in the construction cost index
during the immediately preceding five years as based on the weighted average of wholesale price and
wage indices of the National Census and Statistics Office and the Bureau of Labor Statistics.
B - is equal to the Gross Floor Area of the completed or expanded building in square meters.
C - is equal to the estimated Gross Floor Area permitted under the original deed restrictions, derived by
multiplying the lot area by the effective original FAR shown below for each location.
We then ruled in the aforesaid case that the development charges are a fair measure of
compensatory damages which therein respondent Ray Burton Development Inc. is liable to Ayala
Corporation. The dispositive portion of the decision in the said case which is squarely applicable to the
case at bar, reads as follows:
WHEREFORE, premises considered, the assailed Decision of the Court of Appeals dated February 27,
1996, in CA-G.R. C.V. No. 46488, and its Resolution dated October 7, 1996 are hereby REVERSED and
SET ASIDE, and in lieu thereof, judgment is hereby rendered finding that:
(1) The Deed Restrictions are valid and petitioner AYALA is not estopped from enforcing them
against lot owners who have not yet adopted the Consolidated and Revised Deed
Restrictions.
(2) Having admitted that the Consolidated and Revised Deed Restrictions are the applicable
Deed Restrictions to Ray Burton Development Corporation, RBDC should be, and is
bound by the same.
(3) Considering that Ray Burton Development Corporations Trafalgar plaza exceeds the floor
area limits of the Deed Restrictions, RBDC is hereby ordered to pay development
charges as computed under the provisions of the consolidated and Revised Deed
Restrictions currently in force.
(4) Ray Burton Development corporation is further ordered to pay AYALA exemplary
damages in the amount of P2,500,000.00 attorneys fees in the amount of P250,000.00.
SO ORDERED.
There is no reason why the same rule should not be followed in the case at bar, the remedies of
specific performance and/or rescission prayed for by petitioner no longer being feasible. In accordance
with the peculiar circumstances of the case at bar, the development charges would certainly be a fair
measure of compensatory damages to petitioner Ayala.
Exemplary damages in the sum of P2,500,000.00 as prayed for by petitioner are also in order
inasmuch as respondent Rosa-Diana was in evident bad faith when it submitted a set of building plans in
conformity with the deed restrictions to petitioner Ayala for the sole purpose of obtaining title to the
property, but only to prepare and later on submit another set of building plans which are in gross violation
of the Deed Restrictions. Petitioner Ayala is likewise entitled to an award of attorneys fees in the sum of
P250,000.00.

WHEREFORE, the assailed Decision of the Court of Appeals dated December 4, 1997 and its
Resolution dated June 19, 1998 , C.A. G.R. C.V. No. 4598, are REVERSED and SET ASIDE. In lieu
thereof, judgment is rendered
a) ordering respondent Rosa-Diana Realty and Development Corporation to pay development
charges as computed under the provisions of the consolidated and Revised Deed
Restrictions currently in force; and
b) ordering respondent Rosa-Diana Realty and Development Corporation to pay petitioner
Ayala Corporation exemplary damages in the sum of P2,500,000.00, attorneys fees in the
sum of P250,000.00 and the costs of the suit.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

[1]

C.A. G.R. C.V. No. 45987 stated that the 2nd set of building plans contemplated a 91.65 meter high, 38
storey, condominium with a gross floor area of 23,305.09 meters. However, the height clearance permit
granted by Department of Transportation and Communications shows that Rosa- Diana sought a permit
for a proposed 133.05 meter high, 30 storey building (Rollo, p. 133) It is likewise interesting to note that
although under the 2nd set of the building plans, the gross floor area of the building allegedly covers
23,305.09 square meters, the sanitary/plumbing permit issued by the Metropolitan Manila Commission
shows that the total area of the building is in fact 32,208 square meters (Rollo, p. 129).
[2]

C.A. Rollo, p. 355.

[3]

C.A. Rollo, pp. 348-350.

[4]

5 Am Jur 2d, Appeal and Error 746.

[5]

Allen vs. Bryant, 155 Cal 256 100 P 704.

[6]

5 Am Jur 2d, Appellate Review 599 citing Samsel v. Wheeler Transp. Servs., 246 Kan 336, 789 P2d
541.
[7]

5 Am Jur 2d, Appellate Review 599 citing State ex rel. Moore v. Molpus (Miss) 578 So 2d 624.

[8]

Rollo, p. 322.

[9]

Rollo, p. 326.

[10]

21 C.J.S. 311 citing State vs. Tingle, 60 S 728, 103 Miss 672; In re Herles estate, 300 NY S 103, 165
Misc 616.
[11]

20 Am Jur 2d, Courts 39.

[12]

294 SCRA 48, 64 [1998].

[13]

Banson vs. Court of Appeals, 246 SCRA 42, 46 [1995].

[14]

Rollo, p.108.

Case#6 Chua Jan vs. Bernas, 34 Phil. 631 (1916)

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
August 1, 1916
G.R. No. 10010
CHU JAN, plaintiff-appellee,
vs.
LUCIO BERNAS, defendant-appellant.

Sulpicio V. Cea for appellant.

ARAULLO, J.:
On the afternoon of June 26, 1913, a match was held in the cockpit of the municipality of Tabaco, Albay, between
two cocks belonging to the plaintiff and to the defendant respectively. Each of said persons had put up a wager of
P160; and as the referee of the cockpit had declared the defendant's cock the winner in the bout, the plaintiff
brought suit against the defendant in the justice of the peace court of the said pueblo, asking that his own rooster
be declared the winner. The justice of the peace court decided that the bout was a draw. From this judgment the
defendant appealed to the Court of First Instance of the province. For the purposes of the appeal, the plaintiff
filed his complaint and prayed this court to render judgment ordering the defendant to abide by and comply with
the rules and regulations governing cockfights, to pay the stipulated wager of P160; to return the other like
amount (both sums of wager being held for safe-keeping by the cockpit owner, Tomas Almonte) and to assess the
costs of both instances against the defendant.
The defendant denied each and all of the allegations of the complaint and moved to dismiss with the costs against
the plaintiff. On September 11, 1913, the said Court of First Instance rendered judgment dismissing the appeal
without special finding as to costs. The defendant excepted to this judgment as well as to an order dictated by the
same court on November 8th of the same year, on the plaintiff's motion, ordering the provincial treasurer of
Albay and, if necessary, the municipal treasurer of Tabaco of the same province, to release the deposit of P160 and
return it to its owner, the plaintiff Chinaman, Chu Jan. These proceedings have come before us on appeal by
means of the proper bill of exceptions.
The grounds for the dismissal pronounced by the lower court in the judgment appealed from ere that the court
has always dismissed cases of this nature, that he is not familiar with the rules governing cockfights and the
duties of referees thereof; that he does not know where to find the law on the subject and, finally, that he knows
of no law whatever that governs the rights to the plaintiff and the defendant in questions concerning cockfights.
The ignorance of the court or his lack of knowledge regarding the law applicable to a case submitted to him for
decision, the fact that the court does not know the rules applicable to a certain matter that is the subject of an
appeal which must be decided by him and his not knowing where to find the law relative to the case, are not
reasons that can serve to excuse the court for terminating the proceedings by dismissing them without deciding
the issues. Such an excuse is the less acceptable because, foreseeing that a case might arise to which no law would

be exactly applicable, the Civil Code, in the second paragraph of article 6, provides that the customs of the place
shall be observed, and, in the absence thereof, the general principles of law.
Therefore the judgment and the order appealed from, hereinbefore mentioned, are reversed and to record of the
proceedings shall remanded to the court from whence they came for due trial and judgment as provided by law.
No special finding is made with regard to costs. So ordered.
Arellano, C. J., Torres, Johnson, and Trent, JJ., concur.
Moreland, J., took no part.

Case#7 Floresca vs. Philex Mining Corporation, G.R. No. L-30642 (1985)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-30642 April 30, 1985
PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR
S. FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S.
FLORESCA, MELBA S. FLORESCA, JUDITH S. FLORESCA and CARMEN S. FLORESCA;
LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children
LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and
TOMAS MARTINEZ;
SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children
JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;
LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children
EDNA, GEORGE and LARRY III, all surnamed VILLAR;
DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor children
EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed LANUZA;
EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children JOSE,
LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,
vs.

PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII,
Court of First Instance of Manila, respondents.
Rodolfo C. Pacampara for petitioners.
Tito M. Villaluna for respondents.

MAKASIAR, J.:
This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, dated
December 16, 1968 dismissing petitioners' complaint for damages on the ground of lack of jurisdiction.
Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred to
as Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June 28,
1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the complaint
alleges that Philex, in violation of government rules and regulations, negligently and deliberately failed to
take the required precautions for the protection of the lives of its men working underground. Portion of the
complaint reads:
xxx xxx xxx
9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross
and reckless negligence and imprudence and deliberate failure to take the required
precautions for the due protection of the lives of its men working underground at the time,
and in utter violation of the laws and the rules and regulations duly promulgated by the
Government pursuant thereto, allowed great amount of water and mud to accumulate in
an open pit area at the mine above Block 43-S-1 which seeped through and saturated the
600 ft. column of broken ore and rock below it, thereby exerting tremendous pressure on
the working spaces at its 4300 level, with the result that, on the said date, at about 4
o'clock in the afternoon, with the collapse of all underground supports due to such
enormous pressure, approximately 500,000 cubic feet of broken ores rocks, mud and
water, accompanied by surface boulders, blasted through the tunnels and flowed out and
filled in, in a matter of approximately five (5) minutes, the underground workings, ripped
timber supports and carried off materials, machines and equipment which blocked all
avenues of exit, thereby trapping within its tunnels of all its men above referred to,
including those named in the next preceding paragraph, represented by the plaintiffs
herein;
10. That out of the 48 mine workers who were then working at defendant PHILEX's mine
on the said date, five (5) were able to escape from the terrifying holocaust; 22 were
rescued within the next 7 days; and the rest, 21 in number, including those referred to in
paragraph 7 hereinabove, were left mercilessly to their fate, notwithstanding the fact that
up to then, a great many of them were still alive, entombed in the tunnels of the mine, but
were not rescued due to defendant PHILEX's decision to abandon rescue operations, in
utter disregard of its bounden legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations duly
promulgated by the duly constituted authorities as set out by the Special Committee
above referred to, in their Report of investigation, pages 7-13, Annex 'B' hereof, but also
failed completely to provide its men working underground the necessary security for the
protection of their lives notwithstanding the fact that it had vast financial resources, it
having made, during the year 1966 alone, a total operating income of P 38,220,254.00, or
net earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the year
ended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as of
December 31, 1966;
xxx xxx xxx
(pp. 42-44, rec.)
A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen's Compensation
Act (Act 3428, as amended by RA 772) and that the former Court of First Instance has no jurisdiction over
the case. Petitioners filed an opposition dated May 27, 1968 to the said motion to dismiss claiming that
the causes of action are not based on the provisions of the Workmen's Compensation Act but on the
provisions of the Civil Code allowing the award of actual, moral and exemplary damages, particularly:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre- existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.
(b) Art. 1173The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows bad
faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.
Art. 2201. x x x x x x x x x
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted
with gross negligence.
After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968
dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen's
Compensation Commission. On petitioners' motion for reconsideration of the said order, respondent
Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed Philex

to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was opposed by
petitioners.
On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that in
accordance with the established jurisprudence, the Workmen's Compensation Commission has exclusive
original jurisdiction over damage or compensation claims for work-connected deaths or injuries of
workmen or employees, irrespective of whether or not the employer was negligent, adding that if the
employer's negligence results in work-connected deaths or injuries, the employer shall, pursuant to
Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to 50% of the
compensation fixed in the Act.
Petitioners thus filed the present petition.
In their brief, petitioners raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS'
COMPLAINT FOR LACK OF JURISDICTION.
II
THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION
BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR
COMPENSATION UNDER THE WORKMEN'S COMPENSATION ACT.
A
In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of
action since the complaint is based on the provisions of the Civil Code on damages, particularly Articles
2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen's Compensation Act. They
point out that the complaint alleges gross and brazen negligence on the part of Philex in failing to take the
necessary security for the protection of the lives of its employees working underground. They also assert
that since Philex opted to file a motion to dismiss in the court a quo, the allegations in their complaint
including those contained in the annexes are deemed admitted.
In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen's Compensation Act and the claims
for damages based on gross negligence of Philex under the Civil Code. They point out that workmen's
compensation refers to liability for compensation for loss resulting from injury, disability or death of the
working man through industrial accident or disease, without regard to the fault or negligence of the
employer, while the claim for damages under the Civil Code which petitioners pursued in the regular
court, refers to the employer's liability for reckless and wanton negligence resulting in the death of the
employees and for which the regular court has jurisdiction to adjudicate the same.
On the other hand, Philex asserts that work-connected injuries are compensable exclusively under the
provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read:

SEC. 5. Exclusive right to compensation.The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury ...
SEC. 46. Jurisdiction. The Workmen's Compensation Commissioner shall have
exclusive jurisdiction to hear and decide claims for compensation under the Workmen's
Compensation Act, subject to appeal to the Supreme Court, ...
Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all claims
of workmen against their employer for damages due to accident suffered in the course of employment
shall be investigated and adjudicated by the Workmen's Compensation Commission," subject to appeal to
the Supreme Court.
Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A of the
Act provides an additional compensation in case the employer fails to comply with the requirements of
safety as imposed by law to prevent accidents. In fact, it points out that Philex voluntarily paid the
compensation due the petitioners and all the payments have been accepted in behalf of the deceased
miners, except the heirs of Nazarito Floresca who insisted that they are entitled to a greater amount of
damages under the Civil Code.
In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara, now
President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and Assistant
General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections, formerly UP
Law Center Director Froilan Bacungan, appeared as amici curiae and thereafter, submitted their
respective memoranda.
The issue to be resolved as WE stated in the resolution of November 26, 1976, is:
Whether the action of an injured employee or worker or that of his heirs in case of his
death under the Workmen's Compensation Act is exclusive, selective or cumulative, that
is to say, whether his or his heirs' action is exclusively restricted to seeking the limited
compensation provided under the Workmen's Compensation Act or whether they have a
right of selection or choice of action between availing of the worker's right under the
Workmen's Compensation Act and suing in the regular courts under the Civil Code for
higher damages (actual, moral and/or exemplary) from the employer by virtue of
negligence (or fault) of the employer or of his other employees or whether they may avail
cumulatively of both actions, i.e., collect the limited compensation under the Workmen's
Compensation Act and sue in addition for damages in the regular courts.
There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or
worker, or the heirs in case of his death, may initiate a complaint to recover damages (not compensation
under the Workmen's Compensation Act) with the regular court on the basis of negligence of an employer
pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He submits that the remedy of an
injured employee for work-connected injury or accident is exclusive in accordance with Section 5 of the
Workmen's Compensation Act, while Atty. Bacungan's position is that the action is selective. He opines

that the heirs of the employee in case of his death have a right of choice to avail themselves of the
benefits provided under the Workmen's Compensation Act or to sue in the regular court under the Civil
Code for higher damages from the employer by virtue of negligence of the latter. Atty. Bocobo's stand is
the same as that of Atty. Bacungan and adds that once the heirs elect the remedy provided for under the
Act, they are no longer entitled to avail themselves of the remedy provided for under the Civil Code by
filing an action for higher damages in the regular court, and vice versa.
On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss on
the ground that they have amicably settled their claim with respondent Philex. In the resolution of
September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners are connected, it
appearing that there are other petitioners in this case.
WE hold that the former Court of First Instance has jurisdiction to try the case,
It should be underscored that petitioners' complaint is not for compensation based on the Workmen's
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of eight
hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of the
Workmen's Compensation Act to entitle them to compensation thereunder. In fact, no allegation appeared
in the complaint that the employees died from accident arising out of and in the course of their
employments. The complaint instead alleges gross and reckless negligence and deliberate failure on the
part of Philex to protect the lives of its workers as a consequence of which a cave-in occurred resulting in
the death of the employees working underground. Settled is the rule that in ascertaining whether or not
the cause of action is in the nature of workmen's compensation claim or a claim for damages pursuant to
the provisions of the Civil Code, the test is the averments or allegations in the complaint (Belandres vs.
Lopez Sugar Mill, Co., Inc., 97 Phil. 100).
In the present case, there exists between Philex and the deceased employees a contractual relationship.
The alleged gross and reckless negligence and deliberate failure that amount to bad faith on the part of
Philex, constitute a breach of contract for which it may be held liable for damages. The provisions of the
Civil Code on cases of breach of contract when there is fraud or bad faith, read:
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if
the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted
in good faith is able shall be those that are the natural and probable consequences of the
breach of the obligation, and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted.
In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.
Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as assessed by
the court.
The rationale in awarding compensation under the Workmen's Compensation Act differs from that in
giving damages under the Civil Code. The compensation acts are based on a theory of compensation

distinct from the existing theories of damages, payments under the acts being made as compensation
and not as damages (99 C.J.S. 53). Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is liable whether negligence exists or
not since liability is created by law. Recovery under the Act is not based on any theory of actionable
wrong on the part of the employer (99 C.J.S. 36).
In other words, under the compensation acts, the employer is liable to pay compensation benefits for loss
of income, as long as the death, sickness or injury is work-connected or work-aggravated, even if the
death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the other
hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It is the
indemnity recoverable by a person who has sustained injury either in his person, property or relative
rights, through the act or default of another (25 C.J.S. 452).
The claimant for damages under the Civil Code has the burden of proving the causal relation between the
defendant's negligence and the resulting injury as well as the damages suffered. While under the
Workmen's Compensation Act, there is a presumption in favor of the deceased or injured employee that
the death or injury is work-connected or work-aggravated; and the employer has the burden to prove
otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina
Fertilizer Corp. vs. WCC, 60 SCRA 228).
The claim of petitioners that the case is not cognizable by the Workmen's Compensation Commission
then, now Employees Compensation Commission, is strengthened by the fact that unlike in the Civil
Code, the Workmen's Compensation Act did not contain any provision for an award of actual, moral and
exemplary damages. What the Act provided was merely the right of the heirs to claim limited
compensation for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of two
hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12 and 13, Workmen's
Compensation Act), and an additional compensation of only 50% if the complaint alleges failure on the
part of the employer to "install and maintain safety appliances or to take other precautions for the
prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case at bar, the amount sought
to be recovered is over and above that which was provided under the Workmen's Compensation Act and
which cannot be granted by the Commission.
Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of his
employer but caused by factors outside the industrial plant of his employer. Under the Civil Code, the
liability of the employer, depends on breach of contract or tort. The Workmen's Compensation Act was
specifically enacted to afford protection to the employees or workmen. It is a social legislation designed to
give relief to the workman who has been the victim of an accident causing his death or ailment or injury in
the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).
WE now come to the query as to whether or not the injured employee or his heirs in case of death have a
right of selection or choice of action between availing themselves of the worker's right under the
Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages
(actual, moral and exemplary) from the employers by virtue of that negligence or fault of the employers or
whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensation
under the Workmen's Compensation Act and sue in addition for damages in the regular courts.

In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442, ruled that
an injured worker has a choice of either to recover from the employer the fixed amounts set by the
Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher
damages but he cannot pursue both courses of action simultaneously.
In Pacaa WE said:
In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section
6 of the Workmen's Compensation Act on the injured workers' right to sue third- party
tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking for the Court,
pointed out that the injured worker has the choice of remedies but cannot pursue both
courses of action simultaneously and thus balanced the relative advantage of recourse
under the Workmen's Compensation Act as against an ordinary action.
As applied to this case, petitioner Esguerra cannot maintain his action for damages
against the respondents (defendants below), because he has elected to seek
compensation under the Workmen's Compensation Law, and his claim (case No. 44549
of the Compensation Commission) was being processed at the time he filed this action in
the Court of First Instance. It is argued for petitioner that as the damages recoverable
under the Civil Code are much more extensive than the amounts that may be awarded
under the Workmen's Compensation Act, they should not be deemed incompatible. As
already indicated, the injured laborer was initially free to choose either to recover from the
employer the fixed amounts set by the Compensation Law or else, to prosecute an
ordinary civil action against the tortfeasor for higher damages. While perhaps not as
profitable, the smaller indemnity obtainable by the first course is balanced by the
claimant's being relieved of the burden of proving the causal connection between the
defendant's negligence and the resulting injury, and of having to establish the extent of
the damage suffered; issues that are apt to be troublesome to establish satisfactorily.
Having staked his fortunes on a particular remedy, petitioner is precluded from pursuing
the alternate course, at least until the prior claim is rejected by the Compensation
Commission. Anyway, under the proviso of Section 6 aforequoted, if the employer
Franklin Baker Company recovers, by derivative action against the alleged tortfeasors, a
sum greater than the compensation he may have paid the herein petitioner, the excess
accrues to the latter.
Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party
tortfeasor, said rule should likewise apply to the employer-tortfeasor.
Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by Philex
and the said heirs.
With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968
before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr.,
Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation to
the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of
August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments (pp.
106-107, rec.). Such allegation was admitted by herein petitioners in their opposition to the motion to

dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but they set up the defense that the
claims were filed under the Workmen's Compensation Act before they learned of the official report of the
committee created to investigate the accident which established the criminal negligence and violation of
law by Philex, and which report was forwarded by the Director of Mines to the then Executive Secretary
Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).
WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular court because
they became cognizant of the fact that Philex has been remiss in its contractual obligations with the
deceased miners only after receiving compensation under the Act. Had petitioners been aware of said
violation of government rules and regulations by Philex, and of its negligence, they would not have sought
redress under the Workmen's Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies
the choice as it was not an intelligent choice. The case should therefore be remanded to the lower court
for further proceedings. However, should the petitioners be successful in their bid before the lower court,
the payments made under the Workmen's Compensation Act should be deducted from the damages that
may be decreed in their favor.
B
Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. The
Court merely applies and gives effect to the constitutional guarantees of social justice then secured by
Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7, and
9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution,
as amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the
New Civil Code of 1950.
To emphasize, the 1935 Constitution declares that:
Sec. 5. The promotion of social justice to insure the well-being and economic security of
all the people should be the concern of the State (Art. II).
Sec. 6. The State shall afford protection to labor, especially to working women, and
minors, and shall regulate the relations between landowner and tenant, and between
labor and capital in industry and in agriculture. The State may provide for compulsory
arbitration (Art. XIV).
The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity,
welfare, and security of all the people "... regulate the use ... and disposition of private property and
equitably diffuse property ownership and profits "establish, maintain and ensure adequate social services
in, the field of education, health, housing, employment, welfare and social security to guarantee the
enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II, 1973 Constitution);
"... afford protection to labor, ... and regulate the relations between workers and employers ..., and assure
the rights of workers to ... just and humane conditions of work"(Sec. 9, Art. II, 1973 Constitution, emphasis
supplied).
The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the
1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:

Art. 3. Declaration of basic policy.The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed,
and regulate the relations between workers and employers. The State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure, and just
and humane conditions of work. (emphasis supplied).
The aforestated constitutional principles as implemented by the aforementioned articles of the New Civil
Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor Code.
Section 5 of the Workmen's Compensation Act (before it was amended by R.A. No. 772 on June 20,
1952), predecessor of Article 173 of the New Labor Code, has been superseded by the aforestated
provisions of the New Civil Code, a subsequent law, which took effect on August 30, 1950, which obey the
constitutional mandates of social justice enhancing as they do the rights of the workers as against their
employers. Article 173 of the New Labor Code seems to diminish the rights of the workers and therefore
collides with the social justice guarantee of the Constitution and the liberal provisions of the New Civil
Code.
The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are
statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the
case of West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated:
The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes
of political controversy, to place them beyond the reach of majorities and officials and to
establish them as legal principles to be applied by the courts. One's right to life, liberty,
and property, to free speech, a free press, freedom of worship and assembly, and other
fundamental rights may not be submitted to vote; they depend on the outcome of no
elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied).
In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New
Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and
employees.
Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended,
promulgated on May 1, 1974, but which took effect six months thereafter, provides that "all doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor" (Art. 2, Labor Code).
Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it is
presumed that the law-making body intended right and justice to prevail. "
More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer."
Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen's
Compensation Act provided:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,

dependents or nearest of kin against the employer under the Civil Code and other laws,
because of said injury (emphasis supplied).
Employers contracting laborecsrs in the Philippine Islands for work outside the same may
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment; and all service contracts made
in the manner prescribed in this section shall be presumed to include such agreement.
Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was amended by
Commonwealth Act No. 772 on June 20, 1952, thus:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws,
because of said injury.
Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply to injuries
received outside the Island through accidents happening in and during the performance
of the duties of the employment. Such stipulation shall not prejudice the right of the
laborers to the benefits of the Workmen's Compensation Law of the place where the
accident occurs, should such law be more favorable to them (As amended by section 5 of
Republic Act No. 772).
Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of
the New Civil Code, because said Article 173 provides:
Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents. The payment of compensation
under this Title shall bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as
amended, Commonwealth Act Numbered One hundred eighty- six, as amended,
Commonwealth Act Numbered Six hundred ten, as amended, Republic Act Numbered
Forty-eight hundred Sixty-four, as amended, and other laws whose benefits are
administered by the System during the period of such payment for the same disability or
death, and conversely (emphasis supplied).
As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the Revised
Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended,
R.A. No. 4864, as amended, and all other laws whose benefits are administered by the System (referring
to the GSIS or SSS).
Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor Code
does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is not
barred by Article 173 of the New Labor Code. And the damages recoverable under the New Civil Code
are not administered by the System provided for by the New Labor Code, which defines the "System" as
referring to the Government Service Insurance System or the Social Security System (Art. 167 [c], [d] and
[e] of the New Labor Code).
Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the law
of the land.
Article 8 of the New Civil Code provides:
Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.
The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:
Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or
interpreting the laws or the Constitution form part of this jurisdiction's legal system. These
decisions, although in themselves not laws, constitute evidence of what the laws mean.
The application or interpretation placed by the Court upon a law is part of the law as of
the date of the enactment of the said law since the Court's application or interpretation
merely establishes the contemporaneous legislative intent that the construed law
purports to carry into effect" (65 SCRA 270, 272-273 [1975]).
WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself
(Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).
The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it was
amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of the
deceased, ailing or injured employee to the compensation provided for therein. Said Section 5 was not
accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to recover from the
employer the fixed amount set by the Workmen's Compensation Act or to prosecute an ordinary civil
action against the tortfeasor for greater damages; but he cannot pursue both courses of action
simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil
Code as against the Workmen's Compensation Act, reiterating the 1969 ruling in the case of Valencia vs.
Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104
Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L.
Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.
Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first
paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even refer,
neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act did,
with greater reason said Article 173 must be subject to the same interpretation adopted in the cases of
Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful
to and advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions.

It should be stressed likewise that there is no similar provision on social justice in the American Federal
Constitution, nor in the various state constitutions of the American Union. Consequently, the restrictive
nature of the American decisions on the Workmen's Compensation Act cannot limit the range and
compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-vis
Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the
1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies of
Article II of the 1973 Constitution.
The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right to
life is guaranteed specifically by the due process clause of the Constitution. To relieve the employer from
liability for the death of his workers arising from his gross or wanton fault or failure to provide safety
devices for the protection of his employees or workers against the dangers which are inherent in
underground mining, is to deprive the deceased worker and his heirs of the right to recover indemnity for
the loss of the life of the worker and the consequent loss to his family without due process of law. The
dissent in effect condones and therefore encourages such gross or wanton neglect on the part of the
employer to comply with his legal obligation to provide safety measures for the protection of the life, limb
and health of his worker. Even from the moral viewpoint alone, such attitude is un-Christian.
It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented
by the provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering
obedience to the mandates of the fundamental law and the implementing legislation aforementioned.
The Court, to repeat, is not legislating in the instant case.
It is axiomatic that no ordinary statute can override a constitutional provision.
The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor Code
subvert the rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of the
Workmen's Compensation Act and Article 173 of the New Labor Code are retrogressive; because they are
a throwback to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise Wealth
of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon after the close of
the 18th century due to the Industrial Revolution that generated the machines and other mechanical
devices (beginning with Eli Whitney's cotton gin of 1793 and Robert Fulton's steamboat of 1807) for
production and transportation which are dangerous to life, limb and health. The old socio-politicaleconomic philosophy of live-and-let-live is now superdesed by the benign Christian shibboleth of live-andhelp others to live. Those who profess to be Christians should not adhere to Cain's selfish affirmation that
he is not his brother's keeper. In this our civilization, each one of us is our brother's keeper. No man is an
island. To assert otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler
(3 MN 1,150 reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era of
economic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic
reactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates man
and debases him; because the decision derisively refers to the lowly worker as "servant" and utilizes with
aristocratic arrogance "master" for "employer." It robs man of his inherent dignity and dehumanizes him.
To stress this affront to human dignity, WE only have to restate the quotation from Prisley, thus: "The mere
relation of the master and the servant never can imply an obligation on the part of the master to take more
care of the servant than he may reasonably be expected to do himself." This is the very selfish doctrine
that provoked the American Civil War which generated so much hatred and drew so much precious blood
on American plains and valleys from 1861 to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law insures
man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit
giveth life."
C
It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.
That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or court
shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. "
Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain
instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in the
law; because the mind of the legislator, like all human beings, is finite and therefore cannot envisage all
possible cases to which the law may apply Nor has the human mind the infinite capacity to anticipate all
situations.
But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American
Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply the
omissions or to clarify the ambiguities in the American Constitution and the statutes.
'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies that the
power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, Modern Library,
pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is even independent of
the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).
Many of the great expounders of the American Constitution likewise share the same view. Chief Justice
Marshall pronounced: "It is emphatically the province and duty of the Judicial department to say what the
law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice Hughes when he
said that "the Constitution is what the judge says it is (Address on May 3, 1907, quoted by President
Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronounced
that "No doubt the limits for the judge are narrower. He legislates only between gaps. He fills the open
spaces in the law. " (The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan
F. Stone, "The only limit to the judicial legislation is the restraint of the judge" (U.S. vs. Butler 297 U.S. 1
Dissenting Opinion, p. 79), which view is also entertained by Justice Frankfurter and Justice Robert
Jackson. In the rhetoric of Justice Frankfurter, "the courts breathe life, feeble or strong, into the inert
pages of the Constitution and all statute books."
It should be stressed that the liability of the employer under Section 5 of the Workmen's Compensation
Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of the
work, without any fault on the part of the employers. It is correctly termed no fault liability. Section 5 of the
Workmen's Compensation Act, as amended, or Article 173 of the New Labor Code, does not cover the
tortious liability of the employer occasioned by his fault or culpable negligence in failing to provide the
safety devices required by the law for the protection of the life, limb and health of the workers. Under
either Section 5 or Article 173, the employer remains liable to pay compensation benefits to the employee
whose death, ailment or injury is work-connected, even if the employer has faithfully and diligently
furnished all the safety measures and contrivances decreed by the law to protect the employee.

The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice
Cardozo, "the law has outgrown its primitive stage of formalism when the precise word was the sovereign
talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature of the
Judicial Process 100). Justice Cardozo warned that: "Sometimes the conservatism of judges has
threatened for an interval to rob the legislation of its efficacy. ... Precedents established in those items
exert an unhappy influence even now" (citing Pound, Common Law and Legislation 21 Harvard Law
Review 383, 387).
Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a
cautionary undertone: "that judges do and must legislate, but they can do so only interstitially they are
confined from molar to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204 1917).
And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853),
Justice Holmes pronounced:
The great ordinances of the Constitution do not establish and divide fields of black and
white. Even the more specific of them are found to terminate in a penumbra shading
gradually from one extreme to the other. x x x. When we come to the fundamental
distinctions it is still more obvious that they must be received with a certain latitude or our
government could not go on.
To make a rule of conduct applicable to an individual who but for such action would be
free from it is to legislate yet it is what the judges do whenever they determine which of
two competing principles of policy shall prevail.
xxx xxx xxx
It does not seem to need argument to show that however we may disguise it by veiling
words we do not and cannot carry out the distinction between legislative and executive
action with mathematical precision and divide the branches into waterlight compartments,
were it ever so desirable to do so, which I am far from believing that it is, or that the
Constitution requires.
True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly concede
that in certain cases judges do legislate. They criticize the assumption by the courts of such law-making
power as dangerous for it may degenerate into Judicial tyranny. They include Blackstone, Jeremy
Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf
Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal commentators, who
either deny the power of the courts to legislate in-between gaps of the law, or decry the exercise of such
power, have not pointed to examples of the exercise by the courts of such law-making authority in the
interpretation and application of the laws in specific cases that gave rise to judicial tyranny or oppression
or that such judicial legislation has not protected public interest or individual welfare, particularly the lowly
workers or the underprivileged.
On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory enactments
expanding the scope of such provisions to protect human rights. Foremost among them is the doctrine in
the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335), Escubedo vs.
Illinois (378 US 478), which guaranteed the accused under custodial investigation his rights to remain
silent and to counsel and to be informed of such rights as even as it protects him against the use of force

or intimidation to extort confession from him. These rights are not found in the American Bill of Rights.
These rights are now institutionalized in Section 20, Article IV of the 1973 Constitution. Only the peaceand-order adherents were critical of the activism of the American Supreme Court led by Chief Justice Earl
Warren.
Even the definition of Identical offenses for purposes of the double jeopardy provision was developed by
American judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice
Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have been re-stated in
Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the
1964 Revised Rules of Court. In both provisions, the second offense is the same as the first offense if the
second offense is an attempt to commit the first or frustration thereof or necessarily includes or is
necessarily included in the first offense.
The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed by
judicial decisions in the United States and in the Philippines even before people vs. Ylagan (58 Phil. 851853).
Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) as
securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of Brown vs.
Maryland Board of Education (349 US 294), holding that the equal protection clause means that the
Negroes are entitled to attend the same schools attended by the whites-equal facilities in the same
school-which was extended to public parks and public buses.
De-segregation, not segregation, is now the governing principle.
Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil.
440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working womenaccording primacy to property rights over human rights. The case of People vs. Pomar is no longer the
rule.
As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice
Holmes had been railing against the conservatism of Judges perverting the guarantee of due process to
protect property rights as against human rights or social justice for the working man. The law fixing
maximum hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in the case of
West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court upheld
the rights of workers to social justice in the form of guaranteed minimum wage for women and minors,
working hours not exceeding eight (8) daily, and maternity leave for women employees.
The power of judicial review and the principle of separation of powers as well as the rule on political
questions have been evolved and grafted into the American Constitution by judicial decisions (Marbury vs.
Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210212, 72 L. ed. 852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate
concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question as
beyond the ambit of judicial review. There is nothing in both the American and Philippine Constitutions
expressly providing that the power of the courts is limited by the principle of separation of powers and the

doctrine on political questions. There are numerous cases in Philippine jurisprudence applying the
doctrines of separation of powers and political questions and invoking American precedents.
Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in the
Supreme Court the power to review the validity or constitutionality of any legislative enactment or
executive act.
WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET
ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER
AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS
ALREADY MADE TO THEM PURSUANT TO THE WORKMEN'S COMPENSATION ACT SHALL BE
DEDUCTED. NO COSTS.
SO ORDERED.
Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur.
Concepcion, Jr., J., is on leave.
Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

A
This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for its
non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title
XVIII-Damages that:
COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH,
INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.
Compensation and damages are synonymous. In Esguerra vs. Muoz Palma, etc., et al., 104 Phil. 582,
586, Justice J.B.L. Reyes had said:
Petitioner also avers that compensation is not damages. This argument is but a play on
words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the
sense of indemnity for damages suffered, being awarded for a personal injury caused or
aggravated by or in the course of employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the
complaint involved in the instant case. That "special law", in reference to the complaint, can be no other
than the Workmen's Compensation
Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude the
exercise of the other. The petitioners had already exercised their option to come under the Workmen's
Compensation Act, and they have already received compensation payable to them under that Act. Stated
differently, the remedy under the Workmen's Compensation Act had already become a "finished
transaction".
There are two considerations why it is believed petitioners should no longer be allowed to exercise the
option to sue under the Civil Code. In the first place, the proceedings under the Workmen's Compensation
Act have already become the law in regards to" the "election of remedies", because those proceedings
had become a "finished transaction".
In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies"
makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself of
the second option. At the very least, if he wants to make a second election, in disregard of the first
election he has made, when he makes the second election he should surrender the benefits he had
obtained under the first election, This was not done in the case before the Court.
B.
'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the
exclusory provision of the Workmen's Compensation Act." I may further add:
1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.
Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of
the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the
Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2]
Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the Act
is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.
Sec. 112. Hawaii
Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment'
and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S.,
Vol. 1, p. 713.)
Compensation is not payable when injury is due to employee's willful intention to injure
himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)
When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine
Legislature worded the first paragraph of Section 5 of the Act as follows:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee
by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer
under the Civil Code and other laws, because of said injury (Paragraphing and emphasis
supplied)
In regards to the intent of the Legislature under the foregoing provision:
A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read and
considered in their natural, ordinary, commonly-accepted and most obvious significations,
according to good and approved usage and without resorting to forced or subtle
construction Courts, therefore, as a rule, cannot presume that the law-making body does
not know the meaning of words and the rules of grammar. Consequently, the grammatical
reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52
SCRA 92, 98) [Italics supplied]
3. The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment. (Italics supplied)
The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject
only to exceptions which may be provided in the Act itself.
4. It might be mentioned that, within the Act itself, provision is made for remedies other than within the Act
itself. Thus, Section 6, in part, provides:
SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer,
under this Act, or sue such other person for damages, in accordance with law; ...
(Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue his
employer under the Civil Code, the legislator could very easily have formulated the said first paragraph of
Section 5 according to the pattern of Section 6. That that was not done shows the legislative intent not to

allow any option to an employee to sue the employer under the Civil Code for injuries compensable under
the Act.
5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor to
any other law relative to the liability of the employer. After 1927, there were occasions when the legislator
had the opportunity to amend the first paragraph of Section 5 such that the remedies under the Act would
not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives continuing intent
to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the Act
itself.
(a) The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment (and all service contracts made
in the manner prescribed in this section be presumed to include such agreement).
On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination of
the underlined words in parentheses, and the addition of this sentence at the end of the paragraph:
Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such law
be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if he
had so desired, the legislator could have amended the first paragraph of Section 5 so that the employee
would have the option to sue the employer under the Act, or under the Civil Code, should the latter be
more favorable to him.
(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).
In time, it must have been thought that it was inequitable to have the amount of compensation, caused by
negligence on the part of the employer, to be the same amount payable when the employer was not
negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June 20, 1952, through RA
772. Said Section 4-A increased the compensation payable by 50% in case there was negligence on the
part of the employer. That additional section evidenced the intent of the legislator not to give an option to
an employee, injured with negligence on the part of the employer, to sue the latter under the provisions of
the Civil Code.
On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given
the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the
Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is
unjustifiably legislating.
It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.
GUTIERREZ, JR., J., dissenting:
To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's Compensation
Act but a departure from the principles evolved in the long history of workmen's compensation. At the very
least, it should be the legislature and not this Court which should remove the exclusory provision of the
Workmen's Compensation Act, a provision reiterated in the present Labor Code on employees'
compensation.
Workmen's compensation evolved to remedy the evils associated with the situation in the early years of
the industrial revolution when injured workingmen had to rely on damage suits to get recompense.
Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit
that his employer was either negligent or in bad faith, that his injury was caused by the employer and not
a fellow worker, and that he was not guilty of contributory negligence. The employer could employ not
only his wealth in defeating the claim for damages but a host of common law defenses available to him as
well. The worker was supposed to know what he entered into when he accepted employment. As stated
in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the mere
relation of the master and the servant never can imply an obligation on the part of the master to take more
care of the servant than he may reasonably be expected to do of himself." By entering into a contract of
employment, the worker was deemed to accept the risks of employment that he should discover and
guard against himself.
The problems associated with the application of the fellow servant rule, the assumption of risk doctrine,
the principle of contributory negligence, and the many other defenses so easily raised in protracted
damage suits illustrated the need for a system whereby workers had only to prove the fact of covered
employment and the fact of injury arising from employment in order to be compensated.
The need for a compensation scheme where liability is created solely by statute and made compulsory
and where the element of fault-either the fault of the employer or the fault of the employee-disregarded
became obvious. Another objective was to have simplified, expeditious, inexpensive, and non-litigious
procedures so that victims of industrial accidents could more readily, if not automatically, receive
compensation for work-related injuries.
Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a major
step in the desired direction. However, employers liability legislation proved inadequate. Legislative
reform led to the workmen's compensation.
I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the right
to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only disregards the
element of fault but it is also a pre- determined amount based on the wages of the injured worker and in
certain cases, the actual cost of rehabilitation. The worker does not receive the total damages for his pain

and suffering which he could otherwise claim in a civil suit. The employer is required to act swiftly on
compensation claims. An administrative agency supervises the program. And because the overwhelming
mass of workingmen are benefited by the compensation system, individual workers who may want to sue
for big amounts of damages must yield to the interests of their entire working class.
The nature of the compensation principle is explained as follows:
An appreciation of the nature of the compensation principle is essential to an
understanding of the acts and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both the
avoidable and unavoidable variety had become enormous, and government was faced
with the problem of who was to pay for the human wreckage wrought by the dangers of
modern industry. If the accident was avoidable and could be attributed to the
carelessness of the employer, existing tort principles offered some measure of redress.
Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the
finger of blame had been pointed officially at the employer or his agents. In most cases
both the facts and the law were uncertain. The witnesses, who were usually fellow
workers of the victim, were torn between friendship or loyalty to their class, on the one
hand, and fear of reprisal by the employer, on the other. The expense and delay of
litigation often prompted the injured employee to accept a compromise settlement for a
fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus
the employer against whom judgment was cast often paid a substantial damage bill, while
only a part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.
xxx xxx xxx
Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services- should
ultimately bear the cost of the injuries or deaths that are incident to the manufacture,
preparation and distribution of the product. ...
xxx xxx xxx
Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among the
ultimate consumers. So long as each competing unit in a given industry is uniformly
affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.
In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be fixed

at a figure that will not disrupt too violently the traffic in the product of the industry
affected. Thus predictability and moderateness of cost are necessary from the broad
economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important respects:
Fault on the part of either employer or employee is eliminated; and compensation
payable according to a definitely limited schedule is substituted for damages. All
compensation acts alike work these two major changes, irrespective of how they may
differ in other particulars.
Compensation, when regarded from the viewpoint of employer and employee represents
a compromise in which each party surrenders certain advantages in order to gain others
which are of more importance both to him and to society. The employer gives up the
immunity he otherwise would enjoy in cases where he is not at fault, and the employee
surrenders his former right to full damages and accepts instead a more modest claim for
bare essentials, represented by compensation.
The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced greatly by
the court's reaction to the basic point of compromise established in the Act. If the court
feels that the basic compromise unduly favors the employer, it will be tempted to restore
what it regards as a proper balance by adopting an interpretation that favors the worker.
In this way, a compensation act drawn in a spirit of extreme conservatism may be
transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act
that greatly favors the laborer may be so interpreted by the courts that employers can
have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this."
(Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65).
The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many other
interrelated parts have all been carefully studied before the integrated scheme was enacted in to law. We
have a system whose parts must mesh harmonious with one another if it is to succeed. The basic theory
has to be followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the
system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive employment
compensation, can still elect to file damage suits for industrial accidents. It was precisely for this reason
that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude

all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury. ...
Article 173 of the labor Code also provides:
ART. 173. Exclusivenesss of liability.Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the
employer to the employee his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents.
I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public
hearings. If employers already required to contribute to the State Insurance Fund will still have to bear the
cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue before
us is more far reaching than the interests of the poor victims and their families. All workers covered by
workmen's compensation and all employers who employ covered employees are affected. Even as I have
deepest sympathies for the victims, I regret that I am constrained to dissent from the majority opinion.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

A
This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for its
non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title
XVIII-Damages that:
COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH,
INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.
Compensation and damages are synonymous. In Esguerra vs. Muoz Palma, etc., et al., 104 Phil. 582,
586, Justice J.B.L. Reyes had said:
Petitioner also avers that compensation is not damages. This argument is but a play on
words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the
sense of indemnity for damages suffered, being awarded for a personal injury caused or
aggravated by or in the course of employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the
complaint involved in the instant case. That "special law", in reference to the complaint, can be no other
than the Workmen's Compensation
Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude the
exercise of the other. The petitioners had already exercised their option to come under the Workmen's
Compensation Act, and they have already received compensation payable to them under that Act. Stated
differently, the remedy under the Workmen's Compensation Act had already become a "finished
transaction".
There are two considerations why it is believed petitioners should no longer be allowed to exercise the
option to sue under the Civil Code. In the first place, the proceedings under the Workmen's Compensation
Act have already become the law in regards to" the "election of remedies", because those proceedings
had become a "finished transaction".
In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies"
makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself of
the second option. At the very least, if he wants to make a second election, in disregard of the first
election he has made, when he makes the second election he should surrender the benefits he had
obtained under the first election, This was not done in the case before the Court.
B.
'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the
exclusory provision of the Workmen's Compensation Act." I may further add:
1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.
Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of
the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the
Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2]
Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the Act
is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.
Sec. 112. Hawaii
Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment'
and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S.,
Vol. 1, p. 713.)
Compensation is not payable when injury is due to employee's willful intention to injure
himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)
When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine
Legislature worded the first paragraph of Section 5 of the Act as follows:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee
by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer
under the Civil Code and other laws, because of said injury (Paragraphing and emphasis
supplied)
In regards to the intent of the Legislature under the foregoing provision:
A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read and
considered in their natural, ordinary, commonly-accepted and most obvious significations,
according to good and approved usage and without resorting to forced or subtle
construction Courts, therefore, as a rule, cannot presume that the law-making body does
not know the meaning of words and the rules of grammar. Consequently, the grammatical
reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52
SCRA 92, 98) [Italics supplied]
3. The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment. (Italics supplied)
The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject
only to exceptions which may be provided in the Act itself.
4. It might be mentioned that, within the Act itself, provision is made for remedies other than within the Act
itself. Thus, Section 6, in part, provides:
SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer,
under this Act, or sue such other person for damages, in accordance with law; ...
(Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue his
employer under the Civil Code, the legislator could very easily have formulated the said first paragraph of
Section 5 according to the pattern of Section 6. That that was not done shows the legislative intent not to

allow any option to an employee to sue the employer under the Civil Code for injuries compensable under
the Act.
5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor to
any other law relative to the liability of the employer. After 1927, there were occasions when the legislator
had the opportunity to amend the first paragraph of Section 5 such that the remedies under the Act would
not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives continuing intent
to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the Act
itself.
(a) The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment (and all service contracts made
in the manner prescribed in this section be presumed to include such agreement).
On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination of
the underlined words in parentheses, and the addition of this sentence at the end of the paragraph:
Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such law
be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if he
had so desired, the legislator could have amended the first paragraph of Section 5 so that the employee
would have the option to sue the employer under the Act, or under the Civil Code, should the latter be
more favorable to him.
(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).
In time, it must have been thought that it was inequitable to have the amount of compensation, caused by
negligence on the part of the employer, to be the same amount payable when the employer was not
negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June 20, 1952, through RA
772. Said Section 4-A increased the compensation payable by 50% in case there was negligence on the
part of the employer. That additional section evidenced the intent of the legislator not to give an option to
an employee, injured with negligence on the part of the employer, to sue the latter under the provisions of
the Civil Code.
On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given
the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the
Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is
unjustifiably legislating.
It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.
GUTIERREZ, JR., J., dissenting:
To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's Compensation
Act but a departure from the principles evolved in the long history of workmen's compensation. At the very
least, it should be the legislature and not this Court which should remove the exclusory provision of the
Workmen's Compensation Act, a provision reiterated in the present Labor Code on employees'
compensation.
Workmen's compensation evolved to remedy the evils associated with the situation in the early years of
the industrial revolution when injured workingmen had to rely on damage suits to get recompense.
Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit
that his employer was either negligent or in bad faith, that his injury was caused by the employer and not
a fellow worker, and that he was not guilty of contributory negligence. The employer could employ not
only his wealth in defeating the claim for damages but a host of common law defenses available to him as
well. The worker was supposed to know what he entered into when he accepted employment. As stated
in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the mere
relation of the master and the servant never can imply an obligation on the part of the master to take more
care of the servant than he may reasonably be expected to do of himself." By entering into a contract of
employment, the worker was deemed to accept the risks of employment that he should discover and
guard against himself.
The problems associated with the application of the fellow servant rule, the assumption of risk doctrine,
the principle of contributory negligence, and the many other defenses so easily raised in protracted
damage suits illustrated the need for a system whereby workers had only to prove the fact of covered
employment and the fact of injury arising from employment in order to be compensated.
The need for a compensation scheme where liability is created solely by statute and made compulsory
and where the element of fault-either the fault of the employer or the fault of the employee-disregarded
became obvious. Another objective was to have simplified, expeditious, inexpensive, and non-litigious
procedures so that victims of industrial accidents could more readily, if not automatically, receive
compensation for work-related injuries.
Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a major
step in the desired direction. However, employers liability legislation proved inadequate. Legislative
reform led to the workmen's compensation.
I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the right
to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only disregards the
element of fault but it is also a pre- determined amount based on the wages of the injured worker and in
certain cases, the actual cost of rehabilitation. The worker does not receive the total damages for his pain

and suffering which he could otherwise claim in a civil suit. The employer is required to act swiftly on
compensation claims. An administrative agency supervises the program. And because the overwhelming
mass of workingmen are benefited by the compensation system, individual workers who may want to sue
for big amounts of damages must yield to the interests of their entire working class.
The nature of the compensation principle is explained as follows:
An appreciation of the nature of the compensation principle is essential to an
understanding of the acts and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both the
avoidable and unavoidable variety had become enormous, and government was faced
with the problem of who was to pay for the human wreckage wrought by the dangers of
modern industry. If the accident was avoidable and could be attributed to the
carelessness of the employer, existing tort principles offered some measure of redress.
Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the
finger of blame had been pointed officially at the employer or his agents. In most cases
both the facts and the law were uncertain. The witnesses, who were usually fellow
workers of the victim, were torn between friendship or loyalty to their class, on the one
hand, and fear of reprisal by the employer, on the other. The expense and delay of
litigation often prompted the injured employee to accept a compromise settlement for a
fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus
the employer against whom judgment was cast often paid a substantial damage bill, while
only a part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.
xxx xxx xxx
Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services- should
ultimately bear the cost of the injuries or deaths that are incident to the manufacture,
preparation and distribution of the product. ...
xxx xxx xxx
Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among the
ultimate consumers. So long as each competing unit in a given industry is uniformly
affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.
In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be fixed

at a figure that will not disrupt too violently the traffic in the product of the industry
affected. Thus predictability and moderateness of cost are necessary from the broad
economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important respects:
Fault on the part of either employer or employee is eliminated; and compensation
payable according to a definitely limited schedule is substituted for damages. All
compensation acts alike work these two major changes, irrespective of how they may
differ in other particulars.
Compensation, when regarded from the viewpoint of employer and employee represents
a compromise in which each party surrenders certain advantages in order to gain others
which are of more importance both to him and to society. The employer gives up the
immunity he otherwise would enjoy in cases where he is not at fault, and the employee
surrenders his former right to full damages and accepts instead a more modest claim for
bare essentials, represented by compensation.
The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced greatly by
the court's reaction to the basic point of compromise established in the Act. If the court
feels that the basic compromise unduly favors the employer, it will be tempted to restore
what it regards as a proper balance by adopting an interpretation that favors the worker.
In this way, a compensation act drawn in a spirit of extreme conservatism may be
transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act
that greatly favors the laborer may be so interpreted by the courts that employers can
have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this."
(Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65).
The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many other
interrelated parts have all been carefully studied before the integrated scheme was enacted in to law. We
have a system whose parts must mesh harmonious with one another if it is to succeed. The basic theory
has to be followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the
system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive employment
compensation, can still elect to file damage suits for industrial accidents. It was precisely for this reason
that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude

all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury. ...
Article 173 of the labor Code also provides:
ART. 173. Exclusivenesss of liability.Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the
employer to the employee his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents.
I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public
hearings. If employers already required to contribute to the State Insurance Fund will still have to bear the
cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue before
us is more far reaching than the interests of the poor victims and their families. All workers covered by
workmen's compensation and all employers who employ covered employees are affected. Even as I have
deepest sympathies for the victims, I regret that I am constrained to dissent from the majority opinion.

Footnotes
1 SEC. 4-A. Right to additional compensation.- In case of the employee's death, injury or
sickness due to the failure of the to comply with any law, or with any order, rule or
regulation of the Workmen's Compensation Commission or the Bureau of Labor
Standards or should the employer violate the provisions of Republic Act Numbered Six
hundred seventy-nine and its amendments or fail to install and maintain safety
appliances, or take other precautions for the prevention of accidents or occupational
disease, he shall be liable to pay an additional compensation equal to fifty per centum of
the compensation fixed in this Act.