1

ARIS (PHIL.) INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
FELIPE GARDUQUE III, LEODEGARIO DE GUZMAN, LILIA PEREZ,
ROBERTO BESTAMONTE, AIDA OPENA, REYNALDO TORIADO,
APOLINARIO GAGAHINA, RUFINO DE CASTRO, FLORDELIZA
RAYOS DEL SOL, STEVE SANCHO, ESTER CAIRO, MARIETA
MAGALAD, and MARY B. NADALA, respondents.
Cesar C. Cruz & Partners for petitioner.
Zosimo Morillo for respondent Rayos del Sol.
Banzuela, Flores, Miralles, Raneses, Sy & Associates for private
respondents.

Page

1.

immediately be executory even pending appeal. The employee

shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation, or, at the
option of the employer, merely be reinstated in the payroll.
The posting of a bond by the employer shall not stay the
execution for reinstatement.
xxx xxx xxx
Section 17. Transitory provision. Appeals filed on or after
March 21, 1989, but prior to the effectivity of these Interim Rules
must conform to the requirements as herein set forth or as may
be directed by the Commission.

The antecedent facts and proceedings which gave rise to this petition are
not disputed:
DAVIDE, JR., J.:p
Petitioner assails the constitutionality of the amendment introduced by
Section 12 of Republic Act No. 6715 to Article 223 of the Labor Code of the
Philippines (PD No. 442, as amended) allowing execution pending appeal of
the reinstatement aspect of a decision of a labor arbiter reinstating a
dismissed or separated employee and of Section 2 of the NLRC Interim
Rules on Appeals under R.A. No. 6715 implementing the same. It also
questions the validity of the Transitory Provision (Section 17) of the said
Interim Rules.
The challenged portion of Section 12 of Republic Act No. 6715, which took
effect on 21 March 1989, reads as follows:
SEC 12. Article 223 of the same code is amended to read as
follows:
ART. 223. Appeal.
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, in so far as the reinstatement
aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement provided therein.
This is a new paragraph ingrafted into the Article.
Sections 2 and 17 of the "NLRC Interim Rules On Appeals Under R.A. No.
6715, Amending the Labor Code", which the National Labor Relations
Commission (NLRC) promulgated on 8 August 1989, provide as follows:
Section 2. Order of Reinstatement and Effect of Bond. In so far
as the reinstatement aspect is concerned, the decision of the
Labor Arbiter reinstating a dismissed or separated employee shall

On 11 April 1988, private respondents, who were employees of petitioner,

aggrieved by management's failure to attend to their complaints concerning
their working surroundings which had become detrimental and hazardous,
requested for a grievance conference. As none was arranged, and believing
that their appeal would be fruitless, they grouped together after the end of
their work that day with other employees and marched directly to the
management's office to protest its long silence and inaction on their
complaints.
On 12 April 1988, the management issued a memorandum to each of the
private respondents, who were identified by the petitioner's supervisors as
the most active participants in the rally requiring them to explain why they
should not be terminated from the service for their conduct. Despite their
explanation, private respondents were dismissed for violation of company
rules and regulations, more specifically of the provisions on security and
public order and on inciting or participating in illegal strikes or concerted
actions.
Private respondents lost no time in filing a complaint for illegal dismissal
against petitioner and Mr. Gavino Bayan with the regional office of the
NLRC at the National Capital Region, Manila, which was docketed therein
as NLRC-NCR-00-0401630-88.
After due trial, Labor Arbiter Felipe Garduque III handed down on 22 June
1989 a decision' the dispositive portion of which reads:
ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered
to reinstate within ten (10) days from receipt hereof, herein
complainants Leodegario de Guzman, Rufino de Castro, Lilia M.
Perez, Marieta Magalad, Flordeliza Rayos del Sol, Reynaldo
Toriado, Roberto Besmonte, Apolinario Gagahina, Aidam (sic)
Opena, Steve C. Sancho Ester Cairo, and Mary B. Nadala to their
former respective positions or any substantial equivalent
positions if already filled up, without loss of seniority right and
privileges but with limited backwages of six (6) months except
complainant Leodegario de Guzman.
All other claims and prayers are hereby denied for lack of merit.
SO ORDERED.

On 21 July 1989, petitioner filed its Appeal. 3

On 26 July 1989, the complainants, except Flor Rayos del Sol, filed a Partial
Appeal. 4
On 10 August 1989, complainant Flor Rayos del Sol filed a Partial Appeal. 5
6

On 29 August 1989, petitioner filed an Opposition to the motion for

execution alleging that Section 12 of R.A. No. 6715 on execution pending
appeal cannot be applied retroactively to cases pending at the time of its
effectivity because it does not expressly provide that it shall be given
retroactive effect 7 and to give retroactive effect to Section 12 thereof to
pending cases would not only result in the imposition of an additional
obligation on petitioner but would also dilute its right to appeal since it would
be burdened with the consequences of reinstatement without the benefit of
a final judgment. In their Reply 8 filed on 1 September 1989, complainants
argued that R.A. No. 6715 is not sought to be given retroactive effect in this
case since the decision to be executed pursuant to it was rendered after the
effectivity of the Act. The said law took effect on 21 March 1989, while the
decision was rendered on 22 June 1989.
Petitioner submitted a Rejoinder to the Reply on 5 September 1989. 9
On 5 October 1989, the Labor Arbiter issued an Order granting the motion
for execution and the issuance of a partial writ of execution 10 as far as
reinstatement of herein complainants is concerned in consonance with the
provision of Section 2 of the rules particularly the last sentence thereof.
In this Order, the Labor Arbiter also made reference to Section 17 of the
NLRC Interim Rules in this wise:
Since Section 17 of the said rules made mention of appeals filed
on or after March 21, 1989, but prior to the effectivity of these
interim rules which must conform with the requirements as
therein set forth (Section 9) or as may be directed by the
Commission, it obviously treats of decisions of Labor Arbiters
before March 21,1989. With more reason these interim rules be
made to apply to the instant case since the decision hereof (sic)
was rendered thereafter. 11
Unable to accept the above Order, petitioner filed the instant petition on 26
October 1989 12 raising the issues adverted to in the introductory portion of
this decision under the following assignment of errors:
A. THE LABOR ARBITER A QUO AND THE NLRC, IN
ORDERING THE REINSTATEMENT OF THE PRIVATE
RESPONDENTS PENDING APPEAL AND IN PROVIDING FOR
SECTION 2 OF THE INTERIM RULES, RESPECTIVELY, ACTED
WITHOUT AND IN EXCESS OF JURISDICTION SINCE THE
BASIS FOR SAID ORDER AND INTERIM RULE, i.e., SECTION
12 OF R.A. 6715 IS VIOLATIVE OF THE CONSTITUTIONAL
GUARANTY OF DUE PROCESS IT BEING OPPRESSIVE AND
UNREASONABLE.

Page

On 19 July 1989, complainants (herein private respondents) filed a Motion

For Issuance of a Writ of Execution 2pursuant to the above-quoted Section
12 of R.A. No. 6715.

B. GRANTING ARGUENDO THAT THE PROVISION IN(SIC)

REINSTATEMENT
PENDING
APPEAL
IS
VALID,
NONETHELESS, THE LABOR ARBITER A QUO AND THE
NLRC STILL ACTED IN EXCESS AND WITHOUT
JURISDICTION IN RETROACTIVELY APPLYING SAID
PROVISION TO PENDING LABOR CASES.

In Our resolution of 7 March 1989, We required the respondents to

comment on the petition.
Respondent NLRC, through the Office of the Solicitor General, filed its
Comment on 20 November 1989. 13Meeting squarely the issues raised by
petitioner, it submits that the provision concerning the mandatory and
automatic reinstatement of an employee whose dismissal is found
unjustified by the labor arbiter is a valid exercise of the police power of the
state and the contested provision "is then a police legislation."
As regards the retroactive application thereof, it maintains that being merely
procedural in nature, it can apply to cases pending at the time of its
effectivity on the theory that no one can claim a vested right in a rule of
procedure. Moreover, such a law is compatible with the constitutional
provision on protection to labor.
On
11
December
1989,
private
respondents
Manifestation 14 informing the Court that they are adopting the
filed by the Solicitor General and stressing that petitioner failed
with the requisites for a valid petition for certiorari under Rule
Rules of Court.

filed
a
Comment
to comply
65 of the

On 20 December 1989, petitioner filed a Rejoinder 15 to the Comment of the

Solicitor General.
In the resolution of 11 January 1990, 16 We considered the Comments as
respondents' Answers, gave due course to the petition, and directed that the
case be calendared for deliberation.
In urging Us to declare as unconstitutional that portion of Section 223 of the
Labor Code introduced by Section 12 of R.A. No. 6715, as well as the
implementing provision covered by Section 2 of the NLRC Interim Rules,
allowing immediate execution, even pending appeal, of the reinstatement
aspect of a decision of a labor arbiter reinstating a dismissed or separated
employee, petitioner submits that said portion violates the due process
clause of the Constitution in that it is oppressive and unreasonable. It
argues that a reinstatement pending appeal negates the right of the
employer to self-protection for it has been ruled that an employer cannot be
compelled to continue in employment an employee guilty of acts inimical to
the interest of the employer; the right of an employer to dismiss is consistent
with the legal truism that the law, in protecting the rights of the laborer,
authorizes neither the oppression nor the destruction of the employer. For,
social justice should be implemented not through mistaken sympathy for or
misplaced antipathy against any group, but even-handedly and fairly. 17

resources reform, urban land reform and housing, health, working women,
and people's organizations and reaches out to the underprivileged sector of
society, for which reason the President of the Constitutional Commission of
1986, former Associate Justice of this Court Cecilia Muoz-Palma, aptly
describes this Article as the "heart of the new Charter." 21

These rationalizations and portrayals are misplaced and are purely

conjectural which, unfortunately, proceed from a misunderstanding of the
nature and scope of the relief of execution pending appeal.
Execution pending appeal is interlinked with the right to appeal. One cannot
be divorced from the other. The latter may be availed of by the losing party
or a party who is not satisfied with a judgment, while the former may be
applied for by the prevailing party during the pendency of the appeal. The
right to appeal, however, is not a constitutional, natural or inherent right. It is
a statutory privilege of statutory origin 18 and, therefore, available only if
granted or provided by statute. The law may then validly provide limitations
or qualifications thereto or relief to the prevailing party in the event an
appeal is interposed by the losing party. Execution pending appeal is one
such relief long recognized in this jurisdiction. The Revised Rules of Court
allows execution pending appeal and the grant thereof is left to the
discretion of the court upon good reasons to be stated in a special order. 19
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the
Labor Code already allowed execution of decisions of the NLRC pending
their appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the reinstatement aspect of a
decision of the Labor Arbiter reinstating a dismissed or separated employee,
the law itself has laid down a compassionate policy which, once more,
vivifies and enhances the provisions of the 1987 Constitution on labor and
the working-man.
These provisions are the quintessence of the aspirations of the workingman
for recognition of his role in the social and economic life of the nation, for
the protection of his rights, and the promotion of his welfare. Thus, in the
Article on Social Justice and Human Rights of the Constitution, 20 which
principally directs Congress to give highest priority to the enactment of
measures that protect and enhance the right of all people to human dignity,
reduce social, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common
good, the State is mandated to afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all; to guarantee the rights of all
workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with
law, security of tenure, human conditions of work, and a living wage, to
participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law; and to promote the principle of
shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes. Incidentally, a study of the
Constitutions of various nations readily reveals that it is only our
Constitution which devotes a separate article on Social Justice and Human
Rights. Thus, by no less than its fundamental law, the Philippines has laid
down the strong foundations of a truly just and humane society. This Article
addresses itself to specified areas of concern labor, agrarian and natural

Page

To clinch its case, petitioner tries to demonstrate the oppressiveness of

reinstatement pending appeal by portraying the following consequences: (a)
the employer would be compelled to hire additional employees or adjust the
duties of other employees simply to have someone watch over the
reinstated employee to prevent the commission of further acts prejudicial to
the employer, (b) reinstatement of an undeserving, if not undesirable,
employee may demoralize the rank and file, and (c) it may encourage and
embolden not only the reinstated employees but also other employees to
commit similar, if not graver infractions.

These duties and responsibilities of the State are imposed not so much to
express sympathy for the workingman as to forcefully and meaningfully
underscore labor as a primary social and economic force, which the
Constitution also expressly affirms With equal intensity. 22 Labor is an
indispensable partner for the nation's progress and stability.
If in ordinary civil actions execution of judgment pending appeal is
authorized for reasons the determination of which is merely left to the
discretion of the judge, We find no plausible reason to withhold it in cases of
decisions reinstating dismissed or separated employees. In such cases, the
poor employees had been deprived of their only source of livelihood, their
only means of support for their family their very lifeblood. To Us, this special
circumstance is far better than any other which a judge, in his sound
discretion, may determine. In short, with respect to decisions reinstating
employees, the law itself has determined a sufficiently overwhelming reason
for its execution pending appeal.
The validity of the questioned law is not only supported and sustained by
the foregoing considerations. As contended by the Solicitor General, it is a
valid exercise of the police power of the State. Certainly, if the right of an
employer to freely discharge his employees is subject to regulation by the
State, basically in the exercise of its permanent police power on the theory
that the preservation of the lives of the citizens is a basic duty of the State,
that is more vital than the preservation of corporate profits. 23 Then, by and
pursuant to the same power, the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or
separated employee since that saving act is designed to stop, although
temporarily since the appeal may be decided in favor of the appellant, a
continuing threat or danger to the survival or even the life of the dismissed
or separated employee and its family.
The charge then that the challenged law as well as the implementing rule
are unconstitutional is absolutely baseless. Laws are presumed
constitutional. 24 To justify nullification of a law, there must be a clear and
unequivocal breach of the Constitution, not a doubtful and argumentative
implication; a law shall not be declared invalid unless the conflict with the
constitution is clear beyond reasonable doubt. 25 In Parades, et al. vs.
Executive Secretary 26 We stated:
2. For one thing, it is in accordance with the settled doctrine that
between two possible constructions, one avoiding a finding of
unconstitutionality and the other yielding such a result, the former
is to be preferred. That which will save, not that which will
destroy, commends itself for acceptance. After all, the basic
presumption all these years is one of validity. The onerous task of
proving otherwise is on the party seeking to nullify a statute. It
must be proved by clear and convincing evidence that there is an
infringement of a constitutional provision, save in those cases
where the challenged act is void on its face. Absent such a
showing, there can be no finding of unconstitutionality. A doubt,
even if well-founded, does not suffice. Justice Malcolm's
aphorism is apropos: To doubt is to sustain. 27
The reason for this:

the Manila Mayor to immediately issue to ADC the permit/licenseto operate

the jai-alai in Manila, under Manila Ordinance No. 7065.
On 13 September 1994, petitioner Guingona (as executive secretary)
issued a directive to then chairman of the Games and Amusements Board
(GAB) Francisco R. Sumulong, jr. to hold in abeyance the grant of authority,
or if any had been issued, to withdraw such grant of authority, to Associated
Development Corporation to operate the jai-alai in the City of Manila, until
the following legal questions are properly resolved:
1. Whether P.D. 771 which revoked all existing Jai-Alai franchisers issued
by local governments as of 20 August 1975 is unconstitutional.
2. Assuming that the City of Manila had the power on 7 September 1971 to
issue a Jai-Alai franchise to Associated Development Corporation, whether
the franchise granted is valied considering that the franchise has no
duration, and appears to be granted in perpetuity.
3. Whether the City of Manila had the power to issue a Jai-Alai franchise to
Associated Development Corporation on 7 September 1971 in view of
executive Order No. 392 dated 1 January 1951 which transferred from local
governments to the Games and Amusements Board the power to regulate
Jai-Alai. 1
On 15 September 1994, respondent Associated Development Corporation
(ADC) filed a petition for prohibition,mandamus, injunction and damages
with prayer for temporary restraining order and/or writ of preliminary
injunction in the Regional Trial Court of Manila against petitioner Guingona
and then GAB chairman Sumulong, docketed as Civil Case No. 94-71656,
seeking to prevent GAB from withdrawing the provisional authority that had
earlier been granted to ADC. On the same day, the RTC of Manila, Branch
4, through presiding Judge Vetino Reyes, issued a temporary restraining
order enjoining the GAB from withdrawing ADC's provisional authority. This
temporary restraining order was converted into a writ of preliminary
injunction upon ADC's posting of a bond in the amount of P2,000,000.00. 2
Subsequently, also in G.R. No. 115044, the Republic of the Philippines,
through the Games and Amusements Board, filed a "Motion for Intervention;
for Leave to File a Motion for reconsideration in Intervention; and to Refer
the case to the Court En Banc" and later a "Motion for Leave to File
Supplemental Motion for Reconsideration-in-Intervention and to Admit
Attached Supplemental Motion for Reconsideration-in-Intervention".
In an En Banc Resolution dated 20 September 1994, this Court referred
G.R. No. 115044 to the Court En Bancand required the respondents therein
to comment on the aforementioned motions.
Meanwhile, Judge Reyes on 19 October 1994 issued another order, this
time, granting ADC a writ of preliminarymandatory injunction against
Guingona and GAB to compel them to issue in favor of ADC the authority to
operate jai-alai.
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new
GAB chairman, then filed the petition in G.R. No. 117263 assailing the
abovementioned orders of respondent Judge Vetino Reyes.
On 25 October 1994, in G.R. No. 117263, this Court granted petitioner's
motion for leave to file supplemental petition and to admit attached
supplemental petition with urgent prayer for restraining order. The Court
further required respondents to file their comment on the petition and
supplemental petition with urgent prayer for restraining order. The Court
likewise set the case and all incidents thereof for hearing on 10 November
1994.
At the hearing on 10 November 1994, the issues to be resolved were
formulated by the Court as follows:
1. whether or not intervention by the Republic of the Philippines at this stage
of the proceedings is proper;
2. assuming such intervention is proper, whether or not the Associated
Development Corporation has a valid and subsisting franchise to maintain
and operate the jai-alai;
3. whether or not there was grave abuse of discretion committed by
respondent Judge Reyes in issuing the aforementioned temporary
restraining order (later writ of preliminary injunction); and

The issue concerning Section 17 of the NLRC Interim Rules does not
deserve a measure of attention. The reference to it in the Order of the Labor
Arbiter of 5 October 1989 was unnecessary since the procedure of the
appeal proper is not involved in this case. Moreover, the questioned interim
rules of the NLRC, promulgated on 8 August 1989, can validly be given
retroactive effect. They are procedural or remedial in character, promulgated
pursuant to the authority vested upon it under Article 218(a) of the Labor
Code of the Philippines, as amended. Settled is the rule that procedural
laws may be given retroactive effect. 29 There are no vested rights in rules of
procedure. 30 A remedial statute may be made applicable to cases pending
at the time of its enactment. 31
WHEREFORE, the petition is hereby DISMISSED for lack of merit. Costs
against petitioner.
SO ORDERED.
EN BANC
2. G.R. No. 115044 January 27, 1995
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the
City of Manila, petitioners,
vs.
HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial Court
of Manila and ASSOCIATED CORPORATION, respondents.
3. G.R. No. 117263 January 27, 1995
TEOFISTO GUINGONA, JR. and DOMINADOR R. CEPEDA, petitioners,
vs.
HON. VETINO REYES and ASSOCIATED DEVELOPMENT
CORPORATION, respondents.
PADILLA, J.:
These two (2) cases which are inter-related actually involve simple issues. if
these issues have apparently become complicated, it is not by reason of
their nature because of the events and dramatis personae involved.
The petition in G.R. No. 115044 was dismissed by the First Division of this
Court on 01 September 1994 based on a finding that there was "no abuse
of discretion, much less lack of or excess of jurisdiction, on the part of
respondent judge [Pacquing]", in issuing the questioned orders. Judge
Pacquing had earlier issued in Civil Case No. 88-45660, RTC of Manila,
Branch 40, the following orders which were assailed by the Mayor of the
City of Manila, Hon. Alfredo S. Lim, in said G.R. No. 115044:
a. order dated 28 March 1994 directing Manila mayor Alfredo S. Lim to
issue the permit/license to operate the jai-alai in favor of Associated
Development Corporation (ADC).
b. order dated 11 April 1994 directing mayor Lim to explain why he should
not be cited for contempt for non-compliance with the order dated 28 March
1994.
c. order dated 20 April 1994 reiterating the previous order directing Mayor
Lim to immediately issue the permit/license to Associated Development
Corporation (ADC).
The order dated 28 march 1994 was in turn issued upon motion by ADC for
execution of a final judgment rendered on 9 September 1988 which ordered

Page

... can be traced to the doctrine of separation of powers which

enjoins on each department a proper respect for the acts of the
other departments. ... The theory is that, as the joint act of the
legislative and executive authorities, a law is supposed to have
been carefully studied and determined to be constitution before it
was finally enacted. Hence, as long as there is some other basis
that can be used by the courts for its decision, the
constitutionality of the challenged law will not be touched upon
and the case will be decided on other available grounds. 28

No. 771 as unconstitutional, since only the Court En Banc has that power
under Article VIII, Section 4(2) of the Constitution. 4
And on the question of whether or not the government is estopped from
contesting ADC's possession of a valid franchise, the well-settled rule is that
the State cannot be put in estoppel by the mistakes or errors, if any, of its
officials or agents (Republic v. Intermediate Appellate Court, 209 SCRA 90)
Consequently, in the light of the foregoing expostulation, we conclude that
the republic (in contra distinction to the City of Manila) may be allowed to
intervene in G.R. No. 115044. The Republic is intervening in G.R. No.
115044 in the exercise, not of its business or proprietary functions, but in
the exercise of its governmental functions to protect public morals and
promote the general welfare.
II
Anent the question of whether ADC has a valid franchise to operate the JaiAlai de Manila, a statement of the pertinent laws is in order.
1. The Charter of the City of Manila was enacted by Congress on 18 June
1949. Section 18 thereof provides:
Sec. 18. Legislative Powers. The Municipal Board shall have the
following legislative powers:
xxx xxx xxx
(jj) To tax, license, permit and regulate wagers or betting by the public on
boxing, sipa, bowling, billiards, pools, horse and dog races, cockpits, jaialai, roller or ice-skating on any sporting or athletic contests, as well as
grant exclusive rights to establishments for this purpose, notwithstanding
any existing law to the contrary.
2. On 1 January 1951, Executive Order No. 392 was issued transferring the
authority to regulate jai-alais from local government to the Games and
Amusements Board (GAB).
3. On 20 June 1953, Congress enacted Republic Act No. 954, entitled "An
Act to Prohibit With Horse Races and Basque Pelota Games (Jai-Alai), And
To Prescribe Penalties For Its Violation". The provisions of Republic Act No.
954 relating to jai-alai are as follows:
Sec. 4. No person, or group of persons other than the operator or
maintainer of a fronton with legislative franchise to conduct basque pelota
games (Jai-alai), shall offer, to take or arrange bets on any basque pelota
game or event, or maintain or use a totalizator or other device, method or
system to bet or gamble on any basque pelota game or event. (emphasis
supplied).
Sec. 5. No person, operator or maintainer of a fronton with legislative
franchise to conduct basque pelota games shall offer, take, or arrange bets
on any basque pelota game or event, or maintain or use a totalizator or
other device, method or system to bet or gamble on any basque pelota
game or event outside the place, enclosure, or fronton where the basque
pelota game is held. (emphasis supplied).
4. On 07 September 1971, however, the Municipal Board of Manila
nonetheless passed Ordinance No. 7065 entitled "An Ordinance Authorizing
the Mayor To Allow And Permit The Associated Development Corporation To
Establish, Maintain And Operate A Jai-Alai In The City Of Manila, Under
Certain Terms And Conditions And For Other Purposes."
5. On 20 August 1975, Presidential Decree No. 771 was issued by then
President Marcos. The decree, entitled "Revoking All Powers and Authority
of Local Government(s) To Grant Franchise, License or Permit And
Regulate Wagers Or Betting By The Public On Horse And Dog Races, JaiAlai Or Basque Pelota, And Other Forms Of Gambling", in Section 3
thereof, expressly revoked all existing franchises and permits issued by
local governments.
6. On 16 October 1975, Presidential Decree No. 810, entitled "An Act
granting The Philippine Jai-Alai And Amusement Corporation A Franchise To
Operate, Construct And Maintain A Fronton For Basque Pelota And Similar
Games of Skill In THE Greater Manila Area," was promulgated.
7 On 08 May 1987, then President Aquino, by virtue of Article XVIII, Section
6, of the Constitution, which allowed the incumbent legislative powers until
the first Congress was convened, issued Executive Order No. 169 expressly

Page

4. whether or not there was grave abuse of discretion committed by

respondent Judge Reyes in issuing the aforementioned writ of
preliminary mandatory injunction.
On the issue of the propriety of the intervention by the Republic of the
Philippines, a question was raised during the hearing on 10 November 1994
as to whether intervention in G.R. No. 115044 was the proper remedy for
the national government to take in questioning the existence of a valid ADC
franchise to operate the jai-alai or whether a separate action for quo
warranto under Section 2, Rule 66 of the Rules of Court was the proper
remedy.
We need not belabor this issue since counsel for respondent ADC agreed to
the suggestion that this Court once and for all settle all substantive issues
raised by the parties in these cases. Moreover, this Court can consider the
petition filed in G.R. No. 117263 as one for quo warranto which is within the
original jurisdiction of the Court under section 5(1), Article VIII of the
Constitution. 3
On the propriety of intervention by the Republic, however, it will be recalled
that this Court in Director of Lands v. Court of Appeals (93 SCRA 238)
allowed intervention even beyond the period prescribed in Section 2 Rule
12 of the Rules of Court. The Court ruled in said case that a denial of the
motions for intervention would "lead the Court to commit an act of injustice
to the movants, to their successor-in-interest and to all purchasers for value
and in good faith and thereby open the door to fraud, falsehood and
misrepresentation, should intervenors' claim be proven to be true."
In the present case, the resulting injustice and injury, should the national
government's allegations be proven correct, are manifest, since the latter
has squarely questioned the very existence of a valid franchise to maintain
and operate the jai-alai (which is a gambling operation) in favor of ADC. As
will be more extensively discussed later, the national government contends
that Manila Ordinance No. 7065 which purported to grant to ADC a
franchise to conduct jai-alai operations is void and ultra vires since Republic
Act No. 954, approved on 20 June 1953, or very much earlier than said
Ordinance No. 7065, the latter approved 7 September 1971, in Section 4
thereof, requires a legislative franchise, not a municipal franchise, for the
operation of jai-alai. Additionally, the national government argues that even
assuming, arguendo, that the abovementioned ordinance is valid, ADC's
franchise was nonetheless effectively revoked by Presidential decree No.
771, issued on 20 August 1975, Sec. 3 of which expressly
revoked all existing franchises and permits to operate all forms of gambling
facilities (including the jai-alai) issued by local governments.
On the other hand, ADC's position is that Ordinance No. 7065 was validly
enacted by the City of Manila pursuant to its delegated powers under it
charter, Republic Act No. 409. ADC also squarely assails the
constitutionality of PD No. 771 as violative of the equal protection and nonimpairment clauses of the Constitution. In this connection, counsel for ADC
contends that this Court should really rule on the validity of PD No. 771 to
be able to determine whether ADC continues to possess a valid franchise.
It will undoubtedly be a grave injustice to both parties in this case if this
Court were to shirk from ruling on the issue of constitutionality of PD No.
771. Such issue has, in our view, become the very lis mota in resolving the
present controversy, in view of ADC's insistence that it was granted a valid
and legal franchise by Ordinance No. 7065 to operate the jai-alai.
The time-honored doctrine is that all laws (PD No. 771 included) are
presumed valid and constitutional until or unless otherwise ruled by this
Court. Not only this; Article XVIII Section 3 of the Constitution states:
Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of
instructions and other executive issuances not inconsistent with this
Constitution shall remain operative until amended, repealed or revoked.
There is nothing on record to show or even suggest that PD No. 771 has
been repealed, altered or amended by any subsequent law or presidential
issuance (when the executive still exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of
ADC's franchise by reason of the unconstitutionality of PD No. 771 was
settled in G.R. No. 115044, for the decision of the Court's First Division in
said case, aside from not being final, cannot have the effect of nullifying PD

basically regulatory in nature. 5 The regulatory nature of these powers finds

support not only in the plain words of the enumerations under Section 28
but also in this Court's ruling inPeople v. Vera (65 Phil. 56).
In Vera, this Court declared that a law which gives the Provincial Board the
discretion to determine whether or not a law of general application (such as,
the Probation law-Act No. 4221) would or would not be operative within the
province, is unconstitutional for being an undue delegation of legislative
power.
From the ruling in Vera, it would be logical to conclude that, if ADC's
arguments were to prevail, this Court would likewise declare Section 18(jj)
of the Revised Charter of Manila unconstitutional for the power it would
delegate to the Municipal Board of Manila would give the latter the absolute
and unlimited discretion to render the penal code provisions on gambling
inapplicable or inoperative to persons or entities issued permits to operate
gambling establishments in the City of Manila.
We need not go to this extent, however, since the rule is that laws must be
presumed valid, constitutional and in harmony with other laws. Thus, the
relevant provisions of Rep. Acts Nos. 409 and 954 and Ordinance No. 7065
should be taken together and it should then be clear that the legislative
powers of the Municipal Board should be understood to be regulatory in
nature and that Republic Act No. 954 should be understood to refer
tocongressional franchises, as a necessity for the operation of jai-alai.
We need not, however, again belabor this issue further since the task at
hand which will ultimately, and with finality, decide the issues in this case is
to determine whether PD No. 771 validly revoked ADC's franchise to
operate the jai-alai, assuming (without conceding) that it indeed possessed
such franchise under Ordinance No. 7065.
ADC argues that PD No. 771 is unconstitutional for being violative of the
equal protection and non-impairment provisions of the Constitution. On the
other hand, the government contends that PD No. 771 is a valid exercise of
the inherent police power of the State.
The police power has been described as the least limitable of the inherent
powers of the State. It is based on the ancient doctrine salus populi est
suprema lex (the welfare of the people is the supreme law.) In the early
case of Rubi v. Provincial Board of Mindoro (39 Phil. 660), this Court
through Mr. Justice George A. Malcolm stated thus:
The police power of the State . . . is a power co-extensive with selfprotection, and is not inaptly termed the "law of overruling necessity." It may
be said to be that inherent and plenary power in the State which enables it
to prohibit all things hurtful to the comfort, safety and welfare of society.
Carried onward by the current of legislation, the judiciary rarely attempts to
dam the onrushing power of legislative discretion, provided the purposes of
the law do not go beyond the great principles that mean security for the
public welfare or do not arbitrarily interfere with the right of the individual.
In the matter of PD No. 771, the purpose of the law is clearly stated in the
"whereas clause" as follows:
WHEREAS, it has been reported that in spite of the current drive of our law
enforcement agencies against vices and illegal gambling, these social ills
are still prevalent in many areas of the country;
WHEREAS, there is need to consolidate all the efforts of the government to
eradicate and minimize vices and other forms of social ills in pursuance of
the social and economic development program under the new society;
WHEREAS, in order to effectively control and regulate wagers or betting by
the public on horse and dog races, jai-alai and other forms of gambling
there is a necessity to transfer the issuance of permit and/or franchise from
local government to the National Government.
It cannot be argued that the control and regulation of gambling do not
promote public morals and welfare. Gambling is essentially antagonistic and
self-reliance. It breeds indolence and erodes the value of good, honest and
hard work. It is, as very aptly stated by PD No. 771, a vice and a social ill
which government must minimize (if not eradicate) in pursuit of social and
economic development.
In Magtajas v. Pryce Properties Corporation (20 July 1994, G.R. No.
111097), this Court stated thru Mr. Justice Isagani A. Cruz:

Page

repealing PD 810 and revoking and cancelling the franchise granted to the
Philippine Jai-Alai and Amusement Corporation.
Petitioners in G.R. No. 117263 argue that Republic Act No. 954 effectively
removed the power of the Municipal Board of Manila to grant franchises for
gambling operations. It is argued that the term "legislative franchise" in Rep.
Act No. 954 is used to refer to franchises issued by Congress.
On the other hand, ADC contends that Republic Act N. 409 (Manila
Chapter) gives legislative powers to the Municipal Board to grant franchises,
and since Republic Act No. 954 does not specifically qualify the word
"legislative" as referring exclusively to Congress, then Rep. Act No. 954 did
not remove the power of the Municipal Board under Section 18(jj) of
Republic Act No. 409 and consequently it was within the power of the City of
Manila to allow ADC to operate the jai-alai in the City of Manila.
On this point, the government counter-argues that the term "legislative
powers" is used in Rep. Act No. 409 merely to distinguish the powers under
Section 18 of the law from the other powers of the Municipal Board, but that
the term "legislative franchise" in Rep. Act No. 954 refers to a franchise
granted solely by Congress.
Further, the government argues that Executive Order No. 392 dated 01
January 1951 transferred even the power to regulate Jai-Alai from the local
governments to the Games and Amusements Board (GAB), a national
government agency.
It is worthy of note that neither of the authorities relied upon by ADC to
support its alleged possession of a valid franchise, namely the Charter of
the City of Manila (Rep. Act No. 409) and Manila Ordinance No. 7065 uses
the word "franchise". Rep. Act No. 409 empowers the Municipal Board of
Manila to "tax, license, permit and regulatewagers or betting" and to "grant
exclusive rights to establishments", while Ordinance No. 7065 authorized
the Manila City Mayor to "allow and permit" ADC to operate jai-alai facilities
in the City of Manila.
It is clear from the foregoing that Congress did not delegate to the City of
Manila the power "to franchise" wagers or betting, including the jai-alai, but
retained for itself such power "to franchise". What Congress delegated to
the City of Manila in Rep. Act No. 409, with respect to wagers or betting,
was the power to "license, permit, or regulate" which therefore means that a
license or permit issued by the City of Manila to operate a wager or betting
activity, such as the jai-alai where bets are accepted, would not amount to
something meaningful UNLESS the holder of the permit or license was also
FRANCHISED by the national government to so operate. Moreover, even
this power to license, permit, or regulate wagers or betting on jai-alai was
removed from local governments, including the City of Manila, and
transferred to the GAB on 1 January 1951 by Executive Order No. 392. The
net result is that the authority to grant franchises for the operation of jai-alai
frontons is in Congress, while the regulatory function is vested in the GAB.
In relation, therefore, to the facts of this case, since ADC has no franchise
from Congress to operate the jai-alai, it may not so operate even if its has a
license or permit from the City Mayor to operate the jai-alai in the City of
Manila.
It cannot be overlooked, in this connection, that the Revised Penal Code
punishes gambling and betting under Articles 195 to 199 thereof. Gambling
is thus generally prohibited by law, unless another law is enacted
byCongress expressly exempting or excluding certain forms of gambling
from the reach of criminal law. Among these form the reach of criminal law.
Among these forms of gambling allowed by special law are the horse races
authorized by Republic Acts Nos. 309 and 983 and gambling casinos
authorized under Presidential Decree No. 1869.
While jai-alai as a sport is not illegal per se, the accepting of bets or wagers
on the results of jai-alai games is undoubtedly gambling and, therefore, a
criminal offense punishable under Articles 195-199 of the Revised Penal
Code, unless it is shown that a later or special law had been passed
allowing it. ADC has not shown any such special law.
Republic Act No. 409 (the Revised Charter of the City of Manila) which was
enacted by Congress on 18 June 1949 gave the Municipal Board
certain delegated legislative powers under Section 18. A perusal of the
powers enumerated under Section 18 shows that these powers are

As earlier noted, ADC has not alleged ever applying for a franchise under
the provisions of PD No. 771. and yet, the purpose of PD No. 771 is quite
clear from its provisions, i.e., to give to the national government the
exclusive power to grant gambling franchises. Thus, all franchises then
existing were revoked but were made subject to reissuance by the national
government upon compliance by the applicant with government-set
qualifications and requirements.
There was no violation by PD No. 771 of the equal protection clause since
the decree revoked all franchises issued by local governments without
qualification or exception. ADC cannot allege violation of the equal
protection clause simply because it was the only one affected by the
decree, for as correctly pointed out by the government, ADC was not
singled out when all jai-alai franchises were revoked. Besides, it is too late
in the day for ADC to seek redress for alleged violation of its constitutional
rights for it could have raised these issues as early as 1975, almost twenty
920) years ago.
Finally, we do not agree that Section 3 of PD No. 771 and the requirement
of a legislative franchise in Republic Act No. 954 are "riders" to the two 92)
laws and are violative of the rule that laws should embrace one subject
which shall be expressed in the title, as argued by ADC. In Cordero v.
Cabatuando (6 SCRA 418), this Court ruled that the requirement under the
constitution that all laws should embrace only one subject which shall be
expressed in the title is sufficiently met if the title is comprehensive enough
reasonably to include the general object which the statute seeks to effect,
without expressing each and every end and means necessary or convenient
for the accomplishing of the objective.
III
On the issue of whether or not there was grave abuse of discretion
committed by respondent Judge Reyes in issuing the temporary restraining
order (later converted to a writ of preliminary injunction) and the writ of
preliminary mandatory injunction, we hold and rule there was.
Section 3, Rule 58 of the rules of Court provides for the grounds for the
issuance of a preliminary injunction. While ADC could allege these grounds,
respondent judge should have taken judicial notice of Republic Act No. 954
and PD 771, under Section 1 rule 129 of the Rules of court. These laws
negate the existence of any legal right on the part of ADC to the reliefs it
sought so as to justify the issuance of a writ of preliminary injunction. since
PD No. 771 and Republic Act No. 954 are presumed valid and constitutional
until ruled otherwise by the Supreme Court after due hearing, ADC was not
entitled to the writs issued and consequently there was grave abuse of
discretion in issuing them.
WHEREFORE, for the foregoing reasons, judgment is hereby rendered:
1. allowing the Republic of the Philippines to intervene in G.R. No. 115044.
2. declaring Presidential Decree No. 771 valid and constitutional.
3. declaring that respondent Associated Development corporation (ADC)
does not possess the required congressional franchise to operate and
conduct the jai-alai under Republic Act No. 954 and Presidential Decree No.
771.
4. setting aside the writs of preliminary injunction and preliminary mandatory
injunction issued by respondent Judge Vetino Reyes in civil Case No. 9471656.
SO ORDERED.
Feliciano, Bidin, Regalado, Romero, Bellosillo and Mendoza, JJ., concur.
Narvasa, C.J. and Francisco, JJ., took no part.

Page

In the exercise of its own discretion, the legislative power may prohibit
gambling altogether or allow it without limitation or it may prohibit some
forms of gambling and allow others for whatever reasons it may consider
sufficient. Thus, it has prohibited jueteng and monte but permits lotteries,
cockfighting and horse-racing. In making such choices, Congress has
consulted its own wisdom, which this Court has no authority to review, much
less reverse. Well has it been said that courts do not sit to resolve the
merits of conflicting theories. That is the prerogative of the political
departments. It is settled that questions regarding wisdom, morality and
practicability of statutes are not addressed to the judiciary but may be
resolved only by the executive and legislative departments, to which the
function belongs in our scheme of government. (Emphasis supplied)
Talks regarding the supposed vanishing line between right and privilege in
American constitutional law has no relevance in the context of these cases
since the reference there is to economic regulations. On the other hand, jaialai is not a mere economic activity which the law seeks to regulate. It is
essentially gambling and whether it should be permitted and, if so, under
what conditions are questions primarily for the lawmaking authority to
determine, talking into account national and local interests. Here, it is the
police power of the State that is paramount.
ADC questions the motive for the issuance of PD Nos. 771. Clearly,
however, this Court cannot look into allegations that PD No. 771 was
enacted to benefit a select group which was later given authority to operate
the jai-alai under PD No. 810. The examination of legislative motivation is
generally prohibited. (Palmer v. Thompson, 403 U.S. 217, 29 L. Ed. 2d 438
[1971] per Black, J.) There is, the first place, absolute lack of evidence to
support ADC's allegation of improper motivation in the issuance of PD No.
771. In the second place, as already averred, this Court cannot go behind
the expressed and proclaimed purposes of PD No. 771, which are
reasonable and even laudable.
It should also be remembered that PD No. 771 provides that the national
government can subsequently grant franchises "upon proper application
and verification of the qualifications of the applicant." ADC has not alleged
that it filed an application for a franchise with the national government
subsequent to the enactment of PD No. 771; thus, the allegations
abovementioned (of preference to a select group) are based on conjectures,
speculations and imagined biases which do not warrant the consideration of
this Court.
On the other hand, it is noteworthy that while then president Aquino issued
Executive Order No. 169 revoking PD No. 810 (which granted a franchise to
a Marcos-crony to operate the jai-alai), she did not scrap or repeal PD No.
771 which had revoked all franchises to operate jai-alais issued by local
governments, thereby re-affirming the government policy that franchises to
operate jai-alais are for the national government (not local governments) to
consider and approve.
On the alleged violation of the non-impairment and equal protection clauses
of the Constitution, it should be remembered that a franchise is not in the
strict sense a simple contract but rather it is more importantly, a mere
privilege specially in matters which are within the government's power to
regulate and even prohibit through the exercise of the police power. Thus, a
gambling franchise is always subject to the exercise of police power for the
public welfare.
In RCPI v. NTC (150 SCRA 450), we held that:
A franchise started out as a "royal privilege or (a) branch of the King's
prerogative, subsisting in the hands of a subject." This definition was given
by Finch, adopted by Blackstone, and accepted by every authority since . . .
Today, a franchise being merely a privilege emanating from the sovereign
power of the state and owing its existence to a grant, is subject to regulation
by the state itself by virtue of its police power through its administrative
agencies.
There is a stronger reason for holding ADC's permit to be a mere privilege
because jai-alai, when played for bets, is pure and simple gambling. To
analogize a gambling franchise for the operation of a public utility, such as
public transportation company, is to trivialize the great historic origin of this
branch of royal privilege.

EN BANC
4.

[G.R. No. 149276. September 27, 2002]

Office of the City Prosecutor of Quezon City, arguing that PD 818 violates
the constitutional provisions on due process, bail and imposition of cruel,
degrading or inhuman punishment.

DECISION
CORONA, J.:

Page

JOVENCIO LIM and TERESITA LIM, petitioners, vs. THE PEOPLE OF

THE PHILIPPINES, THE REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 217, THE CITY PROSECUTOR OF
QUEZON CITY, AND WILSON CHAM, respondents.

In a resolution dated February 26, 2002, this Court granted the

petition of Jovencio Lim to post bail pursuant to Department of Justice
Circular No. 74 dated November 6, 2001 which amended the 2000 Bail
Bond Guide involving estafa under Article 315, par. 2 (d), and qualified
theft. Said Circular specifically provides as follows:

The constitutionality of PD 818, a decree which amended Article 315

of the Revised Penal Code by increasing the penalties for estafa committed
by means of bouncing checks, is being challenged in this petition for
certiorari, for being violative of the due process clause, the right to bail and
the provision against cruel, degrading or inhuman punishment enshrined
under the Constitution.

xxx xxx xxx

3) Where the amount of fraud is P32,000.00 or over in which
the imposable penalty is reclusion temporal to reclusion
perpetua,
bail
shall
be
based
on reclusion
temporal maximum, pursuant to Par. 2 (a) of the 2000 Bail
Bond Guide, multiplied by P2,000.00, plus an additional of
P2,000.00 for every P10,000.00 in excess of
P22,000.00; Provided, however, that the total amount of
bail shall not exceed P60,000.00.

The antecedents of this case, as gathered from the parties pleadings

and documentary proofs, follow.
In December 1991, petitioner spouses issued to private respondent
two postdated checks, namely, Metrobank check no. 464728 dated January
15, 1992 in the amount of P365,750 and Metrobank check no. 464743
dated January 22, 1992 in the amount of P429,000. Check no. 464728 was
dishonored upon presentment for having been drawn against insufficient
funds while check no. 464743 was not presented for payment upon request
of petitioners who promised to replace the dishonored check.
When petitioners reneged on their promise to cover the amount of
check no. 464728, the private respondent filed a complaint-affidavit before
the Office of the City Prosecutor of Quezon City charging petitioner spouses
with the crime of estafa under Article 315, par. 2 (d) of the Revised Penal
Code, as amended by PD 818.
On February 16, 2001, the City Prosecutor issued a resolution finding
probable cause against petitioners and recommending the filing of an
information for estafa with no bail recommended. On the same day, an
information for the crime of estafa was filed with Branch 217 of the Regional
Trial Court of Quezon City against petitioners. The case was docketed as
Criminal Case No. Q-01-101574. Thereafter, the trial court issued a warrant
for the arrest of herein petitioners, thus:
It appearing on the face of the information and from supporting affidavit of
the complaining witness and its annexes that probable cause exists, that
the crime charged was committed and accused is probably guilty thereof,
let a warrant for the arrest of the accused be issued.
No Bail Recommended.
SO ORDERED.[1]
On July 18, 2001, petitioners filed an Urgent Motion to Quash
Information and Warrant of Arrest which was denied by the trial
court. Likewise, petitioners motion for bail filed on July 24, 2001 was denied
by the trial court on the same day. Petitioner Jovencio Lim was arrested by
virtue of the warrant of arrest issued by the trial court and was detained at
the Quezon City Jail. However, petitioner Teresita Lim remained at large.
On August 22, 2001, petitioners filed the instant petition for certiorari
imputing grave abuse of discretion on the part of the lower court and the

In view of the aforementioned resolution, the matter concerning bail

shall no longer be discussed. Thus, this decision will focus on whether or
not PD 818 violates Sections 1 and 19 of Article III of the Constitution, which
respectively provide:
Section 1. No person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the
laws.
xxx
Section 19 (1) Excessive fines shall not be imposed, nor cruel, degrading or
inhuman punishment inflicted. x x x.
We shall deal first with the issue of whether PD 818 was enacted in
contravention of Section 19 of Article III of the Constitution. In this regard,
the impugned provision of PD 818 reads as follows:
SECTION 1. Any person who shall defraud another by means of false
pretenses or fraudulent acts as defined in paragraph 2(d) of Article 315 of
the Revised Penal Code, as amended by Republic Act No. 4885, shall be
punished by:
1st. The penalty of reclusion temporal if the amount of the fraud is over
12,000 pesos but does not exceed 22,000 pesos, and if such amount
exceeds the later sum, the penalty provided in this paragraph shall be
imposed in its maximum period, adding one year for each additional 10,000
pesos but the total penalty which may be imposed shall in no case exceed
thirty years. In such cases, and in connection with the accessory penalties
which may be imposed under the Revised Penal Code, the penalty shall be
termed reclusion perpetua;
2nd. The penalty of prision mayor in its maximum period, if the amount of the
fraud is over 6,000 pesos but does not exceed 12,000 pesos.
3rd. The penalty of prision mayor in its medium period, if such amount is
over 200 pesos but does not exceed 6,000 pesos; and

checks. Taking into account the salutary purpose for which said law was
decreed, we conclude that PD 818 does not violate Section 19 of Article
III of the Constitution.

Petitioners contend that, inasmuch as the amount of the subject

check is P365,750, they can be penalized with reclusion perpetua or 30
years of imprisonment. This penalty, according to petitioners, is too severe
and disproportionate to the crime they committed and infringes on the
express mandate of Article III, Section 19 of the Constitution which prohibits
the infliction of cruel, degrading and inhuman punishment.
Settled is the rule that a punishment authorized by statute is not cruel,
degrading or disproportionate to the nature of the offense unless it is
flagrantly and plainly oppressive and wholly disproportionate to the nature of
the offense as to shock the moral sense of the community. It takes more
than merely being harsh, excessive, out of proportion or severe for a
penalty to be obnoxious to the Constitution.[2] Based on this principle, the
Court has consistently overruled contentions of the defense that the penalty
of fine or imprisonment authorized by the statute involved is cruel and
degrading.
In People vs. Tongko,[3] this Court held that the prohibition against
cruel and unusual punishment is generally aimed at the form or character of
the punishment rather than its severity in respect of its duration or amount,
and applies to punishments which never existed in America or which public
sentiment regards as cruel or obsolete. This refers, for instance, to those
inflicted at the whipping post or in the pillory, to burning at the stake,
breaking on the wheel, disemboweling and the like. The fact that the penalty
is severe provides insufficient basis to declare a law unconstitutional and
does not, by that circumstance alone, make it cruel and inhuman.
Petitioners also argue that while PD 818 increased the imposable
penalties for estafa committed under Article 315, par. 2 (d) of the Revised
Penal Code, it did not increase the amounts corresponding to the said new
penalties. Thus, the original amounts provided for in the Revised Penal
Code have remained the same notwithstanding that they have become
negligible and insignificant compared to the present value of the peso.
This argument is without merit. The primary purpose of PD 818 is
emphatically and categorically stated in the following:
WHEREAS, reports received of late indicate an upsurge of estafa
(swindling) cases committed by means of bouncing checks;
WHEREAS, if not checked at once, these criminal acts would erode the
peoples confidence in the use of negotiable instruments as a medium of
commercial transaction and consequently result in the retardation of trade
and commerce and the undermining of the banking system of the country;
WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of
estafa cases by increasing the existing penalties provided therefor.
Clearly, the increase in the penalty, far from being cruel and
degrading, was motivated by a laudable purpose, namely, to effectuate the
repression of an evil that undermines the countrys commercial and
economic growth, and to serve as a necessary precaution to deter people
from issuing bouncing checks. The fact that PD 818 did not increase the
amounts corresponding to the new penalties only proves that the amount is
immaterial and inconsequential. What the law sought to avert was the
proliferation of estafa cases committed by means of bouncing

Page

4th. By prision mayor in its minimum period, if such amount does not exceed
200 pesos.

Moreover, when a law is questioned before the Court, the

presumption is in favor of its constitutionality. To justify its nullification, there
must be a clear and unmistakable breach of the Constitution, not a doubtful
and argumentative one.[4] The burden of proving the invalidity of a law rests
on those who challenge it. In this case, petitioners failed to present clear
and convincing proof to defeat the presumption of constitutionality of PD
818.
With respect to the issue of whether PD 818 infringes on Section 1 of
Article III of the Constitution, petitioners claim that PD 818 is violative of the
due process clause of the Constitution as it was not published in the Official
Gazette. This claim is incorrect and must be rejected. Publication, being an
indispensable part of due process, is imperative to the validity of laws,
presidential decrees and executive orders.[5] PD 818 was published in the
Official Gazette on December 1, 1975.[6]
With the foregoing considerations in mind, this Court upholds the
constitutionality of PD 818.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Vitug, Panganiban, Quisumbing, YnaresSantiago,
Sandoval-Gutierrez,
Carpio,
Austria-Martinez,
Morales, and Callejo, Sr., JJ., concur.
Puno, J., no part due to relation to counsel.
Mendoza, J., on leave.

5.

G.R. No. 94723

August 21, 1997

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father

and Natural Guardian, and Spouses FEDERICO N. SALVACION, JR.,
and EVELINA E. SALVACION, petitioners, vs. CENTRAL BANK OF THE
PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI
y NORTHCOTT,respondents.
DECISION
TORRES, JR., J.:
In our predisposition to discover the original intent of a statute, courts
become the unfeeling pillars of the status quo. Little do we realize that
statutes or even constitutions are bundles of compromises thrown our way
by their framers. Unless we exercise vigilance, the statute may already be
out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:

10

attachment against Greg Bartelli. On February 24, 1989, the day there was
a scheduled hearing for Bartellis petition for bail the latter escaped from jail.

b.) After hearing, judgment be rendered:

1.) Declaring the respective rights and duties of
petitioners and respondents;
2.) Adjudging Section 113 of Central Bank
Circular No. 960 as contrary to the provision of
the Constitution, hence void; because its
provision that Foreign currency deposits shall be
exempt from attachment, garnishment, or any
other order to process of any court, legislative
body, government agency or any administrative
body whatsoever
i.) has taken away the right of petitioners to
have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the
judgment rendered in petitioners favor in
violation of substantive due process
guaranteed by the Constitution;
ii.) has given foreign currency depositors an
undue favor or a class privilege in violation
of the equal protection clause of the
Constitution;
iii.) has provided a safe haven for criminals
like the herein respondent Greg Bartelli y
Northcott since criminals could escape civil
liability for their wrongful acts by merely
converting their money to a foreign currency
and depositing it in a foreign currency
deposit account with an authorized bank.
The antecedents facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist,
coaxed and lured petitioner Karen Salvacion, then 12 years old to go with
him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for
four days, or up to February 7, 1989 and was able to rape the child once on
February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby, rescued Karen,
Greg Bartelli was arrested and detained at the Makati Municipal Jail. The
policemen recovered from Bartelli the following items: 1.) Dollar Check No.
368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK
Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account China
Banking Corp., US $/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine
Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy
Bear) used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya
filed against Greg Bartelli, Criminal Case No. 801 for Serious Illegal
Detention and Criminal Cases Nos. 802, 803, 804, and 805 for four (4)
counts of Rape. On the same day, petitioners filed with the Regional Trial
Court of Makati Civil Case No. 89-3214 for damages with preliminary

Page

a.) Immediately upon the filing of this petition, an Order be

issued restraining the respondents from applying and enforcing
Section 113 of Central Bank Circular No. 960;

On February 28, 1989, the court granted the fiscals Urgent ExParte Motion for the Issuance of Warrant of Arrest and Hold Departure
Order. Pending the arrest of the accused Greg Bartelli y Northcott, the
criminal cases were archived in an Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order
dated February 22, 1989 granting the application of herein petitioners, for
the issuance of the writ of preliminary attachment. After petitioners gave
Bond No. JCL (4) 1981 by FGU Insurance Corporation in the
amount P100,000.00, a Writ of Preliminary Attachment was issued by the
trial court on February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of
Garnishment on China Banking Corporation. In a letter dated March 13,
1989 to the Deputy Sheriff of Makati, China Banking Corporation invoked
Republic Act No. 1405 as its answer to the notice of garnishment served on
it. On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent
his reply to China Banking Corporation saying that the garnishment did not
violate the secrecy of bank deposits since the disclosure is merely incidental
to a garnishment properly and legally made by virtue of a court order which
has placed the subject deposits in custodia legis. In answer to this letter of
the Deputy Sheriff of Makati, China Banking Corporation, in a letter dated
March 20, 1989, invoked Section 113 of Central Bank Circular No. 960 to
the effect that the dollar deposits of defendant Greg Bartelli are exempt from
attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body,
whatsoever.
This prompted the counsel for petitioners to make an inquiry with the
Central Bank in a letter dated April 25, 1989 on whether Section 113 of CB
Circular No. 960 has any exception or whether said section has been
repealed or amended since said section has rendered nugatory the
substantive right of the plaintiff to have the claim sought to be enforced by
the civil action secured by way of the writ of preliminary attachment as
granted to the plaintiff under Rule 57 of the Revised Rules of Court. The
Central Bank responded as follows:
May 26, 1989
Ms. Erlinda S. Carolino
12 Pres. Osmea Avenue
South Admiral Village
Paranaque, Metro Manila
Dear Ms. Carolino:
This is in reply to your letter dated April 25, 1989 regarding your
inquiry on Section 113, CB Circular No. 960 (1983).
The cited provision is absolute in application. It does not admit
of any exception, nor has the same been repealed nor
amended.

11
Page

The purpose of the law is to encourage dollar accounts within

the countrys banking system which would help in the
development of the economy. There is no intention to render
futile the basic rights of a person as was suggested in your
subject letter. The law may be harsh as some perceive it, but it
is still the law. Compliance is, therefore, enjoined.

newspaper. Defendant, however, failed to file his answer to the

complaint despite the lapse of the period of sixty (60) days from
the last publication; hence, upon motion of the plaintiffs through
counsel, defendant was declared in default and plaintiffs were
authorized to present their evidence ex parte.
In support of the complaint, plaintiffs presented as witness the
minor Karen E. Salvacion, her father, Federico N. Salacion, Jr.,
a certain Joseph Aguilar and a certain Liberato Mandulio, who
gave the following testimony:

Very truly yours,

(SGD) AGAPITO S. FAJARDO

Karen took her first year high school in St. Marys Academy in Pasay City
but has recently transferred to Arellano University for her second year.

Director[1]
Meanwhile, on April 10, 1989, the trial court granted petitioners
motion for leave to serve summons by publication in the Civil Case No. 893214 entitled Karen Salvacion. et al. vs. Greg Bartelli y Northcott. Summons
with the complaint was published in the Manila Times once a week for three
consecutive weeks. Greg Bartelli failed to file his answer to the complaint
and was declared in default on August 7, 1989. After hearing the case exparte, the court rendered judgment in favor of petitioners on March 29,
1990, the dispositive portion of which reads:

In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati
Cinema Square, with her friend Edna Tangile whiling away her free time. At
about 3:30 p.m. while she was finishing her snack on a concrete bench in
front of Plaza Fair, an American approached her. She was then alone
because Edna Tangile had already left, and she was about to go
home. (TSN, Aug. 15, 1989, pp. 2 to 5)

WHEREFORE, judgment is hereby rendered in favor of plaintiffs

and against defendant, ordering the latter:
amount

The American asked her name and introduced himself as Greg Bartelli. He
sat beside her when he talked to her. He said he was a Math teacher and
told her that he has a sister who is a nurse in New York. His sister allegedly
has a daughter who is about Karens age and who was with him in his house
along Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5).

2. To pay her parents, plaintiffs spouses Federico N. Salvacion,

Jr., and Evelina E. Salvacion the amount of P150,000.00 each
or a total of P300,000.00 for both of them;

The American asked Karen what was her favorite subject and she told him
its Pilipino. He then invited her to go with him to his house where she could
teach Pilipino to his niece. He even gave her a stuffed toy to persuade her
to teach his niece. (Id., pp.5-6)

1. To pay plaintiff Karen E.

of P500,000.00 as moral damages;

Salvacion

the

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

4. To pay attorneys fees in an amount equivalent to 25% of the
total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The heinous acts of respondents Greg Bartelli which gave rise to the
award were related in graphic detail by the trial court in its decision as
follows:
The defendant in this case was originally detained in the
municipal jail of Makati but was able to escape therefrom on
February 24, 1989 as per report of the Jail Warden of Makati to
the Presiding Judge, Honorable Manuel M. Cosico of the
Regional Trial Court of Makati, Branch 136, where he was
charged with four counts of Rape and Serious Illegal Detention
(Crim. Cases Nos. 802 to 805).Accordingly, upon motion of
plaintiffs, through counsel, summons was served upon
defendant by publication in the Manila Times, a newspaper of
general circulation as attested by the Advertising Manager of the
Metro Media Times, Inc., the publisher of the said

They walked from Plaza Fair along Pasong Tamo, turning right to reach the
defendants house along Kalayaan Avenue. (Id., p.6)
When they reached the apartment house, Karen notices that defendants
alleged niece was not outside the house but defendant told her maybe his
niece was inside. When Karen did not see the alleged niece inside the
house, defendant told her maybe his niece was upstairs, and invited Karen
to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door. Karen
became nervous because his niece was not there. Defendant got a piece of
cotton cord and tied Karens hands with it, and then he undressed
her. Karen cried for help but defendant strangled her. He took a packing
tape and he covered her mouth with it and he circled it around her head.
(Id., p. 7)
Then, defendant suddenly pushed Karen towards the bed which was just
near the door. He tied her feet and hands spread apart to the bed posts. He
knelt in front of her and inserted his finger in her sex organ.She felt severe
pain. She tried to shout but no sound could come out because there were
tapes on her mouth. When defendant withdrew his finger it was full of blood
and Karen felt more pain after the withdrawal of the finger. (Id., p.8)
He then got a Johnsons Baby Oil and he applied it to his sex organ as well
as to her sex organ. After that he forced his sex organ into her but he was
not able to do so. While he was doing it, Karen found it difficult to breathe
and she perspired a lot while feeling severe pain. She merely presumed that

noon. After he had raped her for the second time he left but only for a short
while. Upon his return, he caught her shouting for help but he did not
understand what she was shouting about.After she was raped the third time,
he left the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to the
bathroom and shouted for help. After shouting for about five minutes, she
heard many voices. The voices were asking for her name and she gave her
name as Karen Salvacion. After a while, she heard a voice of a woman
saying they will just call the police. They were also telling her to change her
clothes.She went from the bathroom to the room but she did not change her
clothes being afraid that should the neighbors call the police and the
defendant see her in different clothes, he might kill her. At that time she was
wearing a T-shirt of the American bacause the latter washed her dress. (Id.,
p. 16)

After that, he stood up and went to the bathroom to wash. He also told
Karen to take a shower and he untied her hands. Karen could only hear the
sound of the water while the defendant, she presumed, was in the bathroom
washing his sex organ. When she took a shower more blood came out from
her. In the meantime, defendant changed the mattress because it was full of
blood. After the shower, Karen was allowed by defendant to sleep. She fell
asleep because she got tired crying. The incident happened at about 4:00
p.m. Karen had no way of determining the exact time because defendant
removed her watch.Defendant did not care to give her food before she went
to sleep. Karen woke up at about 8:00 oclock the following morning. (Id., pp.
9-10)
The following day, February 5, 1989, a Sunday, after breakfast of biscuit and
coke at about 8:30 to 9:00 a.m. defendant raped Karen while she was still
bleeding. For lunch, they also took biscuit and coke. She was raped for the
second time at about 12:00 to 2:00 p.m. In the evening, they had rice for
dinner which defendant had stored downstairs; it was he who cooked the
rice that is why it looks like lugaw. For the third time, Karen was raped again
during the night. During those three times defendant succeeded in inserting
his sex organ but she could not say whether the organ was inserted wholly.
Karen did not see any firearm or any bladed weapon. The defendant did not
tie her hands and feet nor put a tape on her mouth anymore but she did not
cry for help for fear that she might be killed; besides, all those windows and
doors were closed. And even if she shouted for help, nobody would hear
her. She was so afraid that if somebody would hear her and would be able
to call a police, it was still possible that as she was still inside the house,
defendant might kill her. Besides, the defendant did not leave that Sunday,
ruling out her chance to call for help. At nighttime he slept with her
again. (TSN, Aug. 15, 1989, pp. 12-14)
On February 6, 1989, Monday, Karen was raped three times, once in the
morning for thirty minutes after breakfast of biscuits; again in the afternoon;
and again in the evening. At first, Karen did not know that there was a
window because everything was covered by a carpet, until defendant
opened the window for around fifteen minutes or less to let some air in, and
she found that the window was covered by styrofoam and plywood. After
that, he again closed the window with a hammer and he put the styrofoam,
plywood, and carpet back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom and saw
a small window covered by styrofoam and she also spotted a small
hole. She stepped on the bowl and she cried for help through the hole. She
cried: Maawa na po kayo sa akin. Tulungan nyo akong makalabas
dito. Kinidnap ako! Somebody heard her. It was a woman, probably a
neighbor, but she got angry and said she was istorbo. Karen pleaded for
help and the woman told her to sleep and she will call the police. She finally
fell asleep but no policeman came. (TSN, Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 oclock the following morning, and she saw defendant
in bed, this time sleeping. She waited for him to wake up. When he woke
up, he again got some food but he always kept the door locked. As usual,
she was merely fed with biscuit and coke. On that day, February 7, 1989,
she was again raped three times. The first at about 6:30 to 7:00 a.m., the
second at about 8:30 9:00, and the third was after lunch at 12:00

Page

12

he was able to insert his sex organ a little, because she could not
see. Karen could not recall how long the defendant was in that position. (Id.,
pp. 8-9)

Afterwards, defendant arrived and opened the door. He asked her if she had
asked for help because there were many policemen outside and she denied
it. He told her to change her clothes, and she did change to the one she
was wearing on Saturday. He instructed her to tell the police that she left
home and willingly; then he went downstairs but he locked the door. She
could hear people conversing but she could not understand what they were
saying. (Id., p. 19)
When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she could. She
heard somebody going upstairs and when the door was opened, she saw a
policeman. The policeman asked her name and the reason why she was
there. She told him she was kidnapped. Downstairs, he saw about five
policemen in uniform and the defendant was talking to them. Nakikipagareglo po sa mga pulis, Karen added. The policeman told him to just explain
at the precinct. (Id., p. 20)
They went out of the house and she saw some of her neighbors in front of
the house. They rode the car of a certain person she called Kuya Boy
together with defendant, the policeman, and two of her neighbors whom she
called Kuya Bong Lacson and one Ate Nita. They were brought to SubStation I and there she was investigated by a policeman. At about 2:00
a.m., her father arrived, followed by her mother together with some of their
neighbors. Then they were brought to the second floor of the police
headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the
investigator. The written statement she gave to the police was marked
Exhibit A. Then they proceeded to the National Bureau of Investigation
together with the investigator and her parents. At the NBI, a doctor,
a medico-legal officer, examined her private parts. It was already 3:00 in
early morning, of the following day when they reached the NBI, (TSN, Aug.
15, 1989, p. 22) The findings of the medico-legal officer has been marked
as Exhibit B.
She was studying at the St. Marys Academy in Pasay City at the time of the
Incident but she subsequently transferred to Apolinario Mabini, Arellano
University, situated along Taft Avenue, because she was ashamed to be the
subject of conversation in the school. She first applied for transfer to Jose
Abad Santos, Arellano University along Taft Avenue near the Light Rail
Transit Station but she was denied admission after she told the school the
true reason for her transfer. The reason for their denial was that they might
be implicated in the case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx

law seems to be reasonable; c.) it is enforced according to regular methods

of procedure; and d.) it applies to all members of a class.

Pursuant to an Order granting leave to publish notice of decision, said

notice was published in the Manila Bulletin once a week for three
consecutive weeks. After the lapse of fifteen (15) days from the date of the
last publication of the notice of judgment and the decision of the trial court
had become final, petitioners tried to execute on Bartellis dollar deposit with
China Banking Corporation. Likewise, the bank invoked Section 113 of
Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil
down to two:
May this Court entertain the instant petition despite the fact that
original jurisdiction in petitions for declaratory relief rests with the lower
court? She Section 113 of Central Bank Circular No. 960 and Section 8 of
R.A. 6426, as amended by P.D. 1246, otherwise known as the Foreign
Currency Deposit Act be made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank
Circular No. 960 providing that Foreign currency deposits shall be exempt
from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever.
should be adjudged as unconstitutional on the grounds that: 1.) it has taken
away the right of petitioners to have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners
favor in violation of substantive due process guaranteed by the
Constitution; 2.) it has given foreign currency depositors an undue favor or a
class privilege n violation of the equal protection clause of the
Constitution; 3.) it has provided a safe haven for criminals like the herein
respondent Greg Bartelli y Northcott since criminal could escape civil liability
for their wrongful acts by merely converting their money to a foreign
currency and depositing it in a foreign currency deposit account with an
authorized bank; and 4.) The Monetary Board, in issuing Section 113 of
Central Bank Circular No. 960 has exceeded its delegated quasi- legislative
power when it took away: a.) the plaintiffs substantive right to have the claim
sought to be enforced by the civil action secured by way of the writ of
preliminary attachment as granted by Rule 57 of the Revised Rules of
Court; b.) the plaintiffs substantive right to have the judgment credit satisfied
by way of the writ of execution out of the bank deposit of the judgment
debtor as granted to the judgment creditor by Rule 39 of the Revised Rules
of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges
that the Monetary Board in issuing Section 113 of CB Circular No. 960 did
not exceed its power or authority because the subject Section is copied
verbatim from a portion of R.A. No. 6426 as amended by P.D. 1246. Hence,
it was not the Monetary Board that grants exemption from attachment or
garnishment to foreign currency deposits, but the law (R.A. 6426 as
amended) itself; that it does not violate the substantive due process
guaranteed by the Constitution because a.) it was based on a law; b.) the

Page

13

After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she has
been absent-minded and is ashamed even to go out of the house. (TSN,
Sept. 12, 1989, p. 10) She appears to be restless or sad. (Id., p. 11) The
father prays for P500,000.00 moral damages for Karen for this shocking
experience which probably, she would always recall until she reaches old
age, and he is not sure if she could ever recover from this
experience. (TSN, Sept. 24, 1989, pp. 10-11)

Expanding, the Central Bank said; that one reason for exempting the
foreign currency deposits from attachment, garnishment or any other order
process of any court, is to assure the development and speedy growth of
the Foreign Currency Deposit System and the Offshore Banking System in
the Philippines; that another reason is to encourage the inflow of foreign
currency deposits into the banking institutions thereby placing such
institutions more in a position to properly channel the same to loans and
investments in the Philippines, thus directly contributing to the economic
development of the country; that the subject section is being enforced
according to the regular methods of procedure; and that it applies to all
currency deposits made by any person and therefore does not violate the
equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision
is needed to promote the public interest and the general welfare; that the
State cannot just stand idly by while a considerable segment of the society
suffers from economic distress; that the State had to take some measures
to encourage economic development; and that in so doing persons and
property may be subjected to some kinds of restraints or burdens to secure
the general welfare or public interest. Respondent Central Bank also alleges
that Rule 39 and Rule 57 of the Revised Rules of Court provide that some
properties are exempted from execution/attachment especially provided by
law and R.A. No. 6426 as amended is such a law, in that it specifically
provides, among others, that foreign currency deposits shall be exempted
from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving
reasons similar to that of respondent Central Bank, also stated that
respondent China Bank is not unmindful of the inhuman sufferings
experienced by the minor Karen E. Salvacion from the beastly hands of
Greg Bartelli; that it is not only too willing to release the dollar deposit of
Bartelli which may perhaps partly mitigate the sufferings petitioner has
undergone; but it is restrained from doing so in view of R.A. No. 6426 and
Section 113 of Central Bank Circular No. 960; and that despite the harsh
effect to these laws on petitioners, CBC has no other alternative but to
follow the same.
This court finds the petition to be partly meritorious.
Petitioner deserves to receive the damages awarded to her by the
court. But this petition for declaratory relief can only be entertained and
treated as a petition for mandamus to require respondents to honor and
comply with the writ of execution in Civil Case No. 89-3214.
The Court has no original and exclusive jurisdiction over a petition for
declatory relief.[2] However, exceptions to this rule have been
recognized. Thus, where the petition has far-reaching implications and
raises questions that should be resolved, it may be treated as one for
mandamus.[3]
Here is a child, a 12-year old girl, who in her belief that all Americans
are good and in her gesture of kindness by teaching his alleged niece the
Filipino language as requested by the American, trustingly went with said
stranger to his apartment, and there she was raped by said American tourist
Greg Bartelli. Not once, but ten times. She was detained therein for four (4)
days. This American tourist was able to escape from the jail and avoid

Page

14

punishment. On the other hand, the child, having received a favorable

judgment in the Civil Case for damages in the amount of more
than P1,000,000.00, which amount could alleviate the humiliation, anxiety,
and besmirched reputation she had suffered and may continue to suffer for
a long, long time; and knowing that this person who had wronged her has
the money, could not, however get the award of damages because of this
unreasonable law. This questioned law, therefore makes futile the favorable
judgment and award of damages that she and her parents fully deserve. As
stated by the trial court in its decision,

In his comment, the Solicitor General correctly opined, thus:

"The present petition has far-reaching implications on the right
of a national to obtain redress for a wrong committed by an alien
who takes refuge under a law and regulation promulgated for a
purpose which does not contemplate the application thereof
envisaged by the allien. More specifically, the petition raises the
question whether the protection against attachment,
garnishment or other court process accorded to foreign currency
deposits PD No. 1246 and CB Circular No. 960 applies when
the deposit does not come from a lender or investor but from a
mere transient who is not expected to maintain the deposit in
the bank for long.

Indeed, after hearing the testimony of Karen, the Court believes

that it was indoubtedly a shocking and traumatic experience she
had undergone which could haunt her mind for a long, long time,
the mere recall of which could make her feel so humiliated, as in
fact she had been actually humiliated once when she was
refused admission at the Abad Santos High School, Arellano
University, where she sought to transfer from another school,
simply because the school authorities of the said High School
learned about what happened to her and allegedly feared that
they might be implicated in the case.
xxx

as civilized society to remain ever under the regimen of their

barbarous ancestors.

The resolution of this question is important for the protection of

nationals who are victimized in the forum by foreigners who are
merely passing through.
xxx

The reason for imposing exemplary or corrective damages is

due to the wanton and bestial manner defendant had committed
the acts of rape during a period of serious illegal detention of his
hapless victim, the minor Karen Salvacion whose only fault was
in her being so naive and credulous to believe easily that
defendant, an American national, could not have such a bestial
desire on her nor capable of committing such heinous
crime. Being only 12 years old when that unfortunate incident
happened, she has never heard of an old Filipino adage that in
every forest there is a snake, xxx.[4]
If Karens sad fate had happened to anybodys own kin, it would be
difficult for him to fathom how the incentive for foreign currency deposit
could be more important than his childs right to said award of damages; in
this case, the victims claim for damages from this alien who had the gall to
wrong a child of tender years of a country where he is mere visitor. This
further illustrates the flaw in the questioned provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a
time when the countrys economy was in a shambles; when foreign
investments were minimal and presumably, this was the reason why said
statute was enacted. But the realities of the present times show that the
country has recovered economically; and even if not, the questioned law still
denies those entitled to due process of law for being unreasonable and
oppressive. The intention of the questioned law may be good when
enacted. The law failed to anticipate the inquitous effects producing outright
injustice and inequality such as as the case before us.
It has thus been said thatBut I also know,[5] that laws and institutions must go hand in
hand with the progress of the human mind. As that becomes
more developed, more enlightened, as new discoveries are
made, new truths are disclosed and manners and opinions
change with the change of circumstances, institutions must
advance also, and keep pace with the times We might as well
require a man to wear still the coat which fitted him when a boy,

xxx Respondents China Banking Corporation and Central Bank

of the Philippines refused to honor the writ of execution issued
in Civil Case No. 89-3214 on the strength of the following
provision of Central Bank Circular No. 960:
Sec. 113 Exemption from attachment. Foreign
currency deposits shall be exempt from
attachment, garnishment, or any other order or
process of any court, legislative body, government
agency or any administrative body whatsoever.
Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic
Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary
Board of the Central Bank shall promulgate such
rules and regulations as may be necessary to
carry out the provisions of this Act which shall
take effect after the publication of such rules and
regulations in the Official Gazette and in a
newspaper of national circulation for at least once
a week for three consecutive weeks. In case the
Central Bank promulgates new rules and
regulations decreasing the rights of depositors,
the rules and regulations at the time the deposit
was made shall govern.
The aforecited Section 113 was copied from Section 8 of
Republic Act No. 6426. As amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. -All foreign currency deposits authorized under this
Act, as amended by Presidential Decree No.
1035, as well as foreign currency deposits
authorized under Presidential Decree No. 1034,
are hereby declared as and considered of an

The purpose of PD 1246 in according protection against

attachment, garnishment and other court process to foreign
currency deposits is stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as
amended by Presidential Decree No. 1035,
certain Philippine banking institutions and
branches of foreign banks are authorized to
accept deposits in foreign currency;
WHEREAS, under provisions of Presidential
Decree No. 1034 authorizing the establishment of
an offshore banking system in the Philippines,
offshore banking units are also authorized to
receive foreign currency deposits in certain
cases;
WHEREAS, in order to assure the development
and speedy growth of the Foreign Currency
Deposit System and the Offshore Banking
System in the Philippines, certain incentives were
provided for under the two Systems such as
confidentiality subject to certain exceptions and
tax exemptions on the interest income of
depositors who are nonresidents and are not
engaged in trade or business in the Philippines;
WHEREAS, making absolute the protective cloak
of confidentiality over such foreign currency
deposits, exempting such deposits from tax, and
guaranteeing the vested right of depositors would
better encourage the inflow of foreign currency
deposits into the banking institutions authorized to
accept such deposits in the Philippines thereby
placing such institutions more in a position to
properly channel the same to loans and
investments in the Philippines, thus directly
contributing to the economic development of the
country;
Thus, one of the principal purposes of the protection accorded
to foreign currency deposits is to assure the development and
speedy growth of the Foreign Currency Deposit system and the
Offshore Banking in the Philippines (3rd Whereas).
The Offshore Banking System was established by PD No.
1034. In turn, the purposes of PD No. 1034 are as follows:

15
Page

absolutely confidential nature and, except upon

the written permission of the depositor, in no
instance shall such foreign currency deposits be
examined, inquired or looked into by any person,
government official, bureau or office whether
judicial or administrative or legislative or any other
entity whether public or private: Provided,
however, that said foreign currency deposits shall
be exempt from attachment, garnishment, or any
other order or process of any court, legislative
body, government agency or any administrative
body whatsoever.

WHEREAS, conditions conducive to the

establishment of an offshore banking system,
such as political stability, a growing economy and
adequate communication facilities, among others,
exist in the Philippines;
WHEREAS, it is in the interest of developing
countries to have as wide access as possible to
the sources of capital funds for economic
development;
WHEREAS, an offshore banking system based in
the Philippines will be advantageous and
beneficial to the country by increasing our links
with foreign lenders, facilitating the flow of desired
investments into the Philippines, creating
employment opportunities and expertise in
international finance, and contributing to the
national development effort.
WHEREAS, the geographical location, physical
and human resources, and other positive factors
provide the Philippines with the clear potential to
develop as another financial center in Asia;
On the other hand, the Foreign Currency Deposit system was
created by PD No. 1035. Its purpose are as follows:
WHEREAS, the establishment of an offshore
banking system in the Philippines has been
authorized under a separate decree;
WHEREAS, a number of local commercial banks,
as depository bank under the Foreign Currency
Deposit Act (RA No. 6426), have the resources
and managerial competence to more actively
engage in foreign exchange transactions and
participate in the grant of foreign currency loans
to resident corporations and firms;
WHEREAS, it is timely to expand the foreign
currency lending authority of the said depository
banks under RA 6426 and apply to their
transactions the same taxes as would be
applicable to transaction of the proposed offshore
banking units;
It is evident from the above [Whereas clauses] that the Offshore
Banking System and the Foreign Currency Deposit System
were
designed
to
draw
deposits
from
foreign lenders and investors (Vide second Whereas of PD No.
1034; third Whereas of PD No. 1035). It is these depositors that
are induced by the two laws and given protection and incentives
by them.
Obviously, the foreign currency deposit made by a transient or a
tourist is not the kind of deposit encourage by PD Nos. 1034
and 1035 and given incentives and protection by said laws
because such depositor stays only for a few days in the country

Perpetuo L.B. Alonzo for petitioners.

16

and, therefore, will maintain his deposit in the bank only for a
short time.

For the reasons stated above, the Solicitor General thus submits
that the dollar deposit of respondent Greg Bartelli is not entitled
to the protection of Section 113 of Central Bank Circular No. 960
and PD No. 1246 against attachment, garnishment or other
court processes.[6]
In fine, the application of the law depends on the extent of its
justice. Eventually, if we rule that the questioned Section 113 of Central
Bank Circular No. 960 which exempts from attachment, garnishment, or any
other order or process of any court. Legislative body, government agency or
any administrative body whatsoever, is applicable to a foreign transient,
injustice would result especially to a citizen aggrieved by a foreign guest like
accused Greg Bartelli. This would negate Article 10 of the New Civil Code
which provides that in case of doubt in the interpretation or application of
laws, it is presumed that the lawmaking body intended right and justice to
prevail. Ninguno non deue enriquecerse tortizerzmente con damo de
otro.Simply stated, when the statute is silent or ambiguous, this is one of
those fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377)
It would be unthinkable, that the questioned Section 113 of Central
Bank No. 960 would be used as a device by accused Greg Bartelli for
wrongdoing, and in so doing, acquitting the guilty at the expense of the
innocent.
Call it what it may but is there no conflict of legal policy here? Dollar
against Peso? Upholding the final and executory judgment of the lower
court against the Central Bank Circular protecting the foreign
depositor? Shielding or protecting the dollar deposit of a transient alien
depositor against injustice to a national and victim of a crime? This situation
calls for fairness legal tyranny.
We definitely cannot have both ways and rest in the belief that we
have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No.
960 and PD No. 1246, insofar as it amends Section 8 of R.A. 6426 are
hereby held to be INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby REQUIRED to COMPLY with the
writ of execution issued in Civil Case No. 89-3214, Karen Salvacion, et al.
vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to
RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y
Northcott in such amount as would satisfy the judgment.

6.

G.R. No. 72873

May 28, 1987

CARLOS ALONZO and CASIMIRA ALONZO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.

Page

Luis R. Reyes for private respondent.

Respondent Greg Bartelli, as stated, is just a tourist or a

transient. He deposited his dollars with respondent China
Banking Corporation only for safekeeping during his temporary
stay in the Philippines.

CRUZ, J.:
The question is sometimes asked, in serious inquiry or in curious
conjecture, whether we are a court of law or a court of justice. Do we apply
the law even if it is unjust or do we administer justice even against the law?
Thus queried, we do not equivocate. The answer is that we do neither
because we are a court both of law and of justice. We apply the
law with justice for that is our mission and purpose in the scheme of our
Republic. This case is an illustration.
Five brothers and sisters inherited in equal pro indiviso shares a parcel of
land registered in 'the name of their deceased parents under OCT No.
10977 of the Registry of Deeds of Tarlac. 1
On March 15, 1963, one of them, Celestino Padua, transferred his
undivided share of the herein petitioners for the sum of P550.00 by way of
absolute sale. 2 One year later, on April 22, 1964, Eustaquia Padua, his
sister, sold her own share to the same vendees, in an instrument
denominated "Con Pacto de Retro Sale," for the sum of P 440.00. 3
By virtue of such agreements, the petitioners occupied, after the said sales,
an area corresponding to two-fifths of the said lot, representing the portions
sold to them. The vendees subsequently enclosed the same with a fence. In
1975, with their consent, their son Eduardo Alonzo and his wife built a semiconcrete house on a part of the enclosed area. 4
On February 25, 1976, Mariano Padua, one of the five coheirs, sought to
redeem the area sold to the spouses Alonzo, but his complaint was
dismissed when it appeared that he was an American citizen . 5 On May 27,
1977, however, Tecla Padua, another co-heir, filed her own complaint
invoking the same right of redemption claimed by her brother.6
The trial court * also dismiss this complaint, now on the ground that the right
had lapsed, not having been exercised within thirty days from notice of the
sales in 1963 and 1964. Although there was no written notice, it was held
that actual knowledge of the sales by the co-heirs satisfied the requirement
of the law. 7
In truth, such actual notice as acquired by the co-heirs cannot be plausibly
denied. The other co-heirs, including Tecla Padua, lived on the same lot,
which consisted of only 604 square meters, including the portions sold to
the petitioners . 8 Eustaquia herself, who had sold her portion, was staying
in the same house with her sister Tecla, who later claimed redemption
petition. 9 Moreover, the petitioners and the private respondents were close
friends and neighbors whose children went to school together. 10

The petition before us appears to be an illustration of the Holmes dictum

that "hard cases make bad laws" as the petitioners obviously cannot argue
against the fact that there was really no written notice given by the vendors
to their co-heirs. Strictly applied and interpreted, Article 1088 can lead to
only one conclusion, to wit, that in view of such deficiency, the 30 day period
for redemption had not begun to run, much less expired in 1977.

The only real question in this case, therefore, is the correct interpretation
and application of the pertinent law as invoked, interestingly enough, by
both the petitioners and the private respondents. This is Article 1088 of the
Civil Code, providing as follows:
Art. 1088. Should any of the heirs sell his hereditary
rights to a stranger before the partition, any or all of the
co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month
from the time they were notified in writing of the sale by
the vendor.
In reversing the trial court, the respondent court ** declared that the notice
required by the said article was written notice and that actual notice would
not suffice as a substitute. Citing the same case of De Conejero v. Court of
Appeals 11 applied by the trial court, the respondent court held that that
decision, interpreting a like rule in Article 1623, stressed the need for written
notice although no particular form was required.
Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court,
furnishing the co-heirs with a copy of the deed of sale of the property
subject to redemption would satisfy the requirement for written notice. "So
long, therefore, as the latter (i.e., the redemptioner) is informed in writing of
the sale and the particulars thereof," he declared, "the thirty days for
redemption start running. "
In the earlier decision of Butte v. UY, 12 " the Court, speaking through the
same learned jurist, emphasized that the written notice should be given by
the vendor and not the vendees, conformably to a similar requirement under
Article 1623, reading as follows:
Art. 1623. The right of legal pre-emption or redemption
shall not be exercised except within thirty days from
the notice in writing by the prospective vendor, or by
the vendors, as the case may be. The deed of sale
shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that
he has given written notice thereof to all possible
redemptioners.
The right of redemption of co-owners excludes that of
the adjoining owners.
As "it is thus apparent that the Philippine legislature in Article 1623
deliberately selected a particular method of giving notice, and that notice
must be deemed exclusive," the Court held that notice given by
the vendees and not the vendor would not toll the running of the 30-day
period.

Page

17

It is highly improbable that the other co-heirs were unaware of the sales and
that they thought, as they alleged, that the area occupied by the petitioners
had merely been mortgaged by Celestino and Eustaquia. In the
circumstances just narrated, it was impossible for Tecla not to know that the
area occupied by the petitioners had been purchased by them from the
other. co-heirs. Especially significant was the erection thereon of the
permanent semi-concrete structure by the petitioners' son, which was done
without objection on her part or of any of the other co-heirs.

But as has also been aptly observed, we test a law by its results; and
likewise, we may add, by its purposes. It is a cardinal rule that, in seeking
the meaning of the law, the first concern of the judge should be to discover
in its provisions the in tent of the lawmaker. Unquestionably, the law should
never be interpreted in such a way as to cause injustice as this is never
within the legislative intent. An indispensable part of that intent, in fact, for
we presume the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we must
keep them so. To be sure, there are some laws that, while generally valid,
may seem arbitrary when applied in a particular case because of its peculiar
circumstances. In such a situation, we are not bound, because only of our
nature and functions, to apply them just the same, in slavish obedience to
their language. What we do instead is find a balance between the word and
the will, that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly
apply the law as it is worded, yielding like robots to the literal command
without regard to its cause and consequence. "Courts are apt to err by
sticking too closely to the words of a law," so we are warned, by Justice
Holmes again, "where these words import a policy that goes beyond
them." 13 While we admittedly may not legislate, we nevertheless have the
power to interpret the law in such a way as to reflect the will of the
legislature. While we may not read into the law a purpose that is not there,
we nevertheless have the right to read out of it the reason for its enactment.
In doing so, we defer not to "the letter that killeth" but to "the spirit that
vivifieth," to give effect to the law maker's will.
The spirit, rather than the letter of a statute determines
its construction, hence, a statute must be read
according to its spirit or intent. For what is within the
spirit is within the letter but although it is not within the
letter thereof, and that which is within the letter but not
within the spirit is not within the statute. Stated
differently, a thing which is within the intent of the
lawmaker is as much within the statute as if within the
letter; and a thing which is within the letter of the
statute is not within the statute unless within the intent
of the lawmakers. 14
In requiring written notice, Article 1088 seeks to ensure
that the redemptioner is properly notified of the sale
and to indicate the date of such notice as the starting
time of the 30-day period of redemption. Considering
the shortness of the period, it is really necessary, as a
general rule, to pinpoint the precise date it is supposed
to begin, to obviate any problem of alleged delays,
sometimes consisting of only a day or two.
The instant case presents no such problem because the right of redemption
was invoked not days but years after the sales were made in 1963 and
1964. The complaint was filed by Tecla Padua in 1977, thirteen years after

The co-heirs in this case were undeniably informed of the sales although no
notice in writing was given them. And there is no doubt either that the 30day period began and ended during the 14 years between the sales in
question and the filing of the complaint for redemption in 1977, without the
co-heirs exercising their right of redemption. These are the justifications for
this exception.

Was there a valid notice? Granting that the law requires the notice to be
written, would such notice be necessary in this case? Assuming there was a
valid notice although it was not in writing. would there be any question that
the 30-day period for redemption had expired long before the complaint was
filed in 1977?
In the face of the established facts, we cannot accept the private
respondents' pretense that they were unaware of the sales made by their
brother and sister in 1963 and 1964. By requiring written proof of such
notice, we would be closing our eyes to the obvious truth in favor of their
palpably false claim of ignorance, thus exalting the letter of the law over its
purpose. The purpose is clear enough: to make sure that the redemptioners
are duly notified. We are satisfied that in this case the other brothers and
sisters were actually informed, although not in writing, of the sales made in
1963 and 1964, and that such notice was sufficient.

Page

18

the first sale and fourteen years after the second sale. The delay invoked by
the petitioners extends to more than a decade, assuming of course that
there was a valid notice that tolled the running of the period of redemption.

More than twenty centuries ago, Justinian defined justice "as the constant
and perpetual wish to render every one his due." 16 That wish continues to
motivate this Court when it assesses the facts and the law in every case
brought to it for decision. Justice is always an essential ingredient of its
decisions. Thus when the facts warrants, we interpret the law in a way that
will render justice, presuming that it was the intention of the lawmaker, to
begin with, that the law be dispensed with justice. So we have done in this
case.
WHEREFORE, the petition is granted. The decision of the respondent court
is REVERSED and that of the trial court is reinstated, without any
pronouncement as to costs. It is so ordered.

Now, when did the 30-day period of redemption begin?

While we do not here declare that this period started from the dates of such
sales in 1963 and 1964, we do say that sometime between those years and
1976, when the first complaint for redemption was filed, the other co-heirs
were actually informed of the sale and that thereafter the 30-day period
started running and ultimately expired. This could have happened any time
during the interval of thirteen years, when none of the co-heirs made a
move to redeem the properties sold. By 1977, in other words, when Tecla
Padua filed her complaint, the right of redemption had already been
extinguished because the period for its exercise had already expired.

7.

The following doctrine is also worth noting:

QUIASON, J.:

While the general rule is, that to charge a party with laches in the
assertion of an alleged right it is essential that he should have
knowledge of the facts upon which he bases his claim, yet if the
circumstances were such as should have induced inquiry, and the
means of ascertaining the truth were readily available upon
inquiry, but the party neglects to make it, he will be chargeable
with laches, the same as if he had known the facts. 15
It was the perfectly natural thing for the co-heirs to wonder why the spouses
Alonzo, who were not among them, should enclose a portion of the inherited
lot and build thereon a house of strong materials. This definitely was not the
act of a temporary possessor or a mere mortgagee. This certainly looked
like an act of ownership. Yet, given this unseemly situation, none of the coheirs saw fit to object or at least inquire, to ascertain the facts, which were
readily available. It took all of thirteen years before one of them chose to
claim the right of redemption, but then it was already too late.
We realize that in arriving at our conclusion today, we are deviating from the
strict letter of the law, which the respondent court understandably applied
pursuant to existing jurisprudence. The said court acted properly as it had
no competence to reverse the doctrines laid down by this Court in the
above-cited cases. In fact, and this should be clearly stressed, we ourselves
are not abandoning the De Conejero and Buttle doctrines. What we are
doing simply is adopting an exception to the general rule, in view of the
peculiar circumstances of this case.

G.R. No. 112099

February 21, 1995

ACHILLES C. BERCES, SR., petitioner,

vs.
HON. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA, JR., CHIEF
PRESIDENTIAL LEGAL COUNSEL ANTONIO CARPIO and MAYOR
NAOMI C. CORRAL OF TIWI, ALBAY, respondents.

This is a petition for certiorari and prohibition under Rule 65 of the Revised
Rules of Court with prayer for mandatory preliminary injunction, assailing
the Orders of the Office of the President as having been issued with grave
abuses of discretion. Said Orders directed the stay of execution of the
decision of the Sangguniang Panlalawigan suspending the Mayor of Tiwi,
Albay from office.
I
Petitioner filed two administrative cases against respondent Naomi C.
Corral, the incumbent Mayor of Tiwi, Albay with the Sangguniang
Panlalawigan of Albay, to wit:
(1) Administrative Case No. 02-92 for abuse of authority and/or
oppression for non-payment of accrued leave benefits due the
petitioner amounting to P36,779.02.
(2) Administrative Case No. 05-92 for dishonesty and abuse of
authority for installing a water pipeline which is being operated,
maintained and paid for by the municipality to service
respondent's private residence and medical clinic.
On July 1, 1993, the Sangguniang Panlalawigan disposed the two
Administrative cases in the following manner:

19

ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi,

Albay, is hereby ordered to pay Achilles Costo Berces, Sr. the
sum of THIRTY-SIX THOUSAND AND SEVEN HUNDRED
SEVENTY-NINE PESOS and TWO CENTAVOS (P36,779.02) per
Voucher No. 352, plus legal interest due thereon from the time it
was approved in audit up to final payment, it being legally due the
Complainant representing the money value of his leave credits
accruing for services rendered in the municipality from 1988 to
1992 as a duly elected Municipal Councilor. IN ADDITION,
respondent Mayor NAOMI C. CORRAL is hereby ordered
SUSPENDED from office as Municipal Mayor of Tiwi, Albay, for a
period of two (2) months, effective upon receipt hereof for her
blatant abuse of authority coupled with oppression as a public
example to deter others similarly inclined from using public office
as a tool for personal vengeance, vindictiveness and oppression
at the expense of the Taxpayer (Rollo, p. 14).
(2) Administrative Case No. 05-92
WHEREFORE, premises considered, respondent Mayor NAOMI
C. CORRAL of Tiwi, Albay, is hereby sentenced to suffer the
penalty of SUSPENSION from office as Municipal Mayor thereof
for a period of THREE (3) MONTHS beginning after her service of
the first penalty of suspension ordered in Administrative Case No.
02-92. She is likewise ordered to reimburse the Municipality of
Tiwi One-half of the amount the latter have paid for electric and
water bills from July to December 1992, inclusive (Rollo, p. 16).

Page

(1) Administrative Case No. 02-92

respondent shall be considered as having been placed under

preventive suspension during the pendency of an appeal in the
events he wins such appeal. In the event the appeal results in an
exoneration, he shall be paid his salary and such other
emoluments during the pendency of the appeal (R.A. No. 7160).
Sec. 6 Except as otherwise provided by special laws, the
execution of the decision/resolution/order appealed from is
stayed upon filing of the appeal within the period prescribed
herein. However, in all cases, at any time during the pendency of
the appeal, the Office of the President may direct or stay the
execution of the decision/resolution/order appealed from upon
such terms and conditions as it may deem just and reasonable
(Adm. Order No. 18).
xxx xxx xxx
After due consideration, and in the light of the Petition for Review
filed before this Office, we find that a stay of execution pending
appeal would be just and reasonable to prevent undue prejudice
to public interest.
WHEREFORE, premises considered, this Office hereby orders
the suspension/stay of execution of:
a) the Decision of the Sangguniang
Panlalawigan of Albay in Administrative
Case No. 02-92 dated 1 July 1993
suspending Mayor Naomi C. Corral from
office for a period of two (2) months, and

Consequently, respondent Mayor appealed to the Office of the President

questioning the decision and at the same time prayed for the stay of
execution thereof in accordance with Section 67(b) of the Local Government
Code, which provides:

b) the Resolution of the Sangguniang

Panlalawigan of Albay in Administrative
Case. No. 05-92 dated 5 July 1993
suspending Mayor Naomi C. Corral from
office for a period of three (3) months (Rollo,
pp. 55-56).

Administrative Appeals. Decision in administrative cases may,

within thirty (30) days from receipt thereof, be appealed to the
following:

Petitioner then filed a Motion for Reconsideration questioning the aforesaid

Order of the Office of the President.

xxx xxx xxx

(b) The Office of the President, in the case
of decisions of the sangguniang
panlalawigan and the sangguniang
panglungsod of highly urbanized cities and
independent component cities.
Acting on the prayer to stay execution during the pendency of the appeal,
the Office of the President issued an Order on July 28, 1993, the pertinent
portions of which read as follows:
xxx xxx xxx
The stay of the execution is governed by Section 68 of R.A. No.
7160 and Section 6 of Administrative Order No. 18 dated 12
February 1987, quoted below:
Sec. 68. Execution Pending Appeal. An appeal shall not
prevent a decision from becoming final or executory. The

On September 13, 1990, the Motion for Reconsideration was denied.

Hence, this petition.
II
Petitioner claims that the governing law in the instant case is R.A. No. 7160,
which contains a mandatory provision that an appeal "shall not prevent a
decision from becoming final and executory." He argues that administrative
Order No. 18 dated February 12, 1987, (entitle "Prescribing the Rules and
Regulations Governing Appeals to Office the President") authorizing the
President to stay the execution of the appealed decision at any time during
the pendency of the appeal, was repealed by R.A. No. 7160, which took
effect on January 1, 1991 (Rollo, pp. 5-6).
The petition is devoid of merit.

rendition of service by the mayor to the public, a stay of the execution of the
decision is in order.

All general and special laws, acts, city charters,

decrees, executive orders, administrative regulations,
part or parts thereof, which are incosistent with any of
the provisions of this Code, are hereby repealed or
modified accordingly.
The aforementioned clause is not an express repeal of Section 6 of
Administrative Order No. 18 because it failed to identify or designate the
laws or executive orders that are intended to be repealed (cf. I Sutherland,
Statutory Construction 467 [1943]).
If there is any repeal of Administrative Order No. 18 by R.A. No. 7160, it is
through implication though such kind of repeal is not favored (The Philippine
American Management Co., Inc. v. The Philippine American Management
Employees Association, 49 SCRA 194 [1973]). There is even a presumption
against implied repeal.

Page

20

Petitioner invokes the repealing clause of Section 530 (f), R.A. No. 7160,
which provides:

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

8.

G.R. No. 103982

December 11, 1992

ANTONIO A. MECANO, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:

An implied repeal predicates the intended repeal upon the condition that a
substantial conflict must be found between the new and prior laws. In the
absence of an express repeal, a subsequent law cannot be construed as
repealing a prior law unless an irreconcible inconsistency and repugnancy
exists in the terms of the new and old laws (Iloilo Palay and Corn Planters
Association, Inc. v. Feliciano, 13 SCRA 377 [1965]). The two laws must be
absolutely incompatible (Compania General de Tabacos v. Collector of
Customs, 46 Phil. 8 [1924]). There must be such a repugnancy between the
laws that they cannot be made to stand together (Crawford, Construction of
Statutes 631 [1940]).

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the

decision of the Commission on Audit (COA, for brevity) embodied in its 7th
Indorsement, dated January 16, 1992, denying his claim for reimbursement
under Section 699 of the Revised Administrative Code (RAC), as amended,
in the total amount of P40,831.00.

We find that the provisions of Section 68 of R.A. No. 7160 and Section 6 of
Administrative Order No. 18 are not irreconcillably inconsistent and
repugnant and the two laws must in fact be read together.

On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim

(Director Lim, for brevity), he requested reimbursement for his expenses on
the ground that he is entitled to the benefits under Section 699 1 of the RAC,
the pertinent provisions of which read:

The first sentence of Section 68 merely provides that an "appeal shall not
prevent a decision from becoming final or executory." As worded, there is
room to construe said provision as giving discretion to the reviewing officials
to stay the execution of the appealed decision. There is nothing to infer
therefrom that the reviewing officials are deprived of the authority to order a
stay of the appealed order. If the intention of Congress was to repeal
Section 6 of Administrative Order No. 18, it could have used more direct
language expressive of such intention.
The execution of decisions pending appeal is procedural and in the absence
of a clear legislative intent to remove from the reviewing officials the
authority to order a stay of execution, such authority can provided in the
rules and regulations governing the appeals of elective officials in
administrative cases.
The term "shall" may be read either as mandatory or directory depending
upon a consideration of the entire provisions in which it is found, its object
and the consequences that would follow from construing it one way or the
other (cf. De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case at bench,
there is no basis to justify the construction of the word as mandatory.
The Office of the President made a finding that the execution of the decision
of the Sagguniang Panlalawigan suspending respondent Mayor from office
might be prejudicial to the public interest. Thus, in order not to disrupt the

Petitioner is a Director II of the National Bureau of Investigation (NBI). He

was hospitalized for cholecystitis from March 26, 1990 to April 7, 1990, on
account of which he incurred medical and hospitalization expenses, the total
amount of which he is claiming from the COA.

Sec. 699. Allowances in case of injury, death, or

sickness incurred in performance of duty. When a
person in the service of the national government of a
province, city, municipality or municipal district is so
injured in the performance of duty as thereby to receive
some actual physical hurt or wound, the proper Head
of Department may direct that absence during any
period of disability thereby occasioned shall be on full
pay, though not more than six months, and in such
case he may in his discretion also authorize the
payment of the medical attendance, necessary
transportation, subsistence and hospital fees of the
injured person. Absence in the case contemplated shall
be charged first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly
with the performance of some act in the line of duty,
the Department head may in his discretion authorize
the payment of the necessary hospital fees.

that to allow simultaneous recovery of benefits under both laws on account

of the same contingency would be unfair and unjust to the Government.

However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th

Indorsement dated November 21, 1990, returned petitioner's claim to
Director Lim, having considered the statements of the Chairman of the COA
in its 5th Indorsement dated 19 September 1990, to the effect that the RAC
being relied upon was repealed by the Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion
No. 73, S. 1991 2 dated April 26, 1991 of then Secretary of Justice Franklin
M. Drilon (Secretary Drilon, for brevity) stating that "the issuance of the
Administrative Code did not operate to repeal or abregate in its entirety the
Revised Administrative Code, including the particular Section 699 of the
latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew
Mecano's claim to then Undersecretary Bello for favorable consideration.
Under a 6th Indorsement, dated July 2, 1991, Secretary Drilon forwarded
petitioner's claim to the COA Chairman, recommending payment of the
same. COA Chairman Eufemio C. Domingo, in his 7th Indorsement of
January 16, 1992, however, denied petitioner's claim on the ground that
Section 699 of the RAC had been repealed by the Administrative Code of
1987, solely for the reason that the same section was not restated nor reenacted in the Administrative Code of 1987. He commented, however, that
the claim may be filed with the Employees' Compensation Commission,
considering that the illness of Director Mecano occurred after the effectivity
of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice
Eduardo Montenegro to Director Lim under a 9th Indorsement dated
February 7, 1992, with the advice that petitioner "elevate the matter to the
Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987
repealed or abrogated Section 699 of the RAC, this petition was brought for
the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and
on the aforementioned Opinion No. 73, S. 1991 of Secretary Drilon. He
further maintains that in the event that a claim is filed with the Employees'
Compensation Commission, as suggested by respondent, he would still not
be barred from filing a claim under the subject section. Thus, the resolution
of whether or not there was a repeal of the Revised Administrative Code of
1917 would decide the fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the
Administrative Code of 1987 (Exec. Order No. 292) operated to revoke or
supplant in its entirety the Revised Administrative Code of 1917. The COA
claims that from the "whereas" clauses of the new Administrative Code, it
can be gleaned that it was the intent of the legislature to repeal the old
Code. Moreover, the COA questions the applicability of the aforesaid
opinion of the Secretary of Justice in deciding the matter. Lastly, the COA
contends that employment-related sickness, injury or death is adequately
covered by the Employees' Compensation Program under P.D. 626, such

Page

21

Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated

June 22, 1990, to the Secretary of Justice, along with the comment, bearing
the same date, of Gerarda Galang, Chief, LED of the NBI, "recommending
favorable action thereof". Finding petitioner's illness to be serviceconnected, the Committee on Physical Examination of the Department of
Justice favorably recommended the payment of petitioner's claim.

The question of whether a particular law has been repealed or not by a

subsequent law is a matter of legislative intent. The lawmakers may
expressly repeal a law by incorporating therein a repealing provision which
expressly and specifically cites the particular law or laws, and portions
thereof, that are intended to be repealed. 3 A declaration in a statute, usually
in its repealing clause, that a particular and specific law, identified by its
number or title, is repealed is an express repeal; all others are implied
repeals. 4
In the case of the two Administrative Codes in question, the ascertainment
of whether or not it was the intent of the legislature to supplant the old Code
with the new Code partly depends on the scrutiny of the repealing clause of
the new Code. This provision is found in Section 27, Book VII (Final
Provisions) of the Administrative Code of 1987 which reads:
Sec. 27. Repealing Clause. All laws, decrees,
orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or
modified accordingly.
The question that should be asked is: What is the nature of this repealing
clause? It is certainly not an express repealing clause because it fails to
identify or designate the act or acts that are intended to be
repealed. 5 Rather, it is an example of a general repealing provision, as
stated in Opinion No. 73, S. 1991. It is a clause which predicates the
intended repeal under the condition that substantial conflict must be found
in existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an
irreconcilable inconcistency and repugnancy exist in the terms of the new
and old laws. 6 This latter situation falls under the category of an implied
repeal.
Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. 7 Hence, before
there can be a repeal, there must be a clear showing on the part of the
lawmaker that the intent in enacting the new law was to abrogate the old
one. The intention to repeal must be clear and manifest; 8 otherwise, at
least, as a general rule, the later act is to be construed as a continuation of,
and not a substitute for, the first act and will continue so far as the two acts
are the same from the time of the first enactment. 9
There are two categories of repeal by implication. The first is where
provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an
implied repeal of the earlier one. The second is if the later act covers the
whole subject of the earlier one and is clearly intended as a substitute, it will
operate to repeal the earlier law. 10
Implied repeal by irreconcilable inconsistency takes place when the two
statutes cover the same subject matter; they are so clearly inconsistent and
incompatible with each other that they cannot be reconciled or harmonized;
and both cannot be given effect, that is, that one law cannot be enforced
without nullifying the other. 11

implementation of the law. This will not hold water. This principle is subject
to limitations. Administrative decisions may be reviewed by the courts upon
a showing that the decision is vitiated by fraud, imposition or mistake. 18 It
has been held that Opinions of the Secretary and Undersecretary of Justice
are material in the construction of statutes in pari materia. 19

Moreover, the COA failed to demonstrate that the provisions of the two
Codes on the matter of the subject claim are in an irreconcilable conflict. In
fact, there can be no such conflict because the provision on sickness
benefits of the nature being claimed by petitioner has not been restated in
the Administrative Code of 1987. However, the COA would have Us
consider that the fact that Section 699 was not restated in the Administrative
Code of 1987 meant that the same section had been repealed. It further
maintained that to allow the particular provisions not restated in the new
Code to continue in force argues against the Code itself. The COA
anchored this argument on the whereas clause of the 1987 Code, which
states:
WHEREAS, the effectiveness of the Government will
be enhanced by a new Administrative Code which
incorporate in a unified document the major structural,
functional and procedural principles and rules of
governance; and

Page

22

Comparing the two Codes, it is apparent that the new Code does not cover
nor attempt to cover the entire subject matter of the old Code. There are
several matters treated in the old Code which are not found in the new
Code, such as the provisions on notaries public, the leave law, the public
bonding law, military reservations, claims for sickness benefits under
Section 699, and still others.

Lastly, it is a well-settled rule of statutory construction that repeals of

statutes by implication are not favored. 20The presumption is against
inconsistency and repugnancy for the legislature is presumed to know the
existing laws on the subject and not to have enacted inconsistent or
conflicting statutes. 21
This Court, in a case, explains the principle in detail as follows: "Repeals by
implication are not favored, and will not be decreed unless it is manifest that
the legislature so intended. As laws are presumed to be passed with
deliberation with full knowledge of all existing ones on the subject, it is but
reasonable to conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to some matter, unless the
repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the
later act fully embraces the subject matter of the earlier, or unless the
reason for the earlier act is beyond peradventure renewed. Hence, every
effort must be used to make all acts stand and if, by any reasonable
construction, they can be reconciled, the later act will not operate as a
repeal of the earlier. 22

xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code the
Administrative Code of 1987. This contention is untenable.
The fact that a later enactment may relate to the same subject matter as
that of an earlier statute is not of itself sufficient to cause an implied repeal
of the prior act, since the new statute may merely be cumulative or a
continuation of the old one. 12 What is necessary is a manifest indication of
legislative purpose to repeal. 13

Regarding respondent's contention that recovery under this subject section

shall bar the recovery of benefits under the Employees' Compensation
Program, the same cannot be upheld. The second sentence of Article 173,
Chapter II, Title II (dealing on Employees' Compensation and State
Insurance Fund), Book IV of the Labor Code, as amended by P.D. 1921,
expressly provides that "the payment of compensation under this Title shall
not bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code . . . whose benefits are administered by the
system (meaning SSS or GSIS) or by other agencies of the government."

We come now to the second category of repeal the enactment of a

statute revising or codifying the former laws on the whole subject matter.
This is only possible if the revised statute or code was intended to cover the
whole subject to be a complete and perfect system in itself. It is the rule that
a subsequent statute is deemed to repeal a prior law if the former revises
the whole subject matter of the former statute. 14 When both intent and
scope clearly evidence the idea of a repeal, then all parts and provisions of
the prior act that are omitted from the revised act are deemed
repealed. 15 Furthermore, before there can be an implied repeal under this
category, it must be the clear intent of the legislature that the later act be the
substitute to the prior act. 16

WHEREFORE, premises considered, the Court resolves to GRANT the

petition; respondent is hereby ordered to give due course to petitioner's
claim for benefits. No costs.

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what

appears clear is the intent to cover only those aspects of government that
pertain to administration, organization and procedure, understandably
because of the many changes that transpired in the government structure
since the enactment of the RAC decades of years ago. The COA challenges
the weight that this opinion carries in the determination of this controversy
inasmuch as the body which had been entrusted with the implementation of
this particular provision has already rendered its decision. The COA relied
on the rule in administrative law enunciated in the case of Sison
vs.Pangramuyen 17 that in the absence of palpable error or grave abuse of
discretion, the Court would be loathe to substitute its own judgment for that
of the administrative agency entrusted with the enforcement and

DANILO E. PARAS, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.

SO ORDERED.
SO ORDERED.

9.

[G.R. No. 123169. November 4, 1996]

RESOLUTION

FRANCISCO, J.:

of office. Paragraph (b) construed together with paragraph (a) merely

designates the period when such elective local official may be subject of a
recall election, that is, during the second year of his term of office. Thus,
subscribing to petitioner's interpretation of the phrase regular local
election to include the SK election will unduly circumscribe the novel
provision of the Local Government Code on recall, a mode of removal of
public officers by initiation of the people before the end of his term. And if
the SK election which is set by R.A No. 7808 to be held every three years
from May 1996 were to be deemed within the purview of the phrase "regular
local election", as erroneously insisted by petitioner, then no recall election
can be conducted rendering inutile the recall provision of the Local
Government Code.

In a resolution dated January 5, 1996, the COMELEC, for the third time, rescheduled the recall election an January 13, 1996; hence, the instant
petition for certiorari with urgent prayer for injunction. On January 12, 1996,
the Court issued a temporary restraining order and required the Office of the
Solicitor General, in behalf of public respondent, to comment on the petition.
In view of the Office of the Solicitor General's manifestation maintaining an
opinion adverse to that of the COMELEC, the latter through its law
department filed the required comment. Petitioner thereafter filed a reply. 3
Petitioner's argument is simple and to the point. Citing Section 74 (b) of
Republic Act No. 7160, otherwise known as the Local Government Code,
which states that "no recall shall take place within one (1) year from the
date of the official's assumption to office or one (1) year immediately
preceding a regular local election", petitioner insists that the scheduled
January 13, 1996 recall election is now barred as the Sangguniang
Kabataan (SK) election was set by Republic Act No. 7808 on the first
Monday of May 1996, and every three years thereafter. In support thereof,
petitioner cites Associated Labor Union v. Letrondo-Montejo, 237 SCRA
621, where the Court considered the SK election as a regular local election.
Petitioner maintains that as the SK election is a regular local election, hence
no recall election can be had for barely four months separate the SK
election from the recall election. We do not agree.
The subject provision of the Local Government Code provides:
Sec. 74. Limitations on Recall. (a) Any elective local
official may be the subject of a recall election only once
during his term of office for loss of confidence.
(b) No recall shall take place within one (1) year from
the date of the official's assumption to office or one (1)
year immediately preceding a regular local election.
[Emphasis added]
It is a rule in statutory construction that every part of the statute must be
interpreted with reference to the context,i.e., that every part of the statute
must be considered together with the other parts, and kept subservient to
the general intent of the whole enactment. 4 The evident intent of Section 74
is to subject an elective local official to recall election once during his term

Page

23

Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula,

Cabanatuan City who won during the last regular barangay election in 1994.
A petition for his recall as Punong Barangay was filed by the registered
voters of the barangay. Acting on the petition for recall, public respondent
Commission on Elections (COMELEC) resolved to approve the petition,
scheduled the petition signing on October 14, 1995, and set the recall
election
on
November
13,
1995. 1 At least 29.30% of the registered voters signed the petition, well
above the 25% requirement provided by law. The COMELEC, however,
deferred the recall election in view of petitioner's opposition. On December
6, 1995, the COMELEC set anew the recall election, this time on December
16, 1995. To prevent the holding of the recall election, petitioner filed before
the Regional Trial Court of Cabanatuan City a petition for injunction,
docketed as SP Civil Action No. 2254-AF, with the trial court issuing a
temporary restraining order. After conducting a summary hearing, the trial
court lifted the restraining order, dismissed the petition and required
petitioner and his counsel to explain why they should not be cited for
contempt for misrepresenting that the barangay recall election was without
COMELEC approval. 2

In the interpretation of a statute, the Court should start with the assumption
that the legislature intended to enact an effective law, and the legislature is
not presumed to have done a vain thing in the enactment of a statute. 5 An
interpretation should, if possible, be avoided under which a statute or
provision being construed is defeated, or as otherwise expressed, nullified,
destroyed, emasculated, repealed, explained away, or rendered
insignificant, meaningless, inoperative or nugatory. 6
It is likewise a basic precept in statutory construction that a statute should
be interpreted in harmony with the Constitution. 7 Thus, the interpretation of
Section 74 of the Local Government Code, specifically paragraph (b)
thereof, should not be in conflict with the Constitutional mandate of Section
3 of Article X of the Constitution to "enact a local government code which
shall provide for a more responsive and accountable local government
structure instituted through a system of decentralization with effective
mechanism of recall, initiative, and referendum . . . ."
Moreover, petitioner's too literal interpretation of the law leads to absurdity
which we cannot countenance. Thus, in a case, the Court made the
following admonition:
We admonish against a too-literal reading of the law as
this is apt to constrict rather than fulfill its purpose and
defeat the intention of its authors. That intention is
usually found not in "the letter that killeth but in the
spirit that vivifieth". . . 8
The spirit, rather than the letter of a law determines its
construction; hence, a statute, as in this case, must be read
according to its spirit and intent.
Finally, recall election is potentially disruptive of the normal working of the
local government unit necessitating additional expenses, hence the
prohibition against the conduct of recall election one year immediately
preceding the regular local election. The proscription is due to the proximity
of the next regular election for the office of the local elective official
concerned. The electorate could choose the official's replacement in the
said election who certainly has a longer tenure in office than a successor
elected through a recall election. It would, therefore, be more in keeping
with the intent of the recall provision of the Code to construe regular local
election as one referring to an election where the office held by the local
elective official sought to be recalled will be contested and be filled by the
electorate.
Nevertheless, recall at this time is no longer possible because of the
limitation stated under Section 74 (b) of the Code considering that the next

he can vote is that he be a registered voter pursuant to the rules on

registration prescribed in the Omnibus Election Code (Section 113-118).

ACCORDINGLY, the petition is hereby dismissed for having become moot

and academic. The temporary restraining order issued by the Court on
January 12, 1996, enjoining the recall election should be as it is hereby
made permanent.

Page

24

regular election involving the barangay office concerned is barely seven (7)
months away, the same having been scheduled on May 1997. 9

Under the law, the SK includes the youth with ages ranging from 15 to 21
(Sec. 424, Local Government Code of 1991). Accordingly, they include
many who are not qualified to vote in a regular election, viz., those from
ages 15 to less than 18. In no manner then may SK elections be considered
a regular election (whether national or local).

SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza, Hermosisima, Jr., Panganiban and Torres, Jr., JJ.,
concur.
Separate Opinions

DAVIDE, JR., J., concurring:

I concur with Mr. Justice Ricardo J. Francisco in his ponencia.
However, I wish to add another reason as to why the SK election cannot be
considered a "regular local election" for purposes of recall under Section 74
of the Local Government Code of 1991.
The term "regular local election" must be confined to the regular election of
elective local officials, as distinguished from the regular election of national
officials. The elective national officials are the President, Vice-President,
Senators and Congressmen. The elective local officials are Provincial
Governors, Vice-Governors of provinces, Mayors and Vice-Mayors of cities
and municipalities, Members of the Sanggunians of provinces, cities and
municipalities, punong barangays and members of the sangguniang
barangays, and the elective regional officials of the Autonomous Region of
Muslim Mindanao. These are the only local elective officials deemed
recognized by Section 2(2) of Article IX-C of the Constitution, which
provides:
Sec. 2. The Commission on Elections shall exercise
the following powers and functions:
xxx xxx xxx
(2) Exercise exclusive original jurisdiction over all
contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city
officials, and appellate jurisdiction over all contests
involving elective municipal officials decided by trial
courts of general jurisdiction, or involving elective
barangay officials decided by trial courts of limited
jurisdiction.
A regular election, whether national or local, can only refer to an election
participated in by those who possess the right of suffrage, are not otherwise
disqualified by law, and who are registered voters. One of the requirements
for the exercise of suffrage under Section 1, Article V of the Constitution is
that the person must be at least 18 years of age, and one requisite before

Indeed the Sangguniang Kabataan is nothing more than a youth

organization, and although fully recognized in the Local Government Code
and vested with certain powers and functions, its elective officials have not
attained the status of local elective officials. So, in Mercado vs. Board of
Election Supervisors (243 SCRA 422 [1995]), this Court ruled that although
the SK Chairman is an ex-officio member of the sangguniang barangay
an elective body that fact does not make him "an
elective barangay official," since the law specifically provides who comprise
the elective officials of the sangguniang barangay, viz., the punong
barangay and the seven (7) regularsangguniang barangay members
elected at large by those qualified to exercise the right of suffrage under
Article V of the Constitution, who are likewise registered voters of
the barangay. This shows further that the SK election is not a regular local
election for purposes of recall under Section 74 of the Local Government
Code.

Separate Opinions
DAVIDE, JR., J., concurring:
I concur with Mr. Justice Ricardo J. Francisco in his ponencia.
However, I wish to add another reason as to why the SK election cannot be
considered a "regular local election" for purposes of recall under Section 74
of the Local Government Code of 1991.
The term "regular local election" must be confined to the regular election of
elective local officials, as distinguished from the regular election of national
officials. The elective national officials are the President, Vice-President,
Senators and Congressmen. The elective local officials are Provincial
Governors, Vice-Governors of provinces, Mayors and Vice-Mayors of cities
and municipalities, Members of the Sanggunians of provinces, cities and
municipalities, punong barangays and members of the sangguniang
barangays, and the elective regional officials of the Autonomous Region of
Muslim Mindanao. These are the only local elective officials deemed
recognized by Section 2(2) of Article IX-C of the Constitution, which
provides:
Sec. 2. The Commission on Elections shall exercise
the following powers and functions:
xxx xxx xxx
(2) Exercise exclusive original jurisdiction over all
contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city
officials, and appellate jurisdiction over all contests
involving elective municipal officials decided by trial

Reversal of this decision is sought by the Commissioner by a petition for

review on certiorari filed with this Court. He ascribes to the Tax Court one
sole error: "of applying the tax credit for overpayment of the 1959 income
tax of .. ESSO, granted by the petitioner (Commissioner), to .. (ESSO's)
basic 1960 deficiency income tax liability x x and imposing the 1-1/2%
monthly interests 3 only on the remaining balance thereof in the sum of
P146,961.00" 4 (instead of the full amount of the 1960 deficiency liability in
the amount of P367,994.00). Reversal of the same judgment of the Court of
Tax Appeals is also sought by ESSO in its own appeal (docketed as G.R.
Nos. L28508-09); but in the brief filed by it in this case, it indicates that it will
not press its appeal in the event that "the instant petition for review be
denied and that judgment be rendered affirming the decision of the Court of
Tax Appeals."

A regular election, whether national or local, can only refer to an election

participated in by those who possess the right of suffrage, are not otherwise
disqualified by law, and who are registered voters. One of the requirements
for the exercise of suffrage under Section 1, Article V of the Constitution is
that the person must be at least 18 years of age, and one requisite before
he can vote is that he be a registered voter pursuant to the rules on
registration prescribed in the Omnibus Election Code (Section 113-118).
Under the law, the SK includes the youth with ages ranging from 15 to 21
(Sec. 424, Local Government Code of 1991). Accordingly, they include
many who are not qualified to vote in a regular election, viz., those from
ages 15 to less than 18. In no manner then may SK elections be considered
a regular election (whether national or local).
Indeed the Sangguniang Kabataan is nothing more than a youth
organization, and although fully recognized in the Local Government Code
and vested with certain powers and functions, its elective officials have not
attained the status of local elective officials. So, in Mercado vs. Board of
Election Supervisors (243 SCRA 422 [1995]), this Court ruled that although
the SK Chairman is an ex-officio member of the sangguniang barangay
an elective body that fact does not make him "an
elective barangay official," since the law specifically provides who comprise
the elective officials of the sangguniang barangay, viz., the punong
barangay and the seven (7) regularsangguniang barangay members
elected at large by those qualified to exercise the right of suffrage under
Article V of the Constitution, who are likewise registered voters of
the barangay. This shows further that the SK election is not a regular local
election for purposes of recall under Section 74 of the Local Government
Code.
Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug and Mendoza, JJ.,
concur.

10. G.R. Nos. L-28502-03

April 18, 1989

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
ESSO STANDARD EASTERN, INC. and THE COURT OF TAX
APPEALS, respondents.

NARVASA, J.:
In two (2) cases appealed to it 1 by the private respondent, hereafter simply
referred to as ESSO, the Court of Tax Appeals rendered
judgment 2sustaining the decisions of the Commissioner of Internal
Revenue excepted to, save "the refund-claim .. in the amount of P39,787.94
as overpaid interest which it ordered refunded to ESSO

Page

25

courts of general jurisdiction, or involving elective

barangay officials decided by trial courts of limited
jurisdiction.

The facts are simple enough and are quite quickly recounted. ESSO
overpaid its 1959 income tax by P221,033.00. It was accordingly granted a
tax credit in this amount by the Comissioner on August 5,1964. However,
ESSOs payment of its income tax for 1960 was found to be short by
P367,994.00. So, on July 10, 1964, the Commissioner wrote to ESSO
demanding payment of the deficiency tax, together with interest thereon for
the period from April 18,1961 to April 18,1964. On August 10, 1964, ESSO
paid under protest the amount alleged to be due, including the interest as
reckoned by the Commissioner. It protested the computation of interest,
contending it was more than that properly due. It claimed that it should not
have been required to pay interest on the total amount of the deficiency tax,
P367,994.00, but only on the amount of P146,961.00representing the
difference between said deficiency, P367,994.00, and ESSOs earlier
overpayment of P221,033.00 (for which it had been granted a tax credit).
ESSO thus asked for a refund.
The Internal Revenue Commissioner denied the claim for refund. ESSO
appealed to the Court of Tax Appeals. As aforestated. that Court ordered
payment to ESSO of its "refund-claim x x in the amount of P39,787.94 as
overpaid interest. Hence, this appeal by the Commissioner. The CTA
justified its award of the refund as follows:
... In the letter of August 5, 1964, .. (the Commissioner) admitted
that .. ESSO had overpaid its 1959 income tax by P221,033.00.
Accordingly .. (the Commissioner) granted to .. ESSO a tax credit
of P221,033.00. In short, the said sum of P221,033.00 of ESSO's
money was in the Government's hands at the latest on July 15,
1960 when it ESSO paid in full its second installment of income
tax for 1959. On July 10, 1964 .. (the Commissioner) claimed that
for 1960, .. ESSO underpaid its income tax by P367,994.00.
However, instead of deducting from P367,994.00 the tax credit of
P221,033.00 which .. (the Commissioner) had already admitted
was due .. ESSO .. (the Commissioner) still insists in collecting
the interest on the full amount of P367,994.00 for the period April
18, 1961 to April 18,1964 when the Government had already in its
hands the sum of P221,033.00 of .. ESSOs money even before
the latter's income tax for 1960 was due and payable. If the
imposition of interest does not amount to a penalty but merely a
just compensation to the State for the delay in paying the tax, and
for the concomitant use by the taxpayer of funds that rightfully
should be in the Government's hand (Castro v. Collector, G.R.
No. L-1274, Dec. 28, 1962), the collection of the interest on the
full amount of P367,994.00 without deducting first the tax credit of
P221,033.00, which has long been in the hands of the
Government, becomes erroneous, illegal and arbitrary.

Accordingly, we hold that the tax credit of P221,033.00 for 1959

should first be deducted from the basic deficiency tax of
P367,994.00 for 1960 and the resulting difference of P146,961.00
would be subject to the 18% interest prescribed by Section 51 (d)
of the Revenue Code. According to the prayer of ..(ESSO) .. (the
Commissioner) is hereby ordered to refund to .. (ESSO) the
amount of P39,787.94 as overpaid interest in the settlement of its
1960 income tax liability. However, as the collection of the tax
was not attended with arbitrariness because .. (ESSO) itself
followed x x (the Commissioner's) manner of computing the tax in
paying the sum of P213,189.93 on August 10, 1964, the prayer of
.. (ESSO) that it be granted the legal rate of interest on its
overpayment of P39,787.94 from August 10, 1964 to the time it is
actually refunded is denied. (See Collector of Internal Revenue v.
Binalbagan Estate, Inc., G.R. No. 1,12752, Jan. 30, 1965).
The Commissioner's position is that income taxes are determined and paid
on an annual basis, and that such determination and payment of annual
taxes are separate and independent transactions; and that a tax credit could
not be so considered until it has been finally approved and the taxpayer duly
notified thereof. Since in this case, he argues, the tax credit of P221,033.00
was approved only on August 5, 1964, it could not be availed of in reduction
of ESSOs earlier tax deficiency for the year 1960; as of that year, 1960,
there was as yet no tax credit to speak of, which would reduce the
deficiency tax liability for 1960. In support of his position, the Commissioner
invokes the provisions of Section 51 of the Tax Code pertinently reading as
follows:

Page

26

.. (ESSO) could hardly be charged of delinquency in paying

P221,033.00 out of the deficiency income tax of P367,994.00, for
which the State should be compensated by the payment of
interest, because the said amount of P221,033.00 was already in
the coffers of the Government. Neither could .. ESSO be charged
for the concomitant use of funds that rightfully belong to the
Government because as early as July 15, 1960, it was the
Government that was using .. ESSOs funds of P221,033.00. In
the circumstances, we find it unfair and unjust for .. (the
Commissioner) to exact the interest on the said sum of
P221,033.00 which, after all, was paid to and received by the
Government even before the incidence of the deficiency income
tax of P367,994.00. (Itogon-Suyoc Mines, Inc. v. Commissioner,
C.T.A. Case No. 1327, Sept. 30,1965). On the contrary, the
Government should be the first to blaze the trail and set the
example of fairness and honest dealing in the administration of
tax laws.

the deficiency and shall be paid upon notice and demand from
the Commissioner of Internal Revenue; and shall be collected as
a part of the tax, at the rate of six per centum per annum from the
date prescribed for the payment of the tax (or, if the tax is paid in
installments, from the date prescribed for the payment of the first
installment) to the date the deficiency is assessed;Provided, That
the amount that may be collected as interest on deficiency shall
in no case exceed the amount corresponding to a period of three
years, the present provision regarding prescription to the contrary
notwithstanding.

The fact is that, as respondent Court of Tax Appeals has stressed, as early
as July 15, 1960, the Government already had in its hands the sum of
P221,033.00 representing excess payment. Having been paid and received
by mistake, as petitioner Commissioner subsequently acknowledged, that
sum unquestionably belonged to ESSO, and the Government had the
obligation to return it to ESSO That acknowledgment of the erroneous
payment came some four (4) years afterwards in nowise negates or
detracts from its actuality. The obligation to return money mistakenly paid
arises from the moment that payment is made, and not from the time that
the payee admits the obligation to reimburse. The obligation of the payee to
reimburse an amount paid to him results from the mistake, not from the
payee's confession of the mistake or recognition of the obligation to
reimburse. In other words, since the amount of P221,033.00 belonging to
ESSO was already in the hands of the Government as of July, 1960,
although the latter had no right whatever to the amount and indeed was
bound to return it to ESSO, it was neither legally nor logically possible for
ESSO thereafter to be considered a debtor of the Government in that
amount of P221,033.00; and whatever other obligation ESSO might
subsequently incur in favor of the Government would have to be reduced by
that sum, in respect of which no interest could be charged. To interpret the
words of the statute in such a manner as to subvert these truisms simply
can not and should not be countenanced. "Nothing is better settled than that
courts are not to give words a meaning which would lead to absurd or
unreasonable consequences. That is a principle that goes back to In re
Allen (2 Phil. 630) decided on October 29, 1903, where it was held that a
literal interpretation is to be rejected if it would be unjust or lead to absurd
results." 6 "Statutes should receive a sensible construction, such as will give
effect to the legislative intention and so as to avoid an unjust or absurd
conclusion." 7
WHEREFORE, the petition for review is DENIED, and the Decision of the
Court of Tax Appeals dated October 28, 1967 subject of the petition is
AFFIRMED, without pronouncement as to costs.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

(c) Definition of deficiency. As used in this Chapter in respect of

tax imposed by this Title, the term 'deficiency' means:
(1) The amount by which the tax imposed by this Title exceeds
the amount shown as the tax by the taxpayer upon his return; but
the amount so shown on the return shall first be increased by the
amounts previously assessed (or collected without assessment)
as a deficiency, and decreased by the amount previously abated
credited, returned, or otherwise in respect of such tax; ..

11. [G.R. No. 112170. April 10, 1996]

CESARIO URSUA, petitioner,
vs.
COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.

xxx xxx xxx

(d) Interest on deficiency. Interest upon the amount
determined as deficiency shall be assessed at the same time as

BELLOSILLO, J.:p

Petitioner appealed to the Court of Appeals.

27

This is a petition for review of the decision of the Court of Appeals which
affirmed the conviction of petitioner by the Regional Trial Court of Davao
City for violation of Sec. 1 of C.A. No. 142, as amended by R.A. No. 6085,
otherwise known as "An Act to Regulate the Use of Aliases". 1
Petitioner Cesario Ursua was a Community Environment and Natural
Resources Officer assigned in Kidapawan, Cotabato. On 9 May 1989 the
Provincial Governor of Cotabato requested the Office of the Ombudsman in
Manila to conduct an investigation on a complaint for bribery, dishonesty,
abuse of authority and giving of unwarranted benefits by petitioner and
other officials of the Department of Environment and Natural Resources.
The complaint was initiated by the Sangguniang Panlalawigan of Cotabato
through a resolution advising the Governor to report the involvement of
petitioner and others in the illegal cutting of mahogany trees and hauling of
illegally-cut logs in the area. 2
On 1 August 1989 Atty. Francis Palmones, counsel for petitioner, wrote the
Office of the Ombudsman in Davao City requesting that he be furnished
copy of the complaint against petitioner. Atty. Palmones then asked his
client Ursua to take his letter-request to the Office of the Ombudsman
because his law firm's messenger, Oscar Perez, had to attend to some
personal matters. Before proceeding to the Office of the Ombudsman
petitioner talked to Oscar Perez and told him that he was reluctant to
personally ask for the document since he was one of the respondents
before the Ombudsman. However, Perez advised him not to worry as he
could just sign his (Perez) name if ever he would be required to
acknowledge receipt of the complaint. 3

When petitioner arrived at the Office of the Ombudsman in Davao City he

was instructed by the security officer to register in the visitors' logbook.
Instead of writing down his name petitioner wrote the name "Oscar Perez"
after which he was told to proceed to the Administrative Division for the
copy of the complaint he needed. He handed the letter of Atty. Palmones to
the Chief of the Administrative Division, Ms. Loida Kahulugan, who then
gave him a copy of the complaint, receipt of which he acknowledged by
writing the name "Oscar Perez." 4
Before petitioner could leave the premises he was greeted by an
acquaintance, Josefa Amparo, who also worked in the same office. They
conversed for a while then he left. When Loida learned that the person who
introduced himself as "Oscar Perez" was actually petitioner Cesario Ursua,
a customer of Josefa Amparo in her gasoline station, Loida reported the
matter to the Deputy Ombudsman who recommended that petitioner be
accordingly charged.
On 18 December 1990, after the prosecution had completed the
presentation of its evidence, petitioner without leave of court filed a
demurrer to evidence alleging that the failure of the prosecution to prove
that his supposedalias was different from his registered name in the local
civil registry was fatal to its cause. Petitioner argued that no document from
the local civil registry was presented to show the registered name of
accused which according to him was a condition sine qua non for the
validity of his conviction.
The trial court rejected his contentions and found him guilty of violating Sec.
1 of C.A. No. 142 as amended by R.A. No. 6085. He was sentenced to
suffer a prison term of one (1) year and one (1) day of prision
correccionalminimum as minimum, to four (4) years of prision
correccional medium as maximum, with all the accessory penalties provided
for by law, and to pay a fine of P4,000.00 plus costs.

Page

On 31 May 1993 the Court of Appeals affirmed the conviction of petitioner

but modified the penalty by imposing an indeterminate term of one (1) year
as minimum to three (3) years as maximum and a fine of P5,000.00.
Petitioner now comes to us for review of his conviction as he reasserts his
innocence. He contends that he has not violated C.A. No. 142 as amended
by R.A. No. 6085 as he never used any alias name; neither is "Oscar
Perez" his alias. An alias, according to him, is a term which connotes the
habitual use of another name by which a person is also known. He claims
that he has never been known as "Oscar Perez" and that he only used such
name on one occasion and it was with the express consent of Oscar Perez
himself. It is his position that an essential requirement for a conviction under
C.A. No. 142 as amended by R.A. No. 6085 has not been complied with
when the prosecution failed to prove that his supposed alias was different
from his registered name in the Registry of Births. He further argues that the
Court of Appeals erred in not considering the defense theory that he was
charged under the wrong law. 5
Time and again we have decreed that statutes are to be construed in the
light of the purposes to be achieved and the evils sought to be remedied.
Thus in construing a statute the reason for its enactment should be kept in
mind and the statute should be construed with reference to the intended
scope and purpose. 6 The court may consider the spirit and reason of the
statute, where a literal meaning would lead to absurdity, contradiction,
injustice, or would defeat the clear purpose of the lawmakers. 7
For a clear understanding of the purpose of C.A. No. 142 as amended,
which was allegedly violated by petitioner, and the surrounding
circumstances under which the law was enacted, the pertinent provisions
thereof, its amendments and related statutes are herein cited. C.A. No. 142,
which was approved on 7 November 1936, and before its amendment by
R.A. No. 6085, is entitled An Act to Regulate the Use of Aliases. It provides
as follows:
Sec. 1. Except as a pseudonym for literary purposes, no person
shall use any name different from the one with which he was
christened or by which he has been known since his childhood, or
such substitute name as may have been authorized by a
competent court. The name shall comprise the patronymic name
and one or two surnames.
Sec. 2. Any person desiring to use an alias or aliases shall apply
for authority therefor in proceedings like those legally provided to
obtain judicial authority for a change of name. Separate
proceedings shall be had for each alias, and each new petition
shall set forth the original name and the alias oraliases for the
use of which judicial authority has been, obtained, specifying the
proceedings and the date on which such authority was granted.
Judicial authorities for the use of aliases shall be recorded in the
proper civil register . . . .
The above law was subsequently amended by R.A. No. 6085, approved on
4 August 1969. As amended, C.A. No. 142 now reads:
Sec. 1. Except as a pseudonym solely for literary, cinema,
television, radio or other entertainment purposes and in athletic
events where the use of pseudonym is a normally accepted

In Yu Kheng Chiau v. Republic 10 the Court had occasion to explain the

meaning, concept and ill effects of the use of analias within the purview of
C.A. No. 142 when we ruled

Sec. 2. Any person desiring to use an alias shall apply for

authority therefor in proceedings like those legally provided to
obtain judicial authority for a change of name and no person shall
be allowed to secure such judicial authority for more than
one alias. The petition for an alias shall set forth the person's
baptismal and family name and the name recorded in the civil
registry, if different, his immigrant's name, if an alien, and his
pseudonym, if he has such names other than his original or real
name, specifying the reason or reasons for the desired alias. The
judicial authority for the use ofalias, the Christian name and the
alien immigrant's name shall be recorded in the proper local civil
registry, and no person shall use any name or names other than
his original or real name unless the same is or are duly recorded
in the proper local civil registry.
The objective and purpose of C.A. No. 142 have their origin and basis in Act
No. 3883, An Act to Regulate the Use in Business Transactions of Names
other than True Names, Prescribing the Duties of the Director of the Bureau
of Commerce and Industry in its Enforcement, Providing Penalties for
Violations thereof, and for other purposes, which was approved on 14
November 1931 and amended by Act No. 4147, approved on 28 November
1934. 8 The pertinent provisions of Act No. 3883 as amended follow
Sec. 1. It shall be unlawful for any person to use or sign, on any
written or printed receipt including receipt for tax or business or
any written or printed contract not verified by a notary public or on
any written or printed evidence of any agreement or business
transactions, any name used in connection with his business
other than his true name, or keep conspicuously exhibited in plain
view in or at the place where his business is conducted, if he is
engaged in a business, any sign announcing a firm name or
business name or style without first registering such other name,
or such firm name, or business name or style in the Bureau of
Commerce together with his true name and that of any other
person having a joint or common interest with him in such
contract, agreement, business transaction, or business . . . .
For a bit of history, the enactment of C.A. No. 142 as amended was made
primarily to curb the common practice among the Chinese of adopting
scores of different names and aliases which created tremendous confusion
in the field of trade. Such a practice almost bordered on the crime of using
fictitious names which for obvious reasons could not be successfully
maintained against the Chinese who, rightly or wrongly, claimed they
possessed a thousand and one names. C.A. No. 142 thus penalized the act
of using an alias name, unless such alias was duly authorized by proper
judicial proceedings and recorded in the civil register. 9

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28

practice, no person shall use any name different from the one
with which he was registered at birth in the office of the local civil
registry or with which he was baptized for the first time, or in case
of all alien, with which he was registered in the bureau of
immigration upon entry; or such substitute name as may have
been authorized by a competent court: Provided, That persons
whose births have not been registered in any local civil registry
and who have not been baptized, have one year from the
approval of this act within which to register their names in the civil
registry of their residence. The name shall comprise the
patronymic name and one or two surnames.

There can hardly be any doubt that petitioner's use

of alias "Kheng Chiau Young" in addition to his real name "Yu
Cheng Chiau" would add to more confusion. That he is known in
his business, as manager of the Robert Reid, Inc., by the former
name, is not sufficient reason to allow him its use. After all,
petitioner admitted that he is known to his associates by both
names. In fact, the Anselmo Trinidad, Inc., of which he is a
customer, knows him by his real name. Neither would the fact
that he had encountered certain difficulties in his transactions
with government offices which required him to explain why he
bore two names, justify the grant of his petition, for petitioner
could easily avoid said difficulties by simply using and sticking
only to his real name "Yu Kheng Chiau."
The fact that petitioner intends to reside permanently in the
Philippines, as shown by his having filed a petition for
naturalization in Branch V of the above-mentioned court, argues
the more against the grant of his petition, because if naturalized
as a Filipino citizen, there would then be no necessity for his
further using said alias, as it would be contrary to the usual
Filipino way and practice of using only one name in ordinary as
well as business transactions. And, as the lower court correctly
observed, if he believes (after he is naturalized) that it would be
better for him to write his name following the Occidental method,
"he can easily file a petition for change of name, so that in lieu of
the name "Yu Kheng Chian," he can, abandoning the same, ask
for authority to adopt the name Kheng Chiau Young."
All things considered, we are of the opinion and so hold, that
petitioner has not shown satisfactory proper and reasonable
grounds under the aforequoted provisions of Commonwealth Act
No. 142 and the Rules of Court, to warrant the grant of his
petition for the use of an alias name.

Clearly therefore an alias is a name or names used by a person or intended

to be used by him publicly and habitually usually in business transactions in
addition to his real name by which he is registered at birth or baptized the
first time or substitute name authorized by a competent authority. A man's
name is simply the sound or sounds by which he is commonly designated
by his fellows and by which they distinguish him but sometimes a man is
known by several different names and these are known
as aliases. 11 Hence, the use of a fictitious name or a different name
belonging to another person in a single instance without any sign or
indication that the user intends to be known by this name in addition to his
real name from that day forth does not fall within the prohibition contained in
C.A. No. 142 as amended. This is so in the case at bench.
It is not disputed that petitioner introduced himself in the Office of the
Ombudsman as "Oscar Perez," which was the name of the messenger of
his lawyer who should have brought the letter to that office in the first place
instead of petitioner. He did so while merely serving the request of his
lawyer to obtain a copy of the complaint in which petitioner was a
respondent. There is no question then that "Oscar Perez" is not
an alias name of petitioner. There is no evidence showing that he had used
or was intending to use that name as his second name in addition to his real
name. The use of the name "Oscar Perez" was made by petitioner in an

to which mankind would be safe, and the discretion of the court

limited. 14 Indeed, our mind cannot rest easy on the proposition that
petitioner should be convicted on a law that does not clearly penalize the
act done by him.

While the act of petitioner may be covered by other provisions of law, such
does not constitute an offense within the concept of C.A. No. 142 as
amended under which he is prosecuted. The confusion and fraud in
business transactions which the anti-alias law and its related statutes seek
to prevent are not present here as the circumstances are peculiar and
distinct from those contemplated by the legislature in enacting C.A. No. 142
as amended. There exists a valid presumption that undesirable
consequences were never intended by a legislative measure and that a
construction of which the statute is fairly susceptible is favored, which will
avoid all objectionable, mischievous, indefensible, wrongful, evil and
injurious consequences. 12 Moreover, as C.A. No. 142 is a penal statute, it
should be construed strictly against the State and in favor of the
accused. 13 The reason for this principle is the tenderness of the law for the
rights of individuals and the object is to establish a certain rule by conformity

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29

isolated transaction where he was not even legally required to expose his
real identity. For, even if he had identified himself properly at the Office of
the Ombudsman, petitioner would still be able to get a copy of the complaint
as a matter of right, and the Office of the Ombudsman could not refuse him
because the complaint was part of public records hence open to inspection
and examination by anyone under the proper circumstances.

WHEREFORE, the questioned decision of the Court of Appeals affirming

that of the Regional Trial Court of Davao City is REVERSED and SET
ASIDE and petitioner CESARIO URSUA is ACQUITTED of the crime
charged.
SO ORDERED.