Statutory Construction (private respondent) as representative of the party-list organization Citizens’ Battle Against Corruption (CIBAC) in the House of

Part IV and V Representatives, and denied petitioner’s Motion for Reconsideration.

AY 2011-2012
IV. Adherence to or Departure from Language of a statute
In her Petition for Quo Warranto1 seeking the ouster of private respondent, petitioner alleged that, among other things, private
a. Verba Legis Rule respondent assumed office without a formal proclamation issued by the Commission on Elections (COMELEC); he was
i. Amores vs. HRET, G.R. No. 189600, June 29, 2010
disqualified to be a nominee of the youth sector of CIBAC since, at the time of the filing of his certificates of nomination and
ii. Aparri vs. Court of Appeals, G.R. No. 30057, January 31, 1984 acceptance, he was already 31 years old or beyond the age limit of 30 pursuant to Section 9 of Republic Act (RA) No. 7941,
iii. San Diego vs. Sayson, G.R. No. 16258, August 31, 1961
otherwise known as the Party-List System Act; and his change of affiliation from CIBAC’s youth sector to its overseas Filipino
b. When departure to literal interpretation allowed workers and their families sector was not effected at least six months prior to the May 14, 2007 elections so as to be qualified to
i. When necessary to determine legislative intent
represent the new sector under Section 15 of RA No. 7941.
U.S. vs. Go Chico, 14 Phil 128 (1909)
ii. When a literal interpretation would lead to unjust, unfair and absurd results
Solid Homes vs. Tan, 465 SCRA 137 (2005) Not having filed his Answer despite due notice, private respondent was deemed to have entered a general denial pursuant to
US vs. Paguirigan, 14 Phil 450 (1909) public respondent’s Rules.2
Amatan vs. Aujero, 248 SCRA 511 (1995)
People vs. Purisima, supra. As earlier reflected, public respondent, by Decision of May 14, 2009, 3 dismissed petitioner’s Petition for Quo Warranto, finding
iii. In order to accomplish its purpose that CIBAC was among the party-list organizations which the COMELEC had partially proclaimed as entitled to at least one seat
Rivera vs. Campbell, 34 Phil 348 (1916) in the House of Representatives through National Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 2007. It also
People vs. Lacson, G.R. No. 149453 (2003) found the petition which was filed on October 17, 2007 to be out of time, the reglementary period being 10 days from private
US vs. Toribio, 15 Phil 85 (1910) respondent’s proclamation.
iv. When reason of law ceases, law itself ceases
Ramirez vs. Court of Appeals, G.R. No. 23587 (1967)
Belo vs. PNB, G.R. No. 134330, March 1, 2001 Respecting the age qualification for youth sectoral nominees under Section 9 of RA No. 7941, public respondent held that it
v. In order to supply legislative omissions and/or correcting clerical errors applied only to those nominated as such during the first three congressional terms after the ratification of the Constitution or until
vi. In order to avoid danger to public interest 1998, unless a sectoral party is thereafter registered exclusively as representing the youth sector, which CIBAC, a multi-sectoral
Co Kim Cham vs. Valdez Tan Teh 75 Phil 113 (1945) organization, is not.
vii. When necessary to adopt construction in favor of right and justice
In the matter of private respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their
V. DOCTRINE OF NECESSARY IMPLICATION families sector, public respondent held that Section 15 of RA No. 7941 did not apply as there was no resultant change in party-list
a. City of Manila vs. Gomez, G.R. No. 37251 (1981) affiliation.
b. Gatchalian vs. COMELEC, G.R. No. 32560 (1970)
c. Felipe vs. Leuterio, 91 Phil 482 (1952)
d. Manila Prince Hotel vs. GSIS, 267 SCRA 408 (1997) Her Motion for Reconsideration having been denied by Resolution No. 09-130 dated August 6, 2009, 4 petitioner filed the present
e. Dimagiba vs. Heraldez, 102 Phil 1016 (1958) Petition for Certiorari.5
f. Shioji vs. Harvey, 43 Phil 333 (1922)
g. People vs. Lakandula, G.R. No. 31103 (1983) Petitioner contends that, among other things, public respondent created distinctions in the application of Sections 9 and 15 of RA
h. Dingalasan vs. Lee Hun, 99 Phil 427 (1956) No. 7941 that are not found in the subject provisions, fostering interpretations at war with equal protection of the laws; and NBC
i. People vs. Concepcion, 44 Phil 126 (1922 Resolution No. 07-60, which was a partial proclamation of winning party-list organizations, was not enough basis for private
respondent to assume office on July 10, 2007, especially considering that he admitted receiving his own Certificate of
G.R. No. 189600 June 29, 2010 Proclamation only on December 13, 2007.

MILAGROS E. AMORES, Petitioner, In his Comment,6 private respondent avers in the main that petitioner has not substantiated her claims of grave abuse of discretion
vs. against public respondent; and that he became a member of the overseas Filipinos and their families sector years before the 2007
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and EMMANUEL JOEL J. VILLANUEVA,Respondents. elections.

DECISION
CARPIO MORALES, J.:
Via this petition for certiorari, Milagros E. Amores (petitioner) challenges the Decision of May 14, 2009 and Resolution No. 09-
130 of August 6, 2009 of the House of Representatives Electoral Tribunal (public respondent), which respectively dismissed
petitioner’s Petition for Quo Warranto questioning the legality of the assumption of office of Emmanuel Joel J. Villanueva
It bears noting that the term of office of party-list representatives elected in the May, 2007 elections will expire on June 30, 2010.
While the petition has, thus, become moot and academic, rendering of a decision on the merits in this case would still be of
practical value.7
The Court adopts the issues framed by public respondent, to wit: (1) whether petitioner’s Petition for Quo Warranto was
dismissible for having been filed unseasonably; and (2) whether Sections 9 and 15 of RA No. 7941 apply to private respondent.
On the first issue, the Court finds that public respondent committed grave abuse of discretion in considering petitioner’s Petition
for Quo Warranto filed out of time. Its counting of the 10-day reglementary period provided in its Rules 8 from the issuance of
NBC Resolution No. 07-60 on July 9, 2007 is erroneous.
To be sure, while NBC Resolution No. 07-60 partially proclaimed CIBAC as a winner in the May, 2007 elections, along with
other party-list organizations,9 it was by no measure a proclamation of private respondent himself as required by Section 13 of RA
No. 7941.
Section 13. How Party-List Representatives are Chosen. Party-list representatives shall be proclaimed by the COMELEC based
on the list of names submitted by the respective parties, organizations, or coalitions to the COMELEC according to their ranking
in said list.
AT ALL EVENTS, this Court set aside NBC Resolution No. 07-60 in Barangay Association for National Advancement and
Transparency v. COMELEC10 after revisiting the formula for allocation of additional seats to party-list organizations.
Considering, however, that the records do not disclose the exact date of private respondent’s proclamation, the Court overlooks
the technicality of timeliness and rules on the merits. Alternatively, since petitioner’s challenge goes into private respondent’s
qualifications, it may be filed at anytime during his term.
Qualifications for public office are continuing requirements and must be possessed not only at the time of appointment or election
or assumption of office but during the officer's entire tenure. Once any of the required qualifications is lost, his title may be
seasonably challenged.11
On the second and more substantial issue, the Court shall first discuss the age requirement for youth sector nominees under
Section 9 of RA No. 7941 reading:
Section 9. Qualifications of Party-List Nominees. No person shall be nominated as party-list representative unless he is a natural-
born citizen of the Philippines, a registered voter, a resident of the Philippines for a period of not less than one (1)year
immediately preceding the day of the election, able to read and write, a bona fide member of the party or organization which he
seeks to represent for at least ninety (90) days preceding the day of the election, and is at least twenty-five (25) years of age on
the day of the election.
In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the day
of the election. Any youth sectoral representative who attains the age of thirty (30) during his term shall be allowed to continue in
office until the expiration of his term. (Emphasis and underscoring supplied.)
The Court finds no textual support for public respondent’s interpretation that Section 9 applied only to those nominated during the
first three congressional terms after the ratification of the Constitution or until 1998, unless a sectoral party is thereafter registered
exclusively as representing the youth sector.
A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for
construction or interpretation. There is only room for application. 12
As the law states in unequivocal terms that a nominee of the youth sector must at least be twenty-five (25) but not more than
thirty (30) years of age on the day of the election, so it must be that a candidate who is more than 30 on election day is not
qualified to be a youth sector nominee. Since this mandate is contained in RA No. 7941, the Party-List System Act, it covers ALL
youth sector nominees vying for party-list representative seats.
As petitioner points out, RA No. 7941 was enacted only in March, 1995. There is thus no reason to apply Section 9 thereof only
to youth sector nominees nominated during the first three congressional terms after the ratification of the Constitution in 1987.
Under this interpretation, the last elections where Section 9 applied were held in May, 1995 or two months after the law was
enacted. This is certainly not sound legislative intent, and could not have been the objective of RA No. 7941.
There is likewise no rhyme or reason in public respondent’s ratiocination that after the third congressional term from the
ratification of the Constitution, which expired in 1998, Section 9 of RA No. 7941 would apply only to sectoral parties registered
exclusively as representing the youth sector. This distinction is nowhere found in the law. Ubi lex non distinguit nec nos
distinguire debemus. When the law does not distinguish, we must not distinguish. 13
Respecting Section 15 of RA No. 7941, the Court fails to find even an iota of textual support for public respondent’s ratiocination
that the provision did not apply to private respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino
workers and their families sector as there was no resultant change in party-list affiliation. Section 15 reads:
Section 15. Change of Affiliation; Effect. Any elected party-list representative who changes his political party or sectoral
affiliation during his term of office shall forfeit his seat: Provided, That if he changes his political party orsectoral
affiliation within six (6) months before an election, he shall not be eligible for nomination as party-list representative under his
new party or organization. (emphasis and underscoring supplied.)
What is clear is that the wording of Section 15 covers changes in both political party and sectoral affiliation. And the latter may
occur within the same party since multi-sectoral party-list organizations are qualified to participate in the Philippine party-list
system. Hence, a nominee who changes his sectoral affiliation within the same party will only be eligible for nomination under
the new sectoral affiliation if the change has been effected at least six months before the elections. Again, since the statute is clear
and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This is the plain
meaning rule or verba legis, as expressed in the maxim index animi sermo or speech is the index of intention. 14
It is, therefore, beyond cavil that Sections 9 and 15 of RA No. 7941 apply to private respondent.
The Court finds that private respondent was not qualified to be a nominee of either the youth sector or the overseas Filipino
workers and their families sector in the May, 2007 elections.
The records disclose that private respondent was already more than 30 years of age in May, 2007, it being stipulated that he was
born in August, 1975.15 Moreover, he did not change his sectoral affiliation at least six months before May, 2007, public
respondent itself having found that he shifted to CIBAC’s overseas Filipino workers and their families sector only on March 17,
2007.161avvphi1
That private respondent is the first nominee of CIBAC, whose victory was later upheld, is of no moment. A party-list
organization’s ranking of its nominees is a mere indication of preference, their qualifications according to law are a different
matter.
It not being contested, however, that private respondent was eventually proclaimed as a party-list representative of CIBAC and
rendered services as such, he is entitled to keep the compensation and emoluments provided by law for the position until he is
properly declared ineligible to hold the same.17
WHEREFORE, the petition is GRANTED. The Decision dated May 14, 2009 and Resolution No. 09-130 dated August 6, 2009
of the House of Representatives Electoral Tribunal are SET ASIDE. Emmanuel Joel J. Villanueva is declared ineligible to hold
office as a member of the House of Representatives representing the party-list organization CIBAC.
SO ORDERED.
G.R. No. L-30057 January 31, 1984 The power of the Board of Directors of the NARRA to appoint the general manager is provided for in paragraph (2),Section 8,
Republic Act No. 1160 (approved June 18, 1954), to wit:
BRUNO O. APARRI, petitioner,
vs. Sec. 8. Powers and Duties of the Board of Directors. — The Board of Directors shall have the following powers and duties: ...
THE COURT OF APPEALS and LAND AUTHORITY, the latter in substitution for REMEDIOS O. FORTICH, as
Chairman, ANGELINO M. BANZON, RAFAEL B. HILAO, VALERIANO PLANTILLA and SEVERO YAP, as 2) To appoint and fix the term of office of General Manager ..., subject to the recommendation of the Office of Economic
members of the Board of Directors of the defunct National Resettlement and Rehabilitation Administration
Coordination and the approval of the President of the Philippines, .... The Board, by a majority vote of all members, may, for
(NARRA), respondents. cause, upon recommendation of the Office of Economic Coordination and with the approval of the President of the Philippines,
suspend and/or remove the General Manager and/or the Assistant General Manager (p. 46, rec., emphasis supplied).
MAKASIAR, J.:
On March 15, 1962, the same Board of Directors approved the following resolution:
This petition for certiorari seeks to review the decision of the then Court of Appeals (now Intermediate Appellate Court under BP
129) dated September 24, 1968, affirming the decision of the then Court of First Instance (now Regional Trial Court), the
RESOLUTION NO. 24 (Series of 1962)
dispositive portion of which is as follows:

WHEREAS, the Chairman of the Board has transmitted to the Board of Directors the desire of the Office of the President
WHEREFORE, the judgment of the lower court insofar as it decrees the dismissal of the present petition for mandamus is hereby
Malacanang, Manila, to fix the term of office of the incumbent General Manager up to the close of office hours on March 31,
affirmed, without pronouncement as to costs (p. 50, rec.). 1962, in accordance with the provision of Section 8, sub-section 2 of R.A. No. 1160;

The facts of the case are as follows:

On January 15, 1960, private respondents (as members of the Board of Directors of the defunct National Resettlement and
Rehabilitation Administration created under Republic Act No. 1160, approved June 18, 1954 — NARRA) approved the following
resolution:
RESOLUTION NO. 13 (Series of 1960)
RESOLVED, as it is hereby resolved, to appoint Mr. Bruno 0. Aparri, as General Manager of the National Resettlement and
Rehabilitation Administration (NARRA) with all the rights, prerogatives and compensation appurtenant thereto to take effect on
January 16, 1960);
RESOLVED FURTHER, as it is hereby resolved, to inform the President of the Philippines of the above appointment of Mr.
Aparri (p. 2, rec.).
NOW, THEREFORE, BE IT RESOLVED, as it is hereby resolved, that the Board of Directors hereby fix, as it is hereby fixed,
the term of office of the incumbent General Manager of the National Resettlement and Rehabilitation Administration (NARRA)
to March 31, 1962 (pp. 6-7, rec., emphasis supplied).
Petitioner filed a petition for mandamus with preliminary injunction with the then Court of First Instance of Manila on March 29,
1962. The petition prayed to annul the resolution of the NARRA Board dated March 15, 1962, to command the Board to allow
petitioner to continue in office as General Manager until he vacates said office in accordance with law and to sentence the private
respondents jointly and severally to pay the petitioner actual damages in the sum of P95,000.00, plus costs.
On August 8, 1963, when the case was still pending decision in the lower court, Republic Act No. 3844, otherwise known as the
Agricultural Land Reform Code, took effect. The said law abolished the NARRA (Sec. 73, R.A. 3844) and transferred its
functions and powers to the Land Authority. On October 21, 1963, the then Court of First Instance of Manila rendered judgment,
finding "that this case has become academic by reason of the approval of the Agricultural Land Reform Code (Republic Act No.
3844) and thereby dismissing the instant petition without pronouncement as to costs" (p. 5, rec.).

Pursuant thereto, private respondent Remedies O. Fortich, in her capacity as Chairman of the NARRA Board, appointed On appeal to the then Court of Appeals, the appellate tribunal speaking through then Mr. Justice Antonio C. Lucero, affirmed the
decision of the lower court. in dismissing the petition for mandamus. Pertinent provisions of the decision are as follows:
petitioner Bruno O. Aparri as reflected in the following letter:

Manila, January 22, 1960 xxx xxx xxx

In the light of the foregoing facts, it is evident that Bruno O. Aparri accepted the position of General Manager without fixed term
Mr. Bruno O. Aparri c/o NARRA, Manila
and his appointment is, in essence, terminable at the pleasure of the appointing power which, in this case, is the Board of
Directors. Where, as in the case at bar, the appointing officer, that is, the Board of Directors, had fixed the term of office of the
SIR: incumbent Manager to end on March 31, 1962, the replacement of Bruno O. Aparri is not removal but by reason of the term of his
office which is one of the recognized modes of terminating official relations.Considering that the term of office of the General
You are hereby appointed as GENERAL MANAGER in the National Resettlement and Rehabilitation Administration (NARRA) Manager of the NARRA is not fixed by law nor has it been fixed by the Board of Directors at the time of his appointment although
with compensation at the rate of TWELVE THOUSAND (P12,000.00) PESOS per annum the appointment to take effect January it had the power to do so, it is obvious that the term of office of herein petitioner Bruno O. Aparri expired on March 31, 1962 and
16,1960 . . . . REINSTATEMENT ... (p. 2, rec.). his right to hold the said office was thereby extinguished. In other words, Bruno O. Aparri cessation from office invokes no
removal but merely the expiration of the term of office which was within the power of the Board of Directors to fix. Hence, Bruno
O. Aparri continues only for so long as the term of his office has not ended (Alba vs. Hon. Jose N. Evangelists, 100 Phil. 683)
[Decision of the Court of Appeals, pp. 48-49, rec., emphasis supplied].
The motion for reconsideration by petitioner in the then Court of Appeals was denied on January 10, 1969.
On January 20, 1969, the petitioner filed a petition for certiorari to review the decision of the then Court of Appeals dated
September 24, 1968 (pp. 1-41, rec.). The same was initially denied for lack of merit in a resolution dated January 27, 1969 (p. 55,
rec.); but on motion for reconsideration filed on February 11, 1969, the petition was given due course (p. 66, rec.).
The only legal issue sought to be reviewed is whether or not Board Resolution No. 24 (series of 1962) was a removal or dismissal
of petitioner without cause.
WE affirm. WE hold that the term of office of the petitioner expired on March 31, 1962.
A public office is the right, authority, and duty created and conferred by law, by which for a given period, either fixed by law or
enduring at the pleasure of the creating power, an individual is invested with some portion of the sovereign functions of the
government, to be exercise by him for the benefit of the public ([Mechem Public Offices and Officers,] Sec. 1). The right to hold
a public office under our political system is therefore not a natural right. It exists, when it exists at all only because and by virtue
of some law expressly or impliedly creating and conferring it (Mechem Ibid., Sec. 64). There is no such thing as a vested interest
or an estate in an office, or even an absolute right to hold office. Excepting constitutional offices which provide for special
immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary (42 Am. Jur. 881).
The National Resettlement and Rehabilitation Administration (NARRA) was created under Republic Act No. 1160 (approved
June 18,1954), which provides that:
Sec. 2. NATIONAL RESETTLEMENT AND REHABILITATION ADMINISTRATION — ... there is hereby created a
corporation to be known as National Resettlement and Rehabilitation Administration hereafter referred to as "NARRA" to
perform under the supervision and control of the President of the Philippines, through the Office of Economic Coordinator all the
duties and functions of the Bureau of Lands as provided for in Commonwealth Act numbered Six Hundred and Ninety-one, as
amended, and such other duties as are hereinafter specified in this Act. It shall be headed by a General Manager and an Assistant
Manager who shall be appointed as hereinafter provided (emphasis supplied).
Paragraph 2, Section 8 of Republic Act 1160 expressly gives to the Board of Directors of the NARRA the power "to appoint and
fix the term of office of the general manager ... subject to the recommendation of Economic Coordination and the approval of the
President of the Philippines" (emphasis supplied).
By "appointment" is meant the act of designation by the executive officer, board or body, to whom that power has been delegated,
of the individual who is to exercise the functions of a given office (Mechem op. cit., Sec. 102). When the power of appointment is
absolute, and the appointee has been determined upon, no further consent or approval is necessary, and the formal evidence of the
appointment, the commission, may issue at once. Where, however, the assent or confirmationof some other officer or body is
required, the Commission can issue or the appointment is complete only when such assent or condition is obtained (People vs.
Bissell, 49 Cal. 407). To constitute an "appointment" to office, there must be some open, unequivocal act of appointment on the
part of the appointing authority empowered to make it, and it may be said that an appointment to office is made and is complete
when the last act required of the appointing authority has been performed (Molnar vs. City of Aurora, 348 N.E. 2d 262, 38 III
App. 3d 580). In either case, the appointment becomes complete when the last act required of the appointing power is performed
(State vs. Barbour, 53 Conn. 76, 55 Am. Rep. 65).
The petitioner was appointed as general manager pursuant to Resolution No. 13 (series of 1960 — approved on January 15, 1960)
of the Board of Directors. A careful perusal of the resolution points out the fact that the appointment is by itself incomplete
because of the lack of approval of the President of the Philippines to such appointment. Thus, We note that Resolution No. 13
states:
xxx xxx xxx
... RESOLVED FURTHER, as it is hereby resolved, to inform the President of the Philippines of the above appointment of Mr.
Aparri (p. 2, rec.).
Presumably, the Board of Directors of the NARRA expected that such appointment be given approval by the then President.
Lacking such approval by the President as required by the law (par. 2, Sec. 8 of R.A. 1160), the appointment of petitioner was not
complete. The petitioner can, at best, be classified as a de facto officer because he assumed office "under color of a known
appointment or election, void because the officer was not eligible or because there was a want of power in the electing body, or
by reasons of some defect or irregularity in its exercise, such ineligibility, want of power, or defect being unknown to the public"
(State vs. Carroll, 38 Conn. 449, 9Am. Rep. 409).
However, such appointment was made complete upon approval of Resolution No. 24 (series of 1962-approved March 15, 1962)
wherein the President submitted to the Board his "desire" to fix the term of office of the petitioner up to the close of office hours
on March 31, 1962. The questioned resolution corrected whatever requisite lacking in the earlier Resolution No. 13 of the
respondent Board. Resolution No. 24, approved by the respondent Board and pursuant to "the desire of the President" legally
fixed the term of office of petitioner as mandated by paragraph 2, Section 8 of Republic Act 1160.
The word "term" in a legal sense means a fixed and definite period of time which the law describes that an officer may hold an
office (Sueppel vs. City Council of Iowa City, 136 N.W. 2D 523, quoting 67 CJS OFFICERS, secs. 42, 54[1]). According to
Mochem, the term of office is the period during which an office may be held. Upon the expiration of the officer's term, unless he
is authorized by law to hold over, his rights, duties and authority as a pubic officer must ipso facto cease (Mechem, op. cit., Secs.
396-397). In the law on Public Officers, the most natural and frequent method by which a public officer ceases to be such is by
the expiration of the term for which he was elected or appointed. The question of when this event has occurred depends upon a
number of considerations, the most prominent of which, perhaps, are whether he was originally elected or appointed for a definite
term or for a term dependent upon some act or event ... (Mechem op. cit., Sec. 384).
It is necessary in each case to interpret the word "term" with the purview of statutes so as to effectuate the statutory scheme
pertaining to the office under examination (Barber vs. Blue, 417 P.2D 401, 51 Cal. Rptr. 865, 65 C.2d N5). In the case at bar, the
term of office is not fixed by law. However, the power to fix the term is vested in the Board of Directors subject to the
recommendation of the Office of Economic Coordination and the approval of the President of the Philippines. Resolution No. 24
(series of 1962) speaks of no removal but an expiration of the term of office of the petitioner. The statute is undeniably clear. It is
the rule in statutory construction that if the words and phrase of a statute are not obscure or ambiguous, its meaning and the
intention of the legislature must be determined from the language employed, and, where there is no ambiguity in the words, there
is no room for construction (Black on Interpretation of Laws, Sec. 51). The courts may not speculate as to the probable intent of
the legislature apart from the words (Hondoras vs. Soto, 8 Am. St., Rep. 744). The reason for the rule is that the legislature must
be presumed to know the meaning of words, to have used words advisedly and to have expressed its intent by the use of such
words as are found in the statute (50 Am. Jur. p. 212).
Removal entails the ouster of an incumbent before the expiration of his term (Manalang vs. Quitoriano, 50 O.G. 2515). The
petitioner in this case was not removed before the expiration of his term. Rather, his right to hold the office ceased by the
expiration on March 31, 1962 of his term to hold such office.
WHEREFORE, THE DECISION APPEALED FROM IS HEREBY AFFIRMED. WITHOUT COSTS.
SO ORDERED.
G.R. No. L-16258 August 31, 1961
BARTOLOME E. SAN DIEGO, petitioner,
vs.
ELIGIO SAYSON, respondent.
LABRADOR, J.:
This is a petition for certiorari to review a decision of the Court of Appeals affirming a judgment of the Court of First Instance of
Manila which sentenced petitioner Bartolome San Diego to pay respondent Eligio Sayson the sum of P5,541.76 with legal interest
thereon from September 10, 1956, plus P500 as attorney's fees and costs. In the action brought by respondent Eligio Sayson in the
Court of First Instance of Manila, he alleged that in November, 1954, he and San Diego entered into an agreement where by
Sayson would furnish labor for the construction of a building at 1200 Arlegui, Farnecio Quiapo, Manila, in accordance with the
plans approved by the city engineer, at the price of P15,000; that in the course of the construction the plans approved by the city
engineer were modified and changes were made not called for in the approved plans, for which plaintiff had to perform and or
furnish additional labor valued at P6,840.31; and that San Diego has refused to pay this additional sum. In a special de defense,
San Diego alleged that even granting that additional work had been performed, he may not be held liable for the same in view of
the provisions of Article 1724 of the Civil Code.
At the trial the Court of First Instance of Manila found the following extra or additional work performed by Sayson:
. . . he testified that the width of the building was in decreased from 13.80 meters in the plan as approved to 14.30 meters; the
party wall of hollow block as appearing in the plan was changed to reinforced concrete; that although the mezzanine was ordered
eliminated in the plan and therefore not included in the contract, defendant had it constructed; that after the stairs were
constructed, it was ordered removed (Exhibit A-1-a) that the partitions were enlarged (Exhibit A-1-b); that the partitions on the
second floor was raised, the transem was removed and the partition elevated to the ceiling (Exh. A-1-c) ; that all the partitions
which were single in the plan were ordered made into double wall; the wooden flooring in Section 22 in the plan was changed to
reinforced concrete (Exhibit A-3-a) ; that the eaves facing Farnecio Street although crossed out by the City Engineer were ordered
made (Exh. A-1-d) ; that the walls had "costura" only under the plan but were ordered plastered and ceilings were ordered
although not included in the plan (Exhibit Ale These changes which were ordered by defendant and his engineer are summarized
on page 8 Exhibit B as follows:
xxx xxx xxx
For additional work performed P6,840.31. (Record on Appeal, pp. 18, 19-20.) .
Judgment for Sayson having been ordered for this amount the case was appealed to the Court of Appeals. In said court petitioner
herein again raised as his defense the provisions of Article 1724 of the Civil Code, but this court held:.
We do not see any plausible reason why defendant should not compensate plaintiff for the alterations done by the latter at the
instance of the former who has benefited thereby. Bid for such alterations were not included in the amount of P15,000.00, which
amount was computed and submitted in the light of the approved plans. And since these alterations undoubtedly entailed
expenses, time and efforts on the part of the contractor, then he should be in justice and equity to him paid for by defendant as
owner of the building where they were done. It is true that there was no written agreement for such alterations but the absence
thereof should not be allowed to make the contractor poorer and the owner of the building richer. Defendant in trying to justify
his refusal to pay plaintiff for the latter's claim cites the following article of the Civil Code —
Art. 1724. The contractor who undertakes to build a structure or any other work for a stipulated price, in conformity with plans
and specifications agreed upon with the landowner, in neither withdraw from the contract nor demand an increase to the price on
account of the higher cost of labor or materials, save when there has been a change in the plans and specifications provided:
(1) Such change has been authorized by the proprietor in writing; and
(2) The additional price to be paid to the contractor has en determined in writing by both parties.
Obviously, the aforequoted provision of law is not applicable on the claim of defendant.
The decision was affirmed. Hence the case was brought re on an appeal by certiorari.
Article 1724 of the Civil Code is a modified form of article 1593 of the Spanish Civil Code which provides as follows:
No architect or contractor who, for a lump sum, undertakes the construction of a building, or any other work to be done in
accordance with a plan agreed upon with the owner the ground, may demand an increase of the price, even if the cost of the
materials or labor has increased; but he may do when any change increasing the work is made in the plans, provided the owner
has given his consent thereto.
In his commentaries on this Article, Manresa said:
El articulo 1.793 del Codigo frances es mas previsor que el que comentamos, pues exige para que el aumento de precio eda
pedirse que los cambios o amplicaciones del plano se hayan autorizado por escrito y que se haya convenido el precio con el
propietario (X Manresa, Fifth ed., p. 926.)
Obviously influenced by the above criticism of the article, the Code Commission recommended and the legislature proved the
provision as it now stands. It will be noted at whereas under the old article recovery for additional cost in a construction contract
can be had if authorization on to make such additions can be proved, the amendment evidently requires that instead of merely
proving authorization, such authorization by the proprietor must be made writing. The evident purpose of the amendment is
prevent litigation for additional costs incurred by reason of additions or changes in the original plans. Is this additional
requirement of a written authorization, to be considered as a mere extension of the Statute of Frauds, or is it a substantive
provision? That the requirement for a written authorization is not merely to prohibit admission of oral testimony against the
objection Of the adverse fact that the provision is party, can be inferred 'from the not included among those specified in the
Statute of Frauds, Article 1403 of the Civil Code. As it does not appear to have been intended as an extension of the Statute of
Frauds, it must have been adopted as a substantive provision or a condition precedent to recovery.
Our duty in this respect is not to dispute the wisdom of the provision; we should only limit ourselves to inquiring into the
legislative intent, and once that is determined to make said intent effective. The new provision was evidently adopted to prevent
misunderstandings and litigations between contractors and owners. Clearly it was the intention of the legislature in making the
amendment to require authorization in writing before costs of additional labor in a contract for the construction of a building may
be demanded. We find that the provision is applicable to the circumstances surrounding the case at bar, and we are duty bound to
enforce the same. The trial court should have denied the demand for additional cost as directed by the provisions of Article 1724
of the Civil Code.
WHEREFORE, the writ is hereby granted, the decision of the Court of Appeals reversed, and the action of respondent dismissed.
Without costs
G.R. No. 4963
THE UNITED STATES, plaintiff-appellee,
vs.
GO CHICO, defendant-appellant.
Moreland, J.:
The defendant is charged with the violation of section 1 of Act No. 1696 of the Philippine Commission, which reads as follows:
Any person who shall expose, or cause or permit to be exposed, to public view on his own premises, or who shall expose, or
cause to be exposed, to public view, either on his own premises or elsewhere, any flag, banner, emblem, or device used during the
late insurrection in the Philippine Islands to designate or identify those in armed rebellion against the United States, or any flag,
banner, emblem, or device used or adopted at any time by the public enemies of the United States in the Philippine Island for the
purpose of public disorder or of rebellion or insurrection against the authority of the United States in the Philippine Islands, or
any flag, banner, emblem, or device of the Katipunan Society, or which is commonly known as such, shall be punished by a fine
of not less that five hundred pesos for more than five thousand pesos, or by imprisonment for not less than three months nor more
than five years, or by both such fine and imprisonment, in the discretion of the court.
The defendant was tried in the Court of First Instance of the city of Manila on the 8th day of September, 1908. After hearing the
evidence adduced the court adjudged the defendant guilty of the crime charged and sentenced him under that judgment to pay a
fine of P500, Philippine currency, and to pay the costs of the action, and to suffer subsidiary imprisonment during the time and in
the form and in the place prescribed by law until said fine should be paid. From that judgment and sentence the defendant
appealed to this court.
A careful examination of the record brought to this court discloses the following facts:
That on or about the 4th day of August, 1908, in the city of Manila, the appellant Go Chico displayed in one of the windows and
one of the show cases of his store, No. 89 Calle Rosario, a number of medallions, in the form of a small button, upon the faces of
which were imprinted in miniature the picture of Emilio Aguinaldo, and the flag or banner or device used during the late
insurrection in the Philippine Islands to designate and identify those in armed insurrection against the United States. On the day
previous to the one above set forth the appellant had purchased the stock of goods in said store, of which the medallions formed a
part, at a public sale made under authority of the sheriff of the city of Manila. On the day in question, the 4th of August aforesaid,
the appellant was arranging his stock of goods for the purpose of displaying them to the public and in so doing placed in his
showcase and in one of the windows of his store the medallions described. The appellant was ignorant of the existence of a law
against the display of the medallions in question and had consequently no corrupt intention. The facts above stated are admitted.
The appellant rests his right to acquittal upon two propositions:
First. That before a conviction under the law cited can be had, a criminal intent upon the part of the accused must be proved
beyond a reasonable doubt.
Second. That the prohibition of the law is directed against the use of the identical banners, devices, or emblems actually used
during the Philippine insurrection by those in armed rebellion against the United States.
In the opinion of this court it is not necessary that the appellant should have acted with the criminal intent. In many crimes, made
such by statutory enactment, the intention of the person who commits the crime is entirely immaterial. This is necessarily so. If it
were not, the statute as a deterrent influence would be substantially worthless. It would be impossible of execution. In many cases
the act complained of is itself that which produces the pernicious effect which the statute seeks to avoid. In those cases the
pernicious effect is produced with precisely the same force and result whether the intention of the person performing the act is
good or bad. The case at bar is a perfect illustration of this. The display of a flag or emblem used particularly within a recent
period, by the enemies of the Government tends to incite resistance to governmental functions and insurrection against
governmental authority just as effectively if made in the best of good faith as if made with the most corrupt intent. The display
itself, without the intervention of any other factor, is the evil. It is quite different from that large class of crimes, made such by the
common law or by statute, in which the injurious effect upon the public depends upon the corrupt intention of the person
perpetrating the act. If A discharges a loaded gun and kills B, the interest which society has in the act depends, not upon B's
death, upon the intention with which A consummated the act. If the gun were discharged intentionally, with the purpose of
accomplishing the death of B, then society has been injured and its security violated; but if the gun was discharged accidentally
on the part of A, then society, strictly speaking, has no concern in the matter, even though the death of B results. The reason for
this is that A does not become a danger to society and institutions until he becomes a person with a corrupt mind. The mere
discharge of the gun and the death of B do not of themselves make him so. With those two facts must go the corrupt intent to kill.
In the case at bar, however, the evil to society and the Governmental does not depend upon the state of mind of the one who
displays the banner, but upon the effect which that display has upon the public mind. In the one case the public is affected by the
intention of the actor; in the other by the act itself.
It is stated in volume 12 of Cyc., page 148, that —
The legislature, however, may forbid the doing of an act and make its commission a crime without regard to the intent of the doer,
and if such an intention appears the courts must give it effect although the intention may have been innocent. Whether or not in a
given case the statute is to be so construed is to be determined by the court by considering the subject-matter of the prohibition as
well as the language of the statute, and thus ascertaining the intention of the legislature.
In the case of The People vs. Kibler (106 N.Y. 321) the defendant was charged with the sale of adulterated milk under a statute
reading as follows:
No person or persons shall sell or exchange or expose for sale or exchange any impure, unhealthy, adulterated, of unwholesome
milk.
It was proved in that case that one Vandeburg purchased at the defendant's store 1 pint of milk which was shown to contain a very
small percentage of water more than that permitted by the statute. There was no dispute about the facts, but the objection made by
the defendant was that he was not allowed, upon the trial, to show an absence of criminal intent, or to go the jury upon the
question whether it existed, but was condemned under a charge from the court which made his intent totally immaterial and his
guilt consist in having sold the adulterated article whether he knew it or not and however carefully he may have sought to keep on
hand and sell the genuine article.
The opinion of the court in that case says:
As the law stands, knowledge or intention forms no elements of the offense. The act alone, irrespective of its motive, constitutes
the crime.
xxx xxx xxx
It is notorious that the adulteration of food products has grown to proportions so enormous as to menace the health and safety of
the people. Ingenuity keeps pace with greed, and the careless and heedless consumers are exposed to increasing perils. To redress
such evils is a plain duty but a difficult task. Experience has taught the lesson that repressive measures which depend for their
efficiency upon proof of the dealer's knowledge or of his intent to deceive and defraud are of title use and rarely accomplish their
purpose. Such an emergency may justify legislation which throws upon the seller the entire responsibility of the purity and
soundness of what he sells and compels him to know and certain.
In the case of Gardner vs. The People (62 N.Y. 299) the question arose under a statute which provided that an inspector of
elections of the city of New York should not be removed from office except "after notice in writing to the officer sought to be
removed, which notice shall set forth clearly and distinctly the reasons for his removal," and further provided that any person who
removed such an officer without such notice should be guilty of a misdemeanor. An officer named Sheridan was removed by
Gardener, the defendant, without notice. Gardener was arrested and convicted of a misdemeanor under the statute. He appealed
from the judgment of conviction and the opinion from which the following quotation is made was written upon the decision of
that appeal. Chief Justice Church, writing the opinion of the court, says in relation to criminal intent:
In short, the defense was an honest misconstruction of the law under legal device. The court ruled out the evidence offered, and
held that intentionally doing the act prohibited constituted the offense. It is quite clear that the facts offered to be shown, if true,
would relieve the defendant from the imputation of a corrupt intent, and, indeed, from any intent to violate the statute. The
defendants made a mistake of law. Such mistakes do not excuse the commission of prohibited acts. "The rule on the subject
appears to be, that in acts mala in se, intent governs but in those mala prohibita, the only inquiry is, has the law been violated?
xxx xxx xxx
The authorities seem to establish that sustain and indictment for doing a prohibited act, it is sufficient to prove that the act was
knowingly and intentionally done.
xxx xxx xxx

In this case, if the defendants could have shown that they believed that in fact notice had been given to the inspector, although it
had not, they would not have been guilty of the offense, because the intention to do the act would have been wanting. Their plea
is: True, we intended to remove the inspector without notice, but we thought the law permitted it. This was a mistake of law, and
is not strictly a defense.
xxx xxx xxx
If the offense is merely technical, the punishment can be made correspondingly nominal; while a rule requiring proof of a
criminal intent to violate the statute, independent of an intent to do the act which the statute declares shall constitute the offense,
would, in many cases, prevent the restraining influence which the statute was designed to secure.
In the case of Fiedler vs. Darrin (50 N.Y. 437) the court says:
But when an act is illegal, the intent of the offender is immaterial.
In the case of The Commonwealth vs. Murphy (165 Mass. 66) the court says:
In general, it may be said that there must be malus animus, or a criminal intent. But there is a large class of cases in which, on
grounds of public policy, certain acts are made punishable without proof that the defendant understands the facts that give
character to his act.
In such cases it is deemed best to require everybody at his peril to ascertain whether his act comes within the legislative
prohibition.
xxx xxx xxx
Considering the nature of the offense, the purpose to be accomplished, the practical methods available for the enforcement of the
law, and such other matters as throw light upon the meaning of the language, the question in interpreting a criminal statute is
whether the intention of the legislature was to make knowledge of the facts an essential element of the offense, or to put upon
everyone the burden of finding out whether his contemplated act is prohibited, and of refraining from it if it is.
In the case of Halsted vs. The State (41 N.J.L. 552; 32 Am. Rep. 247), the question of a criminal intent arose under a statute,
under which the defendant was convicted of a crime, providing that if any township committee or other body shall disburse or
vote for the disbursement of public moneys in excess of appropriations made for the purpose, the persons constituting such board
shall be guilty of a crime. The defendant was one who violated this law by voting to incur obligations in excess of the
appropriation. He was convicted and appealed and the opinion from which the quotation is taken was written upon a decision of
that appeal. That court says:
When the State had closed, the defense offered to show that the defendant, in aiding in the passage and effectuation of the
resolution which I have pronounced to be illegal, did so under the advice of counsel and in good faith, and from pure and honest
motives, and that he therein exercise due care and caution.
xxx xxx xxx
As there is an undoubted competency in the lawmaker to declare an act criminal, irrespective of the knowledge or motive of the
doer of such act, there can be of necessity, no judicial authority having the power to require, in the enforcement of the law, such
knowledge or motive to be shown. In such instances the entire function of the court is to find out the intention of the legislature,
and to enforce the law in absolute conformity to such intention. And in looking over the decided cases on the subject it will be
found that in the considered adjudications this inquiry has been the judicial guide.
In the case of Rex vs. Ogden (6 C. & P. 631; 25 E.C.L. 611), the prisoner was indicted for unlawfully transposing from one piece
of wrought plate to another the lion-poisson contrary to the statutes. It was conceded that the act was done without any fraudulent
intention. The court said:
There are no words in the act of Parliament referring to any fraudulent intention. The words of it are, 'Shall transpose or remove,
or cause of procure to be transposed or removed, from one piece of wrought plate to another.
In the case of The State vs. McBrayer (98 N.C. 623) the court stated:
It is a mistaken notion that positive, willful intent to violate the criminal law is an essential ingredient in every criminal offense,
and that where is an absence of such intent there is no offense; this is especially true as to statutory offenses. When the statute
plainly forbids an act to be done, and it is done by some person, the law implies conclusively the guilty intent, although the
offender was honestly mistaken as to the meaning of the law he violates. When the language is plain and positive, and the offense
is not made to depend upon the positive, willful intent and purpose, nothing is left to interpretation.
In the case of the Commonwealth vs. Weiss (139 Pa. St. 247), the question arose on an appeal by the defendant from a judgment
requiring him to pay a penalty for a violation of the statute of the State which provided that any person would be liable to pay a
penalty "who shall manufacture, sell, or offer or expose for sale, or have in his possession with intent to sell," oleomargarine, etc.
At the trial the defendant requested the court to instruct the injury that if they believed, from the evidence, that the defendant did
not knowingly furnish or authorize to be furnished, or knew of there furnished, to any of his customers any oleomargarine, but, as
far as he knew, furnished genuine butter, then the verdict must be for the defendant. The court refused to make the charge as
requested and that is the only point upon which the defendant appealed Qoyr0R7VrC.
The court says:
The prohibition is absolute and general; it could not be expressed in terms more explicit and comprehensive. The statutory
definition of the offense embraces no word implying that the forbidden act shall be done knowingly or willfully, and if it did, the
designed purpose of the act would be practically defeated. The intention of the legislature is plain, that persons engaged in the
traffic so engage in it at their peril and that they can not set up their ignorance of the nature and qualities of the commodities they
sell, as a defense.
The following authorities are to the same effect: State vs. Gould (40 Ia. 374); Commonwealth vs. Farren (9 Allen 489);
Commonwealth vs. Nichols (10 Allen 199); Commonwealth vs. Boyton (2 Allen 160); Wharton's Criminal Law, section 2442;
Commonwealth vs. Sellers (130 Pa. 32); 3 Greenleaf on Evidence, section 21; Farrell vs. The State (32 Ohio State 456); Beekman
vs. Anthony (56 Miss. 446); The People vs. Roby (52 Mich. 577).
It is clear from the authorities cited that in the act under consideration the legislature did not intend that a criminal intent should
be a necessary element of the crime. The statutory definition of the offense embraces no word implying that the prohibited act
shall be done knowingly or willfully. The wording is plain. The Act means what it says. Nothing is left to the interpretation.
Care must be exercised in distinguishing the differences between the intent to commit the crime and the intent to perpetrate the
act. The accused did not consciously intend to commit a crime; but he did intend to commit an act, and the act is, by the very
nature of things, the crime itself — intent and all. The wording of the law is such that the intent and the act are inseparable. The
act is the crime. The accused intended to put the device in his window. Nothing more is required to commit the crime.
We do not believe that the second proposition of the accused, namely, that the law is applicable only to the identical banners, etc.,
actually used in the late insurrection, and not to duplicates of those banners, can be sustained.
It is impossible that the Commission should have intended to prohibit the display of the flag or flags actually used in the
insurrection, and, at the same time, permit exact duplicates thereof (saving, perhaps, size) to be displayed without hindrance. In
the case before us, to say that the display of a certain banner is a crime and that the display of its exact duplicate is not is to say
nonsense. The rules governing the interpretation of statutes are rules of construction not destruction. To give the interpretation
contended for by the appellant would, as to this particular provision, nullify the statute altogether.
The words "used during the late insurrection in the Philippine Islands to designate or identity those in armed rebellion against the
United States" mean not only the identical flags actually used in the insurrection, but any flag which is of that type. This
description refers not to a particular flag, but to a type of flag. That phrase was used because there was and is no other way of
describing that type of flag. While different words might be employed, according to the taste of the draftsman, the method of
description would have to be the same. There is no concrete word known by which that flag could be aptly or properly described.
There was no opportunity, within the scope of a legislative enactment, to describe the physical details. It had no characteristics
whatever, apart from its use in the insurrection, by which it could, in such enactment, be identified. The great and the only
characteristic which it had upon the which the Commission could seize as a means of description and identification was the fact
that it was used in the insurrection. There was, therefore, absolutely no way in which the Commission could, in the Act, describe
the flag except by reciting where and how it was used. It must not be forgotten that the Commission, by the words and phrases
used, was not attempting to describe a particular flag, but a type of flag. They were not describing a flag used upon a particular
field or in a certain battle, but a type of flag used by an army — a flag under which many persons rallied and which stirred their
sentiments and feelings wherever seen or in whatever form it appeared. It is a mere incident of description that the flag was used
upon a particular field or in a particular battle. They were describing the flag not a flag. It has a quality and significance and an
entity apart from any place where or form in which it was used.
Language is rarely so free from ambiguity as to be incapable of being used in more than one sense, and the literal interpretation of
a statute may lead to an absurdity or evidently fail to give the real intent of the legislature. When this is the case, resort is had to
the principle that the spirit of a law controls the letter, so that a thing which is within the intention of a statute is as much within
the statute as if it were within the letter, and a thing which is within the letter of the statute is not within the statute unless it be
within the intention of the makers, and the statute should be construed as to advance the remedy and suppress the mischief
contemplated by the framers. (U.S. vs. Kirby, 7 Wall. 487; State Bolden, 107 La. 116, 118; U.S. vs. Buchanan, 9 Fed. Rep. 689;
Green vs. Kemp, 13 Mass. 515; Lake Shore R. R. Co. vs. Roach, 80 N.Y. 339; Delafield vs. Brady, 108 N.Y. 524 Doyle vs.
Doyle, 50 Ohio State 330.)
The intention of the legislature and the object aimed at, being the fundamental inquiry in judicial construction, are to control the
literal interpretation of particular language in a statute, and language capable of more than one meaning is to be taken in that
sense which will harmonize with such intention and object, and effect the purpose of the enactment. (26 Am. & Eng. Ency. of
Law 602.)
Literally hundreds of cases might be cited to sustain this proposition PtS0.
The preamble is no part of the statute, but as setting out the object and intention of the legislature, it is considered in the
construction of an act. Therefore, whenever there is ambiguity, or wherever the words of the act have more than one meaning, and
there is no doubt as to the subject-matter to which they are to be applied, the preamble may be used." (U.S. vs. Union Pacific R.
R. Co., 91 U.S. 72; Platt vs. Union Pacific R. R. Co., 99 U.S. 48; Myer vs. Western Car Co., 102 U.S. 1; Holy Trinity Church vs.
U.S., 143 U.S. 457; Coosaw Mining Co. vs. South Carolina, 144 U.S. 550; Cohn vs. Barrett, 5 Cal. 195; Barnes vs. Jones, 51 Cal.
303; Field vs. Gooding, 106 Mass. 310; People vs. Molineaux, 40 N.Y. 113; Smith vs. The People, 47 N.Y. 330; The People vs.
Davenport, 91 N.Y. 547; The People vs. O'Brien, 111 N.Y. 1)
The statute, then, being penal, must be construed with such strictness as to carefully safeguard the rights of the defendant and at
the same time preserve the obvious intention of the legislature. If the language be plain, it will be construed as it reads, and the
words of the statute given their full meaning; if ambiguous, the court will lean more strongly in favor of the defendant than it
would if the statute were remedial. In both cases it will endeavor to effect substantial justice." (Bolles vs. Outing Co., 175 U.S.
262, 265; U.S. vs. Wiltberger, 5 Wheat. 76, 95; U.S. vs. Reese, 92 U.S. 214)
It is said that notwithstanding this rule (the penal statutes must be construed strictly) the intention of the lawmakers must govern
in the construction of penal as well as other statutes. This is true, but this is not a new, independent rule which subverts the old. It
is a modification of the known maxim and amounts to this -- that though penal statutes are to be construed strictly, they are not be
construed so strictly as to defeat the obvious purpose of the legislature. (U.S. vs. Wiltberger, 5 Wheat. 76; Taylor vs. Goodwin,
L.R. 4, Q.B.Civ. 228.)
In the latter case it was held that under a statute which imposed a penalty for "furiously driving any sort of carriage" a person
could be convicted for immoderately driving a bicycle.
It is presumed that the legislature intends to impart to its enactments such a meaning as will render then operative and effective,
and to prevent persons from eluding or defeating them. Accordingly, in case of any doubt or obscurity, the construction will be
such as to carry out these objects. (Black, Interpretation of Laws, p. 106.)
In The People vs. Supervisors (43 N.Y. 130) the court said:
The occasion of the enactment of a law always be referred to in interpreting and giving effect to it. The court should place itself in
the situation of the legislature and ascertain the necessity and probable object of the statute, and then give such construction to the
language used as to carry the intention of the legislature into effect so far as it can be ascertained from the terms of the statute
itself. (U. S. vs. Union Pacific R. R. Co., 91 U.S. 72, 79.)
We do not believe that in construing the statute in question there is necessity requiring that clauses should be taken from the
position given them and placed in other portions of the statute in order to give the whole Act a reasonable meaning. Leaving all of
the clauses located as they now are in the statute, a reasonable interpretation, based upon the plain and ordinary meaning of the
words used, requires that the Act should be held applicable to the case at bar.
The judgment of the court below and the sentence imposed thereunder are hereby affirmed. So ordered.
SOLID HOMES, INC., petitioner, vs. SPOUSES ANCHETA K. TAN and CORAZON DE JESUS TAN,respondents.
DECISION
GARCIA, J.:
In this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Solid Homes, Inc.
urges us to nullify and set aside the following issuances of the Court of Appeals in CA-G.R. SP No. 53443 and 55324, to wit:
1. Decision dated May 23, 2000,[1] setting aside an earlier decision of the Office of the President in a complaint for breach of
obligation filed by the herein respondents against the petitioner in connection with the sale of a subdivision lot; and
2. Resolution dated September 12, 2000,[2] denying petitioner’s motion for reconsideration.
The material facts, undisputed by the parties, may be briefly stated, as follows:
On April 7, 1980, petitioner Solid Homes, Inc., sold to the spouses Joe Uy and Myrna Uy a subdivision lot with an area of 1,069
square meters, more particularly identified as Lot 18, Block 2, located at petitioner’s Loyola Grand Villas Subdivision, Quezon
City. Thereafter, the lot was registered in the name of the Uys under Transfer Certificate of Title (TCT) No. 280963/T-1409 of
the Register of Deeds of Quezon City.
Sometime in February, 1985, the spouses Uy sold the same lot to herein respondents, the spouses Ancheta K. Tan and Corazon de
Jesus-Tan, by reason of which the former title covering the lot was cancelled and replaced by TCT No. RT-14465 (327754) in
respondents’ name.
From then on, respondents visited their property a number of times, only to find out the sad state of development thereat. There
was no infrastructure and utility systems for water, sewerage, electricity and telephone, as announced in the approved plans and
advertisements of the subdivision. Worse, squatters occupy their lot and its surrounding areas. In short, there has been no
development at all.
Accordingly, in a letter dated December 18, 1995, respondents demanded on petitioner to provide the needed utility systems and
clear the area of squatters and other obstructions by the end of January, 1996 to enable them to start the construction of their
house thereon and to allow other lot owners in the area a full access to and peaceful possession of their respective lots,
conformably with P.D. No. 957 which requires an owner or developer of a subdivision project to develop the same within one
year from the issuance of its license.
Having received no reply from petitioner, respondents filed with the Field Office of the Housing and Land Use Regulatory Board
(HLURB), NCR a complaint for specific performance and damages therein praying, inter alia, that petitioner be ordered to
provide the needed facilities in the premises and rid the same of squatters; or, in the alternative, for petitioner to replace
respondents’ property with another lot in the same subdivision where there are facilities and sans squatters.
After due proceedings, the Housing and Land Use Arbiter, in a decision dated September 17, 1996, [3] rendered judgment for the
respondents by directing petitioner:
a. to perform its obligation to provide subdivision facilities in the subject premises and to rid the premises of squatters. In the
alternative, at the option of complainants xxx to replace subject lot with a lot of similar size and with available facilities, located
in the subject subdivision.
b. to pay complainants P20,000.00 as and by way of attorney’s fees.
In the same decision, the Arbiter dismissed the complaint against petitioner’s co-defendant, Purita Soliven.
Dissatisfied, petitioner went on appeal to the HLURB Board of Commissioners, which, in a decision dated April 16, 1997,
[4]
affirmed that of the Arbiter.
From there, petitioner elevated the case to the Office of the President (O.P.).
In a decision[5] dated June 3, 1999, the O.P., thru then Executive Secretary Ronaldo B. Zamora, affirmed with modification the
appealed decision of the HLURB Board of Commissioners, thus:
WHEREFORE, premises considered, the first paragraph of the decision appealed from is hereby AFFIRMED with the
modification that in case Solid Homes, Inc. fails to replace subject lot with a lot of similar size and with available facilities
located in the subdivision, because it had already sold or transferred all of its properties in the subdivision, it shall pay spouses
Ancheta Tan and Corazon Tan the total amount received from them as purchase price, with legal rate of interest from February
1985, until fully paid. Save for this modification, the decision appealed from is hereby AFFIRMED.
SO ORDERED (Italics, ours).
On June 25, 1999, respondents filed a motion for partial reconsideration of the aforementioned decision, praying for the deletion
of that portion thereof giving petitioner the option of merely paying them the purchase price with interest in the event
petitioner “fails to replace subject lot with a lot of similar size and with available facilities located in the subdivision, because it
had already sold or transferred all of its properties in the subdivision.” Respondents argued that it would be more in accord with
equity and fair play if they will be paid the fair market value of the lot in question and not merely its purchase price, should
there be no available lot with facilities in the area.
However, in a resolution dated September 22, 1999,[6] O.P. denied respondents’ motion.
Both parties then went to the Court of Appeals via their respective petitions for review, thereat separately docketed as CA- G.R.
SP No. 53443 (for petitioners) and CA-G.R. SP No. 55324 (for respondent). Pursuant to Section 1, Rule 31 of the Rules of the
Court, the appellate court ordered the consolidation of the two (2) petitions.
As stated at the threshold hereof, the Court of Appeals, in its consolidated decision dated May 23, 2000,[7] set aside that of the
O.P. and affirmed the earlier decision dated April 16, 1997 of the HLURB Board of Commissioners, but subject to the
modification that petitioner shall pay respondents the current market value of the lot, not merely its purchase price, should there
be no more available lots with facilities in petitioner’s Loyola Grand Villas Subdivision. We quote the decretal portion of the
appellate court’s decision:
WHEREFORE, Premises Considered, the assailed Decision dated 03 June 1999 is hereby SET ASIDE and the Decision of the
HLURB dated 16 April 1997 is hereby AFFIRMED subject to the modification that if there is no more available lot in Loyola
Grand Villas to replace subject lot, Solid Homes, Inc. should pay the spouses Tan the current market value of their lot.
SO ORDERED.
This time, petitioner moved for reconsideration but its motion was denied by the same court in its resolution of September 12,
2000.[8]
Hence, petitioner’s present recourse, contending that the Court of Appeals erred –
1. XXX IN RULING THAT PRESCRIPTION HAS NOT SET-IN;
2. XXX IN APPLYING THE PRINCIPLE ON EQUITY AS AGAINST POSITIVE LAW TO THE PREJUDICE OF
HEREIN PETITIONER; AND
3. XXX IN RULING THAT PETITIONER SHOULD PAY RESPONDENTS THE CURRENT MARKET VALUE OF THE
LOT IN QUESTION.
We DENY.
The errors assigned actually simmered down to only two (2) issues, namely: (1) whether or not respondents’ right to bring the
instant case against petitioner has already prescribed; and (2) in the event respondents opt to rescind the contract, should
petitioner pay them merely the price they paid for the lot plus interest or the current market value thereof.
In the matter of prescription, it is petitioner’s posture that respondents’ right to bring the action against it has already prescribed,
arguing that the 10-year prescriptive period therefor should be reckoned from April 7, 1980 when petitioner originally sold the lot
in question to the spouses Joe Uy and Myrna Uy, or, at the latest from February, 1985, when respondents acquired the same lot
from the Uy spouses. Hence, and as respondents’ action was filed with the HLURB Field Office only on April 1, 1996 or after
more than ten (10) years, it follows that the same was filed out of time and, therefore, ought to have been dismissed.
We disagree.
There can be no debate at all on the legal postulate that the prescriptive period for bringing action for specific performance, as
here, prescribes in ten (10) years. This is so provided in Article 1144 of the Civil Code. What we cannot agree on with the
petitioner, and about which petitioner is in serious error, is its submission that the 10-year prescriptive period should commence
either on April 7, 1980, when petitioner originally sold the lot to spouses Uy; or in February, 1985, when the respondents
thereafter bought the same lot from the Uy couple. Obviously, petitioner misread Article 1144 which specifically provides that
the 10-year period therein referred to commences to run only from the time the right of action accrues. We quote in full the codal
provision relied upon by petitioner:
Article 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment (Emphasis supplied).
If not on a written contract, petitioner’s obligation to introduce improvements on the area in question arises from law, more
specifically P.D. 957, as amended by P.D. 1216, Section 31 of which pertinently reads:
SECTION 31. Roads, Alleys, Sidewalks and Open Spaces. – The owner as developer of a subdivision shall provide adequate
roads, alleys and sidewalks. For subdivision projects one (1) hectare or more, the owner or developer shall reserve thirty percent
(30%) of the gross area for open space.
The next inquiry, then, is when the respondents’ cause of action accrued. Our earlier ruling in Banco Filipino Savings and
Mortgage Bank vs. CA[9] provides the answer:
Thus, the period of prescription of any action is reckoned only from the date the cause of action accrued. And a cause of action
arises when that which should have been done is not done, or that which should not have been done is done. The period
should not be made to retroact to the date of execution of the contract on January 15, 1975 as claimed by the petitioner for at that
time, there would be no way for the respondents to know of the violation of their rights. The Court of Appeals therefore correctly
found that respondents’ cause of action accrued on October 30, 1978, the date they received the statement of account showing the
increased rate of interest, for it was only from that moment that they discovered the petitioner’s unilateral increase thereof. We
quote with approval the pertinent portions of the Court of Appeals decision as follows:
It is the legal possibility of bringing the action that determines the starting point for the computation of the period of prescription.
[10]
In fine, the ten-year prescriptive period is to be reckoned from the accrual of the Appellee’s right of action, not necessarily on
the very date of the execution of the contracts subject of the action [11](Emphasis supplied)
In law, a cause of action exists when the following requisites concur, to wit: (1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (2) an obligation on the part on the defendant to respect such right;
and (3) an act or omission on the part of such defendant violative of the right of the plaintiff. [12]
Time and again, we have emphasized that it is only upon the happening of the last element when it can be said that a cause of
action has arisen. In short, it is from the time an act is performed or an omission incurred which is violative of the plaintiff’s
right, that signals the accrual of a cause of action. And it is from that time that the 10-year prescriptive period commences to run.
Here, it was only on December 18, 1995 when respondents made a written demand upon petitioner to construct subdivision roads,
put up utility facilities and rid the premises of squatters, obligations which are unquestionably in the nature of an obligation to
do. And under Article 1169 [13] of the Code, a party who is under obligation to do something incurs delay only from the time that
the obligee demands, either judicially or extrajudicially, for the fulfillment of the obligation.
Parenthetically, and as we have said in Social Security System vs. Moonwalk Development and Housing Corporation, et al.,[14] an
obligor violates his obligation to the obligee from the time the latter made a demand for performance, which demand also marks
the point of time when the former incurs mora or delay:
The debtor, therefore, violates the obligation in point of time if there is mora or delay. Now, there is no mora or delay unless
there is a demand. It is noteworthy that in the present case during all the period when the principal obligation was still subsisting,
although there were late amortizations there was no demand made by the creditor, plaintiff-appellant for the payment of the
penalty. Therefore up to the time of the letter of plaintiff-appellant there was no demand for the payment of the penalty, hence the
debtor was not in mora in the payment of the penalty.
Hence, absent any demand from the obligee, the obligor does not incur delay. And so long as the obligor does not incur in delay,
he cannot be said to be guilty of some omission violative of the obligee’s rights. Consequently, as long as the obligor is not guilty
of some omission violative of the obligee’s rights, the latter has no cause of action against the former. As a result, the
prescriptive period within which the obligee may bring an action against the obligor does not commence to run until a demand is
made.
With the reality that in this case, respondents made their written demand upon petitioner to perform what is incumbent upon it
only on December 18, 1995, it was only from that date when the 10-year prescriptive period under Article 1144 commenced to
run. And since respondents’ complaint for specific performance was filed with the Field Office of the HLURB only on April 1,
1996, or less than four (4) months after the date of their demand, petitioner’s reliance on prescription of action is simply without
any leg to stand on.
This brings us to the second question.
Petitioner submits as erroneous the appellate court’s ruling that “[e]quity and justice dictate that the injured party should be paid
the market value of the lot, otherwise, respondents Solid Homes, Inc. & Purita Soliven would enrich themselves at the expense of
herein lot owners when they sell the same lot at the present market value”. To petitioner, equity may be availed of only in the
absence of and never against statutory law or judicial rules of procedure. It then invokes Article 1385 of the New Civil Code,
which provides:
Article 1385. Rescission creates the obligation to return the things which were the object of the contract, together with their
fruits, and the price with its interests; consequently, it can be carried out only when he who demands rescission can return
whatever he may be obliged to restore.
On surface, petitioner’s argument appears infallible. However, a closer look at our laws and the reason and spirit behind their
enactment, as well as established jurisprudence, negates petitioner’s thesis.
It is true that this Court have, in the past, applied the provision of Article 1385 to cases of rescission due to breach of obligation
under Article 1191.[15] But this notwithstanding, the Court finds no reason to alter the ruling of the Court of Appeals.
In many instances, this Court has refused to apply the literal import of a particular provision of law when to do so would lead to
unjust, unfair and absurd results. After all, it is the function of courts to see to it that justice is dispensed, fairness is observed and
absurdity prevented. So it is that in Commissioner of Internal Revenue vs. Solidbank Corporation,[16] we made the following
pronouncement:
A literal application of any part of a statute is to be rejected if it will operate unjustly, lead to absurd results, or contradict
the evident meaning of the statute taken as a whole. Unlike the CA, we find that the literal application of the aforesaid
sections of the Tax Code and its implementing regulations does not operate unjustly or contradict the evident meaning of the
statute taken as a whole. Neither does it lead to absurd results. Indeed, our courts are not to give words meanings that would lead
to absurd or unreasonable consequences. We have repeatedly held thus:
xxx [Statutes should receive a sensible construction, such as will give effect to the legislative intention and so as to avoid an
unjust or an absurd conclusion. (Emphasis supplied.)
Were we to follow the letter of Article 1385, we will in effect be paving the way to an absurd situation whereby subdivision
developers who have reneged on their contractual and legal obligation to provide utility systems and facilities for the use of
subdivision lot owners may themselves profit from their very own wrongs and shortcomings. In the curt language of the Court of
Appeals, to which we are in full accord:
Indeed, there would be unjust enrichment if respondents Solid Homes, Inc. & Purita Soliven are made to pay only the purchase
price plus interest. It is definite that the value of the subject property already escalated after almost two decades from the time the
petitioner paid for it. Equity and justice dictate that the injured party should be paid the market value of the lot, otherwise,
respondents Solid Homes, Inc. & Purita Soliven would enrich themselves at the expense of herein lot owners when they sell the
same lot at the present market value. Surely, such a situation should not be countenanced for to do so would be contrary to reason
and therefore, unconscionable. Over time, courts have recognized with almost pedantic adherence that what is inconvenient or
contrary to reason is not allowed in law.
The foregoing scenario becomes even more intolerable when it is considered that P.D. 959 was issued precisely as a measure
against subdivision owners, developers, operators and/or sellers who reneged on their obligation to provide the needed utility
systems and facilities in their subdivisions. As expressed in one of the decree’s whereas clauses:
WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators and/or sellers have reneged
on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems,
lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers.
WHEREFORE, the instant petition is DENIED and the assailed decision and resolution of the Court of Appeals AFFIRMED.
Costs against petitioner.
SO ORDERED.
THE UNITED STATES, plaintiff-appellee,
vs.
ALEJO PAGUIRAN, defendant-appellant.
ELLIOTT, J.:
The defendant Paguirigan, charged with having threatened to kill Sotero Pascua, Vicente Marquez, and Maximo Lopez, was
convicted and sentenced under the second part of article 494 of the Penal Code to one month and one day of arresto mayor, and
to pay a fine of 325 pesetas, and in case of insolvency, to suffer subsidiary imprisonment at the rate of 12 ½ pesetas a day, said
subsidiary imprisonment not to exceed ten days, and to pay the costs of this prosecution. The court found no extenuating or
aggravating circumstances, and gave the defendant the benefit of article 11 of the Penal Code, for the purpose of reducing the
penalty from the medium to the minimum degree.
The offense was not a serious one, and there is nothing in the evidence to show that the defendant ever really contemplated
carrying his threat into effect. The men were engaged in transplanting rice upon land which was claimed by the defendant. While
they were at work the defendant appeared, and flourishing a cane in an excited manner, ordered them to stop their work and leave,
at the time threatening to kill them unless they obeyed. They obeyed the order, and the incident was closed. Upon these facts the
defendant should have been convicted under the third subdivision of article 589, instead of article 494 of the Penal Code. The
threats referred to in article 494 consist in formally threatening a private person with some injury to himself or his family which
would amount to a crime. A threat made in jest or in the heat of anger is a misdemeanor only under article 589. Subdivision 3 of
article 589 provides that "Those who shall threaten another, by words and in the heat of anger, with an injury that would
constitute a crime, and who by their subsequent actions show that they persisted in the intention which they gave utterance to in
their threat; provided that, in view of the circumstances of the deed, it should not be included in Book II of this code," shall be
punished with the penalty of from one to five days of arrest, or a fine of from 15 to 125 pesetas. The fact that the threat was made
in the heat of anger, and that the subsequent actions of the party show that he did not seriously intend to carry the threat into
execution, reduce the offense from a crime to a misdemeanor. It is true that the code uses the words "and who by their subsequent
actions showed that they persisted in the intention which they gave utterance to in their threat," but a literal adherence to this
language would produce the absurd result of making persistence in an illegal purpose operate in mitigation of the offense. The
power of the court to supply or omit words from a statute in order to prevent an absurd result which the legislature will not be
supposed to have intended, is well established. (State vs. Bates, 96 Minn., 110.) It is evident that words of negotiation should be
inserted between the words "they and "persisted," thus making the provision read "and who by their subsequent actions showed
that they had not persisted in the intention which they gave utterance to in their threat." In connecting upon this section, Viada,
volume 3 page 310, says:
The article says . . . "that did persist." This is undoubtedly a mistake, because it is precisely the persistence in a threat that gives it
the aggravating character so as to amount the crime. However, this mistake is not found among the many that were corrected by
the decree of January 1, 1870. But the strict moral and juridical sense should supply this omission.
That this is understood to be the true meaning of the provision of the code appears from the language used inUnited States vs.
Estrada (10 Phil. Rep., 583). The defendant had taken offense at some words used by one Delgado, and threatened to kill him.
While Estrada was searching for a revolver, Delgado concealed himself. On the following day Estrada called at Delgado's house
and stated that the threat had been uttered without premeditation, and that it was not seriously made. The court commented upon
the fact that it appeared that the defendant had not persisted in carrying out the threat, and held that the offense had only the
characteristics of a misdemeanor, and was punishable under article 589, instead of article 494, of the Penal Code. These articles
have been construed by this court several other cases. In United States vs. Sevilla (1 Phil. Rep., 143) it appeared that the defendant
while beating certain parties said that he would kill them if they did not return his jewels. It was held that the threats dealt with
under article 494 are those made with the deliberate purpose of creating in the mind of the person threatened the belief that the
threat will be carried into effect, and that under the circumstances of the case the defendant was punishable under article 589,
instead of article 494. So in United States vs. Simeon (3 Phil. Rep., 388), a person who raised a bolo as if to strike or stab a night
watchman, who thereupon ran away, was held guilty under article 589 of threatening another with weapons.
In United States vs. Castañares (8 Phil Rep., 730), the defendant having taken offense at some remark, drew a revolver and
threatened to kill one Yap Gea, who thereupon fled. The trial court held the defendant guilty ofamenaza under article 494, but this
court was the opinion that the defendant was guilty only of the offense declared by section 2 of article 589 of the Penal Code.
In United States vs. Algurra (9 Phil. Rep., 644), it was held that threats made against another, and in the heat of anger, constituted
a misdeamenor only under section 3 of article 589 of the Penal Code. The court there remarked that "it has not been shown . . .
that he threatened them in earnest with the apparent intent to carry the threat into effect." lawphil.net
Under the authority of these decisions the defendant should have been convicted and punished for a misdemeanor. The sentence
is therefore reversed, and the defendant is hereby sentenced to pay a fine of 125 pesetas, and in case of insolvency, to suffer
subsidiary imprisonment in the provincial jail of La Union, at the rate of 15 pesetas or P3 a day, said subsidiary imprisonment not
to exceed ten days, and to pay the costs of this prosecution. So ordered.
A.M. No. RTJ-93-956 September 27, 1995
PANFILO S. AMATAN, complainant,
vs.
JUDGE VICENTE AUJERIO, respondent.
KAPUNAN, J.:
A criminal complaint accusing Rodrigo Umpad, alias "Meon" of the crime of murder under Article 248 of the Revised Penal
Code was filed by the Philippine National Police Station Commander in Bato, Leyte for the fatal shooting of Genaro Tagsip in the
afternoon of September 14, 1987. 1 After preliminary investigation by the office of the provincial fiscal, an information charged
Umpad with the crime of Homicide as follows:
The undersigned Assistant Provincial Fiscal of Leyte accused Rodrigo Umpad alias "Meon" of the crime of Homicide committed
as follows:
That on or about the 14th day of September 1987, in the Island of Dawahon, Municipality of Bato, Province of Leyte, Philippines
and within the preliminary jurisdiction of this Honorable Court, the above-named accused, with deliberate intent, with intent to
kill did then and there willfully, unlawfully and feloniously shot one GENARO TAGSIP, with a revolver .38 Cal. Snub Nose
Smith and Wesson (Paltik) which the accused had provided himself for the purpose, thereby causing and inflicting upon the
victim fatal gunshot wound on his head which was the direct and immediate cause of the death of Genaro Tagsip.
CONTRARY TO LAW.
Hilongos, Leyte, October 20, 1987.
Upon arraignment, however, the parties, with the acquiescence of the Public Prosecutor and the consent of the offended party,
entered into plea bargaining where it was agreed that the accused would plead guilty to the lesser offense of Attempted
Homicide instead of homicide as originally charged in the information, and would incur the penalty of "four (4) years, two (2)
months and one (1) day of prision correccional as minimum to six (6) year ofprision correccional maximum as
maximum." 2 Consequently, in his decision promulgated on the 27th of June 1990, respondent judge found the accused, Rodrigo
Umpad, guilty beyond reasonable doubt of the lesser crime of Attempted Homicide and sentenced him to suffer imprisonment of
four years, two months and one day of prision correccional maximum, as minimum to six years of prision
correccional maximum, as the maximum period, exactly in accordance with the plea bargaining agreement. 3
On October 16, 1992, a letter-complaint addressed to the Chief Justice and signed by Pedro S. Amatan, a brother-in-law of the
deceased, accused Judge Vicente Aujero of gross incompetence, gross ignorance of the law and gross misconduct, relative to his
disposition of Crim. Case No. H-223 entitled People v. Rodrigo Umpad alias "Meon." In said letter-complaint, complainant
contends that the sentence of respondent judge finding the accused guilty beyond reasonable doubt of the lesser offense of
Attempted Homicide and not Homicide as charged is proof indicative, "on its face, of gross incompetence, gross ignorance of the
law or gross misconduct.
Responding to the complaint, respondent Judge asserts that he relied on Sec. 2, Rule 116 of the 1985 Revised Rules of Criminal
Procedure, as amended, which allows an accused individual — with the consent of the offended party — to plead guilty to a
lesser offense, regardless of whether or not such offense is necessarily included in the crime charged, or is cognizable by a court
of lesser jurisdiction. He explains that during the May 3, 1990 hearing, accused and his counsel, with the acquiescence and in the
presence of the prosecutor, informed the Court of the defendant's desire to plea bargain pursuant to the aforestated rule.
Moreover, he avers that in a conference on June 27, 1990, the wife of the victim herself agreed to the accused's plea of guilty to
attempted homicide, instead of homicide as she needed the monetary indemnity to raise her two orphaned children. In a
Memorandum dated February 5, 1993, the Deputy Court Administrator recommended that the complaint be dismissed, explaining
that:
Section 2 116 is more liberalized as it allows the accused to plead guilty to a lesser offense whether or not it is included in the
offense charged in the complaint or information, with the consent of the offended party and the fiscal. In this regard, it is inferred
that the fiscal consented to abbreviate the proceedings and in order not to run the risk of the accused being acquitted, because
there was no conclusive evidence to obtain the conviction of the accused to the offense charged in the complaint of information.
It may be stated in this connection that unlike in the crime of murder where the accused may plead to the lesser offense of
homicide, in homicide a misinterpretation may arise, as in this case, when the accused pleads guilty to attempted homicide,
because here the fact of the death of the victim, which is the principal element of the crime is obliterated. This is specially so
because the decision/sentence does not contain findings of fact and conclusions of law but merely an account that the accused
pleaded guilty to a lesser offense and the penalty imposed. 4
Section 2, Rule, 116 of the 1985 Revised Rules of Criminal Procedure, as amended, allows the accused in criminal case to plead
guilty "to lesser offense regardless of whether or not it is necessarily included in the crime charged." The fact of death of the
victim for which the accused Rodrigo Umpad was criminally liable, cannot by simple logic and plain common sense be
reconciled with the plea of guilty to the lower offense of attempted homicide. The crime of homicide as defined in Article 249 of
the Revised Penal Code necessarily produces death; attempted homicide does not. Concededly, hiatus in the law exists in the case
before us, which could either lead to a misapprehension of Section 2 of Rule 116 or to outright confusion. Such a result was itself
recognized by the Deputy Court Administrator when he recommended an amendment to the provision in his Memorandum.
However, the law is not entirely bereft of solutions in such cases. In instances where a literal application of a provision of law
would lead to injustice or to a result so directly in opposition with the dictates of logic and everyday common sense as to be
unconscionable, the Civil Code 5 admonishes judges to take principles of right and justice at heart. In case of doubt the intent is to
promote right and justice. Fiat justice ruat coelum. Stated differently, when a provision of law is silent or ambiguous, judges
ought to invoke a solution responsive to the vehement urge of conscience.
These are fundamental tenets of law. In the case at bench, the fact of the victim's death, a clear negation of frustrated or attempted
homicide, ought to have alerted the judge not only to a possibly inconsistent result but to an injustice. The failure to recognize
such principles so cardinal to our body of laws amounts to ignorance of the law and reflects respondent judge's lack of prudence,
if not competence, in the performance of his duties. While it is true, as respondent judge contends, that he merely applied the rule
to the letter, the palpably incongruous result ought to have been a "red flag" alerting him of the possibility of injustice. The death
of an identified individual, the gravamen of the charge against the defendant in the criminal case, cannot and should not be
ignored in favor of a more expedient plea of either attempted or frustrated homicide. We have held before that if the law is so
elementary, not to know it or to act as if one does not know it, constitutes gross ignorance of the law. 6
Finally, every judge must be the embodiment of competence, integrity and independence. 7 A judge should not only be aware of
the bare outlines of the law but also its nuances and ramifications, otherwise, he would not be able to come up with decisions
which are intrinsically fair. In failing to exercise even ordinary common sense, a judge could be held administratively liable for a
verdict that could in no way be legally or factually sustained or justified.
We note, however, that under the circumstances of the case, respondent judge's erroneous exercise of his judicial prerogative was
neither tainted with malice nor bad faith. The phraseology of Sec. 2, Rule 116 is not crafted with such precision as to entirely
eliminate possible misinterpretation. This observation is bolstered by the fact that the same provision prompted the Department of
Justice, on July 31, 1990, or three months after respondent judge took cognizance of the case on April 17, 1990, to issue Circular
No. 35, 8 later amended by Circular No. 55 dated December 11, 1990, clarifying and setting limitations on the application of Sec.
2, Rule 116. The fact also that respondent reached compulsory retirement age on April 5, 1995 after a long period of service in
the judiciary entitles him to a certain measure of leniency. Nonetheless, the case at bench stands unique because of the potently
absurd result of respondent's application of the law.
ACCORDINGLY, we are constrained to find the respondent judge GUILTY of gross ignorance of the law for which he is hereby
REPRIMANDED na FINED ONE THOUSAND (P1,000.00) PESOS. Let this decision appear in respondent's record of service.
SO ORDERED
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA, BRANCH VII, and
PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON BUNDALIAN, JR., JOSEPH C. MAISO,
EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO, MARIANO COTIA,
JR., ARMANDO L. DIZON, ROGELIO B. PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A.
BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA, respondents.
G.R. No. L-46229-32 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and REYNALDO
LAQUI Y AQUINO, ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO VERSOZA, respondents.
G.R. No. L-46313-16 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and JUANITO DE
LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN CASTILLO Y
UBALDO, respondents.
G.R. No. L-46997 November 20, 1978 Contrary to law. (p. 32, rollo of L-42050-66)

THE PEOPLE OF THE PHILIPPINES, petitioner, The other Informations are similarly worded except for the name of the accused, the date and place of the commission of the
vs. crime, and the kind of weapon involved.
THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and PANCHITO
REFUNCION, respondents. 2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren follows:

MUÑOZ PALMA, J.:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO, accused.

These twenty-six (26) Petitions for Review filed by the People of the Philippines represented, respectively, by the Office of the CRIM. CASE NO. 29677
City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and joined by the Solicitor General, are consolidated in this
one Decision as they involve one basic question of law.
VIOL. OF PAR. 3,
These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of Manila, Branch VII,
presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of Manila, Branch XVIII, presided by Hon. PD 9 IN REL. TO LOI
Maximo A. Maceren (8 Petitions) and, the Court of First Instance of Samar, with Hon. Wenceslao M. Polo, presiding, (1
Petition). No. 266 of the Chief

Before those courts, Informations were filed charging the respective accused with "illegal possession of deadly weapon" in
violation of Presidential Decree No. 9. On a motion to quash filed by the accused, the three Judges mentioned above issued in the
respective cases filed before them — the details of which will be recounted below — an Order quashing or dismissing the
Informations, on a common ground, viz, that the Information did not allege facts which constitute the offense penalized by
Presidential Decree No. 9 because it failed to state one essential element of the crime.
Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense of "illegal possession of
deadly weapon" penalized under Presidential Decree (PD for short) No. 9? This is the central issue which we shall resolve and
dispose of, all other corollary matters not being indispensable for the moment.
A — The Information filed by the People —
1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows:
THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y DURAN, accused.
Crim. Case No. 19639
Executive dated April 1, 1975
INFORMATION
The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF PARAGRAPH 3, PRESIDENTIAL DECREE
NO. 9 in relation to Letter of Instruction No. 266 of the Chief Executive dated April 1, 1975, committed as follows:
That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the said accused did then and there wilfully,
unlawfully and knowingly carry outside of his residence a bladed and pointed weapon, to wit: an ice pick with an overall length
of about 8½ inches, the same not being used as a necessary tool or implement to earn his livelihood nor being used in connection
therewith.
Contrary to law. (p. 14, rollo of L-46229-32)
The other Informations are likewise similarly worded except for the name of the accused, the date and place of the commission of
the crime, and the kind of weapon involved.

3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder:
VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081

PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION, accused.

INFORMATION

CRIM. CASE NO. 933

The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of paragraph 3, Presidential Decree No. 9 of
Proclamation 1081, committed as follows:
For:
That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the said accused did then and there wilfully,
unlawfully, feloniously and knowingly have in his possession and under his custody and control one (1) carving knife with a ILLEGAL POSSESSION OF
blade of 6-½ inches and a wooden handle of 5-1/4 inches, or an overall length of 11-¾ inches, which the said accused carried
outside of his residence, the said weapon not being used as a tool or implement necessary to earn his livelihood nor being used in DEADLY WEAPON
connection therewith.
(VIOLATION OF PD NO. 9)
INFORMATION
The undersigned First Assistant Provincial Fiscal of Samar, accuses PANCHITO REFUNCION of the crime of ILLEGAL
POSSESSION OF DEADLY WEAPON or VIOLATION OF PD NO. 9 issued by the President of the Philippines on Oct. 2, 1972,
pursuant to Proclamation No. 1081 dated Sept. 21 and 23, 1972, committed as follows:
That on or about the 6th day of October, 1976, in the evening at Barangay Barruz, Municipality of Matuginao, Province of
Samar Philippines, and within the jurisdiction of this Honorabe Court, the abovenamed accused, knowingly, wilfully, unlawfully
and feloniously carried with him outside of his residence a deadly weapon called socyatan, an instrument which from its very
nature is no such as could be used as a necessary tool or instrument to earn a livelihood, which act committed by the accused is a
Violation of Presidential Decree No. 9.
CONTRARY TO LAW. (p. 8, rollo of L-46997)
B. — The Orders of dismissal —
In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense that one essential element
of the offense charged is missing from the Information, viz: that the carrying outside of the accused's residence of a bladed,
pointed or blunt weapon is in furtherance or on the occasion of, connected with or related to subversion, insurrection, or
rebellion, organized lawlessness or public disorder.
1. Judge Purisima reasoned out, inter alia, in this manner:
... the Court is of the opinion that in order that possession of bladed weapon or the like outside residence may be prosecuted and
tried under P.D. No. 9, the information must specifically allege that the possession of bladed weapon charged was for the
purpose of abetting, or in furtherance of the conditions of rampant criminality, organized lawlessness, public disorder, etc. as are
contemplated and recited in Proclamation No. 1081, as justification therefor. Devoid of this specific allegation, not necessarily in
the same words, the information is not complete, as it does not allege sufficient facts to constitute the offense contemplated in
P.D. No. 9. The information in these cases under consideration suffer from this defect.
xxx xxx xxx
And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to
Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all
can be so heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of
being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where
it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even
that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed
object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the
infamous paltik.
For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its necessity can never be assailed. But it
seems it is back-firing, because it is too hot in the hands of policemen who are inclined to backsliding.
The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal and the conscience of the Court, and hence
this resolution, let alone technical legal basis, is prompted by the desire of this Court to apply said checkvalves. (pp. 55-57, rollo
of L-42050-66)
2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:
xxx xxx xxx
As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is the maintenance of law and order
throughout the Philippines and the prevention and suppression of all forms of lawless violence as well as any act of insurrection
or rebellion. It is therefore reasonable to conclude from the foregoing premises that the carrying of bladed, pointed or blunt
weapons outside of one's residence which is made unlawful and punishable by said par. 3 of P.D. No. 9 is one
thatabets subversion, insurrection or rebellion, lawless violence, criminality, chaos and public disorder or is intended to bring
about these conditions. This conclusion is further strengthened by the fact that all previously existing laws that also made the
carrying of similar weapons punishable have not been repealed, whether expressly or impliedly. It is noteworthy that Presidential
Decree No. 9 does not contain any repealing clause or provisions.
xxx xxx xxx
The mere carrying outside of one's residence of these deadly weapons if not concealed in one's person and if not carried in any of
the aforesaid specified places, would appear to be not unlawful and punishable by law.
With the promulgation of Presidential Decree No. 9, however, the prosecution, through Assistant Fiscal Hilario H. Laqui,
contends in his opposition to the motion to quash, that this act is now made unlawful and punishable, particularly by paragraph 3
thereof, regardless of the intention of the person carrying such weapon because the law makes it "mala prohibita". If the
contention of the prosecution is correct, then if a person happens to be caught while on his way home by law enforcement officers
carrying a kitchen knife that said person had just bought from a store in order that the same may be used by one's cook for
preparing the meals in one's home, such person will be liable for punishment with such a severe penalty as imprisonment from
five to ten years under the decree. Such person cannot claim that said knife is going to be used by him to earn a livelihood
because he intended it merely for use by his cook in preparing his meals.
This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted and applied in the manner that that the
prosecution wants it to be done. The good intentions of the President in promulgating this decree may thus be perverted by some
unscrupulous law enforcement officers. It may be used as a tool of oppression and tyranny or of extortion.
xxx xxx xxx
It is therefore the considered and humble view of this Court that the act which the President intended to make unlawful and
punishable by Presidential Decree No. 9, particularly by paragraph 3 thereof, is one that abets or is intended to abet subversion,
rebellion, insurrection, lawless violence, criminality, chaos and public disorder. (pp. 28-30, rollo of L-46229-32)
3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information filed before him, thus:
... We believe that to constitute an offense under the aforcited Presidential decree, the same should be or there should be an
allegation that a felony was committed in connection or in furtherance of subversion, rebellion, insurrection, lawless violence
and public disorder. Precisely Proclamation No. 1081 declaring a state of martial law throughout the country was issued
because of wanton destruction to lives and properties widespread lawlessness and anarchy. And in order to restore the
tranquility and stability of the country and to secure the people from violence anti loss of lives in the quickest possible manner
and time, carrying firearms, explosives and deadly weapons without a permit unless the same would fall under the exception is
prohibited. This conclusion becomes more compelling when we consider the penalty imposable, which is from five years to ten
years. A strict enforcement of the provision of the said law would mean the imposition of the Draconian penalty upon the
accused.
xxx xxx xxx
It is public knowledge that in rural areas, even before and during martial law, as a matter of status symbol, carrying deadly
weapons is very common, not necessarily for committing a crime nor as their farm implement but for self-preservation or self-
defense if necessity would arise specially in going to and from their farm. (pp. 18-19, rollo of L-46997)
In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In the criminal case before
the Court of (First Instance of Samar the accused was arraigned but at the same time moved to quash the Information. In all the
cases where the accused were under arrest, the three Judges ordered their immediate release unless held on other charges.
C. — The law under which the Informations in question were filed by the People.
As seen from the Informations quoted above, the accused are charged with illegal possession of deadly weapon in violation of
Presidential Decree No. 9, Paragraph 3.
We quote in full Presidential Decree No. 9, to wit:
PRESIDENTIAL DECREE NO. 9
DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22, 1972, AND SEPTEMBER 23,
1972, RESPECTIVELY, TO BE UNLAWFUL AND PROVIDING PENALTIES THEREFORE.
WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the Philippines has been placed under a state of
martial law;
WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated September 22, 1972 and General Order No. 7
dated September 23, 1972, have been promulgated by me;
WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and public disorder mentioned in the
aforesaid Proclamation No. 1081 are committed and abetted by the use of firearms, explosives and other deadly weapons;
NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of the Philippines, in older to
attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree
that:
1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator shall, upon conviction suffer:
(a) The mandatory penalty of death by a firing squad or electrocution as a Military, Court/Tribunal/Commission may direct, it
the firearm involved in the violation is unlicensed and is attended by assault upon, or resistance to persons in authority or their
agents in the performance of their official functions resulting in death to said persons in authority or their agent; or if such
unlicensed firearm is used in the commission of crimes against persons, property or chastity causing the death of the victim used
in violation of any other General Orders and/or Letters of Instructions promulgated under said Proclamation No. 1081:
(b) The penalty of imprisonment ranging from twenty years to life imprisonment as a Military Court/Tribunal/commission may
direct, when the violation is not attended by any of the circumstances enumerated under the preceding paragraph;
(c) The penalty provided for in the preceding paragraphs shall be imposed upon the owner, president, manager, members of the
board of directors or other responsible officers of any public or private firms, companies, corporations or entities who shall
willfully or knowingly allow any of the firearms owned by such firm, company, corporation or entity concerned to be used in
violation of said General Orders Nos. 6 and 7.
2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and other explosives, including, but not
limited to, "pill box bombs," "molotov cocktail bombs," "fire bombs," or other incendiary device consisting of any chemical,
chemical compound, or detonating agents containing combustible units or other ingredients in such proportion, quantity,
packing, or bottling that ignites by fire, by friction, by concussion, by percussion, or by detonation of all or part of the compound
or mixture which may cause such a sudden generation of highly heated gases that the resultant gaseous pressures are capable of
producing destructive effects on continguous objects or of causing injury or death of a person; and any person convicted thereof
shall be punished by imprisonment ranging from ten to fifteen years as a Military Court/Tribunal/Commission may direct.
3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such as "fan knife," "spear," "dagger," "bolo,"
"balisong," "barong," "kris," or club, except where such articles are being used as necessary tools or implements to earn a
livelihood and while being used in connection therewith; and any person found guilty thereof shall suffer the penalty of
imprisonment ranging from five to ten years as a Military Court/Tribunal/Commission may direct.
4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during the commission of or for the purpose of
committing, any other crime, the penalty shall be imposed upon the offender in its maximum extent, in addition to the penalty
provided for the particular offenses committed or intended to be committed.
Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen hundred and seventy-two.
(SGD) FERDINAND E. MARCOS
President
Republic of the Philippines
D. — The arguments of the People —
In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal of Manila and the
Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of dismissal, the main argument advanced on the
issue now under consideration is that a perusal of paragraph 3 of P.D. 9 'shows that the prohibited acts need not be related to
subversive activities; that the act proscribed is essentially a malum prohibitum penalized for reasons of public policy. 1
The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused who commits the act is
immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that P.D. 9 provides and condemns not only the
carrying of said weapon in connection with the commission of the crime of subversion or the like, but also that of criminality in
general, that is, to eradicate lawless violence which characterized pre-martial law days. It is also argued that the real nature of
the criminal charge is determined not from the caption or preamble of the information nor from the specification of the provision
of law alleged to have been violated but by the actual recital of facts in the complaint or information. 2
E. — Our Ruling on the matter —
1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed of the nature and cause
of the accusation against him. 3
Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint or information to be
sufficient it must, inter alia state the designation of the offense by the statute, and the acts or omissions complained of as
constituting the offense. This is essential to avoid surprise on the accused and to afford him the opportunity to prepare his
defense accordingly. 4
To comply with these fundamental requirements of the Constitution and the Rules on Criminal Procedure, it is imperative for the
specific statute violated to be designated or mentioned 4 in the charge. In fact, another compelling reason exists why a
specification of the statute violated is essential in these cases. As stated in the order of respondent Judge Maceren the carrying of
so-called "deadly weapons" is the subject of another penal statute and a Manila city ordinance. Thus, Section 26 of Act No. 1780
provides:
Section 26. It should be unlawful for any person to carry concealed about his person any bowie knife, dirk dagger, kris, or other
deadly weapon: ... Any person violating the provisions of this section shall, upon conviction in a court of competent jurisdiction,
be punished by a fine not exceeding five hundred pesos, or by imprisonment for a period not exceeding six months, or both such
fine and imprisonment, in the discretion of the court.
Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on December 4, 1957, in turn
penalizes with a fine of not more than P200.00 or imprisonment for not more than one months, or both, at the discretion of the
court, anyone who shall carry concealed in his person in any manner that would disguise its deadly character any kind of
firearm, bowie knife, or other deadly weapon ... in any public place.Consequently, it is necessary that the particular law violated
be specified as there exists a substantial difference between the statute and city ordinance on the one hand and P.D. 9 (3) on the
other regarding the circumstances of the commission of the crime and the penalty imposed for the offense.
We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed repealed by P.D. 9 (3). 5 P.
D. 9(3) does not contain any repealing clause or provision, and repeal by implication is not favored. 6 This principle holds true
with greater force with regards to penal statutes which as a rule are to be construed strictly against the state and liberally in
favor of the accused. 7 In fact, Article 7 of the New Civil Code provides that laws are repealed only by subsequent ones and their
violation or non- observance shall not be excused by disuse, or custom or practice to the contrary.
Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a police officer or a
prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree. That being the case, the right becomes
more compelling for an accused to be confronted with the facts constituting the essential elements of the offense charged against
him, if he is not to become an easy pawn of oppression and harassment, or of negligent or misguided official action — a fear
understandably shared by respondent Judges who by the nature of their judicial functions are daily exposed to such dangers.
2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the body of the Information with
a violation of paragraph 3, P.D. 9. What then are the elements of the offense treated in the presidential decree in question?
We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed, blunt, or pointed weapon,
etc. not used as a necessary tool or implement for a livelihood; and second, that the act of carrying the weapon was either in
furtherance of, or to abet, or in connection with subversion, rebellion, insurrection, lawless violence, criminality, chaos, or
public disorder.
It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of the scope of the statute or
the city ordinance mentioned above. In other words, a simple act of carrying any of the weapons described in the presidential
decree is not a criminal offense in itself. What makes the act criminal or punishable under the decree is the motivation behind it.
Without that motivation, the act falls within the purview of the city ordinance or some statute when the circumstances so warrant.
Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction given to P.D. 9(3).
3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries outside his residence any
of the weapons mentioned or described in the decree irrespective of motivation, intent, or purpose, converts these cases into one
of "statutory construction." That there is ambiguity in the presidential decree is manifest from the conflicting views which arise
from its implementation. When ambiguity exists, it becomes a judicial task to construe and interpret the true meaning and scope
of the measure, guided by the basic principle that penal statutes are to be construed and applied liberally in favor of the accused
and strictly against the state.
4. In the construction or interpretation of a legislative measure — a presidential decree in these cases — the primary rule is to
search for and determine the intent and spirit of the law. Legislative intent is the controlling factor, for in the words of this Court
in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee, whatever is within the spirit of a statute is within the statute, and this
has to be so if strict adherence to the letter would result in absurdity, injustice and contradictions. 8
There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3).
First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are clearly spelled out in the
"Whereas" clauses of the presidential decree, thus: (1) the state of martial law in the country pursuant to Proclamation 1081
dated September 21, 1972; (2) the desired result of Proclamation 1081 as well as General Orders Nos. 6 and 7 which are
particularly mentioned in P.D. 9; and (3) the alleged fact that subversion, rebellion, insurrection, lawless violence, criminality,
chaos, aid public disorder mentioned in Proclamation 1081 are committed and abetted by the use of firearms and explosives and
other deadly weapons.
The Solicitor General however contends that a preamble of a statute usually introduced by the word "whereas", is not an
essential part of an act and cannot enlarge or confer powers, or cure inherent defects in the statute (p. 120, rollo of L-42050-66);
that the explanatory note or enacting clause of the decree, if it indeed limits the violation of the decree, cannot prevail over the
text itself inasmuch as such explanatory note merely states or explains the reason which prompted the issuance of the decree. (pp.
114-115, rollo of 46997)
We disagree with these contentions. Because of the problem of determining what acts fall within the purview of P.D. 9, it
becomes necessary to inquire into the intent and spirit of the decree and this can be found among others in the preamble or,
whereas" clauses which enumerate the facts or events which justify the promulgation of the decree and the stiff sanctions stated
therein.
A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs which are to be remedied, and objects
which are to be accomplished, by the provisions of the statute." (West Norman Timber v. State, 224 P. 2d 635, 639, cited in
Words and Phrases, "Preamble"; emphasis supplied)
While the preamble of a statute is not strictly a part thereof, it may, when the statute is in itself ambiguous and difficult of
interpretation, be resorted to, but not to create a doubt or uncertainty which otherwise does not exist." (James v. Du Bois, 16
N.J.L. (1 Har.) 285, 294, cited in Words and Phrases, "Preamble")
In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that '(L)egislative intent must
be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular provision alone. This is
a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might easily convey a meaning quite
different from the one actually intended and evident when the word or phrase is considered with those with which it is associated.
Thus, an apparently general provision may have a limited application if read together with other provisions. 9
Second, the result or effects of the presidential decree must be within its reason or intent.
In the paragraph immediately following the last "Whereas" clause, the presidential decree states:
NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the Armed Forces of the Philippines, in order to
attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree
that:
xxx xxx xxx
From the above it is clear that the acts penalized in P.D. 9 are those related to the desired result of Proclamation 1081 and
General Orders Nos. 6 and 7. General Orders Nos. 6 and 7 refer to firearms and therefore have no relevance to P.D. 9(3) which
refers to blunt or bladed weapons. With respect to Proclamation 1081 some of the underlying reasons for its issuance are quoted
hereunder:
WHEREAS, these lawless elements having taken up arms against our duly constituted government and against our people, and
having committed and are still committing acts of armed insurrection and rebellion consisting of armed raids, forays, sorties,
ambushes, wanton acts of murders, spoilage, plunder, looting, arsons, destruction of public and private buildings, and attacks
against innocent and defenseless civilian lives and property, all of which activities have seriously endangered and continue to
endanger public order and safety and the security of the nation, ...
xxx xxx xxx
WHEREAS, it is evident that there is throughout the land a state of anarchy and lawlessness, chaos and disorder, turmoil and
destruction of a magnitude equivalent to an actual war between the forces of our duly constituted government and the New
People's Army and their satellite organizations because of the unmitigated forays, raids, ambuscades, assaults, violence,
murders, assassinations, acts of terror, deceits, coercions, threats, intimidations, treachery, machinations, arsons, plunders and
depredations committed and being committed by the aforesaid lawless elements who have pledged to the whole nation that they
will not stop their dastardly effort and scheme until and unless they have fully attained their primary and ultimate purpose of
forcibly seizing political and state power in this country by overthrowing our present duly constituted government, ... (See Book I,
Vital Documents on the Declaration of Martial Law in the Philippines by the Supreme Court of the Philippines, pp. 13-39)
It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with or related to the afore-
quoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3), and nothing else.
Statutes are to be construed in the light of purposes to be achieved and the evils sought to be remedied. (U.S. v. American
Tracking Association, 310 U.S. 534, cited in LVN Pictures v. Philippine Musicians Guild, 110 Phil. 725, 731; emphasis supplied)
When construing a statute, the reason for its enactment should be kept in mind, and the statute should be construed with
reference to its intended scope and purpose. (Statutory Construction by E.T. Crawford, pp. 604-605, cited in Commissioner of
Internal Revenue v. Filipinas Compania de Seguros, 107 Phil. 1055, 1060; emphasis supplied)
5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure if a strict adherence to the
letter of the paragraph is followed.
It is a salutary principle in statutory construction that 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. 9-a
It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no intent to work a hardship or
an oppressive result, a possible abuse of authority or act of oppression, arming one person with a weapon to impose hardship on
another, and so on. 10
At this instance We quote from the order of Judge Purisima the following:
And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to
Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all
can be so heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of
being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where
it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even
that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed
object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the
infamous paltik. (pp. 72-73, rollo L-42050-66)
And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in absurdity at times. To his
example We may add a situation where a law-abiding citizen, a lawyer by profession, after gardening in his house remembers to
return the bolo used by him to his neighbor who lives about 30 meters or so away and while crossing the street meets a
policeman. The latter upon seeing the bolo being carried by that citizen places him under arrest and books him for a violation of
P.D. 9(3). Could the presidential decree have been conceived to produce such absurd, unreasonable, and insensible results?
6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused.
American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights of individuals; the object
is to establish a certain rule by conformity to which mankind would be safe, and the discretion of the court limited." 11 The
purpose is not to enable a guilty person to escape punishment through a technicality but to provide a precise definition of
forbidden acts. 12
Our own decisions have set down the same guidelines in this manner, viz:
Criminal statutes are to be construed strictly. No person should be brought within their terms who is not clearly within them, nor
should any act be pronounced criminal which is not made clearly so by the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246)
The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such laws,
instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the meaning of penal
laws. (People v. Manantan, 5 SCRA 684, 692)
F. The Informations filed by petitioner are fatally defective.
The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that the latter may constitute a
sufficiently valid charged. The sufficiency of an Information is determined solely by the facts alleged therein. 13 Where the facts
are incomplete and do not convey the elements of the crime, the quashing of the accusation is in order.
Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the complaint or information when
the facts charged do not constitute an offense.
In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an unjust judgment under
Article 204 of the Revised Penal Code, failure to allege in the Information that the judgment was rendered knowing it to be
unjust, is fatal. 14
In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief Justice of the Court affirmed
an order of the trial court which quashed an Information wherein the facts recited did not constitute a public offense as defined in
Section 1, Republic Act 145. 15
G. The filing of these Petitions was unnecessary because the People could have availed itself of other available remedies below.
Pertinent provisions of the Rules of Court follow:
Rule 117, Section 7. Effect of sustaining the motion to quash. — If the motion to quash is sustained the court may order that
another information be filed. If such order is made the defendant, if in custody, shall remain so unless he shall be admitted to
bail. If such order is not made or if having been made another information is not filed withuntime to be specified in the order, or
within such further time as the court may allow for good cause shown, the defendant, if in custody, shall be discharged therefrom,
unless he is in custody on some other charge.
Rule 110, Section 13. Amendment. — The information or complaint may be amended, in substance or form, without leave of
court, at any time before the defendant pleads; and thereafter and during the trial as to all matters of form, by leave and at the
discretion of the court, when the same can be done without prejudice to the rights of the defendant.
xxx xxx xxx
Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz:
First, if the evidence on hand so warranted, the People could have filed an amended Information to include the second element of
the offense as defined in the disputed orders of respondent Judges. We have ruled that if the facts alleged in the Information do
not constitute a punishable offense, the case should not be dismissed but the prosecution should be given an opportunity to amend
the Information. 16
Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act No. 1780, quoted earlier,
or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928, especially since in most if not all of the cases, the
dismissal was made prior to arraignment of the accused and on a motion to quash.
Section 8. Rule 117 states that:
An order sustaining the motion to quash is not a bar to another prosecution for the same offense unless the motion was based on
the grounds specified in section 2, subsections (f) and (h) of this rule.
Under the foregoing, the filing of another complaint or Information is barred only when the criminal action or liability had been
extinguished (Section 2[f]) or when the motion to quash was granted for reasons of double jeopardy. (ibid., [h])
As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these cases should new
complaints be filed against them, is a matter We need not resolve for the present.
H. — We conclude with high expectations that police authorities and the prosecuting arm of the government true to the oath of
office they have taken will exercise utmost circumspection and good faith in evaluating the particular circumstances of a case so
as to reach a fair and just conclusion if a situation falls within the purview of P.D. 9(3) and the prosecution under said decree is
warranted and justified. This obligation becomes a sacred duty in the face of the severe penalty imposed for the offense.
On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal of Manila on October 15,
1975, written for the Secretary, now Minister of Justice, where he stated the following:
In any case, please study well each and every case of this nature so that persons accused of carrying bladed weapons, specially
those whose purpose is not to subvert the duly constituted authorities, may not be unduly indicted for the serious offenses falling
under P.D. No. 9. 17
Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however a judicial task and
prerogative to determine if official action is within the spirit and letter of the law and if basic fundamental rights of an individual
guaranteed by the Constitution are not violated in the process of its implementation. We have to face the fact that it is an unwise
and unjust application of a law, necessary and justified under prevailing circumstances, which renders the measure an
instrument of oppression and evil and leads the citizenry to lose their faith in their government.
WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent Judges dismissing or
quashing the Information concerned, subject however to Our observations made in the preceding pages 23 to 25 of this Decision
regarding the right of the State or Petitioner herein to file either an amended Information under Presidential Decree No. 9,
paragraph 3, or a new one under other existing statute or city ordinance as the facts may warrant.
Without costs.
SO ORDERED.
G.R. No. L-11119
JUANA RIVERA, petitioner,
vs.
RICHARD CAMPBELL, judge of the Court of First Instance of the city of Manila, respondent.
JOHNSON, J.:
The petition in the present case was presented for the purpose of obtaining the writ of certiorari. The record shows that the
petitioner had been convicted of a violation of subsection (f) of section 4 of Ordinance No. 149, first by the municipal court of the
city of Manila and again by the Court of First Instance of the city of Manila. She alleged in each court that the same was without
jurisdiction to try her for the crime committed. She admitted that she had committed the acts charged in the complaint, but denied
that the courts of the city of Manila had jurisdiction to try her for the same. Each of said courts overruled her objection to the
jurisdiction, each found her guilty of the crime charged, and each sentenced her to pay a fine.
Upon the presentation of the petition in this court the respondent was ordered to appear and show cause why the writ should not
issue. In response to said order a demurrer was presented.
The facts upon which the present proceeding are based seem to be as follows: That the said Juana Rivera was charged with
having willfully and unlawfully washed garments, articles of clothing, and fabrics in the waters of that part of the Mariquina
River lying between the Santolan pumping station and the Boso-Boso dam, in the Province of Rizal, a place then occupied by
duly authorized representatives and employees of the city of Manila, on or about May 11th, 1915, in violation of subsection (f) of
section 4 of Ordinance No. 149 of the city of Manila, in relation with the provisions of sections 6 and 7 of the same Ordinance.
Upon said complaint the municipal court found the plaintiff guilty. She appealed to the Court of First Instance where she was
again found guilty of a violation of said Ordinance.
The simple question presented in the present case is whether or not the courts of the city of Manila have jurisdiction over the
crime committed by the petitioner at the place it was committed.
Said section 4 of paragraph (f) of said Ordinance provides as follows:
SECTION 4. The following regulations shall be observed upon all lands occupied by any duly authorized representative, officer,
or employee of the city of Manila:

xxx xxx xxx
(f) Bathing in water courses. — All persons are prohibited from bathing in the river and water courses. The washing of garments,
articles of clothing, and fabrics in the waters of any river or water course is prohibited.
Said section of said Ordinance was adopted by the municipal board of the city of Manila in pursuance of the power conferred
upon it by authority of the provisions of paragraphs (w) and (cc) of section 17 of Act No. 183, and paragraph (i) of section 3
of Act No. 1150 of the Philippine Commission.
Section 17 and paragraph (w) and (cc) provide:
SEC. 17 . . . . In addition to the foregoing the board (municipal) shall have the following general powers:
xxx xxx xxx
(w) To maintain waterworks for the purpose of supplying water to the inhabitants of the city (of Manila), to purify the source of
supply, and regulate the control and use of the water, and to fix and collect rents therefor; to regulate the construction, repair, and
use of hydrants, pumps, cisterns, and reservoirs, and to prevent the waste of water.
xxx xxx xxx
(cc) To extend and enforce all its ordinances over all waters within the city, . . . and for the purpose of protecting and insuring the
purity of the water supply of the city, to extend and enforce ordinances to that end over all territory within the drainage area of
such water supply, or within one hundred meters of any reservoir, conduit, canal, aqueduct, or pumping station used in connection
with the city water service.
The municipal board was further authorized to protect the purity of the water supply of the city of Manila, by Act No. 1150 of the
Philippine Commission. Section 3 of said Act provides:
SEC. 3 (Act No. 1150.) The ordinances drafted by the Board of Health may provide for:
xxx xxx xxx
(i) Protection from infection of all public and private water supplies and sources, and prohibition of the use of water of dangerous
character of domestic purposes. Ordinances enacted for the purpose of protecting the purity of the water supply of Manila shall
apply to and be enforced over all territory within the drainage area of such water supply or within one hundred meters of any
reservoir, conduit, canal, aqueduct, or pumping station used in connection with the city water service."
It is admitted that during the dry season, the city of Manila was obliged to use, in addition to the natural water supply from Boso-
Boso dam, the water from Mariquina River; that the water was taken out of the Mariquina Rivera by means of a pumping station
located some distance below Boso-Boso dam, and that the petitioner was found washing her clothing between the said pumping
station and Boso-Boso dam. It is clear, therefore, that she was guilty of interfering with the purity of the water which was
supplied to the city of Manila by said pumping station.
With reference to the jurisdiction of the courts of the city of Manila over said territory, it may be noted that section 6 of said
Ordinance No. 149, expressly confers upon the municipal court of the city of Manila power to try any violation of any of its
provisions. Section 7 of said ordinance provides the penalty for its violation.
When the question of the jurisdiction of the Court of First Instance of the city of Manila was presented to the lower court, Judge
Campbell, the respondent herein, in a very well-reasoned opinion, reached the conclusion that the court had jurisdiction over the
petitioner and the offense committed, and sentenced her to pay a fine of P50 and costs, and in case of insolvency to suffer
subsidiary imprisonment. In the course of his opinion, Judge Campbell said:
It is beyond question that by washing garments, articles of clothing, and fabrics in the Mariquina River, as shown above, the
defendant committed a violation of paragraph (f) of section 4 of Ordinance No. 149 of the city of Manila, in connection with
sections 6 and 7 thereof. The Santolan pumping station is a part of the public water supply of the city of Manila which is used in
supplying the inhabitants of the city with water taken from that part of the Mariquina River during the dry reason, in the waters of
which the defendant washed articles of clothing. According to American authorities, the true meaning of the phrase public water
supply is as follows:
'Public was supply is not limited to water supply owned and controlled by a municipal corporation, but should be construed as
meaning a supply of water for public and domestic use, furnished or to be furnished from waterworks.' (State vs. Township etc.,
52 N. J. Law, 496; 19 Atl. Rep., 975.)
The provisions of Ordinance No. 149 of the city of Manila and the Acts of the Philippine Commission upon which it is based
would be meaningless and almost absurd if made applicable only to the Santolan pumping station and not to that part of the
Mariquina River immediately above it and from which the said pumping station draws water for the use of the inhabitants of the
city of Manila during the dry season, considering that the policy and purpose of said ordinance is the protection of the public
health in the said city.
According to American decisions on the construction of statutes: 'Every statute must be construed with reference to the object
intended to be accomplished by it. In order to ascertain this object it is proper to consider the occasion and necessity of its
enactment, . . . . and the statute should be given that construction which is best calculated to advance its object, by suppressing the
mischief and securing the benefits intended.' (36 Cyc., 1110, 1111.)
That the Court of First Instance of the city of Manila has jurisdiction to try the offense under consideration, although committed
in the Province of Rizal, by virtue of the provisions of said ordinance (149), based upon paragraphs (w) and (cc), of section 17 of
Act No. 183, and paragraph (i) f section 3 of Act No. 1150 of the Philippine Commission can not be disputed, if we simply take
into consideration the following rule, which has been pronounced on many occasions, in relation to the same question, by many
courts:
'The corporation boundaries usually mark the limit for the exercise of the police power by the municipality; but in many instances
because essential to the statutory performance of police functions, and especially for the preservation of the public health, the
municipality is granted police power beyond its boundaries. Thus it has been held that the grant of power to acquire territory for
water supply beyond the limits of the municipality is within the competency of the legislature, and that the municipality may
exercise police power in the protection of the territory thus acquired to insure cleanliness, and prevent any business and conduct
likely to corrupt the fountain of water supply for the city.' (28 Cyc., 703, 704.)
After a consideration of the facts and the law applicable thereto and the general power conferred upon the city of Manila, we are
fully persuaded that the municipal court of the city of Manila, as well as the Court of First Instance of the city of Manila, has
jurisdiction to hear and determine the question presented by the complaint originally presented against the petitioner. Therefore
the petition for the writ of certiorari is hereby denied, with costs. So ordered.
G.R. No. 149453 May 28, 2002
PEOPLE OF THE PHILIPPINES, ET AL.,
vs.
PANFILO M. LACSON
RESOLUTION
Before us is a petition for review on certiorari seeking to reverse and set aside the Decision 1 of the Court of Appeals dated
August 24, 2001 in CA-G.R. SP No. 65034.2 The said Decision of the appellate court granted respondent Lacson's Second
Amended Petition for Prohibition with application for the issuance of a Temporary Restraining Order, (1) assailing the Order
issued by Judge Herminia Pasamba of the Regional Trial Court (RTC) of Manila, Branch 40, that allowed the continuation of the
re-investigation of Criminal Cases Nos. Q-99-81679 to Q-99-81689 or the Kuratong Baleleng cases; and (2) praying for the
dismissal of Criminal Cases Nos. Q-01-101102 to Q-01-101112 entitled "People of the Philippines v. Panfilo Lacson, et al."
pending before Branch 81 of the RTC of Quezon City.
The following appear in the records of this case:
(1) On May 18, 1995, then PNP Director-General Recaredo Sarmiento II announced, in a press conference, the killing of eleven
(11) members of the Kuratong Baleleng Gang (KBG) in a shootout with police elements near the fly-over along Commonwealth
Avenue, Quezon City at about 4:00 A.M. that day.3
(2) On May 22, 1995, morning papers carried the news that SPO2 Eduardo delos Reyes had claimed that the killing of the eleven
(11) gang members was a "rub-out" or summary execution and not a shootout. 4
(3) In an affidavit he executed the following day, delos Reyes stated, among others, that he was part of a composite police team
called the Anti-Bank Robbery and Intelligence Task Force Group (ABRITFG) composed of elements of the National Capital
Region Command (NCRC) and headed by Chief Superintendent Jewel Canson; Traffic Management Command, headed by
Senior Superintendent Francisco Subia, Jr.; Presidential Anti-Crime Commission (PACC), headed by Chief Superintendent
Panfilo M. Lacson; Central Police District Command, headed by Chief Superintendent Ricardo de Leon; and Criminal
Investigation Command (CIC), headed by Chief Superintendent Romeo Acop. Delos Reyes claimed that the police team arrested
the eleven (11) gang members in early morning of May 18, 1995 at the gang's safe house in Superville Subdivision, Parañaque;
that after their arrest, the gang members were made to board two vans, their hands tied behind their backs, and brought initially to
Camp Crame where a decision to summarily execute them was made, and later to Commonwealth Avenue where they were shot
to death by elements of ABRITFG. 5
(4) On May 26, 1995, SPO2 Corazon dela Cruz, another CIC investigator, executed an affidavit corroborating the material
allegations of delos Reyes. Dela Cruz claimed that she was with delos Reyes from the time the eleven (11) KBG members were
arrested up to the time they were killed in Commonwealth Avenue. 6
(5) On May 31, 1995, Armando Capili, a reporter of Remate, executed an affidavit stating that he was present when the KBG
members were arrested in Superville Subdivision.7
(6) On June 1, 1995, Chief Superintendent Job A. Mayo, PNP Director for Investigation, filed murder charges with the Office of
the Ombudsman against ninety-seven (97) officers and personnel of ABRITFG. The next-of-kin of the slain KBG members also
filed murder charges against the same officers and personnel. 8
(7) Ombudsman Aniano Desierto then created a panel of investigators to conduct a preliminary investigation of the murder
charges. The panel was headed by Deputy Ombudsman for Military Affairs Bienvenido Blancaflor. On October 20, 1995, the
panel issued a resolution recommending the dismissal of the charges for lack of probable cause.
(8) Ombudsman Desierto referred the resolution for review by a panel composed of Over-all Deputy Ombudsman Francisco Villa
as head, and Special Prosecutor Leonardo Tamayo and Assistant Ombudsman Abelardo Aportadera as members. On November
20, 1995, the review panel reversed the Blancaflor resolution and found probable cause for the prosecution of multiple murder
charges against twenty-six (26) officers and personnel of ABRITFG. 9
(9) On November 2, 1995, the Ombudsman filed before the Sandiganbayan eleven (11) Informations for MURDER, docketed as
Criminal Cases Nos. 23047 to 23057, against respondent Panfilo M. Lacson and twenty-five (25) other accused. All twenty-six
(26) of them were charged as principals.10 The following appear to be the victims: Meleubren Sorronda in Crim. Case No. 23047;
Welbor Elcamel in Crim. Case No. 23048; Carlito Alap-ap in Crim. Case No. 23049; Jevy Redillas in Crim. Case No. 23050; Ray
Abalora in Crim. Case No. 23051; Joel Amora in Crim. Case No. 23052; Alex Neri in Crim. Case No. 23053; Rolando Siplon in
Crim. Case No. 23054; Manuel Montero in Crim. Case No. 23055; Sherwin Abalora in Crim. Case No. 23056; and Pacifico
Montero in Crim. Case No. 23057.
(10) Upon motion of the respondent, the criminal cases were remanded to the Ombudsman for reinvestigation. On March 1, 1996,
Amended Informations were filed against the same twenty-six (26) suspects but the participation of respondent Lacson was
downgraded from principal to accessory. Arraignment then followed and respondent entered a plea of not guilty. 11
(11) With the downgrading of charges against him, respondent Lacson questioned the jurisdiction of theSandiganbayan to hear
the criminal cases as none of the "principal" accused in the Amended Informations was a government official with a Salary Grade
(SG) 27 or higher, citing Section 2 of R. A. No. 7975 then prevailing. Accordingly, the Sandiganbayan ordered the cases
transferred to the Regional Trial Court.12
(12) The Office of the Special Prosecutor filed a motion for reconsideration of the transfer. Pending resolution of the motion, R.
A. No. 8249 took effect on February 23, 1997, amending R. A. No. 7975. In particular, the amendatory law deleted the word
"principal" in Section 2 of R. A. No. 7975, thereby expanding the jurisdiction of the Sandiganbayan to include all cases where at
least one of the accused, whether principal, accomplice or accessory, is a government official of Salary Grade (SG) 27 or higher.
The amendment is made applicable to all cases pending in any court in which trial has not yet begun as of the date of its
approval.13
(13) In Lacson v. Executive Secretary,14 respondent Lacson challenged the constitutionality of the amendment and contended that
the Sandiganbayan had no jurisdiction over the criminal cases. This Court, while dismissing the constitutional challenge,
nonetheless ordered the transfer of the criminal cases to the Regional Trial Court on the ground that the Amended Informations
for murder failed to indicate that the offenses charged therein were committed in relation to, or in discharge of, the official
functions of the respondent, as required by R. A. No. 8249.
(14) Criminal Cases Nos. 23047 to 23057 were raffled off to Branch 81 of the Regional Trial Court of Quezon City, then presided
by Judge, now Associate Justice of the Court of Appeals, Wenceslao Agnir, Jr., and re-docketed as Criminal Cases Nos. Q-99-
81679 to Q-99-81689.
(15) Before the accused could be arraigned, prosecution witnesses Eduardo de los Reyes, Corazon de la Cruz, Armando Capili
and Jane Gomez recanted their affidavits which implicated respondent Lacson in the murder of the KBG members.
On the other hand, private complainants Myrna Abalora,15 Leonora Amora,16 Nenita Alap-ap,17 Imelda Montero,18 Margarita
Redillas,19 Carmelita Elcamel20 and Rolando Siplon21 also executed their respective affidavits of desistance declaring that they
were no longer interested to prosecute these cases. 22
(16) Due to these developments, the twenty-six (26) accused, including respondent Lacson, filed five separate but identical
motions to (1) make a judicial determination of the existence of probable cause for the issuance of warrants of arrest; (2) hold in
abeyance the issuance of the warrants, and (3) dismiss the cases should the trial court find lack of probable cause.
(17) The records of the case before us are not clear whether the private offended parties were notified of the hearing on March 22,
199923 held by Judge Agnir to resolve the motions filed by respondent Lacson and the other accused.
(18) During the said hearing, the private offended parties who desisted do not appear to have been presented on the witness stand.
In their stead, Atty. Godwin Valdez testified that he assisted them in preparing their affidavits of desistance and that he signed
said affidavits as witness. On the other hand, Atty. Aurora Bautista of the Philippine Lawyer's League presented the affidavits of
recantation of prosecution witnesses Eduardo de los Reyes, Armando Capili and Jane Gomez. Only prosecution witness Corazon
de la Cruz testified to affirm her affidavit.24
(19) On March 29, 1999, Judge Agnir issued a Resolution 25 dismissing Criminal Cases Nos. Q-99-81679 to Q-99-81689, as
follows:
"As already seen, the documents attached to the Informations in support thereof have been rendered meaningless, if not absurd,
with the recantation of the principal prosecution witnesses and the desistance of the private complainants. There is no more
evidence to show that a crime has been committed and that the accused are probably guilty thereof. Following the doctrine above-
cited, there is no more reason to hold the accused for trial and further expose them to an open and public accusation. It is time to
write finis to these cases and lay to rest the ghost of the incident of May 18, 1995 so that all those involved--- the accused, the
prosecution witnesses and the private complainants alike--- may get on with their lives.
The Court is not unmindful of the admonition in the recent case of People vs. Court of Appeals (G.R. No. 126005, January 21,
1999) where the Supreme Court said that the general rule is that 'if the Information is valid on its face and there is no showing of
manifest error, grave abuse of discretion or prejudice on the part of the public prosecutor, courts should not dismiss it for want of
evidence, because evidentiary matters should be presented and heard during the trial', and that the ruling in Allado vs. Diokno 'is
an exception to the general rule and may be invoked only if similar circumstances are clearly shown to exist.'
This Court holds that the circumstances in the case at bench clearly make an exception to the general rule.
WHEREFORE, in view of the foregoing, the Court finds no probable cause for the issuance of the warrants of arrest against the
accused or to hold them for trial. Accordingly, the Informations in the above-numbered cases are hereby ordered dismissed."
SO ORDERED."26
(20) On March 27, 2001, PNP Director Leandro R. Mendoza indorsed to the Department of Justice the new affidavits of P/Insp.
Ysmael S. Yu and P/S Insp. Abelardo Ramos regarding the Kuratong Baleleng incident for preliminary investigation. On the
strength of this indorsement, Secretary of Justice Hernando B. Perez formed a panel to investigate the matter. On April 17, 2001,
the respondent was subpoenaed to attend the investigation of Criminal Cases Nos. Q-99-81679 to Q-99-81689. 27
(21) On May 28, 2001, respondent Lacson, et al., invoking, among others, their constitutional right against double jeopardy, filed
a petition for prohibition with application for temporary restraining order and/or writ of preliminary injunction with the Regional
Trial Court of Manila, primarily to enjoin the State prosecutors from conducting the preliminary investigation. The petition was
docketed as Civil Case No. 01-100933 and raffled to Branch 40, presided by Judge Herminia V. Pasamba. 28
(22) The plea for temporary restraining order was denied by Judge Pasamba in an Order 29 dated June 5, 2001,viz:
"After a study, this Court submits that the dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 is not one on the merits
and without any recorded arraignment and entered plea on the part of the herein petitioners. The dismissal was a direct
consequence of the finding of the Quezon City RTC that no probable cause exists for the issuance of warrants of arrest against
petitioners herein and to hold them for trial. The arraignment had with the Sandiganbayan does not put the case in a different
perspective since theSandiganbayan was adjudged to be without any jurisdiction to try the cases. It is the People of the
Philippines who is the complainant in the Kuratong Baleleng case and remains to be the complainant in the present investigation
initiated thru a letter of PNP Chief Mendoza dated March 27, 2001 (Exhibit "B") together with the sworn statements of witnesses
Ramos and Yu (Exhibits "2" and "3" - supportive of the refiling of the case (Exhibit "9").
xxx xxx xxx
Above considered, this Court finds petitioners have not preliminarily established that they have a right to be preserved pending
hearing on the injunctive relief.
WHEREFORE, the prayer for temporary restraining order is hereby DENIED.
SO ORDERED."30
(23) On June 6, 2001, eleven (11) Informations for murder involving the killing of the same members of theKuratong
Baleleng gang were filed before the Regional Trial Court of Quezon City and were docketed as Criminal Cases Nos. 01-101102
to 01-101112. The new Informations charged as principals thirty-four (34) people, including respondent Lacson and his twenty-
five (25) other co-accused in Criminal Cases Nos. Q-99-81679 to Q-99-81689. The criminal cases were assigned to Judge Ma.
Theresa L. Yadao.
(24) On the same day, respondent Lacson filed before the Court of Appeals a petition for certiorari 31 against Judge Pasamba, the
Secretary of Justice, the PNP Chief, State Prosecutors Ong and Zacarias, 2nd Assistant City Prosecutor Jamolin, and the People of
the Philippines. The said petition was amended to implead as additional party-respondents State Prosecutor Claro Arellano and
the RTC, Quezon City, Branch 81 in which the Informations in Criminal Cases Nos. 01-101102 to 01-101112 were filed. 32
(25) The Second Amended Petition33 dated June 14, 2001 and admitted by the Court of Appeals on June 26, 2001, alleged:
"The reliefs of certiorari, prohibition and injunction against the questioned Order (Annex A) and the new Informations in
Criminal Cases Nos. 01-101102 to 01-101112 pending before respondent Yadao (Annex B) are founded upon the grave abuse of
discretion by respondent Judge Pasamba of her discretion in its issuance, the illegality of the proceedings of the respondent State
Prosecutors as they cannot revive complaints which had been dismissed over two (2) years from the date the dismissal order was
issued, and the invalidity of the new Informations for Murder filed against petitioners and others, all in defiance of law and
jurisprudence as shown by the following:
(a) Respondent judge had ruled on the merits of the main prohibition action a quo rendering the same moot and academic by
concluding that the dismissal of Criminal Cases Nos. Q-99-81679-Q-99-81689 by the QC RTC was not final and executory,
hence [i] the complaints therein can be reinvestigated, and [ii] petitioner's arraignment while the case had not yet been remanded
to the QC RTC and while the Sandiganbayan had valid jurisdiction thereover [Criminal Cases No. 23047-2048] was void,
notwithstanding that the only issue in the TRO application was the existence or lack of a valid complaint as defined in S1 and S3,
Rule 110.
(b) Respondent Judge ruled that respondent State Prosecutors could proceed to re-investigate and thereafter file new Informations
on June 6, 2001 covering those offenses subject of Criminal Cases Nos. Q-99-81679-Q-99-81689 on the basis of affidavits filed
after said cases were dismissed on March 29, 1999, despite the fact that under Section 8, Rule 117, cases similar to those filed
against the petitioner and others (where the penalty imposable is imprisonment of six (6) years or more) cannot be revived after
two (2) years from the date the dismissal order was issued.
(c) Respondent Judge held that the petitioner had not shown a right to be preserved despite evidence showing the short cuts taken
by respondent State prosecutors in re-investigating a dismissed case, in not complying with Rules in respect of its re-opening, and
in insisting that a valid complaint was filed in clear violation of the Rules and case law thereon, and despite the fact that the
petitioner had shown that an inextendible deadline of June 5, 2001 was given him to file his counter-affidavit without which his
indictment for a non-bailable offense is assured because of DOJ Secretary Hernando Perez's political schemes." 34
(26) In the meantime, on June 8, 2001, respondent Lacson also filed with the RTC-QC Branch 81 (presided by Judge Ma. Theresa
Yadao), a Motion for Judicial Determination of Probable Cause and in the absence thereof, to dismiss the cases outright.
Respondent Lacson, however, filed a Manifestation and Motion dated June 13, 2001 seeking the suspension of the proceedings
before the trial court.35
(27) The Court of Appeals issued a temporary restraining order enjoining Judge Yadao from issuing a warrant of arrest or
conducting any proceeding or hearing in Criminal Cases Nos. 01-101102 to 01-101112. 36
(28) On August 24, 2001, the Court of Appeals (Special Third Division), rendered the now assailed Decision. It characterized the
termination of Criminal Cases Nos. Q-99-81679 to Q-99-81689 as "provisional dismissal," and considered Criminal Cases Nos.
01-101102 to 01-101112 as mere revivals of the same. Applying Section 8, Rule 117 of the 2000 Revised Rules of Criminal
Procedure, it dismissed the criminal cases against the respondent, viz:
"In sum, this Court is of the considered view that the subject dismissal of [the] criminal cases was provisional in nature and that
the cases presently sought to be prosecuted by the respondents are mere revival or re-opening of the dismissed cases. The present
controversy, being one involving "provisional dismissal" and revival of criminal cases, falls within the purview of the prescriptive
period provided under Section 8, Rule 117 of the 2000 Revised Rules of Criminal Procedure. The second paragraph of the said
provision is couched in clear, simple and categorical words. It mandates that for offenses punishable by imprisonment of more
than six (6) years, as the subject criminal cases, their provisional dismissal shall become permanent two (2) years after the
issuance of the order without the case having been revived. It should be noted that the revival of the subject criminal cases, even
if reckoned from the DOJ's issuance of subpoenas to petitioner, was commenced only on April 19, 2001, that is, more than two
(2) years after the issuance, on March 29, 1999, of RTC-Quezon City's Resolution, provisionally dismissing the criminal cases
now sought to be revived. Applying the clear and categorical mandate of Section 8, Rule 117, supra, such efforts to revive the
criminal cases are now definitely barred by the two-year prescriptive period provided therein.
xxx xxx xxx
WHEREFORE, the petition is GRANTED. As prayed for, the Temporary Restraining Order earlier issued against the conduct of
further proceedings in Criminal Cases Nos. 01-101102 to 01-101112, including the issuance of warrants of arrest against the
petitioner, PANFILO M. LACSON, is hereby made PERMANENT. Accordingly, with respect to said accused, the proceedings
conducted by respondent State Prosecutors in respect of the said criminal cases are declared NULL AND VOID and the
corresponding Informations, docketed as Criminal Cases Nos. 01-101102 to 01-101112, entitled 'People of the Philippines vs.
Panfilo M. Lacson, et al." and filed before respondent Judge Maria Theresa L. Yadao of Branch 81 of the Regional Trial Court of
Quezon City, are hereby ordered DISMISSED.
SO ORDERED."37
The issue is whether Section 8, Rule 117 bars the filing of the eleven (11) informations against the respondent Lacson involving
the killing of some members of the Kuratong Baleleng gang. This rule which took effect on December 1, 2000 provides:
"SEC. 8. Provisional dismissal.- A case shall not be provisionally dismissed except with the express consent of the accused and
with notice to the offended party.
The provisional dismissal of offenses punishable by imprisonment not exceeding six (6) years or a fine of any amount, or both,
shall become permanent one (1) year after issuance of the order without the case having been revived. With respect to offenses
punishable by imprisonment of more than six (6) years, their provisional dismissal shall become permanent two (2) years after
issuance of the order without the case having been revived."
Like any other favorable procedural rule, this new rule can be given retroactive effect. However, this Court cannot rule on this
jugular issue due to the lack of sufficient factual bases. Thus, there is need of proof of the following facts, viz: (1) whether the
provisional dismissal of the cases had the express consent of the accused; (2) whether it was ordered by the court after notice to
the offended party, (3) whether the 2-year period to revive has already lapsed, and (4) whether there is any justification for the
filing of the cases beyond the 2-year period.
There is no uncertainty with respect to the fact that the provisional dismissal of the cases against respondent Lacson bears his
express consent. It was respondent Lacson himself who moved to dismiss the subject cases for lack of probable cause before then
Judge Agnir, hence, it is beyond argument that their dismissal bears his express consent.
The records of the case, however, do not reveal with equal clarity and conclusiveness whether notices to the offended parties were
given before the cases against the respondent Lacson were dismissed by then Judge Agnir. It appears from the resolution of then
Judge Agnir that the relatives of the victims who desisted did not appear during the hearing to affirm their affidavits. Their
affidavits of desistance were only presented by Atty. Godwin Valdez who testified that he assisted the private complainants in
preparing their affidavits and he signed them as a witness. It also appears that only seven (7) persons submitted their affidavits of
desistance, namely:
a. Myrna Abalora, mother of the victims Sherwin Abalora and Rey Abalora
b. Carmelita Elcamel, wife of Wilbur Elcamel;
c. Leonora Amora, mother of victim Joel Amora;
d. Nenita Alap-ap, wife of victim Carlito Alap-ap;
e. Imelda Montero, wife of victim Manuel Montero;
f. Margarita Redillas, mother of victim Hilario Jevy Redillas; and
g. Rolando Siplon.
From the records of the case before us, it cannot be determined whether there were affidavits of desistance executed by the
relatives of the three (3)38 other victims, namely: Meleubren Soronda, Pacifico Montero, Jr., and Alex Neri. The same records do
not show whether they were notified of the hearing or had knowledge thereof. To be sure, it is not fair to expect the element of
notice to be litigated before then Judge Agnir for Section 8, Rule 117 was yet inexistent at that time.
The fact of notice to the offended parties was not raised either in the petition for prohibition with application for temporary
restraining order or writ of preliminary injunction filed by respondent Lacson in the RTC of Manila, presided by Judge Pasamba,
to enjoin the prosecutors from reinvestigating the said cases against him. The only question raised in said petition is whether the
reinvestigation will violate the right of respondent Lacson against double jeopardy. Thus, the issue of whether or not the
reinvestigation is barred by Section 8, Rule 117 was not tackled by the litigants.
Nor was the fact of notice to the offended parties the subject of proof after the eleven (11) informations for murder against
respondent Lacson and company were revived in the RTC of Quezon City presided by Judge Yadao. There was hardly any
proceeding conducted in the case for respondent Lacson immediately filed a petition for certiorari in the appellate court
challenging, among others, the authority of Judge Yadao to entertain the revived informations for multiple murder against him.
This is not to be wondered at. The applicability of Section 8, Rule 117 was never considered in the trial court. It was in the Court
of Appeals where respondent Lacson raised for the first time the argument that Section 8, Rule 117 bars the revival of the
multiple murder cases against him. But even then, the appellate court did not require the parties to elucidate the crucial issue of
whether notices were given to the offended parties before Judge Agnir ordered the dismissal of the cases against respondent
Lacson and company. To be sure, there is a statement in the Decision of the appellate court to the effect that "records show that
the prosecution and the private offended parties were notified of the hearing x x x." 39 It is doubtful whether this finding is
supported by the records of the case. It appears to be contrary to Judge Agnir's finding that only seven (7) of the complainants
submitted affidavits of desistance.
Indeed, the records of this case are inconclusive on the factual issue of whether the multiple murder cases against respondent
Lacson are being revived within or beyond the 2-year bar. The reckoning date of the 2-year bar has to be first determined - - -
whether it is from the date of the Order of then Judge Agnir dismissing the cases or from the dates the Order were received by the
various offended parties or from the date of the effectivity of the new rule.
If the cases were revived only after the 2-year bar, the State must be given the opportunity to justify its failure to comply with said
timeline. The new rule fixes a timeline to penalize the State for its inexcusable delay in prosecuting cases already filed in courts.
It can therefore present compelling reasons to justify the revival of cases beyond the 2-year bar.
In light of the lack of or the conflicting evidence on the various requirements to determine the applicability of Section 8, Rule
117, this Court is not in a position to rule whether or not the re-filing of the cases for multiple murder against respondent Lacson
should be enjoined. Fundamental fairness requires that both the prosecution and the respondent Lacson should be afforded the
opportunity to be heard and to adduce evidence on the presence or absence of the predicate facts upon which the application of
the new rule depends. They involve disputed facts and arguable questions of law. The reception of evidence on these various
issues cannot be done in this Court but before the trial court.
IN VIEW OF THE FOREGOING, the case at bar is remanded to the RTC - Quezon City, Branch 81 so that the State
prosecutors and the respondent Lacson can adduce evidence and be heard on whether the requirements of Section 8, Rule 117
have been complied with on the basis of the evidence of which the trial court should make a ruling on whether the Informations in
Criminal Cases Nos. 01-101102 to 01-101112 should be dismissed or not. Pending the ruling, the trial court is restrained from
issuing any warrant of arrest against the respondent Lacson. Melo and Carpio, JJ., take no part.
SO ORDERED.
G.R. No. L-5060
THE UNITED STATES, plaintiff-appellee,
vs.
LUIS TORIBIO, defendant-appellant.
Carson, J.:
The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or caused to be slaughtered for
human consumption, the carabao described in the information, without a permit from the municipal treasure of the municipality
wherein it was slaughtered, in violation of the provisions of sections 30 and 33 of Act No. 1147, an Act regulating the
registration, branding, and slaughter of large cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered there is no municipal
slaughterhouse, and counsel for appellant contends that under such circumstances the provisions of Act No. 1147 do not prohibit
nor penalize the slaughter of large cattle without a permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are as
follows:
SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse except upon permit secured from
the municipal treasure. Before issuing the permit for the slaughter of large cattle for human consumption, the municipal treasurer
shall require for branded cattle the production of the original certificate of ownership and certificates of transfer showing title in
the person applying for the permit, and for unbranded cattle such evidence as may satisfy said treasurer as to the ownership of the
animals for which permit to slaughter has been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer unless such animals are unfit for
agricultural work or for draft purposes, and in no event shall a permit be given to slaughter for food any animal of any kind which
is not fit for human consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him, and such record shall show the
name and residence of the owner, and the class, sex, age, brands, knots of radiated hair commonly know as remolinos or
cowlicks, and other marks of identification of the animal for the slaughter of which permit is issued and the date on which such
permit is issued. Names of owners shall be alphabetically arranged in the record, together with date of permit.
A copy of the record of permits granted for slaughter shall be forwarded monthly to the provincial treasurer, who shall file and
properly index the same under the name of the owner, together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or killing for food at the municipal
slaughterhouse any large cattle except upon permit duly secured from the municipal treasurer, shall be punished by a fine of not
less than ten nor more than five hundred pesos, Philippine currency, or by imprisonment for not less than one month nor more
than six months, or by both such fine and imprisonment, in the discretion of the court.
It is contended that the proper construction of the language of these provisions limits the prohibition contained in section 30 and
the penalty imposed in section 33 to cases (1) of slaughter of large cattle for human consumption in a municipal slaughter without
a permit duly secured from the municipal treasurer, and (2) cases of killing of large cattle for food in a municipal
slaughterhouse without a permit duly secured from the municipal treasurer; and it is urged that the municipality of Carmen not
being provided with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to cases of slaughter of large
cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of large cattle for human
consumption, anywhere, without a permit duly secured from the municipal treasurer, and (2) expressly and specifically to the
killing for food of large cattle at a municipal slaughterhouse without such permit; and that the penalty provided in section 33
applies generally to the slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the
municipal treasurer, and specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself and examined apart from the context fairly
admits of two constructions: one whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting
both the word "slaughtered" and the words "killed for food" in section 30, and the words "slaughtering or causing to be
slaughtered for human consumption" and the words "killing for food" in section 33; and the other whereby the phrase "at the
municipal slaughterhouse" may be taken as limiting and restricting merely the words "killed for food" and "killing for food" as
used in those sections. But upon a reading of the whole Act, and keeping in mind the manifest and expressed purpose and object
of its enactment, it is very clear that the latter construction is that which should be adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make easy the recovery and
return of such cattle to their proper owners when lost, strayed, or stolen. To this end it provides an elaborate and compulsory
system for the separate branding and registry of ownership of all such cattle throughout the Islands, whereby owners are enabled
readily and easily to establish their title; it prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is made; and it provides also for the disposition
of thieves or persons unlawfully in possession, so as to protect the rights of the true owners. All this, manifestly, in order to make
it difficult for any one but the rightful owner of such cattle to retain them in his possession or to dispose of them to others. But the
usefulness of this elaborate and compulsory system of identification, resting as it does on the official registry of the brands and
marks on each separate animal throughout the Islands, would be largely impaired, if not totally destroyed, if such animals were
requiring proof of ownership and the production of certificates of registry by the person slaughtering or causing them to be
slaughtered, and this especially if the animals were slaughtered privately or in a clandestine manner outside of a municipal
slaughterhouse. Hence, as it would appear, sections 30 and 33 prohibit and penalize the slaughter for human consumption or
killing for food at a municipal slaughterhouse of such animals without a permit issued by the municipal treasurer, and section 32
provides for the keeping of detailed records of all such permits in the office of the municipal and also of the provincial treasurer
er3ZE.
If, however, the construction be placed on these sections which is contended for by the appellant, it will readily be seen that all
these carefully worked out provisions for the registry and record of the brands and marks of identification of all large cattle in the
Islands would prove in large part abortion, since thieves and persons unlawfully in possession of such cattle, and naturally would,
evade the provisions of the law by slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of their
wrongdoing without exposing themselves to the danger of detection incident to the bringing of the animals to the public
slaughterhouse, where the brands and other identification marks might be scrutinized and proof of ownership required.

Where the language of a statute is fairly susceptible of two or more constructions, that construction should be adopted which will
most tend to give effect to the manifest intent of the lawmaker and promote the object for which the statute was enacted, and a
construction should be rejected which would tend to render abortive other provisions of the statute and to defeat the object which
the legislator sought to attain by its enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and
penalize the slaughtering or causing to be slaughtered for human consumption of large cattle at any place without the permit
provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these sections of the "killing for food at a municipal
slaughterhouse" of such animals, despite the fact that this prohibition is clearly included in the general prohibition of the slaughter
of such animals for human consumption anywhere; but it is not improbable that the requirement for the issue of a permit in such
cases was expressly and specifically mentioned out of superabundance of precaution, and to avoid all possibility of
misunderstanding in the event that some of the municipalities should be disposed to modify or vary the general provisions of the
law by the passage of local ordinances or regulations for the control of municipal slaughterhouse HrbBiYI.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same conclusion. One of the secondary
purposes of the law, as set out in that section, is to prevent the slaughter for food of carabaos fit for agricultural and draft
purposes, and of all animals unfit for human consumption. A construction which would limit the prohibitions and penalties
prescribed in the statute to the killing of such animals in municipal slaughterhouses, leaving unprohibited and unpenalized their
slaughter outside of such establishments, so manifestly tends to defeat the purpose and object of the legislator, that unless
imperatively demanded by the language of the statute it should be rejected; and, as we have already indicated, the language of the
statute is clearly susceptible of the construction which we have placed upon it, which tends to make effective the provisions of
this as well as all the other sections of the Act cqrYmYpJz.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was denied him on the ground that
the animal was not unfit "for agricultural work or for draft purposes." Counsel for appellant contends that the statute, in so far as
it undertakes to penalize the slaughter of carabaos for human consumption as food, without first obtaining a permit which can not
be procured in the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and in violation
of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which provides that "no law shall be enacted
which shall deprive any person of life, liberty, or property without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this provision of the statute constitutes a taking of
property for public use in the exercise of the right of eminent domainwithout providing for the compensation of the owners, or
that it is an undue and unauthorized exercise of the police power of the State. But whatever may be the basis of his contention, we
are of opinion, appropriating, with necessary modifications understood, the language of that great jurist, Chief Justice Shaw (in
the case of Com. vs. Tewksbury, 11 Met. 55, where the question involved was the constitutionality of a statute prohibiting and
penalizing the taking or carrying away by any person, including the owner, of any stones, gravel, or sand, from any of the beaches
in the town of Chesea,) that the law in question "is not a taking of the property for public use, within the meaning of the
constitution, but is a just and legitimate exercise of the power of the legislature to regulate and restrain such particular use of the
property as would be inconsistent with or injurious to the rights of the public. All property is acquired and held under the tacit
condition that it shall not be so used as to injure the equal rights of others or greatly impair the public rights and interest of the
community."
It may be conceded that the beneficial use and exclusive enjoyment of the property of all carabao owners in these Islands is to a
greater or less degree interfered with by the provisions of the statute; and that, without inquiring what quantum of interest thus
passes from the owners of such cattle, it is an interest the deprivation of which detracts from their right and authority, and in some
degree interferes with their exclusive possession and control of their property, so that if the regulations in question were enacted
for purely private purpose, the statute, in so far as these regulations are concerned, would be a violation of the provisions of the
Philippine Bill relied on be appellant; but we are satisfied that it is not such a taking, such an interference with the right and title
of the owners, as is involved in the exercise by the State of the right of eminent domain, so as to entitle these owners to
compensation, and that it is no more than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush. 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury(supra) was reviewed and
affirmed, the same eminent jurist who wrote the former opinion, in distinguishing the exercise of the right of eminent domain
from the exercise of the sovereign police powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil society, that every holder of property, however
absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated that is shall not
be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights
of the community. . . . Rights of property, like all other social and conventional rights, are subject to such reasonable limitations
in their enjoyment as shall prevent them from being injurious, and to such reasonable restrain and regulations establish by law, as
the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient.
This is very different from the right of eminent domain, the right of a government to take and appropriate private property to
public use, whenever the public exigency requires it; which can be done only on condition of providing a reasonable
compensation therefor. The power we allude to is rather the police power, the power vested in the legislature by the constitution,
to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or
without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the
subjects of the same.
It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries or prescribe limits to
its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human consumption of carabaos
fit for agricultural work and draft purpose is not an appropriation of property interests to a "public use," and is not, therefore,
within the principle of the exercise by the State of the right of eminent domain. It is fact a mere restriction or limitation upon a
private use, which the legislature deemed to be detrimental to the public welfare. And we think that an examination of the general
provisions of the statute in relation to the public interest which it seeks to safeguard and the public necessities for which it
provides, leaves no room for doubt that the limitations and restraints imposed upon the exercise of rights of ownership by the
particular provisions of the statute under consideration were imposed not for private purposes but, strictly, in the promotion of the
"general welfare" and "the public interest" in the exercise of the sovereign police power which every State possesses for the
general public welfare and which "reaches to every species of property within the commonwealth."
For several years prior to the enactment of the statute a virulent contagious or infectious disease had threatened the total
extinction of carabaos in these Islands, in many sections sweeping away seventy, eighty, and in some cases as much as ninety and
even one hundred per cent of these animals. Agriculture being the principal occupation of the people, and the carabao being the
work animal almost exclusively in use in the fields as well as for draft purposes, the ravages of the disease with which they were
infected struck an almost vital blow at the material welfare of the country. large areas of productive land lay waste for years, and
the production of rice, the staple food of the inhabitants of the Islands, fell off to such an extent that the impoverished people were
compelled to spend many millions of pesos in its importation, notwithstanding the fact that with sufficient work animals to
cultivate the fields the arable rice lands of the country could easily be made to produce a supply more that sufficient for its own
needs. The drain upon the resources of the Islands was such that famine soon began to make itself felt, hope sank in the breast of
the people, and in many provinces the energies of the breadwinners seemed to be paralyzed by the apparently hopeless struggle
for existence with which they were confronted.
To meet these conditions, large sums of money were expended by the Government in relieving the immediate needs of the
starving people, three millions of dollars were voted by the Congress of the United States as a relief or famine fund, public works
were undertaken to furnish employment in the provinces where the need was most pressing, and every effort made to alleviate the
suffering incident to the widespread failure of the crops throughout the Islands, due in large measure to the lack of animals fit for
agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an agricultural community material progress and
permanent prosperity could hardly be hoped for in the absence of the work animals upon which such a community must
necessarily rely for the cultivation of the fields and the transportation of the products of the fields to market. Accordingly efforts
were made by the Government to increase the supply of these animals by importation, but, as appears from the official reports on
this subject, hope for the future depended largely on the conservation of those animals which had been spared from the ravages of
the diseased, and their redistribution throughout the Islands where the need for them was greatest.

At large expense, the services of experts were employed, with a view to the discovery and applications of preventive and curative
remedies, and it is hoped that these measures have proved in some degree successful in protecting the present inadequate supply
of large cattle, and that the gradual increase and redistribution of these animals throughout the Archipelago, in response to the
operation of the laws of supply and demand, will ultimately results in practically relieving those sections which suffered most by
the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase from the three to five fold or more, and it may
fairly be presumed that even if the conservative measures now adopted prove entirely successful, the scant supply will keep the
price of these animals at a high figure until the natural increase shall have more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime of cattle stealing became
extremely prevalent throughout the Islands, necessitating the enactment of a special law penalizing with the severest penalties the
theft of carabaos and other personal property by roving bands; and it must be assumed from the legislative authority found that
the general welfare of the Islands necessitated the enactment of special and somewhat burdensome provisions for the branding
and registration of large cattle, and supervision and restriction of their slaughter for food. It will hardly be questioned that the
provisions of the statute touching the branding and registration of such cattle, and prohibiting and penalizing the slaughter of
diseased cattle for food were enacted in the due and proper exercise of the police power of the State; and we are of opinion that,
under all the circumstances, the provision of the statute prohibiting and penalizing the slaughter for human consumption of
carabaos fit for work were in like manner enacted in the due and proper exercise of that power, justified by the exigent necessities
of existing conditions, and the right of the State to protect itself against the overwhelming disaster incident to the further
reduction of the supply of animals fit for agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and records of the
administrative and legislative departments of the Government, that not merely the material welfare and future prosperity of this
agricultural community were threatened by the ravages of the disease which swept away the work animals during the years prior
to the enactment of the law under consideration, but that the very life and existence of the inhabitants of these Islands as a
civilized people would be more or less imperiled by the continued destruction of large cattle by disease or otherwise. Confronted
by such conditions, there can be no doubt of the right of the Legislature to adopt reasonable measures for the preservation of work
animals, even to the extent of prohibiting and penalizing what would, under ordinary conditions, be a perfectly legitimate and
proper exercise of rights of ownership and control of the private property of the citizen. The police power rests upon necessity
and the right of self-protection and if ever the invasion of private property by police regulation can be justified, we think that the
reasonable restriction placed upon the use of carabaos by the provision of the law under discussion must be held to be authorized
as a reasonable and proper exercise of that power sKvPMCf6.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S. 133, 136):
The extent and limits of what is known as the police power have been a fruitful subject of discussion in the appellate courts of
nearly every State in the Union. It is universally conceded to include everything essential to the public safely, health, and morals,
and to justify the destruction or abatement, by summary proceedings, of whatever may be regarded as a public nuisance. Under
this power it has been held that the State may order the destruction of a house falling to decay or otherwise endangering the lives
of passers-by; the demolition of such as are in the path of a conflagration; the slaughter of diseased cattle; the destruction of
decayed or unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and other means of public
conveyance, and of interments in burial grounds; the restriction of objectionable trades to certain localities; the compulsory
vaccination of children; the confinement of the insane or those afflicted with contagious deceases; the restraint of vagrants,
beggars, and habitual drunkards; the suppression of obscene publications and houses of ill fame; and the prohibition of gambling
houses and places where intoxicating liquors are sold. Beyond this, however, the State may interfere wherever the public interests
demand it, and in this particular a large discretion is necessarily vested in the legislature to determine, not only what the
interests of the public require, but what measures are necessary for the protection of such interests. (Barbier vs. Connolly, 113
U.S. 27; Kidd vs. Pearson, 128 U.S. 1.) To justify the State in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and,
second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon
individuals. The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business,
or impose unusual and unnecessary restrictions upon lawful occupations. In other words, its determination as to what is a proper
exercise of its police powers is not final or conclusive, but is subject to the supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required
by "the interests of the public generally, as distinguished from those of a particular class;" and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably
necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food,
even when by so doing the productive power of the community may be measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt. 140), said (p. 149) that by this "general police power
of the State, persons and property are subjected to all kinds of restraints and burdens, in order to secure the general comfort,
health, and prosperity of the State; of the perfect right in the legislature to do which no question ever was, or, upon acknowledge
and general principles, ever can be made, so far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
It would be quite impossible to enumerate all the instances in which the police power is or may be exercised, because the various
cases in which the exercise by one individual of his rights may conflict with a similar exercise by others, or may be detrimental to
the public order or safety, are infinite in number and in variety. And there are other cases where it becomes necessary for the
public authorities to interfere with the control by individuals of their property, and even to destroy it, where the owners
themselves have fully observed all their duties to their fellows and to the State, but where, nevertheless, some controlling public
necessity demands the interference or destruction. A strong instance of this description is where it becomes necessary to take, use,
or destroy the private property of individuals to prevent the spreading of a fire, the ravages of a pestilence, the advance of a
hostile army, or any other great public calamity. Here the individual is in no degree in fault, but his interest must yield to that
"necessity" which "knows no law." The establishment of limits within the denser portions of cities and villages within which
buildings constructed of inflammable materials shall not be erected or repaired may also, in some cases, be equivalent to a
destruction of private property; but regulations for this purpose have been sustained notwithstanding this result. Wharf lines may
also be established for the general good, even though they prevent the owners of water-fronts from building out on soil which
constitutes private property. And, whenever the legislature deem it necessary to the protection of a harbor to forbid the removal of
stones, gravel, or sand from the beach, they may establish regulations to that effect under penalties, and make them applicable to
the owners of the soil equally with other persons. Such regulations are only "a just restraint of an injurious use of property, which
the legislature have authority" to impose.
So a particular use of property may sometimes be forbidden, where, by a change of circumstances, and without the fault of the
power, that which was once lawful, proper, and unobjectionable has now become a public nuisance, endangering the public health
or the public safety. Milldams are sometimes destroyed upon this grounds; and churchyards which prove, in the advance of urban
population, to be detrimental to the public health, or in danger of becoming so, are liable to be closed against further use for
cemetery purposes.
These citations from some of the highest judicial and text-book authorities in the United States clearly indicate the wide scope
and extent which has there been given to the doctrine us in our opinion that the provision of the statute in question being a proper
exercise of that power is not in violation of the terms of section 5 of the Philippine Bill, which provide that "no law shall be
enacted which shall deprive any person of life, liberty, or property without due process of law," a provision which itself is
adopted from the Constitution of the United States, and is found in substance in the constitution of most if not all of the States of
the Union.
The judgment of conviction and the sentence imposed by the trial court should be affirmed with the costs of this instance against
the appellant. So ordered.
G.R. No. L-23587-88
LUCAS RAMIREZ and ENCARNACION FAJARDO RAMIREZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, respondent.
Before Us is a joint petition for certiorari to review the decision dated May 22, 1964 of the Court of Appeals, affirming the
judgment of the Court of First Instance, Manila Branch XVI, in its Criminal Cases Nos. 33438, 33439 and 33440 convicting the
spouses Lucas Ramirez and Encarnacion Fajardo Ramirez of the crime of falsification of public, official and/or commercial
documents punishable under Section 172, paragraph 1, of the Revised Penal Code, and sentencing each of them in each case to
not less than six (6) months of arresto mayor and not more than three (3) years, six (6) months and twenty- one (21) days
of prision correccional to pay a fine of P1,000.00 and one-half of the costs in each case.
The record discloses the following facts:
On December 9, 1949, the Central Bank of the Philippines, beset by an exchange crisis and pursuant to Section 14 (Exercise of
Authority) and 74 (Emergency Restrictions on Exchange Operation) of Republic Act 265, otherwise known as the Central Bank
Act, issued Circular No. 20 designed to protect the international reserve during the said crisis. It subjected all transactions in gold
and foreign exchange to a previous licensing by the Central Bank. To implement the said circular, guiding principles governing
the licensing of foreign exchange for the payment of imports were promulgated and embodied in Circular No. 44 issued on June
12, 1953, and made effective July 1, 1953. It created the Bankers Committee to process applications of new importers who were
made to accomplish and submit, among others, through local authorized banks, documents such as Balance Sheets, Profit and
Loss Statements, Schedule of Monthly Sales and Merchandise Inventory to show that they met the criteria set by the Central Bank
for new importers. These documents were further required to be certified to by an independent Certified Public Accountant.
Further restrictions were imposed by subsequent circulars, all of which were devised to combat the then prevailing exchange
crisis.
Against this backdrop, Criminal Cases Nos. 33438, 33439 and 33440, each entitled People vs. Lucas Ramirez, Encarnacion
Ramirez and Ligaya Bernardino, People vs. Lucas Ramirez, Encarnacion Ramirez and Salustia Lasin and People vs. Lucas
Ramirez, Encarnacion Ramirez and Natalia Caparaz, respectively, were filed, all for falsification of public, official and or
commercial documents, spawned by a raid of Room 308 of the Quisumbing bldg. at Dasmarinas Street, Manila, which room was
then leased by Mrs. Encarnacion Fajardo Ramirez. The search which was conducted by the NBI agents and Jose Aquino, a
Central Bank confidential agent, yielded voluminous documents among which were duplicates of the papers submitted by
applicant-importers Bernardino, Lasin and Caparaz duly certified by Segundo Esguerra, A CPA but which were allegedly
falsified.
Criminal Case No. 33438 was eventually dismissed for failure of the prosecution to establish falsification and also because one of
the accused, Bernardino, remained at large.
In Criminal Case No. 33439 the information reads as follows:
That on or about the period comprised between December 28, 1953 and May 12, 1954, inclusive, in the City of Manila,
Philippines, the said accused, conspiring and confederating together with others whose true names and Identities are still
unknown, and helping one another, did then and there willfully, unlawfully and feloniously commit acts of falsification in the
following manner, to wit: the said accused for the purpose of securing and obtaining dollar allocations or foreign exchange
license for import payments, from the Central Bank of the Philippines, an agencies of instrumentality of the Government of the
Republic of the Philippines, thru its lawfully authorized agent, the Philippine Bank of Communications, did then and there
willfully, unlawfully and feloniously prepare, concoct, execute and accomplish or cause to be prepared, concocted and executed
and accomplished the following public, official and commercial documents:
1. Application of Salustia Lasin to qualify as new importer, together with:
a. Balance Sheet as of December 31, 1953;
b. Profit and Loss Statement for the year ending December 31, 1953;
c. Schedule of Monthly Sales as of December 31, 1953;
d. Merchandise Inventory as of December 31, 1953. Income Tax Return for 1953 xFAw.
2. Information Sheet of Salustia Lasin as a new importer
which documents have been executed under oath before a notary public and or officer authorized to administer oaths, as required
by law and the regulations duly promulgated by the Monetary Board, Central Bank of the Philippines, pursuant to Republic Act
No. 265, and other records or documents connected therewith and required by to law to kept by merchants, by stating, narrating,
making it appear and representing in the said documents that the accused Salustia Lasin was qualified, under the law and
regulations of the Central Bank, as a new importer, being actively engaged in the general merchandise (textile) business, with an
establishment at Nos. 1514-1515, Divisoria Market, in said city, continuously since July 1, 1953 operating on a paid-up capital of
P23,500.00 with adequate distribution facilities, and that her purchases and gross sales of merchandise during the period from
January 1, 1953 to December 31, 1953 amounted to P147,062.35 and P149,246.30, respectively and such other information or
narration of facts pertinent thereto and in connection therewith, the said information, data and narration of facts being material for
the purpose of said application, the said accused knowing fully well that their manifestations were all false and untrue and were
made solely for the purpose of obtaining the said dollar allocations and foreign exchange license for import Payments from the
Central Bank of the Philippines; and the said accused, in furtherance of their conspiracy, submitted and filed the aforesaid
documents with the said Central Bank of the Philippines thru its aforesaid duly authorized agent bank, vested by law with
authority to determine and authorize the issuance of such dollar payments, securing and obtaining as a result thereof the approval
of the application of said accused as a new importer and the issuance to her of a dollar allocation or foreign exchange license for
import payments in the amount of $8,975.00, every semester, to the damage and prejudice of the Republic of the Philippines and
or the Central Bank of the Philippines.
Criminal Case No. 33440 likewise charged the spouses Lucas and Encarnacion Ramirez with the same offense, with Natalia
Caparaz as co-accused. In the Information it was alleged that the foreign exchange allocation in the amount of $8,177.75 every
semester was obtained by Caparaz through the submission of falsified documents.
Record likewise showed that Salustia Lasin and Natalia Caparaz who were indicted in the information were discharged and made
state witnesses. After trial the lower court convicted petitioners herein of the charges concerning the dollar application of Caparaz
and Lasin. Both spouses appealed to the Court of Appeals which affirmed the judgment of the Court of First Instance and also
denied their motion for reconsideration. Hence this petition.
Before We take up the assigned errors, We note, as was brought up by defense counsels Quisumbing, Ordonez and Gatchalian in
their well-written brief, the fact that-on January 21, 1962, while this case was pending in the Court of Appeals, the Central Bank
issued Circular No. 133 which lifted and abolished the foreign exchange controls instituted by earlier circulars. This particular
circular dispensed with the need for prior specific licensing from the Central Bank for the sale of foreign exchange for imports.
Before Us now therefore are posed these questions:
1. Did the Honorable Court of Appeals err in not acquitting the petitioners herein?
2. Did the Honorable Court of Appeals err in not ruling that prosecution against petitioner spouses may no longer be had for
falsification of documents required by the Central Bank Circular No. 20 as a consequence of the repeal of said Circular by
Circular No. 133?
I
A review of the proceedings and exhibits presented in the lower court reveals that there is truth in the findings of the trial court,
affirmed by the Court of Appeals, that the spouses Lucas and Encarnacion Ramirez were guilty of the crime charged. Although
their names never appeared in the allegedly falsified documents, this was so because they concocted, schemed and executed the
plot to falsify the said documents submitted to the Central Bank very carefully and meticulously without involving their names,
but this plot was betrayed by their active participation (other than signing their names) in the commission of the offense at bar
which was positively proved.
During the trial the fact of illiteracy of the applicant-importers Salustia Lasin and Natalia Caparaz was elicited and established.
Capitalizing on the illiteracy of Lasin and Caparaz who neither could read nor write except to sign their names but who were
eager beavers to be among the importers, spouses Lucas and Encarnacion Ramirez had ready- made applications with
manufactured figures and data signed by them (applicant importers). These applications had every appearance of genuineness and
since the same appear to be duly certified to by Segundo Esguerra, an independent Certified Public Accountant, in compliance
with a CB regulation, the applicant importers qualified as new importers and in fact obtained dollar allocations.
Petitioners herein would pass the buck to Segundo Esguerra the CPA whose signature appeared in all the statements filed in the
CB. Thus petitioner Ramirez declared during the trial that Segundo Esguerra with another lawyer, Osmundo Miranda, now
deceased, sub-leased a portion of the room at 308 Quisumbing Bldg. leased by her which Esguerra used as his office after the
regular office hours (Esguerra was said to be working for H. R. Lopez, Inc. as Accountant) and that he used to stay there from
11:30 A.M. to 2:00 P.M., then from 5:00 P.M. to 7:00 P.M. daily (t.s.n. November 4,1960 pp. 37-41). She would also have us
believe that the alleged falsified papers were found at the outer room which was then occupied by Esguerra and the late Atty.
Miranda—a fact which she failed to prove. When the raid occurred it was Lucas Ramirez who came to the scene, opened the
main door and unlocked all the cabinets and drawers in Room 308. As found out by the Court of Appeals:
... Los agentes de la ley antes de verificar el registro del cuarto Num. 308 del edificio Quisumbing estuvieron en la residencia de
los esposos aqui acusados y Lucas Ramirez fue quien les acompano al referido cuarto, y segun las pruebas de la accusacion,
Ramirez tenia las llavez de los armarios y mesas que estaban dentro del cuarto y fue quien abrio los cajones de dichas mesas
donde se encontraron los duplicados y los documentos falsos. (Emphasis supplied) (Criminal Record, Decision of the court of
Appeals, Third Div.)
The testimony of Jose Aquino, CB agent (t.s.n, March 10, 1958 pp. 3-5) that he remembered that there were divisions in Room
308 with several tables but without Identifying who the occupants of the tables were did not in any way lend support to the
contention of accused Encarnacion Ramirez that she subleased a portion of her room to Esguerra and deceased Miranda. No
contract of sub-lease was presented, and even assuming arguendo that the same was sub-leased, no reason was offered why Lucas
Ramirez had the keys not only to the main door but all the cabinets and drawers as well. What is apparent is that Esguerra held
office at Room 308 Quisumbing Bldg. not as sublessee but on agreement with Lucas Ramirez who was himself a CPA and an
Auditor of H.R. Lopez Inc., a firm where Esguerra was also employed as an Accountant. In fact Esguerra admitted that he went to
308 Quisumbing Bldg. after office hours (t.s.n. March 20, 1959 pp. 12-13.) on instructions of Lucas Ramirez and signed
statements for a fee of P100.00 per certification (t.s.n. October 5, 1956, Criminal Record p. 352, 357). It surprises Us why
Esguerra was not subjected to further investigations if he were equally guilty of the crime charged. Accused Encarnacion Ramirez
too tried to wash her hands by testifying that she did not know Natalia Caparaz nor did she meet her before the hearing (t.s.n. p.
21 Nov. 4, 1960). On further examination, however, she admitted having known her as she (Caparas) was introduced to her
(Ramirez) by a mutual friend, Apolonia Alcantara (t.s.n. p. 31 Nov. 4, 1960). Also during the raid, the NBI and CB agents found
among the papers powers of attorney executed by Lasin and Caparaz in favor of Encarnacion Fajardo Ramirez, authorizing the
latter to manage the disposal of the dollar allocations. Likewise it was shown during the trial that the spouses petitioners herein
benefited from the dollar allocations obtained by Caparaz and Lasin and in fact retained the lion's share therefrom. Thus from the
allocation obtained by Caparaz in the amount of $8,177.75, she (Caparas) was only given the amount of P400.00 as
reimbursement of her expenses and P65.00 as her share of the dollar allocation (t.s.n. pp. 10-11 March 20, 1959). Similarly when
Lasin's application was approved for $8,975.00 she was only given a share of P500.00 (t.s.n. May 15, 1959 pp. 33, 34). All the
above facts positively affirm the guilt of spouses-petitioners herein y9RrQ.
II
Anent the second error, it is the contention of petitioners herein that with the advent of full decontrol envisaged in Circular No.
133 issued on January 21, 1962, the crime for which petitioners were indicted has already been extinguished. Pertinent provisions
of Circular 133 are hereunder quoted for easy reference, viz:
xxx xxx xxx
2. Only authorized agent banks may sell foreign exchange for imports. Such exchange should be sold at the prevailing market rate
to any applicant, without requiring prior specific licensing from the Central Bank, subject to the following conditions:
a. All imports must be covered by letter of credit except small transactions involving not more than $100.00;
b. x x x
xxx xxx xxx
4. The free market rate shall not be administratively fixed but shall be determined through transactions in the free market,
xxx xxx xxx
8. All existing circulars, rules and regulations and conditions governing transactions in foreign exchange not inconsistent with the
provisions on this Circular are deemed incorporated hereto and made integral parts hereof by reference GmfZrJ6L3.
It is very clear that Circular 133 lifted the restrictions imposed by Circular 20 and subsequent circulars thereto. In short Circular
133 repealed Circular 20. This is so because Circular 20 and Circular 133 are diametrically opposed to each other. While Circular
20 restricted the sale of foreign exchange and subjected all transactions therein to specific licensing by the Central Bank, Circular
133 practically did away with prior licensing. As aptly elucidated in the case of People vs. Sandico 1, Jr. et al.
... The Solicitor General's opposition to the motion for dismissal is predicated primarily upon his contention that Circular 20 has
not been repealed by Circular 133, and that far from being incompatible, the two actually complement each other. This contention
is without merit. In the first place, while Circular 20 restricts sales of foreign exchange and subjects all transactions therein to
specific licensing by the Central Bank, Circular 133 neither restricts sales of foreign exchange nor subjects transactions therein to
licensing. As a matter of fact, Circular 133 provides that foreign exchange shall be sold at a free market rate to any applicant
without requiring prior specific licensing from the Central Bank, and that the free market rate shall not be administratively fixed
but shall be determined in the transactions in the free market. From the contradictory concepts of the two systems may be seen the
incompatibility between the two circulars. Circular 133 was promulgated precisely to remedy the evils brought about by the
control system; it is therefore not ancillary to Circular 20. If life is to be given to the remedy of decontrol as a policy for economic
survival, Circular 20 must give away to the supervening Circular 133. The purpose of Circular 133 cannot be achieved by
applying the provisions of Circular 20; the two circulars cannot operate hand in hand. It may be true that Circular 133 contains no
specific provision which is in direct conflict with Secs. 4-a and b of Circular 20, the particular sections under which the appellants
were charged and convicted. But it is obvious nonetheless that the respective purposes of these two circulars are diametrically
opposed to each other, because while Circular 20 restricts the sale of foreign exchange and subjects all transactions therein to
specific licensing by the Central Bank, the purpose of Circular 133 is clearly to abolish such restrictions and do away with
licensing. It is beyond doubt, therefore, that the purpose of Circular 20 was abandoned by the promulgation of Circular 133, and
Secs. 4-a and b thereof have lost all meaning and function.
Also under paragraph 8 of Circular 133 (supra) it is so provided that circulars consistent with the provisions of Circular 133 are
deemed incorporated thereto. However since Circular 20 is inconsistent and runs counter to it then by necessary implication the
same is abrogated and repealed. And as Sutherland 2 an eminent authority on Statutory Construction says-"When a subsequent
enactment covering a field of operation coterminous with a prior statute cannot by any reasonable construction be given effect
while the prior law remains in operative existence because of irreconcilable conflict between the two acts, the latest legislative
expression prevails and the prior law yields to the extent of the conflict."
The decisive question to determine now is whether or not repeal of Circular 20 obliterated petitioners' crime.
Petitioners heavily relied on the case of People vs. Quasha 3 where this Court opined:
... The majority of the court however, are also of the opinion that, even supposing that the act imputed to the dependant
constituted falsification at the time it was perpetrated, still with the approval of the Parity Amendment to the Constitution in
March, 1947, which placed Americans on the same footing as Filipino citizens with respect to the right to operate public utilities
in the Philippines, thus doing away with the prohibition in Section 8, Article XIV, of the Constitution in so far as American
citizens are concerned, the said act has ceased to be an offense within the meaning of the law, so that defendant can no longer be
held criminally liable therefor. ...
On the other hand, the Court of Appeals in its decision said:
Finalmente, los apelantes contienden que con la abolicion de la adjudicacion de dolares, los actos cometidos por los esposos en el
supuesto de que fuesen estos culpables ya han dejado de ser punibles, citando para este efecto la causa de Pueblo vs. Quasha, 49
O.G. 2826. Entendemos que la contencion carece de merito porque en la presente causa los esposos estan acusados de
falsification de documentos official y commercial y no de una infraction de los reglamentos del Banco Central sobre la
adjudicacion de dolares y la causa de Quasha, supra, no es aplicable al caso de autos donde en parte se sostuvo que debido a la
enmienda de la Constitution concediendo a los americanos iguales privilegios que los filipinos en la Llamadad clausula de
paridad, no era necesario expresar en la escritura de incorporacion la nacionalidad de los incorporadores americanos en una
corporacion de utilidad publica puesto que tenian los mismos derechos y privilegios que los filipinos en una corporacion de tal
indole.
We believe that the ratiocination of the Court of Appeals is altogether hair-splitting. If We will recall, the crime of falsification
stemmed from the violation of the legal requirements of the Central Bank, specifically Circulars 20 and 44, where applicant-
importers were obliged to disclose the truth on the figures and data appearing in the documents submitted but which they
allegedly falsified to qualify them as new importers. These requirements incorporated in Circular 20 and subsequent circulars
were issued during an emergency in an effort to curb the outward flow of foreign exhange. Eventually, a free market ensued and
the emergency measures were lifted. Consequently, there is no more obligation now to submit to the Central Bank such
documents in support of an application for foreign exchange.
erroneous or correct when it was rendered. But because judgment is suspended by appeal, it is without finality; that to give it
finality the appellate court must itself pronounce its judgment, and that in so doing it must be governed by the existing law. When
the previous law under which alone validity could be given to the judgment has been repealed, the sole prop and foundation for
support of the judgment has been removed, and of necessity it must be declared null and void (Yeaton v. United States (1809) 5
Cranch (U.S.) 281, 3 L. Ed. 101).
In view of the failure of the Court en banc after its first deliberation to reach a decision on this case due to the absence of the
required number of justices to promulgate a decision, and of the abstention of two justices from participating therein, the case was
set for rehearing en banc in accordance with Sec. 3, Rule 125 of the Rules of Court. On September 4, 1975, the case was
rehearden banc and subsequently the justices present were requested to cast their respective votes on the final outcome of the
case.
On April 8, 1976, the Court for the second time, formally voted on the case, and the result of the voting among the eleven justices
present was as follows:
1. For AQUITTAL of the accused appellants—

Although the acts imputed to the accused constituted, at the time they were committed, falsification of commercial documents 1) Esguerra
penalized under Sec. 172, paragraph 1, of the Revised Penal Code, the promulgation of Central Bank Circular 133 abolishing the 2) Muñoz Palma
requirement of specific licensing under Central Bank Circular No. 20 wiped away the legal obligation of the applicants for 3) Concepcion
foreign exchange to disclose the truth of the facts narrated in the documents supporting their application. As there is no more 4) Martin, JJ.
legal obligation of the applicant to disclose such truth, an untruthful statement therein no longer constitutes the crime of 2. For CONVICTION of the accused appellants—
falsification perpetrated by making false statements in a narration of facts (Francisco, Revised Penal Code, p. 194, 1963 ed.; U.S. 1) Castro, C.J.
vs. Lopez, 15 Phil. 515 and People vs. Quasha,93 Phil. 333) QxwZhcDT. 2) Teehankee
3) Barredo
It may be argued that the repeal of Central Bank Circular No. 20 by Central Bank Circular No. 133 did not extinguish the criminal 4) Makasiar
liability for falsification of commercial documents because the Revised Penal Code where such offense is punishable was 5) Aquino, JJ 2DuQ6jIjf.
unaffected thereby and remains valid and subsisting. True that the pertinent provision of the Revised Penal Code on falsification 3. For ABSTENTION—
was not repealed by Circular No. 133, but the stubborn fact remains that the repeal of Circular No. 20 which imposed the 1) Fernando
obligation to state the truth in the papers supporting the application for foreign exchange extinguished that obligation, leaving no 2) Antonio, JJ.
more foundation on which the falsification of such papers would rest. The root cause of the falsification, which was Central Bank
Circular No. 20, having been totally removed, the offense arising out of a disregard or violation of said circular has no more leg to It resulted that the majority of eight required by the constitution in ordinary cases heard en banc to decide a case has not for the
stand on pHBcRdOvrN. second time been obtained. Pursuant to the provisions of Sec. 3, Rule 125 of the Rules of Court, if after the case is reheard and in
the rehearing no decision is again reached, the judgment of conviction of the lower court shall be reversed and the defendant shall
The greater weight of authority is inclined to the view that an appellate court, in reviewing a judgment on appeal, will dispose of a be acquitted.
question according to the law prevailing at the time of such disposition, and not according to the law prevailing at the time of
rendition of the appealed judgment. The court will, therefore, reverse a judgment which was correct at the time it was originally WHEREFORE, the accused appellants, Lucas Ramirez and Encarnacion Fajardo Ramirez, are hereby acquitted of the offense
rendered where, by statute, there has been an intermediate change in the law which renders such judgment erroneous at the time charge, with costs de oficio.
the case was finally disposed of on appeal (111 A.L.R. 1318; see cases cited therein). Thus, if pending the appeal from a
judgment of the lower court the law is changed, or the statute under which it was decided has been repealed, the appellate court SO ORDERED.
must dispose of the case under the law in force when its decision is rendered. The court must conform its decision to the law then
existing and may, therefore, reverse a judgment which was correct when pronounced in the subordinate tribunal, if it appears that SPOUSES ENRIQUE M. BELO and FLORENCIA G. BELO, petitioners, vs. PHILIPPINE NATIONAL BANK and
pending the appeal a statute which was necessary to support the judgment of the lower court has been withdrawn by an absolute SPOUSES MARCOS and ARSENIA ESLABON, respondents.
repeal (Vance v. Rankin (1902) 194 I11. 625, 62 N.E. 807, 88 Am. St. Rep. 173; Wall v. Chesapeake & O.R. Co. (1919) 290 I11.
227, 125 N.E. 20). DECISION

Likewise it was held that while as a general rule it is the province of an appellate court to inquire only into the question whether a
judgment was erroneous when rendered, if subsequent to the judgment of the lower court and before the decision of the appellate
court is handed down a law intervenes changing the applicable rule, the judgment of the lower court, although correct under the
law prevailing at the time it was rendered must be set aside by the appellate court and a judgment in conformity with the new law
must be entered (U.S. v. The Peggy (1801) 1 Cranch (U.S.) 103, 2L. Ed. 49).
It may be argued that the function of the appellate court is not to consider the merits of a cause on the basis of supervening
extraneous circumstances but merely to review the judgment of the lower court with a view to determining whether it was
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision [1] and Resolution[2] in CA-G.R. No. 53865 of the Court of
Appeals[3] dated May 21, 1998 and June 29, 1998, respectively, which modified the Decision [4] dated April 30, 1996 of the
Regional Trial Court of Roxas City, Branch 19 in a suit [5] for Declaration of Nullity of the Contract of Mortgage.
The facts are as follows:
Eduarda Belo owned an agricultural land with an area of six hundred sixty one thousand two hundred eighty eight (661,288)
square meters located in Timpas, Panitan, Capiz, covered and described in Transfer Certificate of Title (TCT for brevity) No. T-
7493. She leased a portion of the said tract of land to respondents spouses Marcos and Arsenia Eslabon in connection with the
said spouses’ sugar plantation business. The lease contract was effective for a period of seven (7) years at the rental rate of Seven
Thousand Pesos (P7,000.00) per year.
To finance their business venture, respondents spouses Eslabon obtained a loan from respondent Philippine National Bank (PNB
for brevity) secured by a real estate mortgage on their own four (4) residential houses located in Roxas City, as well as on the
agricultural land owned by Eduarda Belo. The assent of Eduarda Belo to the mortgage was acquired through a special power of
attorney which she executed in favor of respondent Marcos Eslabon on June 15, 1982.
Inasmuch as the respondents spouses Eslabon failed to pay their loan obligation, extrajudicial foreclosure proceedings against the
mortgaged properties were instituted by respondent PNB. At the auction sale on June 10, 1991, respondent PNB was the highest
bidder of the foreclosed properties at Four Hundred Forty Seven Thousand Six Hundred Thirty Two Pesos (P447,632.00).
In a letter dated August 28, 1991, respondent PNB appraised Eduarda Belo of the sale at public auction of her agricultural land on
June 10, 1991 as well as the registration of the Certificate of Sheriff’s Sale in its favor on July 1, 1991, and the one-year period to
redeem the land.
Meanwhile, Eduarda Belo sold her right of redemption to petitioners spouses Enrique and Florencia Belo under a deed of absolute
sale of proprietary and redemption rights.
Before the expiration of the redemption period, petitioners spouses Belo tendered payment for the redemption of the agricultural
land in the amount of Four Hundred Eighty Four Thousand Four Hundred Eighty Two Pesos and Ninety Six Centavos
(P484,482.96), which includes the bid price of respondent PNB, plus interest and expenses as provided under Act No. 3135.
However, respondent PNB rejected the tender of payment of petitioners spouses Belo. It contended that the redemption price
should be the total claim of the bank on the date of the auction sale and custody of property plus charges accrued and
interests amounting to Two Million Seven Hundred Seventy Nine Thousand Nine Hundred Seventy Eight and Seventy Two
Centavos (P2,779,978.72).[6] Petitioners spouses disagreed and refused to pay the said total claim of respondent PNB.
On June 18, 1992, petitioners spouses Belo initiated in the Regional Trial Court of Roxas City, Civil Case No. V-6182 which is
an action for declaration of nullity of mortgage, with an alternative cause of action, in the event that the accommodation mortgage
be held to be valid, to compel respondent PNB to accept the redemption price tendered by petitioners spouses Belo which is based
on the winning bid price of respondent PNB in the extrajudicial foreclosure in the amount of Four Hundred Forty Seven
Thousand Six Hundred Thirty Two Pesos (P447,632.00) plus interest and expenses.
In its Answer, respondent PNB raised, among others, the following defenses, to wit:
xxx
77. In all loan contracts granted and mortgage contracts executed under the 1975 Revised Charter (PD 694, as
amended), the proper rate of interest to be charged during the redemption period is the rate specified in the mortgage
contract based on Sec. 25[7] of PD 694 and the mortgage contract which incorporates by reference the provisions of the
PNB Charters. Additionally, under Sec. 78 of the General Banking Act (RA No. 337, as amended) made applicable to
PNB pursuant to Sec. 38 of PD No. 694, the rate of interest collectible during the redemption period is the rate specified in
the mortgage contract.
78. Since plaintiffs failed to tender and pay the required amount for redemption of the property under the provisions
of the General Banking Act, no redemption was validly effected; [8]
xxx
After trial on the merits, the trial court rendered its Decision dated April 30, 1996 granting the alternative cause of action of
spouses Belo, the decretal portion of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of plaintiffs Spouses Enrique M. Belo and
Florencia G. Belo and against defendants Philippine National Bank and Spouses Marcos and Arsenia Eslabon:
1. Making the injunction issued by the court permanent, insofar as the property of Eduarda Belo covered by Transfer
Certificate of Title No. T-7493 is concerned;
2. Ordering defendant Philippine National Bank to allow plaintiff Enrique M. Belo to redeem only Eduarda Belo’s
property situated in Brgy. Timpas, Panitan, Capiz, and covered by Transfer Certificate of Title No. T-7493 by paying only
its bid price of P447,632.00, plus interest and other charges provided for in Section 30, Rule 39 of the Rules of Court, less
the loan value, as originally appraised by said defendant Bank, of the foreclosed four (4) residential lots of defendants
Spouses Marcos and Arsenia Eslabon; and
3. Dismissing for lack of merit the respective counterclaims of defendants Philippine National Bank and spouses Marcos
and Arsenia Eslabon.
With costs against defendants.
SO ORDERED.[9]
Dissatisfied with the foregoing judgment of the trial court, respondent PNB appealed to the Court of Appeals. In its Decision
rendered on May 21, 1998, the appellate court, while upholding the decision of the trial court on the validity of the real estate
mortgage on Eduarda Belo’s property, the extrajudicial foreclosure and the public auction sale, modified the trial court’s finding
on the appropriate redemption price by ruling that the petitioners spouses Belo should pay the entire amount due to PNB under
the mortgage deed at the time of the foreclosure sale plus interest, costs and expenses.[10]
Petitioners spouses Belo sought reconsideration [11] of the said Decision but the same was denied by the appellate court in its
Resolution promulgated on June 29, 1998, ratiocinating, thus:
Once more, the Court shies away from declaring the nullity of the mortgage contract obligating Eduarda Belo as co-mortgagor,
considering that it has not been sufficiently established that Eduarda Belo’s assent to the special power of attorney and to the
mortgage contract was tainted by any vitiating cause. Moreover, in tendering an offer to redeem the property (Exhibit “20”, p.
602 Record) after its extrajudicial foreclosure, she has thereby admitted the validity of the mortgage, as well as the transactions
leading to its inception. Eduarda Belo, and the appellees as mere assignees of Eduarda’s right to redeem the property, are
therefore estopped from questioning the efficacy of the mortgage and its subsequent foreclosure. [12]
The appellate court further declared that petitioners spouses Belo are obligated to pay the total bank’s claim representing the
redemption price for the foreclosed properties, as provided by Section 25 of P.D. No. 694, holding that:
On the other hand, the court’s ruling that the appellees, being the assignee of the right of repurchase of Eduarda Belo, were bound
by the redemption price as provided by Section 25 of P.D. 694, stands. The attack on the constitutionality of Section 25 of P.D.
694 cannot be allowed, as the High Court, in previous instances, (Dulay v. Carriaga, 123 SCRA 794 [1983]; Philippine National
Bank v. Remigio, 231 SCRA 362 [1994]) has regarded the said provision of law with respect, using the same in determining the
proper redemption price in foreclosure of mortgages involving the PNB as mortgagee.
The terms of the said provision are quite clear and leave no room for qualification, as the appellees would have us rule. The said
rule, as amended, makes no specific distinction as to assignees or transferees of the mortgagor of his redemptive right. In the
absence of such distinction by the law, the Court cannot make a distinction. As admitted assignees of Eduarda Belo’s right of
redemption, the appellees succeed to the precise right of Eduarda including all conditions attendant to such right.
Moreover, the indivisible character of a contract of mortgage (Article 2089, Civil Code) will extend to apply in the redemption
stage of the mortgage.
As we have previously remarked, Section 25 of P.D. 694 is a sanctioned deviation from the rule embodied in Rule 39, Section 30
of the Rules of Court, and is a special protection given to government lending institutions, particularly, the Philippine National
Bank. (Dulay v. Carriaga, supra)[13]
Hence, the instant petition.
During the oral argument, petitioners, through counsel, Atty. Enrique M. Belo, agreed to limit the assignment of errors to the
following:
xxx xxx xxx
II. THE COURT OF APPEALS ERRED IN NOT REVERSING THE TRIAL COURT ON THE BASIS OF
THE ASSIGNMENT OF ERRORS ALLEGED BY PETITIONERS IN THEIR BRIEF:
(1) THAT THE SPECIAL POWER OF ATTORNEY EXECUTED BY EDUARDA BELO IN FAVOR OF RESPONDENT
ESLABON WAS NULL AND VOID;
(2) THAT THE REAL ESTATE MORTGAGE EXECUTED BY RESPONDENT MARCOS ESLABON UNDER SAID
INVALID SPECIAL POWER OF ATTORNEY IS ALSO NULL AND VOID;
III. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT PNB ACTED IN BAD
FAITH AND CONNIVED WITH RESPONDENTS-DEBTORS ESLABONS TO OBTAIN THE CONSENT OF
EDUARDA BELO, PETITIONERS’ PREDECESSOR, THROUGH FRAUD.
IV. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT PNB WAS NEGLIGENT IN
THE PERFORMANCE OF ITS DUTY AS COMMERCIAL MONEY LENDER.
V. THE COURT OF APPEALS ERRED IN HOLDING THAT EDUARDA BELO, PETITIONERS’ PREDECESSOR,
HAD WAIVED THE RIGHT TO QUESTION THE LEGALITY OF THE ACCOMMODATION MORTGAGE.
VI. THE COURT OF APPEALS ERRED IN REVERSING THE TRIAL COURT BY HOLDING THAT ON
REDEMPTION, PETITIONERS SHOULD PAY THE ENTIRE CLAIM OF PNB AGAINST RESPONDENTS-
DEBTORS ESLABONS.
VII. THE COURT OF APPEALS ERRED IN NOT ORDERING THAT SHOULD PETITIONERS DECIDE TO PAY
THE ENTIRE CLAIM OF RESPONDENT PNB AGAINST THE RESPONDENTS-DEBTORS ESLABONS,
PETITIONERS SHALL SUCCEED TO ALL THE RIGHTS OF RESPONDENT PNB WITH THE RIGHT TO
REIMBURSEMENT BY RESPONDENTS-DEBTORS, ESLABONS.
VIII. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT SHOULD PETITIONERS DECIDE NOT TO
EXERCISE THEIR RIGHT OF REDEMPTION, PETITIONERS SHALL BE ENTITLED TO THE VALUE OF THEIR
IMPROVEMENTS MADE IN GOOD FAITH AND FOR THE REAL ESTATE TAX DUE PRIOR TO THE
FORECLOSURE SALE.[14]
Petitioners challenge the appreciation of the facts of the appellate court, pointing out the following facts which the appellate court
allegedly failed to fully interpret and appreciate:
1. That respondent PNB in its Answer admitted that Eduarda Belo was merely an accommodation mortgagor and that she
has no personal liability to respondent PNB.
xxx
2. That the PNB Special Power of Attorney (SPA) Form No. 74 (Exh. “D”) used to bind Eduarda Belo as accommodation
mortgagor authorized the agent Eslabons to borrow and mortgage her agricultural land for her (Eduarda Belo) use and
benefit. Instead, said PNB SPA Form No. 74 was used by debtors Eslabons and PNB to bind Eduarda Belo as
accommodation mortgagor for the crop loan extended by PNB to the Eslabons.
3. That the said PNB SPA Form No. 74 was signed by Eduarda Belo in blank, without specifying the amount of the loan to
be granted by respondent PNB to the respondents-debtors Eslabons upon assurance by the PNB manager that the SPA was
merely a formality and that the bank will not lend beyond the value of the four (4) [Roxas City] residential lots located in
Roxas City mortgaged by respondents-debtors Eslabons (see Exhibit “D”; Eduarda Belo’s deposition, Exhibit “V”, pp. 7 to
24).
4. That PNB did not advise Eduarda Belo of the amount of the loan granted to the Eslabons, did not make demands upon
her for payment, did not advise her of Eslabons’ default. The pre-auction sale notice intended for Eduarda Belo was
addressed and delivered to the address of the debtors Eslabons residence at Baybay, Roxas City, not to the Belo Family
House which is the residence of Eduarda Belo located in the heart of Roxas City. The trial court stated in its Decision that
the PNB witness Miss Ignacio “admitted that through oversight, no demand letters were sent to Eduarda Belo, the
accommodation mortgagor” (see p. 7, RTC Decision).
xxx
5. As an agreed fact stated in the Pre-Trial Order of the Regional Trial Court, the loan which was unpaid at the time of the
extrajudicial foreclosure sale was only P789,897.00.
xxx
6. That herein petitioners Spouses Belo in making the tender to redeem Eduarda Belo’s agricultural land expressly
reserved the right to question the legality of the accommodation mortgage in the event that said tender to redeem was
rejected by PNB (Exh. “I”).[15]
Petitioners present basically two (2) issues before this Court. First, whether or not the Special Power of Attorney (SPA for
brevity), the real estate mortgage contract, the foreclosure proceedings and the subsequent auction sale involving Eduarda Belo’s
property are valid. Second, assuming they are valid, whether or not the petitioners are required to pay, as redemption price, the
entire claim of respondent PNB in the amount of P2,779,978.72 as of the date of the public auction sale on June 10, 1991.
On the first issue, the petitioners contend that the SPA is void for the reason that the amount for which the spouses Eslabon are
authorized to borrow from respondent bank was unlimited; and that, while the SPA states that the amount loaned is for the benefit
of Eduarda Belo, it was in fact used for the benefit of the respondents spouses Eslabon. For the said reasons petitioners contend
that the mortgage contract lacks valid consent, object and consideration; that it violates a concept in the law of agency which
provides that the contract entered into by the agent must always be for the benefit of the principal; and, that it does not express the
true intent of the parties.
The subject SPA, the real estate mortgage contract, the foreclosure proceedings and the subsequent auction sale of Eduarda
Belo’s property are valid and legal.
First, the validity of the SPA and the mortgage contract cannot anymore be assailed due to petitioners’ failure to appeal the same
after the trial court rendered its decision affirming their validity. After the trial court rendered its decision granting petitioners
their alternative cause of action, i.e., that they can redeem the subject property on the basis of the winning bid price of respondent
PNB, petitioners did not anymore bother to appeal that decision on their first cause of action. If they felt aggrieved by the trial
court’s decision upholding the validity of the said two (2) documents, then they should have also partially appealed therefrom but
they did not. It is an abuse of legal remedies for petitioners to belatedly pursue a claim that was settled with finality due to their
own shortcoming. As held in Caliguia v. National Labor Relations Commission, [16] where a party did not appeal from the Labor
Arbiter’s decision denying claims for actual, moral and exemplary damages and instead moved for immediate execution, the
decision then became final as to him and by asking for its execution, he was estopped from relitigating his claims for damages.
Second, well-entrenched is the rule that the findings of trial courts which are factual in nature, especially when affirmed
by the Court of Appeals, deserve to be respected and affirmed by the Supreme Court, provided it is supported by
substantial evidence.[17] The finding of facts of the trial court to the effect that Eduarda Belo was not induced by the
manager of respondent PNB but instead that she freely consented to the execution of the SPA is given the highest respect
as it was affirmed by the appellate court. In the case at bar, the burden of proof was on the petitioners to prove or show that
there was alleged inducement and misrepresentation by the manager of respondent PNB and the spouses Eslabon. Their
allegation that Eduarda Belo only agreed to sign the SPA after she was assured that the spouses Eslabon would not borrow more
than the value of their own four (4) residential lots in Roxas City was properly objected to by respondent PNB. [18] Also their
contention that Eduarda Belo signed the SPA in blank was properly objected to by respondent PNB on the ground that the best
evidence was the SPA. There is also no proof to sustain petitioners’ allegation that respondent PNB acted in bad faith and
connived with the debtors, respondents spouses Eslabon, to obtain Eduarda Belo’s consent to the mortgage through
fraud. Eduarda Belo very well knew that the respondents spouses Eslabon would use her property as additional mortgage
collateral for loans inasmuch as the mortgage contract states that “the consideration of this mortgage is hereby initially fixed at
P229,000.00.”[19] The mortgage contract sufficiently apprises Eduarda Belo that the respondents spouses Eslabon can apply for
more loans with her property as continuing additional security. If she found the said provision questionable, she should have
complained immediately. Instead, almost ten (10) years had passed before she and the petitioners sought the annulment of the
said contracts.
Third, after having gone through the records, this Court finds that the courts a quo did not err in holding that the SPA executed by
Eduarda Belo in favor of the respondents spouses Eslabon and the Real Estate Mortgage executed by the respondents spouses in
favor of respondent PNB are valid. It is stipulated in paragraph three (3) of the SPA that Eduarda Belo appointed the Eslabon
spouses “to make, sign, execute and deliver any contract of mortgage or any other documents of whatever nature or kind ....
which may be necessary or proper in connection with the loan herein mentioned, or with any loan which my attorney-in-fact may
contract personally in his own name …...” [20] This portion of the SPA is quite relevant to the case at bar. This was the main
reason why the SPA was executed in the first place inasmuch as Eduarda Belo consented to have her land mortgaged for the
benefit of the respondents spouses Eslabon. The SPA was not meant to make her a co-obligor to the principal contract of loan
between respondent PNB, as lender, and the spouses Eslabon, as borrowers. The accommodation real estate mortgage over her
property, which was executed in favor of respondent PNB by the respondents spouses Eslabon, in their capacity as her attorneys’-
in-fact by virtue of her SPA, is merely an accessory contract.
Eduarda Belo consented to be an accommodation mortgagor in the sense that she signed the SPA to authorize respondents
spouses Eslabons to execute a mortgage on her land. Petitioners themselves even acknowledged that the relation created by the
SPA and the mortgage contract was merely that of mortgagor-mortgagee relationship. The SPA form of the PNB was utilized to
authorize the spouses Eslabon to mortgage Eduarda Belo’s land as additional collateral of the Eslabon spouses’ loan from
respondent PNB. Thus, the petitioners’ contention that the SPA is void is untenable. Besides, Eduarda Belo benefited, in signing
the SPA, in the sense that she was able to collect the rentals on her leased property from the Eslabons. [21]
An accommodation mortgage is not necessarily void simply because the accommodation mortgagor did not benefit from the
same. The validity of an accommodation mortgage is allowed under Article 2085 of the New Civil Code which provides that
“(t)hird persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own
property.” An accommodation mortgagor, ordinarily, is not himself a recipient of the loan, otherwise that would be contrary to his
designation as such. It is not always necessary that the accommodation mortgagor be appraised beforehand of the entire amount
of the loan nor should it first be determined before the execution of the SPA for it has been held that:
“(real) mortgages given to secure future advancements are valid and legal contracts; that the amounts named as consideration in
said contract do not limit the amount for which the mortgage may stand as security if from the four corners of the instrument the
intent to secure future and other indebtedness can be gathered. A mortgage given to secure advancements is a continuing security
and is not discharged by repayment of the amount named in the mortgage, until the full amount of the advancements are paid.” [22]
Fourth, the courts a quo correctly held that the letter of Eduarda Belo addressed to respondent PNB manifesting her intent to
redeem the property is a waiver of her right to question the validity of the SPA and the mortgage contract as well as the
foreclosure and the sale of her subject property. Petitioners claim that her letter was not an offer to redeem as it was merely a
declaration of her intention to redeem. Respondent PNB’s answer to her letter would have carried certain legal effects. Had
respondent PNB accepted her letter-offer, it would have surely bound the bank into accepting the redemption price offered by
Eduarda Belo. If it was her opinion that her SPA and the mortgage contract were null and void, she would not have manifested
her intent to redeem but instead questioned their validity before a court of justice. Her offer was a recognition on her part that the
said contracts are valid and produced legal effects. Inasmuch as Eduarda Belo is estopped from questioning the validity of the
contracts, her assignees who are the petitioners in the instant case, are likewise estopped from disputing the validity of her SPA,
the accommodation real estate mortgage contract, the foreclosure proceedings, the auction sale and the Sheriff’s Certificate of
Sale.
The second issue pertains to the applicable law on redemption to the case at bar. Respondent PNB maintains that Section 25 of
Presidential Decree No. 694 should apply, thus:
SEC. 25. Right of redemption of foreclosed property – Right of possession during redemption period. - Within one year from the
registration of the foreclosure sale of real estate, the mortgagor shall have the right to redeem the property by paying all claims of
the Bank against him on the date of the sale including all the costs and other expenses incurred by reason of the foreclosure sale
and custody of the property, as well as charges and accrued interests. [23]
Additionally, respondent bank seeks the application to the case at bar of Section 78 of the General Banking Act, as amended by
P.D. No. 1828, which states that -
……In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate which is security for any loan
granted before the passage of this Act or under the provisions of this Act, the mortgagor or debtor whose real property has been
sold at public auction, judicially or extrajudicially, for the full or partial payment of an obligation to any bank, banking or credit
institution, within the purview of this Act shall have the right, within one year after the sale of the real estate as a result of the
foreclosure of the respective mortgage, to redeem the property by paying the amount fixed by the court in the order of execution,
or the amount due under the mortgage deed, as the case may be, with interest thereon at the rate specified in the mortgage, and
all the costs, and judicial and other expenses incurred by the bank or institution concerned by reason of the execution and sale
and as a result of the custody of said property less the income received from the property. [24]
On the other hand, petitioners assert that only the amount of the winning bidder’s purchase together with the interest thereon and
on all other related expenses should be paid as redemption price in accordance with Section 6 of Act No. 3135 which provides
that:
Sec. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his
successor in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property
subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of
one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and
sixty-four to four hundred and sixty six, inclusive, of the Code of Civil Procedure [25], in so far as these are not inconsistent with
the provisions of this Act.
Section 28 of Rule 39 of the 1997 Revised Rules of Civil Procedure states that:
SEC. 28. Time and manner of, and amounts payable on, successive redemptions; notice to be given and filed. - The judgment
obligor, or redemptioner, may redeem the property from the purchaser, at any time within one (1) year from the date of the
registration of the certificate of sale, by paying the purchaser the amount of his purchase, within one per centum per month
interest thereon in addition, up to the time of redemption, together with the amount of any assessments or taxes which the
purchaser may have paid thereon after purchase, and interest on such last named amount at the same rate; and if the purchaser be
also a creditor having a prior lien to that of the redemptioner, other than the judgment under which such purchase was made, the
amount of such other lien, with interest. (Italics supplied)
xxx xxx xxx
This Court finds the petitioners’ position on that issue to be meritorious.
There is no doubt that Eduarda Belo, assignor of the petitioners, is an accommodation mortgagor. The Pre-trial Order and
respondent PNB’s brief contain a declaration of this fact. The dispute between the parties is whether Section 25 of P.D. No. 694
applies to an accommodation mortgagor, or her assignees. The said legal provision does not make a distinction between a debtor-
mortgagor and an accommodation mortgagor as it uses the broad term “mortgagor”. The appellate court thus ruled that the
provision applies even to an accommodation mortgagor inasmuch as the law does not make any distinction. We disagree. Where
a word used in a statute has both a restricted and a general meaning, the general must prevail over the restricted unless the nature
of the subject matter or the context in which it is employed clearly indicates that the limited sense is intended .[26] It is presumed
that the legislature intended exceptions to its language which would avoid absurd consequences of this character. [27] In the case at
bar, the qualification to the general rule applies. The same provision of Section 25 of P.D. No. 694 provides that “the mortgagor
shall have the right to redeem the property by paying all claims of the Bank against him”. From said provision can be deduced
that the mortgagor referred to by that law is one from whom the bank has a claim in the form of outstanding or unpaid loan; he is
also called a borrower or debtor-mortgagor. On the other hand, respondent PNB has no claim against accommodation mortgagor
Eduarda Belo inasmuch as she only mortgaged her property to accommodate the Eslabon spouses who are the loan borrowers of
the PNB. The principal contract is the contract of loan between the Eslabon spouses, as borrowers/debtors, and the PNB as
lender. The accommodation real estate mortgage (which secures the loan) is only an accessory contract. It is our view and we
hold that the term “mortgagor” in Section 25 of P.D. No. 694 pertains only to a debtor-mortgagor and not to an accommodation
mortgagor.
It is well settled that courts are not to give a statute a meaning that would lead to absurdities. If the words of a statute are
susceptible of more than one meaning, the absurdity of the result of one construction is a strong argument against its adoption,
and in favor of such sensible interpretation. [28] We test a law by its result. A law should not be interpreted so as not to cause an
injustice. There are laws which are generally valid but may seem arbitrary when applied in a particular case because of its
peculiar circumstances. We are not bound to apply them in slavish obedience to their language.[29]
The interpretation accorded by respondent PNB to Section 25 of P.D. No. 694 is unfair and unjust to accommodation mortgagors
and their assignees. Forcing an accommodation mortgagor like Eduarda Belo to pay for what the principal debtors (Eslabon
spouses) owe to respondent bank is to punish her for the accommodation and generosity she accorded to the Eslabon spouses who
were then hard pressed for additional collaterals needed to secure their bank loan. Respondents PNB and spouses Eslabons very
well knew that she merely consented to be a mere accommodation mortgagor.
The circumstances of the case at bar also provide for ample reason why petitioners cannot be made to pay the entire liability of
the principal debtors, Eslabon spouses, to respondent PNB.
The trial court found that respondent PNB’s application for extrajudicial foreclosure and public auction sale of Eduarda Belo’s
mortgaged property[30] was filed under Act No. 3135, as amended by P.D. No. 385. The notice of extrajudicial sale, the
Certificate of Sheriff’s Sale, and the letter it sent to Eduarda Belo did not mention P. D. No. 694 as the basis for redemption. As
aptly ruled by the trial court -
In fairness to these mortgagors, their successors-in-interest, or innocent purchasers for value of their redemption rights, PNB
should have at least advised them that redemption would be governed by its Revised Charter or PD 69, and not by Act 3135 and
the Rules of Court, as commonly practiced… This practice of defendant Bank is manifestly unfair and unjust to these
redemptioners who are caught by surprise and usually taken aback by the enormous claims of the Bank not shown in the Notice
of Extrajudicial Sale or the Certificate of Sheriff’s Sale, as in this case. [31]
Moreover, the mortgage contract explicitly provides that “…. the mortgagee may immediately foreclose this mortgage judicially
in accordance with the Rules of Court or extrajudicially in accordance with Act No. 3135, as amended and Presidential Decree
No. 385…...”[32] Since the mortgage contract in this case is in the nature of a contract of adhesion as it was prepared solely by
respondent, it has to be interpreted in favor of petitioners. The respondent bank however tries to renege on this contractual
commitment by seeking refuge in the 1989 case of Sy v. Court of Appeals[33] wherein this Court ruled that the redemption price is
equal to the total amount of indebtedness to the bank’s claim inasmuch as Section 78 of the General Banking Act is an
amendment to Section 6 of Act No. 3135, despite the fact that the extrajudicial foreclosure procedure followed by the PNB was
explicitly under or in accordance with Act No. 3135.
In the 1996 case of China Banking Corporation v. Court of Appeals, [34] where the parties also stipulated that Act No. 3135 is the
controlling law in case of foreclosure, this Court ruled that;
By invoking the said Act, there is no doubt that it must “govern the manner in which the sale and redemption shall be effected.”
Clearly, the fundamental principle that contracts are respected as the law between the contracting parties finds application in the
present case, specially where they are not contrary to law, morals, good customs and public policy. [35]
More importantly, the ruling pronounced in Sy v. Court of Appeals and other cases,[36] that the General Banking Act and P.D. No.
694 shall prevail over Act No. 3135 with respect to the redemption price, does not apply here inasmuch as in the said cases the
redemptioners were the debtors themselves or their assignees, and not an accommodation mortgagor or the latter’s assignees such
as in the case at bar. In the said cases, the debtor-mortgagors were required to pay as redemption price their entire liability to the
bank inasmuch as they were obligated to pay their loan which is a principal obligation in the first place. On the other hand,
accommodation mortgagors as such are not in anyway liable for the payment of the loan or principal obligation of the
debtor/borrower. The liability of the accommodation mortgagors extends only up to the loan value of their mortgaged property
and not to the entire loan itself. Hence, it is only just that they be allowed to redeem their mortgaged property by paying only the
winning bid price thereof (plus interest thereon) at the public auction sale.
One wonders why respondent PNB invokes Act No. 3135 in its contracts without qualification and yet in the end appears to
disregard the same when it finds its provisions unfavorable to it. This is unfair to the other contracting party who in good faith
believes that respondent PNB would comply with the contractual agreement.
It is therefore our view and we hold that Section 78 of the General Banking Act, as amended by P.D. No. 1828, is inapplicable to
accommodation mortgagors in the redemption of their mortgaged properties.
While the petitioners, as assignees of Eduarda Belo, are not required to pay the entire claim of respondent PNB against the
principal debtors, spouses Eslabon, they can only exercise their right of redemption with respect to the parcel of land belonging to
Eduarda Belo, the accommodation mortgagor. Thus, they have to pay the bid price less the corresponding loan value of the
foreclosed four (4) residential lots of the spouses Eslabon.
The respondent PNB contends that to allow petitioners to redeem only the property belonging to their assignor, Eduarda Belo,
would violate the principle of indivisibility of mortgage contracts. We disagree.
Article 2089 of the Civil Code of the Philippines, provides that:
A pledge or mortgage is indivisible, even though the debt may be divided among the successors in interest of the debtor or of the
creditor.
Therefore, the debtor’s heir who has paid a part of the debt cannot ask for the proportionate extinguishment of the pledge or
mortgage as the debt is not completely satisfied.
Neither can the creditor’s heir who received his share of the debt return the pledge or cancel the mortgage, to the prejudice of the
other heirs who have not been paid.
From these provisions is excepted the case in which, there being several things given in mortgage or pledge, each one of them
guarantees only a determinate portion of the credit.
The debtor, in this case, shall have a right to the extinguishment of the pledge or mortgage as the portion of the debt for which
each thing is specially answerable is satisfied.
There is no dispute that the mortgage on the four (4) parcels of land by the Eslabon spouses and the other mortgage on the
property of Eduarda Belo both secure the loan obligation of respondents spouses Eslabon to respondent PNB. However, we are
not persuaded by the contention of the respondent PNB that the indivisibility concept applies to the right of redemption of an
accommodation mortgagor and her assignees. The jurisprudence in Philippine National Bank v. Agudelo [37] is enlightening to the
case at bar, to wit:
 xxx xxx xxx
However, Paz Agudelo y Gonzaga (the principal) x x x gave her consent to the lien on lot No. 878 x x x. This acknowledgment,
however, does not extend to lots Nos. 207 and 61… inasmuch as, although it is true that a mortgage is indivisible as to the
contracting parties and as to their successors in interest (Article 1860, Civil code), it is not so with respect to a third person who
did not take part in the constitution thereof either personally or through an agent x x x. Therefore, the only liability of the
defendant-appellant Paz Agudelo y Gonzaga is that which arises from the aforesaid acknowledgment but only with respect to the
lien and not to the principal obligation secured by the mortgage acknowledged by her to have been constituted on said lot No. 878
x x x. Such liability is not direct but a subsidiary one.[38]
xxx xxx xxx
Wherefore, it is hereby held that the liability contracted by the aforesaid defendant-appellant Paz Agudelo y Gonzaga is merely
subsidiary to that of Mauro A. Garrucho (the agent), limited to lot No. 87.
xxx xxx xxx
From the wordings of the law, indivisibility arises only when there is a debt, that is, there is a debtor-creditor relationship. But,
this relationship is wanting in the case at bar in the sense that petitioners are assignees of an accommodation mortgagor and not
of a debtor-mortgagor. Hence, it is fair and logical to allow the petitioners to redeem only the property belonging to their
assignor, Eduarda Belo.
With respect to the four (4) parcels of residential land belonging to the Eslabon spouses, petitioners - being total strangers to said
lots - lack legal personality to redeem the same. Fair play and justice demand that the respondent PNB’s interest of recovering its
entire bank claim should not be at the expense of petitioners, as assignees of Eduarda Belo, who is not indebted to it. Besides,
the letter[39] sent by respondent PNB to Eduarda Belo states that “your (Belo) mortgaged property/ies with PNB covered by TCT
# T-7493 was/were sold at public auction ....”. It further states that “You (Belo) have, therefore, one year from July 1, 1991
within which to redeem your mortgaged property/ies, should you desire to redeem it.” Respondent PNB never mentioned that she
was bound to redeem the entire mortgaged properties including the four (4) residential properties of the spouses Eslabon. The
letter was explicit in mentioning Eduarda Belo’s property only. From the said statement, there is then an admission on the part of
respondent PNB that redemption only extends to the subject property of Eduarda Belo for the reason that the notice of the sale
limited the redemption to said property.
WHEREFORE, the petition is partially granted in that the petitioners are hereby allowed to redeem only the property, covered
and described in Transfer Certificate of Title No. T-7493-Capiz registered in the name of Eduarda Belo, by paying only the bid
price less the corresponding loan value of the foreclosed four (4) residential lots of the respondents spouses Marcos and Arsenia
Eslabon, consistent with the Decision of the Regional Trial Court of Roxas City in Civil Case No. V-6182.
SO ORDERED
G.R. No. L-5 September 17, 1945
CO KIM CHAM (alias CO KIM CHAM), petitioner,
vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of Manila, respondents.1
FERIA, J.:
This petition for mandamus in which petitioner prays that the respondent judge of the lower court be ordered to continue the
proceedings in civil case No. 3012 of said court, which were initiated under the regime of the so-called Republic of the
Philippines established during the Japanese military occupation of these Islands.
The respondent judge refused to take cognizance of and continue the proceedings in said case on the ground that the proclamation
issued on October 23, 1944, by General Douglas MacArthur had the effect of invalidating and nullifying all judicial proceedings
and judgements of the court of the Philippines under the Philippine Executive Commission and the Republic of the Philippines
established during the Japanese military occupation, and that, furthermore, the lower courts have no jurisdiction to take
cognizance of and continue judicial proceedings pending in the courts of the defunct Republic of the Philippines in the absence of
an enabling law granting such authority. And the same respondent, in his answer and memorandum filed in this Court, contends
that the government established in the Philippines during the Japanese occupation were no de facto governments.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next day their Commander in Chief
proclaimed "the Military Administration under law over the districts occupied by the Army." In said proclamation, it was also
provided that "so far as the Military Administration permits, all the laws now in force in the Commonwealth, as well as executive
and judicial institutions, shall continue to be effective for the time being as in the past," and "all public officials shall remain in
their present posts and carry on faithfully their duties as before."
A civil government or central administration organization under the name of "Philippine Executive Commission was organized
by Order No. 1 issued on January 23, 1942, by the Commander in Chief of the Japanese Forces in the Philippines, and Jorge B.
Vargas, who was appointed Chairman thereof, was instructed to proceed to the immediate coordination of the existing central
administrative organs and judicial courts, based upon what had existed therefore, with approval of the said Commander in Chief,
who was to exercise jurisdiction over judicial courts.
The Chairman of the Executive Commission, as head of the central administrative organization, issued Executive Orders Nos. 1
and 4, dated January 30 and February 5, 1942, respectively, in which the Supreme Court, Court of Appeals, Courts of First
Instance, and the justices of the peace and municipal courts under the Commonwealth were continued with the same jurisdiction,
in conformity with the instructions given to the said Chairman of the Executive Commission by the Commander in Chief of
Japanese Forces in the Philippines in the latter's Order No. 3 of February 20, 1942, concerning basic principles to be observed by
the Philippine Executive Commission in exercising legislative, executive and judicial powers. Section 1 of said Order provided
that "activities of the administration organs and judicial courts in the Philippines shall be based upon the existing statutes, orders,
ordinances and customs. . . ."
On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no substantial change was effected thereby
in the organization and jurisdiction of the different courts that functioned during the Philippine Executive Commission, and in the
laws they administered and enforced.
On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur issued a proclamation to the
People of the Philippines which declared:
1. That the Government of the Commonwealth of the Philippines is, subject to the supreme authority of the Government of the
United States, the sole and only government having legal and valid jurisdiction over the people in areas of the Philippines free of
enemy occupation and control;
2. That the laws now existing on the statute books of the Commonwealth of the Philippines and the regulations promulgated
pursuant thereto are in full force and effect and legally binding upon the people in areas of the Philippines free of enemy
occupation and control; and
3. That all laws, regulations and processes of any other government in the Philippines than that of the said Commonwealth are
null and void and without legal effect in areas of the Philippines free of enemy occupation and control.
On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945, General MacArthur, on behalf of the
Government of the United States, solemnly declared "the full powers and responsibilities under the Constitution restored to the
Commonwealth whose seat is here established as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be resolved in the present case may be
reduced to the following:(1) Whether the judicial acts and proceedings of the court existing in the Philippines under the Philippine
Executive Commission and the Republic of the Philippines were good and valid and remained so even after the liberation or
reoccupation of the Philippines by the United States and Filipino forces; (2)Whether the proclamation issued on October 23,
1944, by General Douglas MacArthur, Commander in Chief of the United States Army, in which he declared "that all laws,
regulations and processes of any of the government in the Philippines than that of the said Commonwealth are null and void and
without legal effect in areas of the Philippines free of enemy occupation and control," has invalidated all judgements and judicial
acts and proceedings of the said courts; and (3) If the said judicial acts and proceedings have not been invalidated by said
proclamation, whether the present courts of the Commonwealth, which were the same court existing prior to, and continued
during, the Japanese military occupation of the Philippines, may continue those proceedings pending in said courts at the time the
Philippines were reoccupied and liberated by the United States and Filipino forces, and the Commonwealth of the Philippines
were reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of international law the judicial acts
and proceedings of the courts established in the Philippines under the Philippine Executive Commission and the Republic of the
Philippines were good and valid and remained good and valid even after the liberation or reoccupation of the Philippines by the
United States and Filipino forces.
1. It is a legal truism in political and international law that all acts and proceedings of the legislative, executive, and judicial
departments of a de facto government are good and valid. The question to be determined is whether or not the governments
established in these Islands under the names of the Philippine Executive Commission and Republic of the Philippines during the
Japanese military occupation or regime were de facto governments. If they were, the judicial acts and proceedings of those
governments remain good and valid even after the liberation or reoccupation of the Philippines by the American and Filipino
forces.
There are several kinds of de facto governments. The first, or government de facto in a proper legal sense, is that government that
gets possession and control of, or usurps, by force or by the voice of the majority, the rightful legal governments and maintains
itself against the will of the latter, such as the government of England under the Commonwealth, first by Parliament and later by
Cromwell as Protector. The second is that which is established and maintained by military forces who invade and occupy a
territory of the enemy in the course of war, and which is denominated a government of paramount force, as the cases of Castine,
in Maine, which was reduced to British possession in the war of 1812, and Tampico, Mexico, occupied during the war with
Mexico, by the troops of the United States. And the third is that established as an independent government by the inhabitants of a
country who rise in insurrection against the parent state of such as the government of the Southern Confederacy in revolt not
concerned in the present case with the first kind, but only with the second and third kinds of de facto governments.
Speaking of government "de facto" of the second kind, the Supreme Court of the United States, in the case of
Thorington vs. Smith (8 Wall., 1), said: "But there is another description of government, called also by publicists a government de
facto, but which might, perhaps, be more aptly denominated a government of paramount force. Its distinguishing characteristics
are (1), that its existence is maintained by active military power with the territories, and against the rightful authority of an
established and lawful government; and (2), that while it exists it necessarily be obeyed in civil matters by private citizens who,
by acts of obedience rendered in submission to such force, do not become responsible, or wrongdoers, for those acts, though not
warranted by the laws of the rightful government. Actual governments of this sort are established over districts differing greatly
in extent and conditions. They are usually administered directly by military authority, but they may be administered, also, civil
authority, supported more or less directly by military force. . . . One example of this sort of government is found in the case of
Castine, in Mine, reduced to British possession in the war of 1812 . . . U. S. vs. Rice (4 Wheaton, 253). A like example is found in
the case of Tampico, occupied during the war with Mexico, by the troops of the United States . . . Fleming vs. Page (9 Howard,
614). These were cases of temporary possessions of territory by lawfull and regular governments at war with the country of which
the territory so possessed was part."
The powers and duties of de facto governments of this description are regulated in Section III of the Hague Conventions of 1907,
which is a revision of the provisions of the Hague Conventions of 1899 on the same subject of said Section III provides "the
authority of the legislative power having actually passed into the hands of the occupant, the latter shall take steps in his power to
reestablish and insure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force
in the country."
According to the precepts of the Hague Conventions, as the belligerent occupant has the right and is burdened with the duty to
insure public order and safety during his military occupation, he possesses all the powers of a de facto government, and he can
suspended the old laws and promulgate new ones and make such changes in the old as he may see fit, but he is enjoined to
respect, unless absolutely prevented by the circumstances prevailing in the occupied territory, the municipal laws in force in the
country, that is, those laws which enforce public order and regulate social and commercial life of the country. On the other hand,
laws of a political nature or affecting political relations, such as, among others, the right of assembly, the right to bear arms, the
freedom of the press, and the right to travel freely in the territory occupied, are considered as suspended or in abeyance during the
military occupation. Although the local and civil administration of justice is suspended as a matter of course as soon as a country
is militarily occupied, it is not usual for the invader to take the whole administration into his own hands. In practice, the local
ordinary tribunals are authorized to continue administering justice; and judges and other judicial officers are kept in their posts if
they accept the authority of the belligerent occupant or are required to continue in their positions under the supervision of the
military or civil authorities appointed, by the Commander in Chief of the occupant. These principles and practice have the
sanction of all publicists who have considered the subject, and have been asserted by the Supreme Court and applied by the
President of the United States.
The doctrine upon this subject is thus summed up by Halleck, in his work on International Law (Vol. 2, p. 444): "The right of one
belligerent to occupy and govern the territory of the enemy while in its military possession, is one of the incidents of war, and
flows directly from the right to conquer. We, therefore, do not look to the Constitution or political institutions of the conqueror,
for authority to establish a government for the territory of the enemy in his possession, during its military occupation, nor for the
rules by which the powers of such government are regulated and limited. Such authority and such rules are derived directly from
the laws war, as established by the usage of the of the world, and confirmed by the writings of publicists and decisions of courts
— in fine, from the law of nations. . . . The municipal laws of a conquered territory, or the laws which regulate private rights,
continue in force during military occupation, excepts so far as they are suspended or changed by the acts of conqueror. . . . He,
nevertheless, has all the powers of a de facto government, and can at his pleasure either change the existing laws or make new
ones."
And applying the principles for the exercise of military authority in an occupied territory, which were later embodied in the said
Hague Conventions, President McKinley, in his executive order to the Secretary of War of May 19,1898, relating to the
occupation of the Philippines by United States forces, said in part: "Though the powers of the military occupant are absolute and
supreme, and immediately operate upon the political condition of the inhabitants, the municipal laws of the conquered territory,
such as affect private rights of person and property and provide for the punishment of crime, are considered as continuing in
force, so far as they are compatible with the new order of things, until they are suspended or superseded by the occupying
belligerent; and in practice they are not usually abrogated, but are allowed to remain in force and to be administered by the
ordinary tribunals, substantially as they were before the occupation. This enlightened practice is, so far as possible, to be adhered
to on the present occasion. The judges and the other officials connected with the administration of justice may, if they accept the
authority of the United States, continue to administer the ordinary law of the land as between man and man under the supervision
of the American Commander in Chief." (Richardson's Messages and Papers of President, X, p. 209.)
As to "de facto" government of the third kind, the Supreme Court of the United States, in the same case of
Thorington vs. Smith, supra, recognized the government set up by the Confederate States as a de factogovernment. In that case, it
was held that "the central government established for the insurgent States differed from the temporary governments at Castine and
Tampico in the circumstance that its authority did no originate in lawful acts of regular war; but it was not, on the account, less
actual or less supreme. And we think that it must be classed among the governments of which these are examples. . . .
In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States, discussing the validity of the acts
of the Confederate States, said: "The same general form of government, the same general laws for the administration of justice
and protection of private rights, which had existed in the States prior to the rebellion, remained during its continuance and
afterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of the national authority, or the just
rights of citizens under the Constitution, they are, in general, to be treated as valid and binding. As we said in Horn vs. Lockhart
(17 Wall., 570; 21 Law. ed., 657): "The existence of a state of insurrection and war did not loosen the bonds of society, or do
away with civil government or the regular administration of the laws. Order was to be preserved, police regulations maintained,
crime prosecuted, property protected, contracts enforced, marriages celebrated, estates settled, and the transfer and descent of
property regulated, precisely as in the time of peace. No one, that we are aware of, seriously questions the validity of judicial or
legislative Acts in the insurrectionary States touching these and kindered subjects, where they were not hostile in their purpose or
mode of enforcement to the authority of the National Government, and did not impair the rights of citizens under the
Constitution'. The same doctrine has been asserted in numerous other cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what occured or was done in respect of
such matters under the authority of the laws of these local de facto governments should not be disregarded or held to be
invalid merely because those governments were organized in hostility to the Union established by the national Constitution; this,
because the existence of war between the United States and the Confederate States did not relieve those who are within the
insurrectionary lines from the necessity of civil obedience, nor destroy the bonds of society nor do away with civil government or
the regular administration of the laws, and because transactions in the ordinary course of civil society as organized within the
enemy's territory although they may have indirectly or remotely promoted the ends of the de facto or unlawful government
organized to effect a dissolution of the Union, were without blame 'except when proved to have been entered intowith
actual intent to further invasion or insurrection:'" and "That judicial and legislative acts in the respective states composing the so-
called Confederate States should be respected by the courts if they were not hostile in their purpose or mode of enforcement to the
authority of the National Government, and did not impair the rights of citizens under the Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized by Order No. 1, issued on
January 23, 1942, by the Commander of the Japanese forces, was a civil government established by the military forces of
occupation and therefore a de facto government of the second kind. It was not different from the government established by the
British in Castine, Maine, or by the United States in Tampico, Mexico. As Halleck says, "The government established over an
enemy's territory during the military occupation may exercise all the powers given by the laws of war to the conqueror over the
conquered, and is subject to all restrictions which that code imposes. It is of little consequence whether such government be
called a military or civil government. Its character is the same and the source of its authority the same. In either case it is a
government imposed by the laws of war, and so far it concerns the inhabitants of such territory or the rest of the world, those laws
alone determine the legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the Philippine Executive Commission was a
civil and not a military government and was run by Filipinos and not by Japanese nationals, is of no consequence. In 1806, when
Napoleon occupied the greater part of Prussia, he retained the existing administration under the general direction of a french
official (Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington, on invading France, authorized
the local authorities to continue the exercise of their functions, apparently without appointing an English superior. (Wellington
Despatches, XI, 307.). The Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at least
in Alsace and Lorraine, in every department of administration and of every rank. (Calvo, pars. 2186-93; Hall, International Law,
7th ed., p. 505, note 2.)
The so-called Republic of the Philippines, apparently established and organized as a sovereign state independent from any other
government by the Filipino people, was, in truth and reality, a government established by the belligerent occupant or the Japanese
forces of occupation. It was of the same character as the Philippine Executive Commission, and the ultimate source of its
authority was the same — the Japanese military authority and government. As General MacArthur stated in his proclamation of
October 23, 1944, a portion of which has been already quoted, "under enemy duress, a so-called government styled as the
'Republic of the Philippines' was established on October 14, 1943, based upon neither the free expression of the people's will nor
the sanction of the Government of the United States." Japan had no legal power to grant independence to the Philippines or
transfer the sovereignty of the United States to, or recognize the latent sovereignty of, the Filipino people, before its military
occupation and possession of the Islands had matured into an absolute and permanent dominion or sovereignty by a treaty of
peace or other means recognized in the law of nations. For it is a well-established doctrine in International Law, recognized in
Article 45 of the Hauge Conventions of 1907 (which prohibits compulsion of the population of the occupied territory to swear
allegiance to the hostile power), the belligerent occupation, being essentially provisional, does not serve to transfer sovereignty
over the territory controlled although the de jure government is during the period of occupancy deprived of the power to exercise
its rights as such. (Thirty Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat., 246; Fleming vs.Page, 9
Howard, 603; Downes vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was a scheme contrived by
Japan to delude the Filipino people into believing in the apparent magnanimity of the Japanese gesture of transferring or turning
over the rights of government into the hands of Filipinos. It was established under the mistaken belief that by doing so, Japan
would secure the cooperation or at least the neutrality of the Filipino people in her war against the United States and other allied
nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino who, taking advantage of the
withdrawal of the American forces from the Islands, and the occupation thereof by the Japanese forces of invasion, had organized
an independent government under the name with the support and backing of Japan, such government would have been considered
as one established by the Filipinos in insurrection or rebellion against the parent state or the Unite States. And as such, it would
have been a de facto government similar to that organized by the confederate states during the war of secession and recognized as
such by the by the Supreme Court of the United States in numerous cases, notably those of Thorington vs. Smith,
Williams vs.Bruffy, and Badly vs. Hunter, above quoted; and similar to the short-lived government established by the Filipino
insurgents in the Island of Cebu during the Spanish-American war, recognized as a de facto government by the Supreme Court of
the United States in the case of McCleod vs. United States (299 U. S., 416). According to the facts in the last-named case, the
Spanish forces evacuated the Island of Cebu on December 25, 1898, having first appointed a provisional government, and shortly
afterwards, the Filipinos, formerly in insurrection against Spain, took possession of the Islands and established a republic,
governing the Islands until possession thereof was surrendered to the United States on February 22, 1898. And the said Supreme
Court held in that case that "such government was of the class of de facto governments described in I Moore's International Law
Digest, S 20, . . . 'called also by publicists a government de facto, but which might, perhaps, be more aptly denominated a
government of paramount force . . '." That is to say, that the government of a country in possession of belligerent forces in
insurrection or rebellion against the parent state, rests upon the same principles as that of a territory occupied by the hostile army
of an enemy at regular war with the legitimate power.
The governments by the Philippine Executive Commission and the Republic of the Philippines during the Japanese military
occupation being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts of justice of
those governments, which are not of a political complexion, were good and valid, and, by virtue of the well-known principle of
postliminy (postliminium) in international law, remained good and valid after the liberation or reoccupation of the Philippines by
the American and Filipino forces under the leadership of General Douglas MacArthur. According to that well-known principle in
international law, the fact that a territory which has been occupied by an enemy comes again into the power of its legitimate
government of sovereignty, "does not, except in a very few cases, wipe out the effects of acts done by an invader, which for one
reason or another it is within his competence to do. Thus judicial acts done under his control, when they are not of a political
complexion, administrative acts so done, to the extent that they take effect during the continuance of his control, and the various
acts done during the same time by private persons under the sanction of municipal law, remain good. Were it otherwise, the
whole social life of a community would be paralyzed by an invasion; and as between the state and the individuals the evil would
be scarcely less, — it would be hard for example that payment of taxes made under duress should be ignored, and it would be
contrary to the general interest that the sentences passed upon criminals should be annulled by the disappearance of the intrusive
government ." (Hall, International Law, 7th ed., p. 518.) And when the occupation and the abandonment have been each an
incident of the same war as in the present case, postliminy applies, even though the occupant has acted as conqueror and for the
time substituted his own sovereignty as the Japanese intended to do apparently in granting independence to the Philippines and
establishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a political complexion, are and remain
valid after reoccupation of a territory occupied by a belligerent occupant, is confirmed by the Proclamation issued by General
Douglas MacArthur on October 23, 1944, which declares null and void all laws, regulations and processes of the governments
established in the Philippines during the Japanese occupation, for it would not have been necessary for said proclamation to
abrogate them if they were invalid ab initio.
2. The second question hinges upon the interpretation of the phrase "processes of any other government" as used in the above-
quoted proclamation of General Douglas MacArthur of October 23, 1944 — that is, whether it was the intention of the
Commander in Chief of the American Forces to annul and void thereby all judgments and judicial proceedings of the courts
established in the Philippines during the Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to the judicial processes, but also to
administrative or legislative, as well as constitutional, processes of the Republic of the Philippines or other governmental agencies
established in the Islands during the Japanese occupation. Taking into consideration the fact that, as above indicated, according to
the well-known principles of international law all judgements and judicial proceedings, which are not of a political complexion,
of the de facto governments during the Japanese military occupation were good and valid before and remained so after the
occupied territory had come again into the power of the titular sovereign, it should be presumed that it was not, and could not
have been, the intention of General Douglas MacArthur, in using the phrase "processes of any other government" in said
proclamation, to refer to judicial processes, in violation of said principles of international law. The only reasonable construction
of the said phrase is that it refers to governmental processes other than judicial processes of court proceedings, for according to a
well-known rule of statutory construction, set forth in 25 R. C. L., p. 1028, "a statute ought never to be construed to violate the
law of nations if any other possible construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his government, may not unlawfully
suspend existing laws and promulgate new ones in the occupied territory, if and when the exigencies of the military occupation
demand such action. But even assuming that, under the law of nations, the legislative power of a commander in chief of military
forces who liberates or reoccupies his own territory which has been occupied by an enemy, during the military and before the
restoration of the civil regime, is as broad as that of the commander in chief of the military forces of invasion and occupation
(although the exigencies of military reoccupation are evidently less than those of occupation), it is to be presumed that General
Douglas MacArthur, who was acting as an agent or a representative of the Government and the President of the United States,
constitutional commander in chief of the United States Army, did not intend to act against the principles of the law of nations
asserted by the Supreme Court of the United States from the early period of its existence, applied by the Presidents of the United
States, and later embodied in the Hague Conventions of 1907, as above indicated. It is not to be presumed that General Douglas
MacArthur, who enjoined in the same proclamation of October 23, 1944, "upon the loyal citizens of the Philippines full respect
and obedience to the Constitution of the Commonwealth of the Philippines," should not only reverse the international policy and
practice of his own government, but also disregard in the same breath the provisions of section 3, Article II, of our Constitution,
which provides that "The Philippines renounces war as an instrument of national policy, and adopts the generally accepted
principles of international law as part of the law of the Nation."
Moreover, from a contrary construction great inconvenience and public hardship would result, and great public interests would be
endangered and sacrificed, for disputes or suits already adjudged would have to be again settled accrued or vested rights nullified,
sentences passed on criminals set aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines have been destroyed by fire
as a consequence of the war. And it is another well-established rule of statutory construction that where great inconvenience will
result from a particular construction, or great public interests would be endangered or sacrificed, or great mischief done, such
construction is to be avoided, or the court ought to presume that such construction was not intended by the makers of the law,
unless required by clear and unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives who reoccupies a territory occupied
by an enemy, may set aside or annul all the judicial acts or proceedings of the tribunals which the belligerent occupant had the
right and duty to establish in order to insure public order and safety during military occupation, would be sufficient to paralyze
the social life of the country or occupied territory, for it would have to be expected that litigants would not willingly submit their
litigation to courts whose judgements or decisions may afterwards be annulled, and criminals would not be deterred from
committing crimes or offenses in the expectancy that they may escaped the penalty if judgments rendered against them may be
afterwards set aside.
That the proclamation has not invalidated all the judgements and proceedings of the courts of justice during the Japanese regime,
is impliedly confirmed by Executive Order No. 37, which has the force of law, issued by the President of the Philippines on
March 10, 1945, by virtue of the emergency legislative power vested in him by the Constitution and the laws of the
Commonwealth of the Philippines. Said Executive order abolished the Court of Appeals, and provided "that all case which have
heretofore been duly appealed to the Court of Appeals shall be transmitted to the Supreme Court final decision." This provision
impliedly recognizes that the judgments and proceedings of the courts during the Japanese military occupation have not been
invalidated by the proclamation of General MacArthur of October 23, because the said Order does not say or refer to cases which
have been duly appealed to said court prior to the Japanese occupation, but to cases which had therefore, that is, up to March 10,
1945, been duly appealed to the Court of Appeals; and it is to be presumed that almost all, if not all, appealed cases pending in the
Court of Appeals prior to the Japanese military occupation of Manila on January 2, 1942, had been disposed of by the latter
before the restoration of the Commonwealth Government in 1945; while almost all, if not all, appealed cases pending on March
10, 1945, in the Court of Appeals were from judgments rendered by the Court of First Instance during the Japanese regime.
The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover when it is said that an occupier's
acts are valid and under international law should not be abrogated by the subsequent conqueror, it must be remembered that no
crucial instances exist to show that if his acts should be reversed, any international wrong would be committed. What does
happen is that most matters are allowed to stand by the restored government, but the matter can hardly be put further than this."
(Wheaton, International Law, War, 7th English edition of 1944, p. 245.) And from this quotion the respondent judge "draws the
conclusion that whether the acts of the occupant should be considered valid or not, is a question that is up to the restored
government to decide; that there is no rule of international law that denies to the restored government to decide; that there is no
rule of international law that denies to the restored government the right of exercise its discretion on the matter, imposing upon it
in its stead the obligation of recognizing and enforcing the acts of the overthrown government."
There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the occupier, such as the laws,
regulations and processes other than judicial of the government established by the belligerent occupant. But in view of the fact
that the proclamation uses the words "processes of any other government" and not "judicial processes" prisely, it is not necessary
to determine whether or not General Douglas MacArthur had power to annul and set aside all judgments and proceedings of the
courts during the Japanese occupation. The question to be determined is whether or not it was his intention, as representative of
the President of the United States, to avoid or nullify them. If the proclamation had, expressly or by necessary implication,
declared null and void the judicial processes of any other government, it would be necessary for this court to decide in the present
case whether or not General Douglas MacArthur had authority to declare them null and void. But the proclamation did not so
provide, undoubtedly because the author thereof was fully aware of the limitations of his powers as Commander in Chief of
Military Forces of liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from the usages established between
civilized nations, the laws of humanity and the requirements of the public of conscience, constitute or from the law of nations.
(Preamble of the Hague Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague
Regulations or Conventions which we have already quoted in discussing the first question, imposes upon the occupant the
obligation to establish courts; and Article 23 (h), section II, of the same Conventions, which prohibits the belligerent occupant "to
declare . . . suspended . . . in a Court of Law the rights and action of the nationals of the hostile party," forbids him to make any
declaration preventing the inhabitants from using their courts to assert or enforce their civil rights. (Decision of the Court of
Appeals of England in the case of Porter vs. Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent occupant is required to
establish courts of justice in the territory occupied, and forbidden to prevent the nationals thereof from asserting or enforcing
therein their civil rights, by necessary implication, the military commander of the forces of liberation or the restored government
is restrained from nullifying or setting aside the judgments rendered by said courts in their litigation during the period of
occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be thwarted, for to declare them null and
void would be tantamount to suspending in said courts the right and action of the nationals of the territory during the military
occupation thereof by the enemy. It goes without saying that a law that enjoins a person to do something will not at the same time
empower another to undo the same. Although the question whether the President or commanding officer of the United States
Army has violated restraints imposed by the constitution and laws of his country is obviously of a domestic nature, yet, in
construing and applying limitations imposed on the executive authority, the Supreme Court of the United States, in the case of
Ochoa, vs. Hernandez (230 U.S., 139), has declared that they "arise from general rules of international law and from fundamental
principles known wherever the American flag flies."
In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in command of the forces of the United
States in South Carolina after the end of the Civil War, wholly annulling a decree rendered by a court of chancery in that state in a
case within its jurisdiction, was declared void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428),
and July 19 of the same year (15 id., 14), which defined the powers and duties of military officers in command of the several
states then lately in rebellion. In the course of its decision the court said; "We have looked carefully through the acts of March 2,
1867 and July 19, 1867. They give very large governmental powers to the military commanders designated, within the States
committed respectively to their jurisdiction; but we have found nothing to warrant the order here in question. . . . The clearest
language would be necessary to satisfy us that Congress intended that the power given by these acts should be so exercised. . . . It
was an arbitrary stretch of authority, needful to no good end that can be imagined. Whether Congress could have conferred the
power to do such an act is a question we are not called upon to consider. It is an unbending rule of law that the exercise of
military power, where the rights of the citizen are concerned, shall never be pushed beyond what the exigency requires.
(Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs. Moysten, 1 Cowp., 161; s.c., 1 Smith's L.C.,
pt. 2, p. 934.) Viewing the subject before us from the standpoint indicated, we hold that the order was void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which declared that "all laws,
regulations and processes of any other government in the Philippines than that of the said Commonwealth are null and void
without legal effect in areas of the Philippines free of enemy occupation and control," has not invalidated the judicial acts and
proceedings, which are not a political complexion, of the courts of justice in the Philippines that were continued by the Philippine
Executive Commission and the Republic of the Philippines during the Japanese military occupation, and that said judicial acts and
proceedings were good and valid before and now good and valid after the reoccupation of liberation of the Philippines by the
American and Filipino forces.
3. The third and last question is whether or not the courts of the Commonwealth, which are the same as those existing prior to,
and continued during, the Japanese military occupation by the Philippine Executive Commission and by the so-called Republic of
the Philippines, have jurisdiction to continue now the proceedings in actions pending in said courts at the time the Philippine
Islands were reoccupied or liberated by the American and Filipino forces, and the Commonwealth Government was restored.
Although in theory the authority the authority of the local civil and judicial administration is suspended as a matter of course as
soon as military occupation takes place, in practice the invader does not usually take the administration of justice into his own
hands, but continues the ordinary courts or tribunals to administer the laws of the country which he is enjoined, unless absolutely
prevented, to respect. As stated in the above-quoted Executive Order of President McKinley to the Secretary of War on May 19,
1898, "in practice, they (the municipal laws) are not usually abrogated but are allowed to remain in force and to be administered
by the ordinary tribunals substantially as they were before the occupation. This enlightened practice is, so far as possible, to be
adhered to on the present occasion." And Taylor in this connection says: "From a theoretical point of view it may be said that the
conqueror is armed with the right to substitute his arbitrary will for all preexisting forms of government, legislative, executive and
judicial. From the stand-point of actual practice such arbitrary will is restrained by the provision of the law of nations which
compels the conqueror to continue local laws and institution so far as military necessity will permit." (Taylor, International Public
Law, p.596.) Undoubtedly, this practice has been adopted in order that the ordinary pursuits and business of society may not be
unnecessarily deranged, inasmuch as belligerent occupation is essentially provisional, and the government established by the
occupant of transient character.
Following these practice and precepts of the law of nations, Commander in Chief of the Japanese Forces proclaimed on January
3, 1942, when Manila was occupied, the military administration under martial law over the territory occupied by the army, and
ordered that "all the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall continue to be
affective for the time being as in the past," and "all public officials shall remain in their present post and carry on faithfully their
duties as before." When the Philippine Executive Commission was organized by Order No. 1 of the Japanese Commander in
Chief, on January 23, 1942, the Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 of January 30 and
February 5, respectively, continued the Supreme Court, Court of Appeals, Court of First Instance, and justices of the peace of
courts, with the same jurisdiction in conformity with the instructions given by the Commander in Chief of the Imperial Japanese
Army in Order No. 3 of February 20, 1942. And on October 14, 1943 when the so-called Republic of the Philippines was
inaugurated, the same courts were continued with no substantial change in organization and jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military occupation had been continued
during the Japanese military administration, the Philippine Executive Commission, and the so-called Republic of the Philippines,
it stands to reason that the same courts, which had become reestablished and conceived of as having in continued existence upon
the reoccupation and liberation of the Philippines by virtue of the principle of postliminy (Hall, International Law, 7th ed., p.
516), may continue the proceedings in cases then pending in said courts, without necessity of enacting a law conferring
jurisdiction upon them to continue said proceedings. As Taylor graphically points out in speaking of said principles "a state or
other governmental entity, upon the removal of a foreign military force, resumes its old place with its right and duties
substantially unimpaired. . . . Such political resurrection is the result of a law analogous to that which enables elastic bodies to
regain their original shape upon removal of the external force, — and subject to the same exception in case of absolute crushing
of the whole fibre and content." (Taylor, International Public Law, p. 615.)
The argument advanced by the respondent judge in his resolution in support in his conclusion that the Court of First Instance of
Manila presided over by him "has no authority to take cognizance of, and continue said proceedings (of this case) to final
judgment until and unless the Government of the Commonwealth of the Philippines . . . shall have provided for the transfer of the
jurisdiction of the courts of the now defunct Republic of the Philippines, and the cases commenced and the left pending therein,"
is "that said courts were a government alien to the Commonwealth Government. The laws they enforced were, true enough, laws
of the Commonwealth prior to Japanese occupation, but they had become the laws — and the courts had become the institutions
— of Japan by adoption (U.S. vs. Reiter. 27 F. Cases, No. 16146), as they became later on the laws and institutions of the
Philippine Executive Commission and the Republic of the Philippines."
The court in the said case of U.S. vs. Reiter did not and could not say that the laws and institutions of the country occupied if
continued by the conqueror or occupant, become the laws and the courts, by adoption, of the sovereign nation that is militarily
occupying the territory. Because, as already shown, belligerent or military occupation is essentially provisional and does not serve
to transfer the sovereignty over the occupied territory to the occupant. What the court said was that, if such laws and institutions
are continued in use by the occupant, they become his and derive their force from him, in the sense that he may continue or set
them aside. The laws and institution or courts so continued remain the laws and institutions or courts of the occupied territory.
The laws and the courts of the Philippines, therefore, did not become, by being continued as required by the law of nations, laws
and courts of Japan. The provision of Article 45, section III, of the Hague Conventions of 1907 which prohibits any compulsion
of the population of occupied territory to swear allegiance to the hostile power, "extends to prohibit everything which would
assert or imply a change made by the invader in the legitimate sovereignty. This duty is neither to innovate in the political life of
the occupied districts, nor needlessly to break the continuity of their legal life. Hence, so far as the courts of justice are allowed to
continue administering the territorial laws, they must be allowed to give their sentences in the name of the legitimate sovereign "
(Westlake, Int. Law, Part II, second ed., p. 102). According to Wheaton, however, the victor need not allow the use of that of the
legitimate government. When in 1870, the Germans in France attempted to violate that rule by ordering, after the fall of the
Emperor Napoleon, the courts of Nancy to administer justice in the name of the "High German Powers occupying Alsace and
Lorraine," upon the ground that the exercise of their powers in the name of French people and government was at least an implied
recognition of the Republic, the courts refused to obey and suspended their sitting. Germany originally ordered the use of the
name of "High German Powers occupying Alsace and Lorraine," but later offered to allow use of the name of the Emperor or a
compromise. (Wheaton, International Law, War, 7th English ed. 1944, p. 244.)
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established continues until changed by the
some competent legislative power. It is not change merely by change of sovereignty." (Joseph H. Beale, Cases on Conflict of
Laws, III, Summary Section 9, citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the
Conflict on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum in law. From the time the law comes into
existence with the first-felt corporateness of a primitive people it must last until the final disappearance of human society. Once
created, it persists until a change take place, and when changed it continues in such changed condition until the next change, and
so forever. Conquest or colonization is impotent to bring law to an end; in spite of change of constitution, the law continues
unchanged until the new sovereign by legislative acts creates a change."
As courts are creatures of statutes and their existence defends upon that of the laws which create and confer upon them their
jurisdiction, it is evident that such laws, not being a political nature, are not abrogated by a change of sovereignty, and continue in
force "ex proprio vigore" unless and until repealed by legislative acts. A proclamation that said laws and courts are expressly
continued is not necessary in order that they may continue in force. Such proclamation, if made, is but a declaration of the
intention of respecting and not repealing those laws. Therefore, even assuming that Japan had legally acquired sovereignty over
these Islands, which she had afterwards transferred to the so-called Republic of the Philippines, and that the laws and the courts of
these Islands had become the courts of Japan, as the said courts of the laws creating and conferring jurisdiction upon them have
continued in force until now, it necessarily follows that the same courts may continue exercising the same jurisdiction over cases
pending therein before the restoration of the Commonwealth Government, unless and until they are abolished or the laws creating
and conferring jurisdiction upon them are repealed by the said government. As a consequence, enabling laws or acts providing
that proceedings pending in one court be continued by or transferred to another court, are not required by the mere change of
government or sovereignty. They are necessary only in case the former courts are abolished or their jurisdiction so change that
they can no longer continue taking cognizance of the cases and proceedings commenced therein, in order that the new courts or
the courts having jurisdiction over said cases may continue the proceedings. When the Spanish sovereignty in the Philippine
Islands ceased and the Islands came into the possession of the United States, the "Audiencia" or Supreme Court was continued
and did not cease to exist, and proceeded to take cognizance of the actions pending therein upon the cessation of the Spanish
sovereignty until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court created in Chapter II of Act No.
136 was substituted in lieu thereof. And the Courts of First Instance of the Islands during the Spanish regime continued taking
cognizance of cases pending therein upon the change of sovereignty, until section 65 of the same Act No. 136 abolished them and
created in its Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no enabling acts were
enacted during the Japanese occupation, but a mere proclamation or order that the courts in the Island were continued.
On the other hand, during the American regime, when section 78 of Act No. 136 was enacted abolishing the civil jurisdiction of
the provost courts created by the military government of occupation in the Philippines during the Spanish-American War of 1898,
the same section 78 provided for the transfer of all civil actions then pending in the provost courts to the proper tribunals, that is,
to the justices of the peace courts, Court of First Instance, or Supreme Court having jurisdiction over them according to law. And
later on, when the criminal jurisdiction of provost courts in the City of Manila was abolished by section 3 of Act No. 186, the
same section provided that criminal cases pending therein within the jurisdiction of the municipal court created by Act No. 183
were transferred to the latter.
That the present courts as the same courts which had been functioning during the Japanese regime and, therefore, can continue the
proceedings in cases pending therein prior to the restoration of the Commonwealth of the Philippines, is confirmed by Executive
Order No. 37 which we have already quoted in support of our conclusion in connection with the second question. Said Executive
Order provides"(1) that the Court of Appeals created and established under Commonwealth Act No. 3 as amended, be abolished,
as it is hereby abolished," and "(2) that all cases which have heretofore been duly appealed to the Court of Appeals shall be
transmitted to the Supreme Court for final decision. . . ." In so providing, the said Order considers that the Court of Appeals
abolished was the same that existed prior to, and continued after, the restoration of the Commonwealth Government; for, as we
have stated in discussing the previous question, almost all, if not all, of the cases pending therein, or which had theretofore (that
is, up to March 10, 1945) been duly appealed to said court, must have been cases coming from the Courts of First Instance during
the so-called Republic of the Philippines. If the Court of Appeals abolished by the said Executive Order was not the same one
which had been functioning during the Republic, but that which had existed up to the time of the Japanese occupation, it would
have provided that all the cases which had, prior to and up to that occupation on January 2, 1942, been dully appealed to the said
Court of Appeals shall be transmitted to the Supreme Court for final decision.
G.R. No. L-37251 August 31, 1981
CITY OF MANILA and CITY TREASURER, petitioners-appellants,
vs.
JUDGE AMADOR E. GOMEZ of the Court of First Instance of Manila and ESSO PHILIPPINES, INC.,respondents-
appellees.
AQUINO, J.:
This case is about the legality of the additional one-half percent (½%) realty tax imposed by the City of Manila.
Section 64 of the Revised Charter of Manila, Republic Act No. 409, which took effect on June 18, 1949, fixes the annual realty
tax at one and one-half percent (1-½ %).
On the other hand, section 4 of the Special Education Fund Law, Republic Act No. 5447, which took effect on January 1, 1969,
imposed "an annual additional tax of one per centum on the assessed value of real property in addition to the real property tax
regularly levied thereon under existing laws" but "the total real property tax shall not exceed a maximum of three per centrum.
That maximum limit gave the municipal board of Manila the Idea of fixing the realty tax at three percent. So, by means of
Ordinance No. 7125, approved by the city mayor on December 26, 1971 and effective beginning the third quarter of 1972, the
board imposed an additional one-half percent realty tax. The ordinance reads:
SECTION 1. An additional annual realty tax of one-half percent (1/2%), or in short a total of three percent (3%) realty tax (1-½%
pursuant to the Revised Charter of Manila; 1% per Republic Act No. 5447; and ½% per this Ordinance) on the assessed value ...
is hereby levied and imposed.
Esso Philippines, Inc. paid under protest the sum of P16,092.69 as additional one-half percent realty tax for the third quarter of
1972 on its land and machineries located in Manila.
On November 9, 1972, Esso filed a complaint in the Court of First Instance of Manila for the recovery of the said amount. It
contended that the additional one-half percent tax is void because it is not authorized by the city charter nor by any law (Civil
Case No. 88827).

It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment, the proceedings in cases, not of After hearing, the trial court declared the tax ordinance void and ordered the city treasurer of Manila to refund to Esso the said
political complexion, pending therein at the time of the restoration of the Commonwealth Government. tax. The City of Manila and its treasurer appealed to this Court under Republic Act No. 5440 (which superseded Rule 42 of the
Rules of Court).
Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has jurisdiction to continue to final
judgment the proceedings in civil case No. 3012, which involves civil rights of the parties under the laws of the Commonwealth The only issue is the validity of the tax ordinance or the legality of the additional one-half percent realty tax.
Government, pending in said court at the time of the restoration of the said Government; and that the respondent judge of the
court, having refused to act and continue him does a duty resulting from his office as presiding judge of that court, mandamus is
The petitioners in their manifestation of March 17, 1981 averred that the said tax ordinance is still in force; that Ordinance No.
the speedy and adequate remedy in the ordinary course of law, especially taking into consideration the fact that the question of
7566, which was enacted on September 10, 1974, imposed a two percent tax on commercial real properties (like the real
jurisdiction herein involved does affect not only this particular case, but many other cases now pending in all the courts of these
properties of Esso and that that two percent tax plus the one percent tax under the Special Education Fund Law gives a total of
Islands.
three percent realty tax on commercial properties.

In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to the respondent judge of the
Esso Philippines, Inc., now Petrophil Corporation, in its manifestation of March 2, 1981, revealed that up to this time it has been
Court of First Instance of Manila, ordering him to take cognizance of and continue to final judgment the proceedings in civil case
paying the additional one-half percent tax and that from 1975 to 1980 it paid the total sum of P4,206,240.71 as three percent tax
No. 3012 of said court. No pronouncement as to costs. So ordered.
on its real properties.
In this connection, it is relevant to note that section 39(2) of the Real Property Tax Code, Presidential Decree No. 464, which took
effect on June 1, 1974, provides that a city council may, by ordinance, impose a realty tax "of not less than one half of one percent
but not more than two percent of the assessed value of real property".
Section 41 of the said Code reaffirms the one percent tax on real property for the Special Education Fund in addition to the basic
two percent realty tax.
So, there is no question now that the additional one-half percent realty tax is valid under the Real Property Tax Code. What is in
controversy is the legality of the additional one-half percent realty tax for the two-year period from the third quarter of 1972 up to
the second quarter of 1974.
We hold that the doctrine of implications in statutory construction sustains the City of Manila's contention that the additional one-
half percent realty tax is sanctioned by the provision in section 4 of the Special Education Fund Law that "the total real property
tax shall not exceed a maximum of three per centum.
The doctrine of implications means that "that which is plainly implied in the language of a statute is as much a part of it as that
which is expressed" (In re McCulloch Dick, 38 Phil. 41, 45, 90; 82 C.J.S. 632, 73 Am Jur 2nd 404).
While the 1949 Revised Charter of Manila fixed the realty tax at one and a half percent, on the other hand, the 1968 Special
Education Fund Law definitively fixed three percent as the maximum real property tax of which one percent would accrue to the
Special Education Fund.
The obvious implication is that an additional one-half percent tax could be imposed by municipal corporations. Inferentially, that
law fixed at two percent the realty tax that would accrue to a city or municipality.
And the fact that the 1974 Real Property Tax Code specifically fixes the real property tax at two percent confirms the prior
intention of the lawmaker to impose two percent as the realty tax proper. That was also the avowed intention of the questioned
ordinance.
In invalidating the ordinance, the trial court upheld the view of Esso Philippines, Inc, that the Special Education Fund Law refers
to a contingency where the application of the additional one percent realty tax would have the effect of raising the total realty tax
to more than three percent and that it cannot be construed as an authority to impose an additional realty tax beyond the one
percent fixed by the said law.
At first glance, that appears to be a specious or reasonable contention. But the fact remains that the city charter fixed the realty tax
at 1-½% and the later law, the Special Education Fund Law, provides for three percent as the maximum realty tax of which one
percent would be earmarked for the education fund.
The unavoidable inference is that the later law authorized the imposition of an additional one-half percent realty tax since the
contingency referred to by the complaining taxpayer would not arise in the City of Manila.
It is true, as contended by the taxpayer, that the power of a municipal corporation to levy a tax should be expressly granted and
should not be merely inferred. But in this case, the power to impose a realty tax is not controverted. What is disputed is
the amount thereof, whether one and one-half percent only or two percent. (See sec. 2 of Rep. Act No. 2264.)
As repeatedly observed, section 4 of the Special Education Fund Law, as confirmed by the Real Property Tax Code, in
prescribing a total realty tax of three percent impliedly authorizes the augmentation by one-half percent of the pre-existing one
and one- half percent realty tax.
WHEREFORE, the decision of the trial court is reversed and set aside. The complaint of Esso Philippines, Inc. for recovery of the
realty tax paid under protest is dismissed. No costs.
SO ORDERED.
G.R. Nos. L-32560-61 October 22, 1970
ESMERALDO M. GATCHALIAN, petitioner on his behalf and on behalf of all others similarly situated,
vs.
COMMISSION ON ELECTIONS, respondent.
MAKASIAR, J.:.
Petitioner Esmeraldo M. Gatchalian alleges that he is a candidate for delegate to the Constitutional Convention for the first
district of Rizal, having filed his certificates of candidacy with the Commission on Elections on September 8, 1970.
It appears that pursuant to the request of the advertising firms and associations of the Philippines, the Commission on Elections
promulgated on August 13, 1970 Comelec Resolution No. RR-707 holding that "donations of billboards to the Commission by
foreigners or companies or corporations owned and controlled partially or wholly by foreigners are not covered by the provision
of Sec. 56 of the Revised Election Code." (See Annex A.)
On September 17, 1970, pursuant to the request of the Advertising Council of the Philippines, the Commission on Elections
promulgated Resolution No. RR-731 to the effect that the ban in Sec. 46 of the Revised Election Code, as amended, does not
cover the projected campaign for funds and other contributions by the Advertising Council of the Philippines and others similarly
situated, during the 120 days immediately preceding a regular or special election; and "that in line with the ruling in its resolution
numbered RR-707, donations and contributions for the above campaign may be received from foreigners, companies or
corporation owned and/or controlled wholly or partially by foreigners. (See Annex B.)
On September 21, 1970, petitioner filed a petition with the Commission on Elections impugning the validity of said Resolutions
Nos. RR-707 and 731 as violative of Sec. 56 of the Revised Election Code. (See Annex C)
On the same day, September 21, 1970, the Commission on Elections denied the petitioner's petition on, the ground "that
contributions by foreigners to the Comelec Billboards Committee for the purpose of financing costs of Comelec billboards are not
made in aid or support of any particular candidate in a particular district and that the allocation of space for its candidate is
allowed by lottery, nor would it in any way influence the result of the election, ... . (See Annex D)
From the said order of the Comelec denying his petition, petitioner, pursuant to Sec. 2 of Art. X of the Constitution, filed a notice
of appeal and the present petition for a review by this Tribunal of the said Comelec ruling, contending that said order of the
Comelec is null and void as contrary to law or having been issued in excess of the powers of the Commission on Elections or in
grave abuse of its discretion, and praying for a writ of preliminary as well as permanent injunction.
No writ of preliminary injunction nor restraining order was issued, however, by reason of the fact that the Comelec itself
refrained from enforcing the questioned Resolutions Nos. RR-707 and 731 and had given the corresponding advice to the
advertising firms and associations concerned, including the Advertising Council of the Philippines.
Sec. 56 of the Revised Election Code, as amended, provides that.
No foreigner shall aid any candidate, directly or indirectly, or to take part in or to influence in any manner any elections.
The prohibited active intervention of foreigners thereunder may consist of:.
(1) aiding any candidate, directly or indirectly, in any election;
(2) taking part in any election; and
(3) influencing in any manner any election.
I stockholders or members have common cause with their corporation or organized group, such artificial person or organized group
To dissipate any doubt, although not raised by the parties, the first question is whether the term "any elections" as used in Sec. 56
of the Revised Election Code as amended, includes the election of delegates to the Constitutional Convention under Resolution of
both Houses No. 2 of March 16, 1967, as amended by Resolution of both Houses No. 4 of June 17, 1969, as implemented by Rep.
Act No. 6132.
The affirmative answer is beyond debate; because Sec. 8 of R.A. No. 6132 expressly enumerates prohibited acts "In addition to
and supplementing prohibited acts provided for in the Revised Election Code." Said Sec. 56 of the Revised Election Code, as
amended, defines one such prohibited act or corrupt election practice. Moreover, Sec. 2 of Res. No. 2 states that the election of
delegates to the Constitutional Convention "shall be held on the second Tuesday in November, 1970 in accordance with the
Revised Election Code," which is restated in Sec. 6 of R.A. No. 6132.
The same conclusion finds support in controlling jurisprudence.
Thus, We held recently that the term "any election" in Sec. 2 of Art. XII of the Constitution, which prohibits officers and
employees in the Civil Service, including members of the Armed Forces, from engaging "directly or indirectly in partisan
political activities" or "taking part in any election except to vote," comprehends or applies to election of delegates Constitutional
Convention.1
The term "any election" in a statute making it criminal to bet on any duel or on the result of any election includes all elections
held in the State. 2 It means not only any election then provided by the laws and the Constitution, but any election which may
thereafter be established or required to be held pursuant to law. 3
II
The second issue is whether the term "foreigner as employed in the law includes both natural and juridical persons or associations
or organized groups, with or without legal personality.
Under Sec. 39 of Art. III of the Revised Election Code, "the term "person" includes an individual, partnership, committee,
association, corporation and any other organization or group of persons." 4 Sec. 39 refers to contributions from or expenditures by
any person for the purpose of influencing or attempting to influence the election of candidates.
The contributors to electoral campaign funds are either natural or artificial persons, or an organized group of persons without
separate legal personality. Sec. 39 even goes further by including in the definition of the term "person," a committee or any other
group of persons which may not have any juridical personality.
Moreover, under Sec. 185 of the Revised Election Code, as amended, Sec. 56, a violation of which is a serious election offense
under Sec. 183 of the same Code, may be violated by an entity which, if found guilty, shall be sentenced to pay a fine of from five
thousand pesos (P5,000.00) to one hundred thousand pesos (P100,000.00) and its President, officials and employees performing
duties connected with the offense committed are liable as principals, accomplices or accessories as the case may be, in addition
"to the responsibility of such entity."5
To limit the term "foreigner" to natural persons would be unrealistic and would remove much of the bite in the prohibition. It
should not be disputed that juridical persons or organized groups — whether civic, fraternal, religious, professional, trade, or
labor — have more funds than individuals with which to subsidize a candidate. Consequently, the influence of a juridical person
or organized group, which is a contributor or donor, is greater than that of any natural person. Furthermore, any, juridical person
organized group has more interests to protect than any of its component members or stockholders. And if the interest of the
individual stockholders or members of the juridical person or organized group were also to be considered, because usually the
together with its members will be under a more compelling motivation to aid a candidate or to influence the conduct as well as the
outcome of the election — even to frustrate the holding of the election if it is necessary to protect, if not enhance, their interests.
It has likewise been held that in the absence of an expressed statutory provision or instruction the word "person" comprehends
private corporations unless it appears that it is used in a more limited sense, and that prima faciethe word "person" under even a
penal statute which is intended to inhibit an act, must be a "person in law" that is, an artificial as well as a natural person and
therefore includes corporations if they are within the sphere and purpose of the statute. 6
There is nothing in the Revised Election Code, much less in Sec. 56 itself, indicting that the term "foreigner" is limited only to
natural persons. Neither is there any provision in the same Revised Election Code expressly or impliedly suggesting that the
circumstances of an artificial person in law are not identical to those of natural persons covered by the prohibition in the Revised
Election Code. On the contrary, there is greater reason to believe that the law-maker feared more the assistance and influence of
artificial persons in the elections than the aid of natural persons. Hence, the law utilizes the more generic term "foreigner."
It is a cardinal rule of statutory construction that a law is understood to contain, by implication, if not by its expressed terms, all
such provisions as may be necessary to effectuate its object and purpose. And that the whole and every part of the statute must be
considered in fixing the meaning of its part.7
The law penalizing corrupt election practices should be given a reasonable construction in the interests of the purity of the
elections. 8 Since, as heretofore stated, the danger of desecration of the sanctity of the ballot is greater from artificial persons by
reason of their vastly superior financial and other resources including the combined voting power of their members and
employees, the term "foreigner" in Sec. 56 should be understood to include artificial persons and other organized groups, without
distinct legal personality.
The position of the respondents Chairman and members of the Commission on Elections that the Advertising Council of the
Philippines and the other advertising firms, associations and organizations are the donors, and not the alien contributors for the
construction of Comelec billboards, is as inaccurate as it is specious.
Inaccurate, because the very Resolution No. RR-707 states that the advertising firms and associations mentioned therein "request
an opinion from the Commission whether or not foreigners or companies or corporations which are owned partially or wholly by
foreigners or with foreign stockholders may contribute to or donate billboards to the Commission without violating Sec. 56 of the
Revised Election Code ..." (See Annex A), re-emphasized by its concluding paragraph that "in line with the above rulings of the
Commission in the previous elections the Commission hereby RESOLVES to hold that the donations of billboards to the
Commission by foreigners or companies or corporations owned and controlled partially or wholly by foreigners are not covered
by the prohibition of Sec. 56 of the Revised Election Code." (Emphasis supplied)
Specious, because the advertising firms and organizations are merely the collectors of such donations or contributions; they do
not own the money or materials contributed or donated by the foreigners who are the actual benefactors.
III
The third issue is whether the term "any candidate" in Sec. 56 comprehends "some candidates" or "all candidates."
The term "any can candidate" should be construed also to mean some or all candidates. It has been held that the term "any
candidate" voted for at any election refers to "candidates"; 9 and that the term "any person" is not limited to "any person" in the
singular, but is applicable as well to two or more persons. 10.
When the context so indicates, the word may be construed to mean, and indeed it has been frequently used in its enlarged and
plural sense, as meaning "all," "all or every," "each," "each one of all," "every," without limitation; indefinite number or quantity,
an indeterminate unit or number of units out of many or all, one or more as the case may be, several, some. 11
Penal laws, like Sec. 56 and the Revised Penal Code, usually refer to the felon in the singular.
It is possible that, to play safe or for his own protection, the donor may aid or assist both opponents or all of them, especially if
they have approximately the same political strength or following.
IV
The fourth question is whether by such donations, the foreigner.
(a) aids any candidate directly or indirectly, or
(b) takes a part in any election, or
(c) influences in any manner any election.
12
In law, the word "aid" is understood to mean to support, to help, to assist or to strengthen or to act in cooperation with.
On the other hand, the term "to take part" means to participate or to engage in; 13 while the term "influence" means to use the
party's endeavors, though he may not be able to carry his point, or to exert or have an effect on the nature or behaviour
of, or affect the action or thought of, or modify; or to sway; to persuade; to affect; to have an effect on the condition or
development of; to modify or act upon physically, especially in some gentle, subtle, or gradual way; or to exert or maintain
a mental or moral power upon or over; to effect or sway by modifications, feelings or conduct. 14 (Emphasis supplied).
The fact that the Comelec allowed:.
(1) Operations Quick Count 1969 (OQC '69), established by civic-minded citizens for the purpose of reporting truthfully and
speedily the results of the 1969 Presidential Elections, to accept monetary and material contributions from foreign individuals and
corporations to finance its activities;
(2) Robert L. Stewart, an American citizen who owns TV Channel 7, to utilize his Radio-TV station to disseminate information
and public features beneficial to public interests in connection with the elections; and
(3) Time-Ad, Inc. whose President is an alien who owns 25% of its stocks, to accept political commercials from candidates for
inclusion in their television programs.
as not contravening Sec. 56 of the Revised Election Code, does not make the questioned Resolutions Nos. RR-707 and 731 legal,
nor the 1969 resolutions regarding OQC '69, Channel 7, and Time-Ad, Inc., valid and binding on this Tribunal.
It would indeed be a myopic view and the height of naivete to believe that donations for Comelec billboards will not aid the
candidates nor in any way influence the elections, no matter how small the contributions may be; although parenthetically, the
needed amount of two hundred fifty thousand pesos (P250,000.00) for billboards is not insubstantial. The fact that alien donors
have no direct participation in the distribution or allocation of the Comelec billboards, does not inevitably mean that they have no
participation in the elections nor exercise any influence in the same, nor give assistance to any candidate. Billboards are means of
propaganda. Supplying billboards to all candidates is an assistance greater than the aid that may be given to one candidate. The
influence therefore that may be exerted jointly by the donors on all the candidates is correspondingly as great, because all the
candidates benefited thereby will naturally be grateful to the donors for such needed materials for their publicity or propaganda.
This is even worse than supporting a single candidate, because if the latter's opponent wins he will not be amenable to influence
by those who supported the adversary — out in donations of this sort, whoever wins will feel grateful. The fact that the identity of
the donors is not publicized, does not necessarily mean that their identity cannot be made known to the candidates themselves
thru adroit subtle means. The names of the donors will be entered in the books of the collecting advertising agencies or
associations which must acknowledge receipts thereof and must account for the same in their itemized reports to the Comelec and
to their respective members. Besides, there is nothing to stop the donors or contributors from informing the candidates during the
campaign and after the elections.
The contributions or donations, no matter how small, can effect the thinking or attitude of the victorious candidates in dealing
with matters involving foreigners, and more so when the sum total of all these donations is to be taken into account. The
aggregate total will certainly generate a greater influence on the triumphant candidates than the contribution of one foreigner
considered separately or individually.
Then again, masterminds and financiers almost always stay in the background from where they issue order to those who are either
their outright dummies or who are beholden to them.
This will open the floodgates to undesirable alien influences in our country, which may be exercised subtly and covertly in many
guises and forms. In matters of national interest as well as affecting civil liberties, the caveat isobsta principiis — oppose or resist
from the very beginning such "erosion of small encroachments."
Consequently, We apprehend the same danger feared by petitioner; because the Constitutional Convention will inescapably
discuss proposals concerning the rights — civil, social, economic, legal and political — of foreigners in this country, accentuated
by the off-and-on renegotiations of the Parity Amendment as well as the U.S.-Philippine military base agreement, and which
renegotiations may extend to other treaties to which the Philippines is a signatory. The delegates who are beneficiaries of the
Comelec billboards contributed or donated by foreigners will be under terrific pressure from quarters whose interest are alien, if
not inimical to ours. Some sectors are already agitating for the inclusion in the new Constitution of the principle of jus soli as a
mode of acquiring Filipino citizenship with retroactive effect. One could just visualize the impact of such a constitutional
amendment. Dire repercussions arising from such and other amendments on the political and economic life of our country and
people may be too terrifying to contemplate.
If, as asserted by the Assistant Solicitor General and the Solicitor, who filed an Answer in behalf of the Comelec (which Answer
curiously does not bear the signature of the Solicitor General), the needed amount is only about two hundred fifty thousand pesos
(P250,000.00) for the billboards to be allocated free to all candidates in all congressional districts in the country or at the rate of
two pesos and fifty centavos (P2.50) for each candidate, this amount of two hundred fifty thousand pesos (P250,000.00) can
easily be covered by contributions from patriotic and civic-minded Filipino citizens or Filipino-owned corporations or
associations or organized groups composed entirely of Filipino citizens, which abound in our land. If there are not enough
patriotic and civic-minded citizens of this country who can underwrite said amount, then it is certainly a sad commentary on the
character of our people.
However, even donations from our own compatriots for such billboards, are objectionable; because Congress should appropriate
the needed funds for the purpose.
That Congress slashed the proposed Comelec budget for this election, can only mean that the legislators, who are familiar with
the cost of such campaign materials, estimated that the diminished appropriation will suffice to cover the expenses for this
election including those for Comelec billboards. In the same manner that it had economized and accumulated savings the last
fiscal year, the Comelec must not be prodigal with public funds to effectuate the legislative judgment in reducing its budget for
this particular election.
But above all, our sense of national integrity, pride and dignity should restrain us in subscribing to such a mendicant attitude,
especially considering that our country is endowed by Divine Providence with rich natural resources and a people whose talents,
initiative and resourcefulness are equal if not superior in some respects, to those of foreigners. That we should, without feeling
any shame, barter our national integrity, dignity and pride by running for succor to foreigners to obtain such a measly amount of
two hundred fifty thousand pesos (P250,000.00), does not speak well of our independent status.
3. After the orators had delivered their respective pieces, and after the judges had expressed their votes, the Chairman publicly
announced their decision awarding first price to Nestor Nosce, second price to Emma Imperial, third price to Menandro
Benavides and fourth place to Luis General, Jr.
4. Four days afterwards, Emma Imperial addressed a letter to the Board of Judges protesting the verdict, and alleging that one of
the Judges had committed a mathematical mistake, resulting in her second place only, instead of the first, which she therefore
claimed.
5. Upon refusal of the Board to amend their award, she filed a complaint in the court of first instance.
6. At the contest the five judges were each furnished a blank form wherein he give the participants grades according to his
estimate of their abilities, giving number 1 to the best, number 2 to the second best etc., down to number 8. Then the grades were
added, and the contestant receiving the lowest number got first prize, the next second prize, etc.
7. The sums for the first four winners were: Nosce 10; Imperial 10; Benevides 17, General 17, the Board of judges having voted
as follows:

WHEREFORE, the resolutions of the Commission on Elections Nos. RR-707 and 731 promulgated respectively on August 13, Judge Nosce Imperial Buenavides General
1970 and September 17, 1970 are hereby declared illegal and null and void. Writ granted, without costs. Felipe Sr. ......... 3 1 2 4
Obias .............. 1 2 4 3
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Castro, Fernando, Barredo and Villamor JJ., concur
Rodriguez .......... 1 4 5 3

.R. No. L-4606 May 30, 1952 Prado .............. 3 2 1 3

Moll ............... 2 1 5 4
RAMON B. FELIPE, SR., as Chairman, Board of Judges, petitioner, 10 10 17 17
vs.
HON. JOSE N. LEUTERIO, Judge, Court of First Instance of Camarines Sur, EMMA IMPERIAL, represented by her
guardian-ad-litem JUSTO V. IMPERIAL, and SOUTHERN LUZON COLLEGE,respondents. 8. It appearing that Nestor Nosce and Emma Imperial had tied for the first place, the Chairman, apparently with the consent of the
board, broke the tie awarding first honors to Nosce and second honors to Imperial.
BENGZON, J.:
9. For the convenience of the judges the typewritten forms contained blank spaces in which, after the names of the rival orators
and their respective orations, the judge could not jot down the grades he thought the contestants deserved according to
Statement of the case. The issue in the litigation is whether the courts have the authority to reverse the award of the board of "Originality", "Timeliness", "English", "Stage Personality", "Pronunciation and Enunciation" and "Voice". From such data he
judges of an oratorical competition. made up his vote.

In an oratorical contest held in Naga, Camarines Sur, first honor was given by the board of five judges to Nestor Nosce, and
second honor to Emma Imperial. Six days later, Emma asked the court of the first instance of that province to reversed that award,
alleging that one of the judges had fallen to error in grading her performance. After a hearing, and over the objection of the other
four judges of the contest, the court declared Emma Imperial winner of the first place. Hence this special civil action challenging
the court's power to modify the board's verdict.
The facts. There is no dispute about the facts:
10. It was discovered later that the form filed by Delfin Rodriguez, one of the Judges, gave Imperial and General the following
ratings under the above headings; Imperial 19-15-15-18-14-14 Total 94-Place 4th General 19-15-15 or 14-19-14-14 Total 95-
Place 3rd.
11. Imperial asserts that her total should be 95 instead of 94 and therefore should rank 3rd place in Rodriguez' vote. And if she got
3 from Rodriguez, her total vote should have been 9 instead of ten, with the result that she copped first place in the speaking joust.

12. Rodriguez testified that he made a mistake in adding up Imperial's ratings; that she should have been given a total of 95, or
1. On March 12, 1950 a benefit inter-collegiate oratorical contest was held in Naga City. The contestants were eight, among them placed No. 3, the same as General; that he was not disposed to break the tie between her and General and insisted that he wanted
Nestor Nosce, Emma Imperial, and Luis General, Jr. to give rank 3 to Imperial and rank 3 also to General.

2. There were five judges of the competition, the petitioner Ramon B. Felipe, Sr. being the Chairman. Discussion. Although it would seem anomalous for one judge to give the same rank to two contestants, we will concede for the
moment that Delfin Rodriguez could have given 3 to Imperial to General.
However if deductions are to be made from his recorded vote (Exhibit 3) one may infer that after the contest and before
submitting his vote he decided to give General an edge over Imperial. How? Under the caption "English" General was given by
himself at first "14", later increased to "15". Evidently because after he had added the ratings of Imperial and (erroneously)
reached the sum of 94, he added the ratings of General (which were the same as Imperial with 14 under "English") and
(mistakenly) reached 94 also. So what did he also? He raised the 14 to 15 and thus gave general 95 to place him over Imperial's
94. (Mistakingly again, because with 15 General got 96 instead of 95).
But to us the important thing is Rodriguez' vote during and immediately after the affair. His vote in Exhibit 3 definitely gave
General place No. 3 and Imperial place No. 4. His calculations recorded on Exhibit 3 were not material. In fact the Chairman did
not bother to fill out the blank spaces in his own form, and merely set down his conclusions giving one to Imperial, 2 to
Benavides etc. without specifying the ratings for "Voice", "English", "Stage Personality" etc. In other words what counted was
the vote.
Probably for the above reasons the board refused to "correct" the alleged error.
The situation then is this: Days after a contest has been conducted and the winners announced, one of the judges confesses he
made a mistake, that the ratings he gave the second place winner should have been such as would entitle her to first place. The
other judges refuse to alter their verdict. May the matter be brought to the court to obtain a new award, reversing the decision of
the board of judges?
For more than thirty years oratorical tilts have been held periodically by schools and colleges in these islands. Inter-collegiate
oratorical competitions are of more recent origin. Members of this court have taken part in them either as contestants in their
school days1, or as members of the board of judges afterwards. They know some (few) verdicts did not reflect the audience's
preference and that errors have sometimes been ascribed to the award of the judges. Yet no party ever presumed to invoke judicial
intervention; for it is unwritten law in such contests that the board's decision is final and unappealable.
Like the ancient tournaments of the Sword, these tournaments of the Word apply the highest tenets of sportmanship: finally of the
referee's verdict. No alibis, no murmurs of protest. The participants are supposed to join the competition to contribute to its
success by striving their utmost: the prizes are secondary.
No rights to the prizes may be asserted by the contestants, because their's was merely the privilege to compete for the prize, and
that privilege did not ripen into a demandable right unless and until they were proclaimed winners of the competition by the
appointed arbiters or referees or judges.
Incidentally, these school activities have been imported from the United States. We found in American jurisprudence no litigation
questioning the determination of the board of judges.
Now, the fact that a particular action has had no precedent during a long period affords some reason for doubting the existence of
the right sought to be enforced, especially where occasion for its assertion must have often arisen; and courts are cautious before
allowing it, being loath to establish a new legal principle not in harmony with the generally accepted views thereon. (See C.J.S.
Vol. 1, p. 1012).
We observe that in assuming jurisdiction over the matter, the respondent judge reasoned out that where there is a wrong there is a
remedy and that courts of first instance are courts of general jurisdiction.
The flaw in his reasoning lies in the assumption that Imperial suffered some wrong at the hands of the board of judges. If at all,
there was error on the part of one judge, at most. Error and wrong do not mean the same thing. "Wrong" as used in the aforesaid
legal principle is the deprivation or violation of a right. As stated before, a contestant has no right to the prize unless and until he
or she is declared winner by the board of referees or judges.
Granting that Imperial suffered some loss or injury, yet in law there are instances of "damnum absque injuria". This is one of
them. If fraud or malice had been proven, it would be a different proposition. But then her action should be directed against the
individual judge or judges who fraudulently or maliciously injured her. Not against the other judges.
By the way what is here in stated must not be understood as applying to those activities which the government has chosen to
regulate with the creation of the Games and Amusements Board in Executive Order No. 392, Series 1950.
Judgment. In view of all the foregoing, we are of the opinion and so declare, that the judiciary has no power to reverse the award
of the board of judges of an oratorical contest. For that matter it would not interfere in literary contests, beauty contests and
similar competitions.
Wherefore the order in controversy is hereby set aside. No costs.
MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL
CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL, respondents.
DECISION
BELLOSILLO, J.:
The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to qualified Filipinos,[1] is invoked by petitioner in its bid to
acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents
maintain that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they
ask whether the 51% shares form part of the national economy and patrimony covered by the protective mantle of the
Constitution.
The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of
the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to
51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual “strategic partner,” is to
provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the
profitability and performance of the Manila Hotel.[2] In a close bidding held on 18 September 1995 only two (2) bidders
participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or
15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid
for the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state -
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC -
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other
Qualified Bidders:
a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the
Manila Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER -
The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/ OGCC (Office of the Government
Corporate Counsel) are obtained.”[3]
Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the necessary contracts,
petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong
Berhad.[4] In a subsequent letter dated 10 October 1995 petitioner sent a manager’s check issued by Philtrust Bank for Thirty-three
Million Pesos (P33,000,000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad x x x x[5] which
respondent GSIS refused to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale
of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court
on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from
perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The
case was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici
curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has
been identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of
Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and
sacredness of independence and its power and capacity to release the full potential of the Filipino people. To all intents and
purposes, it has become a part of the national patrimony.[6] Petitioner also argues that since 51% of the shares of the MHC carries
with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled
corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national
economy. Thus, any transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national
economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies. [7]
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part
of the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding
rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other
Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in
terms of price per share.[8]
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and requires implementing legislation(s) x x x x Thus, for the said
provision to operate, there must be existing laws “to lay down conditions under which business may be done.” [9]
Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only
refers to lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited
in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the
guests who have slept in the hotel and the events that have transpired therein which make the hotel historic, these alone do not
make the hotel fall under the patrimony of the nation. What is more, the mandate of the Constitution is addressed to the State, not
to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still
inapplicable since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land
upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national
patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have
questioned it right from the beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted
bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share , is
misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for
any reason, the Highest Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is
premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise
of the privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to
an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should
fail as petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act
required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is
supreme, imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the
fundamental and paramount law of the nation.[10] It prescribes the permanent framework of a system of government, assigns to the
different departments their respective powers and duties, and establishes certain fixed principles on which government is
founded. The fundamental conception in other words is that it is a supreme law to which all other laws must conform and in
accordance with which all private rights must be determined and all public authority administered. [11] Under the doctrine of
constitutional supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by
the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any
force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written
in every statute and contract.
Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to
enact laws and carry out the purposes of the framers who merely establish an outline of government providing for the different
departments of the governmental machinery and securing certain fundamental and inalienable rights of citizens. [12] A provision
which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a
provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or that
which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus a
constitutional provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the
constitution itself, so that they can be determined by an examination and construction of its terms, and there is no language
indicating that the subject is referred to the legislature for action. [13]
As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory
enactments, and the function of constitutional conventions has evolved into one more like that of a legislative body. Hence,
unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that
all provisions of the constitution are self-executing. If the constitutional provisions are treated as requiring legislation instead of
self-executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law. [14] This
can be cataclysmic. That is why the prevailing view is, as it has always been, that -
x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x Unless the
contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give
the legislature discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the
will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass the needed implementing
statute.[15]
Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission -
MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording
of “PREFERENCE” is given to QUALIFIED FILIPINOS,” can it be understood as a preference to qualified Filipinos vis-
a-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word “QUALIFIED?”
MR. RODRIGO. No, no, but say definitely “TO QUALIFIED FILIPINOS” as against whom? As against aliens or over
aliens ?
MR. NOLLEDO. Madam President, I think that is understood. We use the word “QUALIFIED” because the existing laws
or prospective laws will always lay down conditions under which business may be done. For example, qualifications on
capital, qualifications on the setting up of other financial structures, et cetera (underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing
but simply for purposes of style. But, certainly, the legislature is not precluded from enacting further laws to enforce the
constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may be left to the
legislature without impairing the self-executing nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a
convenient remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the
exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-
executing constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission
from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it
was not intended to be self-executing. The rule is that a self-executing provision of the constitution does not necessarily exhaust
legislative power on the subject, but any legislation must be in harmony with the constitution, further the exercise of
constitutional right and make it more available. [17] Subsequent legislation however does not necessarily mean that the subject
constitutional provision is not, by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first
and third paragraphs of the same section which undoubtedly are not self-executing. [18] The argument is flawed. If the first and
third paragraphs are not self-executing because Congress is still to enact measures to encourage the formation and operation of
enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise
authority over foreign investments within its national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the
second paragraph can only be self-executing as it does not by its language require any legislation in order to give preference to
qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A
constitutional provision may be self-executing in one part and non-self-executing in another. [19]
Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies,
which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially
enforceable rights - are simply not in point. Basco v. Philippine Amusements and Gaming Corporation [20] speaks of constitutional
provisions on personal dignity,[21] the sanctity of family life, [22] the vital role of the youth in nation-building, [23] the promotion of
social justice,[24] and the values of education. [25] Tolentino v. Secretary of Finance [26] refers to constitutional provisions on social
justice and human rights[27] and on education.[28] Lastly, Kilosbayan, Inc. v. Morato[29] cites provisions on the promotion of general
welfare,[30] the sanctity of family life, [31] the vital role of the youth in nation-building [32] and the promotion of total human
liberation and development.[33] A reading of these provisions indeed clearly shows that they are not judicially enforceable
constitutional rights but merely guidelines for legislation. The very terms of the provisions manifest that they are only principles
upon which legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in
itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per se judicially enforceable. When our Constitution mandates
that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give
preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred. And when our Constitution declares
that a right exists in certain specified circumstances an action may be maintained to enforce such right notwithstanding the
absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional
right, such right enforces itself by its own inherent potency and puissance, and from which all legislations must take their
bearings. Where there is a right there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission[34] explains -
The patrimony of the Nation that should be conserved and developed refers not only to our rich natural resources but also to the
cultural heritage of our race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only
our lands, forests, mines and other natural resources but also the mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.[35] When the Constitution speaks of national
patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an American hotel
when it first opened in 1912, it immediately evolved to be truly Filipino. Formerly a concourse for the elite, it has since then
become the venue of various significant events which have shaped Philippine history. It was called the Cultural Center of the
1930’s. It was the site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest
House of the Philippine Government it plays host to dignitaries and official visitors who are accorded the traditional Philippine
hospitality.[36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.[37] During World
War II the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces
returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places for their final
stand. Thereafter, in the 1950’s and 1960’s, the hotel became the center of political activities, playing host to almost every
political convention. In 1970 the hotel reopened after a renovation and reaped numerous international recognitions, an
acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a failedcoup d’ etat where an aspirant for
vice-president was “proclaimed” President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of
the equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock,
so that anyone who acquires or owns the 51% will have actual control and management of the hotel. In this instance, 51% of the
MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain
respondents’ claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the
outstanding shares of the corporation, not the Hotel building nor the land upon which the building stands. [38]
The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at least 60%
of which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission -
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in
substituting the words “QUALIFIED FILIPINOS” with the following: “CITIZENS OF THE PHILIPPINES OR
CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY
SUCH CITIZENS.”
xxxx
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a
corporation that is 80-percent Filipino, do we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by
Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent
Filipino.
MR. DAVIDE. I want to get that meaning clear because “QUALIFIED FILIPINOS” may refer only to individuals and not
to juridical personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: “IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS
COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO
QUALIFIED FILIPINOS.” And the word “Filipinos” here, as intended by the proponents, will include not only individual
Filipinos but also Filipino-controlled entities or entities fully-controlled by Filipinos. [40]
The phrase preference to qualified Filipinos was explained thus -
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can
ask a question.
MR. NOLLEDO. “IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS.”
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified,
will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is “yes.”
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision Commissioner Nolledo continues –
MR. NOLLEDO. Yes, Madam President. Instead of “MUST,” it will be “SHALL - THE STATE SHALL GIVE
PREFERENCE TO QUALIFIED FILIPINOS.” This embodies the so-called “Filipino First” policy. That means that
Filipinos should be given preference in the grant of concessions, privileges and rights covering the national patrimony. [42]
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified
by Commissioner Nolledo[43] -
Paragraph 2 of Section 10 explicitly mandates the “Pro-Filipino” bias in all economic concerns. It is better known as the
FILIPINO FIRST Policy x x x x This provision was never found in previous Constitutions x x x x
The term “qualified Filipinos” simply means that preference shall be given to those citizens who can make a viable contribution
to the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and
preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate
preference would be counterproductive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a “qualified foreigner” and
a “qualified Filipino,” the latter shall be chosen over the former.”
Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference
here is that petitioner has been found to be possessed of proven management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall management and marketing proficiency to successfully operate
the Manila Hotel.[44]
The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and
requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision - by the government
itself - is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the
Constitution. For, even some of the provisions of the Constitution which evidently need implementing legislation have juridical
life of their own and can be the source of a judicial remedy. We cannot simply afford the government a defense that arises out of
the failure to enact further enabling, implementing or guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on
constitutional government is apt -
The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts -
provided that there are discoverable legal standards for executive action. When the executive acts, it must be guided by its own
understanding of the constitutional command and of applicable laws. The responsibility for reading and understanding the
Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have to ask Congress, or
perhaps the Court, for an interpretation every time the executive is confronted by a constitutional command. That is not how
constitutional government operates.[45]
Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the
MHC could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. As
correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a
“state action.” In constitutional jurisprudence, the acts of persons distinct from the government are considered “ state action”
covered by the Constitution (1) when the activity it engages in is a “ public function;” (2) when the government is so significantly
involved with the private actor as to make the government responsible for his action; and, (3) when the government has approved
or authorized the action. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under
the second and third categories of “state action.” Without doubt therefore the transaction, although entered into by respondent
GSIS, is in fact a transaction of the State and therefore subject to the constitutional command. [46]
When the Constitution addresses the State it refers not only to the people but also to the government as elements of the
State. After all, government is composed of three (3) divisions of power - legislative, executive and judicial. Accordingly, a
constitutional mandate directed to the State is correspondingly directed to the three (3) branches of government. It is undeniable
that in this case the subject constitutional injunction is addressed among others to the Executive Department and respondent
GSIS, a government instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules
expressly provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the
necessary contracts, and secured the requisite approvals. Since the Filipino First Policy provision of the Constitution bestows
preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared
the winning bidder. Resultantly, respondents are not bound to make the award yet, nor are they under obligation to enter into one
with the highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution
the provisions of which are presumed to be known to all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in
the bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic
principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which
violate the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are
willing to match the highest bid in terms of price per share. [47] Certainly, the constitutional mandate itself is reason enough not to
award the block of shares immediately to the foreign bidder notwithstanding its submission of a higher, or even the highest,
bid. In fact, we cannot conceive of a strongerreason than the constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the
Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the
award should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat is
omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of
the Philippines are understood to be always open to public scrutiny. These are given factors which investors must consider when
venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its
agencies or instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was
well aware from the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and
foreigners alike were invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the
qualified Filipino fails to match the highest bid tendered by the foreign entity. In the case before us, while petitioner was already
preferred at the inception of the bidding because of the constitutional mandate, petitioner had not yet matched the bid offered by
Renong Berhad. Thus it did not have the right or personality then to compel respondent GSIS to accept its earlier bid. Rightly,
only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioner’s matching bid
did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To
insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to
insist that government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment,
regardless of the consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would
rather remedy the indiscretion while there is still an opportunity to do so than let the government develop the habit of forgetting
that the Constitution lays down the basic conditions and parameters for its actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is
left with no alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and
documents to effect the sale in accordance not only with the bidding guidelines and procedures but with the Constitution as
well. The refusal of respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding rules
after the latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as
a guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the
Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is
tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine,
the influx of foreign investments. Far from it, the Court encourages and welcomes more business opportunities but avowedly
sanctions the preference for Filipinos whenever such preference is ordained by the Constitution. The position of the Court on this
matter could have not been more appropriately articulated by Chief Justice Narvasa -
As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the
executive about the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for
decisions perceived as obstacles to economic progress and development x x x x in connection with a temporary injunction issued
by the Court’s First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were
published in a major daily to the effect that that injunction “again demonstrates that the Philippine legal system can be a major
obstacle to doing business here.”
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or
set itself up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the
Constitution or the laws, or are not adopted or implemented with grave abuse of discretion amounting to lack or excess of
jurisdiction. It will never shirk that duty, no matter how buffeted by winds of unfair and ill-informed criticism. [48]
Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-material
values. Indeed, the Court will always defer to the Constitution in the proper governance of a free society; after all, there is
nothing so sacrosanct in any economic policy as to draw itself beyond judicial review when the Constitution is involved. [49]
Nationalism is inherent in the very concept of the Philippines being a democratic and republican state, with sovereignty residing
in the Filipino people and from whom all government authority emanates. In nationalism, the happiness and welfare of the
people must be the goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision must
adhere to such basic concept. Protection of foreign investments, while laudible, is merely a policy. It cannot override the
demands of nationalism.[50]
The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the
sake of privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a
historic relic that has hosted many of the most important events in the short history of the Philippines as a nation. We are talking
about a hotel where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the
highest state function to their official visits to the Philippines. Thus the Manila Hotel has played and continues to play a
significant role as an authentic repository of twentieth century Philippine history and culture. In this sense, it has become truly a
reflection of the Filipino soul - a place with a history of grandeur; a most historical setting that has played a part in the shaping
of a country.[51]
This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark -
this Grand Old Dameof hotels in Asia - to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino
psyche to alien hands cannot be less than mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nation’s
soul for some pieces of foreign silver. And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino,
can be gained by the Filipinos if Manila Hotel - and all that it stands for - is sold to a non-Filipino? How much of national pride
will vanish if the nation’s cultural heritage is entrusted to a foreign entity? On the other hand, how much dignity will be
preserved and realized if the national patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This
is the plain and simple meaning of the Filipino First Policy provision of the Philippine Constitution. And this Court, heeding the
clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation, will continue to respect and
protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to
CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT
the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of the shares of the
Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary agreements and documents to effect the
sale, to issue the necessary clearances and to do such other acts and deeds as may be necessary for the purpose.
SO ORDERED.
SOTERA GARCIA DIMAGIBA, petitioner,
vs.
HON. AMBROSIO M. GERALDEZ, Judge, Municipal Court of Manila, Branch IV and the CITY FISCAL OF
MANILA, respondents.

LABRADOR, J.:
Certiorari against an order of dismissal issued by the Court of First Instance of Manila, and prohibition against the Municipal
Court of Manila, Hon. Ambrosio M. Geraldez, presiding, to enjoin it from taking cognizance ofan information filed before it
for estafa against the petitioner (CriminalCase No. D-157576).
On March 14, 1955, Assistant Fiscal Gregorio F. Lim of Manila filed aninformation for estafa (Criminal Case No. 30750) against
petitioner SoteroDimagiba. The information charges that the accused therein, petitioner inthis proceedings, defrauded,
misappropriated, misapplied and converted, thesum of P200.00, which should have been delivered to complainant. On November
5, 1955, after the information had been read and the accused entered a pleaof not guilty thereto, the court dismissed the
information for want ofjurisdiction. Thereafter, on January 17, 1956, Fiscal Lim presented anotherinformation against the
accused, this time before the Municipal Court of Manila. The information is a replica of the information filed previously inthe
Court of First Instance. Upon the filing of this information the accused, petitioner herein, filed a motion to quash, alleging double
jeopardy. The motion was denied and upon his failure to obtain a reconsideration of thedenial of the motion to quash, the accused
instituted the present action inthis Court.
The petitioner claim that the Court of First Instance of Manila had jurisdiction to try the offense charged in the information filed
with it under the authority of the Revised Charter of the City of Manila(R. A. No. 409), particularly Section 41, which provides as
follows:
SEC. 41. Criminal jurisdiction. — The municipal court shall have territorialjurisdiction embracing the entire police jurisdiction of
the city, and shall hold a daily session, Sundays and legal holidays alone excepted: Provided, however, That when a legal holiday
occurs in two or more successive days or when a Sunday is immediately preceded and/or followed by a holiday, themunicipal
court may hold night session during said holidays. Said courtshall have jurisdiction exclusive of the other courts sitting in the
cityover all criminal cases arising under the penal laws of the Philippines,where the offense is committed within the police
jurisdiction of the cityand the maximum punishment is by imprisonment for not more than six months,or a fine of not more than
two hundred pesos, or both.
It shall also concurrent jurisdiction with the Courts of First Instance over all criminal cases arisng under the laws relating to
gambling and managemant of lotteries, to assaults where the intent to kill is not charged or evident upon the trial, to larcency,
embezzlement and estafa where the amount of money or property stolen, embezzled, or otherwise involved does not exceed the
sum or value of two hundred pesos, to the sale of intoxicating liquors, to falsely impersonating an officer, to malicious mischief,
to trespass on Government or private property, and to threatening to take human life. It may also conduct preliminary
examinations for any offense, without regard to the limits of punishment, and any release, or commit and bind ever any person
charged with such offense to secure appearance before the proper court.
The cases of People vs. Palmon, 86 Phil. 350, 47 O.G. 29, and People vs. Colicio, 88 Phil. 196 are cited in support of this
contention 2CbroNb.
The information filed in the Court of First Instance of Manila chargesmisappropriation of the sum of P200.00. The penalty
prescribed for thisoffense is arresto mayor in its medium and maximum period (Art. 315, par. 5,Revised Penal Code). The
offense charged, therefore, falls within the exclusive jurisdiction of the Municipal Court of Manila in accordance with section 41
of its revised charter. But it is argued that the secondparagraph of the same section, which provides:
It shall also have concurrent jurisdiction with the Courts of First Instanceof Manila over all criminal cases arising under the laws
relating to gambling and management of lotteries, to assaults where the intent to killis not charged or evident upon the trial, to
larceny, embezzlement and estafa where the amount of money or propety stolen, embezzled or otherwise involved does not
exceed the sum or value of two hundred pesos, to the saleof intoxicating liquors, to falsely impersonating an officer, to malicious
mischief, to trespass on Government or private property, and to threatening to take human life. . .
is a grant of concurrent jurisdiction to try the same case to the Court of First Instance. There are various reasons for rejecting this
contention.Section 41 is found in "Article IX - The Municipal Court" of the Charter ofManila, and defines the jurisdiction of the
Municipal Court of the City, bothoriginal and concurrent. No implication may be made therefrom of a grantconcurrent
jurisdiction to the Court of First Instance. Grants of jurisdiction cannot be merely implied. Then the provision from which
thegrant is sought to be implied defines the jurisdiction of the Municipal Court only, and cannot possibly refer to another court,
whose jurisdiction is defined in another law (Republic Act No. 296). That the Municipal Court should have concurrent
jurisdiction over certain specific crimes triable bya Court of First Instance is no bases for the claim that the Court of First
Instance, conversely, has also concurrent jurisdiction over cases triable by the Municipal Court. Lastly, the Court of First Instance
is a court ofgeneral jurisdiction and it is unreasonable to assume that the Legislatureintended to grant to it concurrent jurisdiction
over minor offenses such as estafa involving such amounts as may be less than P200.00.
We have also examined the cases that have been cited by both of the partiesto the proceedings and found out that none of them
covers the precisequestion raised and decided in these proceedings.
The petition is hereby denied, with costs against petitioner.
Bengzon, Paras, C.J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., and Endencia, JJ., concur.
G.R. No. 18940
SHIOJI, petitioner,
vs.
Honorable GEO R. HARVEY, Judge of First Instance of Manila, PACIFIC MAIL STEAMSHIP CO. and TOYO KISEN
KAISHA, respondents.
Malcolm, J.:
Two questions are presented for decisions in this original proceeding by prohibition. The first question, pressed by petitioner,
related to the interference on the part of the lower court with a judgment of the Supreme Court. The second question, urged by
respondents, relates to the validity of Rule 24 (a) of the Supreme Court. While, in our opinion, a resolution of the first point is
decisive of the case, and any discussion of the other point has no more than academic interest, yet , having in mind the positions
of the court; when one of its owner rules is assailed as "unconstitutional, null and void," we have decided to give serious
consideration to both questions.
In logical sequence, there follows a statement of the case and the facts, an opinion on the two points above stated, and the
judgment.
STATEMENT OF THE CASE AND THE FACTS
In cause No. 19471 of the Court of First Instance of Manila, wherein S. Shioji was plaintiff, and the Toyo Kisen Kaisah and the
Pacific Mail Steamship Co., were defendants, judgment was rendered on October 31, 1920, by Judge Concepcion presiding in the
second branch of the court, in favor of the plaintiff and against the defendants jointly and severally for the sum of P19,533.49,
with legal interest and costs. Thereafter, the defendants duly perfected an appeal by way of bill of exceptions, to the Supreme
Court of the Philippine Islands, and the case was docketed as R. G. No. 18592. 1 The date on which the bill of exceptions was
filed in the office of the clerk of the Supreme Court was February 16, 1922, while attorneys for the respective parties received
copies of the same on February 17, 1922.
In accordance with Rule 21 of the Supreme Court, the appellants had thirty days from the receipt of the printed bill of exceptions
within which to serve and file copies of their brief. This period expired on March 19, 1922, without an extension of time within
which to present it. Accordingly, when on March 22 appellants filed a motion for an additional period, the court, on March 24,
1922, denied the motion because it was filed out of time, and pursuant to Rule 24 (a) dismissed the appeal. Subsequent order of
the court on motions for reconsideration have reaffirmed the order of dismissal, and have noted the exception of counsel.
The regular fifteen-day period fixed by the order of the court, of March 24, 1922, for the issuance of judgment and the return of
the records to the lower court, having expired, on April 12, 1922, the records was transmitted to the Court of First Instance of
Manila. Execution was then issued to enforce the judgment but prior to the levy the defendants in the case R. G. No. 18592, filed
an action in the Court of First Instance of Manila, docket No. 21905, based principally on the allegation that the "judgment of the
Supreme Court is unconscionable and was rendered without due process of law, and that the rule (Rule 24 [a]) under which the
judgment was rendered, is unconstitutional, and being in conflict with law is null and void," in which they prayed that a
preliminary injunction forthwith issue enjoining the respondents from levying any execution under the aforesaid judgment and
that after hearing the injunction be made perpetual. After judge Concepcion had singed and order for the transference of the case
to the judge presiding in Branch III, Judge Harvey issued the preliminary injunction in accordance with the prayer of the
complaint.
The countermove of the respondents in the injunction proceedings pending the Court of First Instance was to file a complaint in
prohibition in the Supreme Court, to compel the respondent Judge of First Instance to desist from interfering with the execution of
the judgment in case No. 19471 of the Court of First Instance of Manila and to issue an order revoking the previously
promulgated by him. The preliminary injunction prayed for as an incident to the complaint in prohibition was immediately issued
by the Supreme Court, and has been complied with by the respondents herein. Counsel Petitioner herein moves for judgment on
the pleadings.
A public hearing has been held and the case has been argued with marked ability by counsel for both parties. The attorney for
respondents was in a particularly delicate position, in that he must attack the action of the court, but it is only fair to say that he
has maintained toward the court the respectful attitude which the ethics of his profession requires of him. We cannot, however,
follow counsel into the supercritical mazes of his argument, and must perforce our opinion to the big issues.
OPINION
I. As intimated in the beginning of this decision, the primary question raised by petitioner concerns the action of the Judge of First
Instance in assuming the jurisdiction to interpret and review judgment and order of the Supreme Court, and to obstruct the
enforcement of the decisions of the appellate court.
Lengthy elucidation of the proposition that he only function of a lower court, when the judgment of a high court is returned to its,
is the ministerial one of issuing the order of execution, and that lower court is without supervisory jurisdiction to interpret or to
reverse the judgment of the higher court, would seem to be superfluous. A judge of a lower court cannot enforce different decrees
than those rendered by the superior court. If each and every Court of First Instance could enjoy the privilege of overruling
decisions of the Supreme Court, there would be no end to litigation, and judicial chaos would result. Appellate jurisdiction would
be a farce if the Supreme Court did not have the power of preventing inferior courts from meddling with decisions when sent to
them for compliance. Where a cause has been appealed from the Court of First Instance to the Supreme Court of the Philippine
Islands, and a judgment rendered by the latter, no interference therewith by the lower court can be tolerated through any
proceedings other than such as are directed by the appellate court. Until revoked by the Supreme Court of the United States, the
decision of the Supreme Court of the Philippine Islands must stand and be enforced.
The inferior court is bound by the decree as the law of the case, and must carry it into execution according to the mandate. They
cannot vary its, or examine it for any other purpose than execution, or give any other or further relief, or review it upon any
matter decided on appeal for error apparent, or intermeddle with it, further than to settle so much as has been remanded. These are
the words of the Supreme Court of the United States in the early case of Sibbald vs. United States ([1838], 12 Pet., 488).
When a district court attempted to grant a new trial subsequent to the return of the mandate of the United States Supreme Court,
the trite but emphatic rule of the higher court was that "The district court had no power to set aside the judgment of the Supreme
Court, its authority extending only to executing the mandate." (Ex parte Dubuque & Pacific Railroad [1864], 1 Wall., 69 See,
further, State ex rel. vs. Superior Court [1894] 8 Wash., 591; State ex. rel. Heirs of Gee vs. Drew and Thompson [1886], 38 La.
Ann., 274; In re Alexander [1911], 127 La., 854.)
What has been said is in justification of the preliminary injunction heretofore granted ordering Judge of First Instance Harvey to
desist from interfering with the execution of the judgment in the case of S. Shioji vs. Toyo Kisen Kaisha, et al., and requiring him
to revoke the injunction order previously issued. We ought properly to stop here, because an attack on the validity of the rules of
the Supreme Court should not be initiated by collateral proceedings in a lower court, but as before explained, we waive this phase
of the case so as to do full justice the complainant and so as to make a definite ruling on the point which he raises.
II. The Supreme Court of the Philippine Island is expressly authorized by statute to make rules for regulation of its practice and
the conduct of its business. Section 28 of the Judiciary Act (No. 136), grants to the members of the Supreme Court the power to
"make all necessary rules for orderly procedure in Supreme Court . . . in accordance with the provisions of the Code of Civil
Procedure, which rules shall be . . . binding upon the several courts." The Code of Civil Procedure, in turn, provides in its section
6, as follows:
The judges of the Supreme Court shall prepared rules regulating the conduct of business in the Supreme Court and in the Courts
of First Instance. The rules shall be uniform for all Courts of First Instance throughout the Islands. Such rules, when duly made
and promulgated and not in conflict with the laws of the United States or of the Philippine Islands, shall be binding and must be
observed, but no judgement shall be reversed by reason of a failure of the court to comply with such rules unless the substantial
rights of a party have been impaired by such failure.
The rules of the Supreme Court of the Philippines, drafted principally by Mr. Justice Willard, were promulgated soon after the
organization of the court of American occupation of the Philippines. Amendments of the rules were announced from time to time.
In 1981, a special committee of three members of the Supreme Court was appointed by the court, to compile and revise the rules
of court, and the after long study, and after a number of public hearings, a craft was presented, which was adopted by the court on
October 2, 1918. These are rules which, with a few minor amendments, are now in force.
The rules of the Supreme Court and the rules of the Courts of First Instance alike contain provisions intended to facilitate the
progress of judicial business. Of this nature, and of particular interest here, are rules 21, 22, 23, and 24 of the Supreme court. The
first mentioned rule, 21, provides in mandatory language that "Within thirty days from the receipt of the printed record on appeal
or bill of exception the appellant shall serve upon the appellee errors and file thirty copies thereof with the clerk." The following
rule assign a similar period of time for the serving and filing of the briefs of the appelle. Rule 23, likewise in mandatory language,
provides that "Motions for extension of time for filing of briefs must be presented before the expiration of the time mentioned in
rules 21 and 22, or within a time fixed by special order of the court. No such extension will be allowed except on notice to the
opposite party in accordance with Rule 13, and for good and sufficient cause shown. Extensions may also be granted upon
stipulation of counsel, within reasonable limits." In reality, this was the rule which appellants failed to observe. Then comes Rule
24 (a) specifically challenged in these proceedings, reading as follows: "If the appellant, in any civil case, fails to serve his brief
within the time prescribed by these rules the court may, on motion of the appellee and notice to the appellant, or on its own
motion, dismiss the bill of exceptions or the appeal." The later rule, it may be observed, by the use of the word "may", and in
language quite similar to Rule 5, under "Briefs", of the Rules of the Supreme Court of the United States, confirms the
discretionary power of the court to dismiss actions for want of prosecution.
The practice of the court in the enforcement of its rules has been uniform. The court has gone upon the assumption that although
it retains the power of amendment, nevertheless, its is the duty of the court to enforce its rules, to the best if its judgment,
irrespective of the case, the parties or the counsel. Extensions of time for the filing of briefs are daily granted. The first extension
ordinarily is for fifteen days, the second for ten days, and the third for five days; but an unvarying prerequisite is that motions be
presented before the expiration of the period. This means that attorneys can have a full period of sixty days for the preparation of
their briefs, and in extraordinary cases, for good and sufficient reason, even this period will be enlarged. But if the brief of the
appellant is not filed within the thirty-day period, or if a motion for an extensions of time is not filed before the expiration of this
period, then such cases are removed from the calendar, either on motion of appelle, or on the court's own motion.,
The Supreme Court is, of course, primarily the best judge of its own rules. It is, accordingly, of interest to note what the court has
heretofore said of the rules. In Paterno vs. City of Manila ([1910], 17 Phil., 26), rules 19 and 20 were held valid and the appeal
was dismissed. In the course of the decision, Mr. Justice Trent, speaking for the court, said that "That rules of this court are few
and simple. They are the laws of the court and must be obeyed until repealed, unless it can be shown that they are in conflict with
the laws of the United States or of the Philippine Islands. . . . These rules mean something, otherwise they would not have been
promulgated." Mr. Justice Fisher, who drafted the new rules of the Supreme Court, in submitting the rules for consideration, gave
as principal change, "the discouragement of dilatory tactics by imposing upon the moving party the duty of proceeding promptly
under penalty of dismissal of the appeal." In Salaveria vs. Albindo ([1919], 30 Phil., 922), it was said:
The Rules of the Supreme Court of the Philippine Islands effective after the first day of January, nineteen hundred and nineteen,
were drafted with the primary object of expediting justice. . . . On the supposition that the Supreme Court was, as it is a court of
appeal, period of time were fixed within which attorneys must act, not to urge on the sluggard and the dilatory. If certain
provisions of the rules were not followed automatically the appeal would disappear.

The interpretation of the Rules of the Supreme Court of the Philippine Islands is in substantial accord with the interpretation of
corresponding rules by the other courts. Rules of court prescribing the time within which certain acts must be done, or certain
held as absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharge of business. The
number of instances in which courts have, by rule, filled out the terms of the statutes can be realized on turning to the
encyclopedias. The reason for rules of this nature is because the dispatch of business by courts would be impossible, and
intolerable delays would results, without rules governing practice, and designed to expedite the transaction of business. Such rules
are necessary incident to the proper, efficient and orderly discharge of judicial functions. (See 412 A. S. R., 639, notes.)
In other jurisdictions, there has been no doubt of the validity of such rules, and that failure to comply with them may deprive the
appellant of his right to the judgement of the appellate court. For example, where the record was not filed by the appellant within
the time prescribed by the Rules of the United States Supreme Court, and the appellee filed a copy of it, the appeal was dismissed
upon his motion (U. S. vs. Fremont [1855], 18 How., 30.) Again, where a rule of the Supreme Court of Florida limited the time to
ten days after the return day of writs of error, within which a motion to strike the records or a part thereof, can be made, and when
a motion was made after the lapse of such limited time, the court held that it could not entertain or consider it. (McRae vs. Preston
[1907], 54 Fla., 188.
Rules of court, promulgated by authority of law, have the force and effect of law, if not in conflict with positive law. (Inchausti &
Co. vs. De Leon [1913], 24 Phil., 224.) The rule is subordinate to the statute, and, in case of conflict, the statute will prevail. An
instance is where Congress expressly enabled the courts to make establish all necessary rules for the orderly conduct of business,
provided such rules were not repugnant to the laws of the United States, in the great case of Wayman vs. Southard ([1825], 10
Wheat., 1), made the remark that "these section give the court full power over all matters of practice. . . ."
Recurring now to section 28 of the Judiciary Law, and section 6 of the Code of Civil Procedure, which constitute the legislative
authority for the promulgation of rules by the Supreme Court of the Philippine Islands, it is to be noted, in the first place, that the
court is given the power to make all necessary rules for orderly procedure in the court, and for regulating the conduct of business
in the court. We apprehend that within this language would be included regulations having to do with the preparation and filing of
briefs. The law also provides that such rules shall be binding and must be observed. The general limitation is, that the rules must
not be in conflict with laws of the United States or of the Philippine Islands. The specific limitation is that no judgment shall be
reversed by reason of the failure of the court to comply with such rules, unless the substantial rights of the party have been
impaired buy such failure.
As the specific limitation in section 6 of the Code of Civil Procedure is not here in question, since the Supreme Court is affirming
and not reversing a judgment, the whole case comes down to a determination of whether or not Rule 24 (a) is in conflict with any
law of the United States or of the Philippine Islands.
Respondents point out no provision of a federal statute which bears on the issue, and we know of none. In addition to
emphasizing that the rules prepared by the Supreme Court shall be "in accordance with the provision of the Code of Civil
Procedure," counsel specifically relies on sections 2, 500, 502 and 503 of the Code.
A portion of section 2 of the Code of Civil Procedure is quoted by respondents, but we prefer to set forth the entire section. It
reads: "The provisions of this Code, and the proceedings under it, shall be liberally construed, in order to promote its object and
assist the parties in obtaining speedy justice." We can conceive of no direct applicability of this provision of law, unless it be that
rules of court shall be liberally construed, and that the construction shall be such as to assist the parties in obtaining speedy
justice. In reality, it was the latter purpose which the court had in mind when it laid down definite period for the filing of briefs,
and held both the parties and the court to a compliance therewith.
Portions of sections 500,502 and 503 of the Code of Civil Procedure are also quoted by respondents. But it will be noticed in this
connection, that these various sections speak of the dismissal of bills of exceptions. There is no such question before us.
Respondents undoubtedly have a perfectly good bill of exceptions. Where they failed was in taking the next step seasonably, with
the result that the judgment of the trial court stands.
It is our holding that Rule 24 (a) is not in conflict with any law of the United States or of the Philippines, but is a necessary rule
for orderly procedure and for regulating the conduct of business in Supreme Court. It is a rule which relates to a matter of practice
and procedure over which the Legislature has not exercised its power. It is a rule which does not operate to deprive a party of any
statutory right. It is a rule in harmony with judicial practice and procedure over which the Legislature has not exercised its power.
It is a rule which does not operate to deprive a party of any statutory right. It is a rule in harmony with judicial practice and
procedure and essential to the existence of the courts. And, finally, it is a rule which must be enforced according to the discretion
of the court xMOxj1.
Independent of any statutory provision, we assert that every court has inherent power to do all things reasonably necessary for the
administration of justice within the scope of its jurisdiction.
Any misgivings one might entertain with the reference to the justice of this decision must disappear when it brought to mind that
the respondents herein already have had a day in court; that the presumption of the Code on which they place so much reliance is
always in favor of the correctness of the judgment of the lower court, that an appeal is neither an inherent right nor a necessary
element of due process or law; that both bench and bar must be held to strict accountability for the speedy administration of
justice; that the stability of the whole judicial structure would be shaken by the appellate court complacently permitting an
inferior court to reverse the judgment of the former; and that for the Supreme Court to purge counsel of his negligence and to
reinstate his cause would be merely to invite charges of favoritism and would lead to never-ending confusion.
Counsel for the respondents speaks incidentally of his desire to have the validity of the Rules of the Supreme Court of the
Philippine Islands and by the Supreme Court of the United States. Although we are aware of no constitutional question involved,
in order again to give counsel all the latitude possible, we will say that , on proper motion, and on presentation of a sufficient
supersedeas bond, the instant proceedings will be stayed in order to allow counsel, if he desire, to take the case to the Supreme
Court of the United States dhT1EKyOiQ.
In corroboration of the foregoing, the writ prayed for is granted, and the preliminary injunction is made permanent. Without
special findings as to costs, it is so ordered.
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ERNESTO LAKANDULA y ZAPANTA, defendant-appellant
CONCEPCION, JR., J.:
MANDATORY REVIEW of the death sentence imposed by the Circuit Criminal Court of Pasig, Rizal, upon the accused Ernesto
Lakandula y Zapanta in Criminal Case No. CCC-VII-64-Caloocan City.
The said accused, Ernesto Lakandula y Zapanta was charged, together with John Doe alias Dominador Beltran and Peter
Doe alias Tomas Magno, with Robbery with Homicide, in an information dated January 19, 1968 and filed with the Court of First
Instance of Rizal, Caloocan City Branch, on January 23,1968, committed as follows:
That on or about the 16th day of December, 1967, in Caloocan City, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring together and mutually helping one another, with intent of gain and by means of
force, violence and intimidation, that is by stabbing one Fernando Saya Tan, did then and there wilfully, unlawfully and
feloniously take, rob and carry away cash amounting to P200.00 belonging to Benito Tan, to the damage and prejudice of the
owner thereof, in the aforementioned amount of P200.00; and as a further consequence of said force, violence and intimidation
employed on the person of Fernando Saya Tan, the latter was stabbed on the vital parts of the body, thereby inflicting upon him
serious physical injuries which caused his instantaneous death.
Only the accused Ernesto Lakandula y Zapanta was apprehended, and when arraigned on February 7, 1968, he entered a plea of
"Not Guilty." But, for reasons, mostly due to requests for postponement by counsel for the accused on the ground that he was not
ready for trial and the absence of the trial judge, the case was not heard until after the case was transferred to the Circuit Criminal
Court of Pasig, Rizal. Judgment was rendered on the case whereby the said accused was sentenced, under the charge aforesaid, to
suffer the death penalty and to indemnify the heirs of the deceased Fernando Saya Tan in the amount of P12,000.00, and Benito
Tan in the amount of P182.00, without subsidiary imprisonment in case of insolvency, and to pay the costs of suit.
The People's version of the incident is as follows:
Editha de la Rosa, daughter-in-law of Bernardo Tan, owner of a sari-sari store located at 2556 3rd Avenue, Caloocan City,
declared that on December 16, 1967 at about 9:30 o'clock p.m., she was the one attending to the store customers (p. 10, t.s.n., July
11, 1969). She noticed four persons standing nearby the store. Of these four persons, she recognized one of them by face (p. 11,
t.s.n.). Just then, a boy came in to make a purchase and as she turned around to get the boy's change, Ernesto Lakandula and a
companion later Identified to be Dominador Beltran rushed into the store. Ernesto Lakandula grabbed the money box (p. 11,
t.s.n., Id). Instinctively she shouted 'Robbers' and at this instance Visaya, referring to the deceased Fernando Saya Tan, who an
adopted son of her mother-in-law, came in from the kitchen and chased the two men as far as the store's iron sliding door (p. 11,
t.s.n., Id). Ernesto Lakandula felled Fernando Saya Tan with a fist blow to his chest (p. 11, t.s.n.). Fernando got up and as he
prepared to rush at the accused, the latter held his (Saya's) arms and simultaneously uttered the words of his companion 'Saksakin
mo na, lumalaban.! (p. 12, t.s.n., Id). 'Ador' stabbed Fernando with a 10 inch knife hitting the latter on the left side of the breast
near the armpit (p. 12) (Pls. see Exhibit 'G', p. 212, rec.). After the stabbing, the accused and his companion ran away. (p. 12,
t.s.n., Id). Fernando Saya Tan asked for help (p. 13, t & M). Editha together with others who lend succor, brought Fernando to the
kitchen; Fernando was later on brought to the North General Hospital where he died. (pp. 13-14, t.s.n., Id.)
Editha further declared that the money box contained about P200.00 pesos when she counted the sales at about 7:00 p.m. that
evening and that the two robbers were able to grab the money box as she was taking some change for the boy who made a
purchase. (p. 15 t.s.n. ).
She was brought to the municipal building the next morning where her written statement Exhibit 'G' was taken. (p. 16, t.s.n. )
Sgt. Dizon, detective Ramon Ignacio and Venancio Bantog who responded to a telephone call reporting the robbery, executed
their joint affidavit Exhibit 'E' (p. 210, rec.) wherein they narrated that it was Major Marcelo Orozco who informed them of the
incident that happened at the corner of 3rd St. and 8th Avenue, Caloocan City, and that the complainants were then at the latter's
house. They first fetched the complainants from Major Orozco's house and thereafter repaired to the place of the incident where
they conducted an on the spot investigation. In Exhibit 'E', they stated that several pieces of coins amounting to P6.50 were found
by them scattered on the floor. They also found Exhibit 'B', the scabbard and the half pair of slipper, Exhibit 'C', which according
to Editha de la Rosa Tan were left by a certain John Doe 'Ador'; that Editha pointed to Ernesto Lakandula and Rogelio Mendoza
as among the four who were responsible for the robbery and stabbing of Fernando Saya Tan and when they apprehended the two
suspects, they admitted their participation in the offense, but implicated John Doe 'Ador' as the one who stabbed the victim.
They also stated in Exhibit 'B' that they were able to recover part of the loot in the amount of P 18.00 from the wife of Ernesto
Lakandula. (Exh. 'E', p. 210, Rec.).
Sgt. Mendoza further declared that when they were investigating the two suspects at the police department, they admitted that
when the victim resisted, Ernesto told his companion Dominador Beltran, 'Saksakin mo na, lumalaban' and Dominador Beltran
did stab the deceased. (pp. 9-10, t.s.n., July 9,1969).
Bernarda Tan, declared that after the incident, the wife of Ernesto Lakandula, on two occasions, pleaded with her to have the case
settled amicably. She offered her P 800.00 in settlement of the case, but she refused. (pp. 23-24, t.s.n., July 15,1969).
Dr. Ernesto Ibarrola, Medico-Legal Officer of the NBI conducted a post-mortem examination of the victim and his findings were
contained in his Necropsy Report No. N-7-1800. (Exh. 'A', p. 20,5, Rec.; p. 3, t.s.n., July 7, 1969).
He confirmed, on the witness stand, that the deceased died due to a stab wound on the left chest which could have been caused by
a single bladed instruments. (p. 6, t.s.n., July 7,1969).
The accused, Ernesto Lakandula y Zapanta, on the other hand, while admitting that he was near the scene of the crime when it
was committed, denied participation in its commission. He also denied that he told "Ador" to stab the deceased Fernando Saya
Tan. He declared that at about 9:30 o'clock to 10:00 o'clock in the evening of December 16, 1967, he went to the store of Benito
Tan to buy some cigarettes. When he arrived at the store, he met Felix Itchon and Efren Esquivel who were drinking beer and
talked with them. Itchon was particularly interested in securing a driver's license and asked for his assistance in securing one.
While they were thus conversing, Dominador Beltran, nicknamed "Ador", came to the store to buy beer. But, Benito Tan, the
storeowner, refused to sell him beer. As a result, an altercation ensued. Suddenly, the "boy" of Benito Tan, the deceased Fernando
Saya Tan, appeared and boxed "Ador" on the face, causing the latter to fall. The deceased went towards "Ador" to hit him again,
but "Ador" stood up, drew a knife from his waistband, and stabbed the deceased. Then, "Ador" ran away. So did Felix Itchon and
Efren Esquivel. Then, he heard gunfire and saw Benito Tan holding a gun in his hands. He told Benito Tan not to fire again as
they were many people around and he might hit somebody. He then held the deceased by the shoulders and helped him to his feet.
But, Benito Tan ordered him to put the deceased down (Bitiwan mo yan.) So, he released the deceased. Benito Tan asked him
who the assailants were, but he told Tan that he did not know them. Benito Tan, however, was insistent and warned him that "If
you will not point them to me, I will include you," but he stuck to his answer that he did not know who the persons were. 1 He
went home, and later that evening he was arrested by Ramon Ignacio and Gaudencio Dizon, members of the Caloocan City Police
Department and brought to the police headquarters where he was made to sign a confession, 2 after he was maltreated by the said
policemen. 3
To support his claim, the accused presented the testimony of Felix Itchon and Efren Esquivel, as well as the medical certificate
issued by the medico-legal officer of the Caloocan City General Hospital who examined him in the afternoon of December
17,1967. 4
The trial court however, rejected the defense and found that the accused did in fact participate in the commission of the crime
complained of.
We have examined the records of the case with great care and find no cogent reason to disturb the findings of fact of the trial
court. The alibi of the accused that he was outside the store of Benito Tan when the crime was committed is negated by Editha de
la Rosa Tan who categorically declared that the accused entered the store and took away the cash box which contained their sales
for the day; that it was the accused who boxed the deceased Fernando Saya Tan on the chest, held him by the hands, and directed
Dominador Beltran to stab him because he was fighting back. Editha Tan knew the accused personally so that there was no
possibility of her committing an error in Identifying the accused as one of the malefactors, and the appellant failed to show that
she had any possible motive to falsely implicate him in the commission of the offense.
Besides, in order to accept alibi as a meritorious defense, it must be shown that it was physically impossible for the accused to be
at the scene of the crime when it was committed. In the instant case, however, the accused admitted that he was in the store of
Benito Tan when the crime was committed and even held the hands of the deceased in order to help him up, so that it was not
impossible for him to have committed the crime as testified to by the prosecution witness.
Moreover, as the lower court said, the wife of the appellant offered to pay Bernarda Tan, the adoptive parent of the deceased, the
amount of P800.00, as settlement of the case, an act which constitutes an implied admission of guilt. 5
We also find no merit in the appellant's claim that the lower court erred in assuming jurisdiction over the case. The appellant
argues that the transfer of the case from the Court of First Instance of Rizal to the Circuit Criminal Court, in accordance with
Administrative Order No. 202 issued by the Secretary of Justice on May 26, 1969, was not made in the interest of the
administration of justice, as stated in said Administrative Order, because the accused and his witnesses were made to travel more
than 22 kilometers to Pasig, Rizal, instead of commuting a short distance from the City Jail of Caloocan City, where he had been
detained since his arrest, to the City Hall Annex, where the Court of First Instance holds sessions; that, even assuming that the
Secretary of Justice can legally issue Administrative Order No. 202, nevertheless, he cannot authorize the transfer or
reassignment of cases arising from municipalities other than those mentioned in said Administrative Order; and that Rep. Act No.
5179, which created the circuit criminal courts, does not authorize the transfer of cases which are pending and have been partly
tried by the Courts of First Instance, as in this case where the accused had already been arraigned.
We find no justification, however, to sustain the appellant's claim that this case was transferred to the Circuit Criminal Court of
Pasig, Rizal, by virtue of, and pursuant to, Administrative Order No. 202 of the Department of Justice. The said Administrative
Order reads, as follows:
In the interest of the administration of justice and upon joint petition of the Municipal Mayors of Parañaque, Las Piñas,
Muntinglupa, Montalban, San Mateo, Marikina, Malabon, and Navotas, Rizal, which is favorably indorsed by the Provincial
Governor, all cases arising from the aforesaid municipalities are hereby transferred effective immediately from the branches of
the Court of First Instance of the province to which they are presently assigned to the branches of said Court with official station
at Pasig, with the exception of those cases the trial of which have already been begun by the Judges to which they are presently
assigned.
All administrative orders of this Department which are in conflict herewith are hereby revoked.
As could be seen therefrom, only cases arising from the municipalities of Parañaque, Las Piñas, Muntinglupa, Montalban, San
Mateo, Marikina, Malabon, and Navotas, Rizal, were directed to be transferred to the branches of the Court of First Instance of
Rizal with official station at Pasig, Rizal. No mention whatsoever is made of cases arising from the City of Caloocan; hence, the
transfer of the case to the Circuit Criminal Court could not have been effected pursuant to said Administrative Order No. 202.
But, since this case had been transferred, We can only assume, as the Solicitor General stated, that, in the absence of any other
showing in the records, the transfer of the case to the Circuit Criminal Court was effected in accordance with the long standing
practice followed by judges of moving cases from one branch to another branch of the same court, if they are agreed that such a
step would best promote the ends of justice, as in this case, which had been pending for a long period of time in the Court of First
Instance without being heard although the accused was detained. Thus, in the case of People vs. Gutierrez, 6 the Court justified
the transfer of a criminal case from the Court of First Instance of Ilocos Sur to the Circuit Criminal Court of the Second Judicial
District, saying:
.... The Constitution has vested the Judicial Power in the Supreme Court and such inferior courts as may be established by law
(Article VII, Section 13), and such judicial power connotes certain incidental and inherent attributes reasonably necessary for the
effective administration of justice. The courts 'can by appropriate means do all things necessary to preserve and maintain every
quality needful to make the judiciary an effective institution of government'. (Borromeo vs. Mariano, 41 Phil. 322).
One of these incidental and inherent powers of courts is that of transferring the trial of cases from one court to another of equal
rank in a neighboring site, whenever the imperative of securing a fair and impartial trial, or of preventing a miscarriage of justice,
so demands.
At any rate, since the appellant entered trial in the Circuit Criminal Court without raising any objection to such transfer, he cannot
now be heard to protest such transfer on appeal.
IN VIEW OF ALL THE FOREGOING, the judgment appealed from should be, as it is hereby, AFFIRMED. However, for lack of
the necessary votes, the accused-appellant who has been a detention prisoner for more than fifteen (15) years, is hereby sentenced
to reclusion perpetua With costs.
SO ORDERED
[G.R. No. L-5996. June 27, 1956.]
RAFAEL A. DINGLASAN, ET AL., Petitioners, vs. LEE BUN TING, ANG CHIA, in her capacity as widow of the
deceased Lee Liong, as well as judicial administratrix of the properties of said deceased, and CLARO LEE, Respondents.
DECISION
LABRADOR, J.:
This is an appeal by certiorari against a judgment of the Court of Appeals, affirming that of the Court of First Instance of Capiz.
The facts found in the Court of Appeals, which are pertinent to this appeal are as follows:chanroblesvirtuallawlibrary
In the month of March, 1936 Petitioners-Appellants sold to Lee Liong, a Chinese citizen, predecessor in interest
of Respondents- Appellees, a parcel of land situated on the corner of Roxas Avenue and Pavia Street, Capiz (now Roxas City),
Capiz, designated as lot 398 and covered by original Certificate of Title No. 3389. The cost was P6,000 and soon after the sale
Lee Liong constructed thereon a concrete building which he used as a place for his lumber business and in part as residence for
himself and family. Petitioners had contended that the sale was a conditional sale, or one with the right of repurchase during the
three last years of a ten-year period, but both the trial court and the Court of Appeals found that the sale was an absolute one.
Another contention of the Petitioners-Appellants is that the sale is null and void as it was made in violation of the provision
contained in the Constitution (Article XIII, section 5), but the Court of Appeals found that the purchaser was not aware of the
constitutional prohibition while Petitioners-Appellants were because the negotiations for the sale were conducted with the
knowledge and direct intervention of Judge Rafael Dinglasan, one of thePlaintiffs, who was at that time an assistant attorney in
the Department of Justice. And it held that even if Lee Liong had known of the prohibition, the suit would not lie because of the
principle of pari delicto, that courts will not aid either party to an illegal contract if both are equally guilty but will leave them
where they find them, citing Rellosa vs. Gaw Chee Hun, 93 Phil., 827, promulgated March 18, 1947, and articles 1302, 1305 and
1306 of the Civil Code. The Court of Appeals said:chanroblesvirtuallawlibrary
“By the same token, we hold that Appellants cannot now retrieve the lot in question. ‘Money paid under an agreement which is
executed, whether as the consideration or in performance of the promise, cannot be recovered back where the parties are in pari
delicto. And goods delivered or lands conveyed under an illegal agreement are subject to the same rule (17 C.J.S. 656, 658-659,
660). By this holding we are not sanctioning or legalizing the transaction in question. We merely refuse to aid either party to an
illegal agreement. As stated in Corpus Juris Secundum (Vol. 17, p. 659), the ‘pari delicto rule’ is made for the protection of the
public and not for the benefit of the parties; chan roblesvirtualawlibraryits object in refusing relief to either party where the
contract is executed is not to give validity to the transaction but to deprive the parties of all right to have either enforcement of, or
relief from, the illegal agreement. In such cases the defense of illegality prevails, not as a protection to Defendant, but as a
disability in Plaintiff. The court does not give effect to the contract, but merely refuses its aid to undo what the parties have
already done. While it may not always seem an honorable thing to do, yet a party to an illegal agreement is permitted to set up the
illegality as a defense, even though it may be alleging his own turpitude.”
“Upon the other hand there is a preponderating weight of judicial authorities holding that an alien can take by deed and can hold
land until office found or until the land is taken by the State, and he had full capacity to hold against all the rest of the world
(2 C.J. 1051- 1054; chan roblesvirtualawlibrary2 Am. Jur. 476; chan roblesvirtualawlibraryAbrams vs. State, 45 Wash. 327,
Goon Gan vs. Richardson, 44 P. 762, 16 Wash. 373, Oregon Mortg. Co. Garstens, 47 P. 421, 16 Wash. 165, 35 L. R. A.
841); chan roblesvirtualawlibrarythat before an adjudication of escheat the title of an alien grantee is unaffected; chan
roblesvirtualawlibraryhe has complete dominion over the property acquired by purchase; chan roblesvirtualawlibraryand he can
hold land even against the State itself (19 Am. Jur. 391; chan roblesvirtualawlibrary2 Am. Jur. 476-477; chan
roblesvirtualawlibrary23 A. L. R. 1244-1245); chan roblesvirtualawlibraryand that the one deeding the land to an alien retains no
right, title or interest therein, although the Constitution provides that conveyance to an alien shall be void (Abrams vs. State of
Washington, 45 Wash. 327, 9 L. R. A. MS 186; chan roblesvirtualawlibrary2 Am. Jur. 490-491; chan
roblesvirtualawlibrary3 C.J. S. 550),” pp. 31 to 32, Court of Appeals decision, contained in pp. 67-68, Record on Appeal.)
On this appeal it is contended that as the sale to Lee Liong is prohibited by the Constitution, title to the land did not pass to said
alien because the sale did not produce any juridical effect in his favor and that the constitutional prohibition should be deemed
self-executing in character, in order to give effect to the Constitutional mandate. In answer we state that granting the sale to be
null and void and cannot give title to the vendee, it does not necessarily follow therefrom that the title remained in the vendor,
who had also violated the constitutional prohibition, or that he (vendor) has the right to recover the title of which he had divested
himself by his act in ignoring the prohibition. In such contingency another principle of law sets in to bar the equally guilty vendor
from recovering the title which he had voluntarily conveyed for a consideration, that of pari delicto. We have applied this
principle as a bar to the present action in a series of cases, thus:chanroblesvirtuallawlibrary
“The next question to be determined is whether Plaintiff-Appellant can maintain the present action of annulment and recover the
property considering the effect of the law governing rescission of contracts; chan roblesvirtualawlibraryor, stated in another way,
whether he can recover the property notwithstanding the share he had in the execution of the sale which is known to be tainted
with invalidity. Our answer must of necessity be in the negative following the doctrine laid down in the case of Trinidad Gonzaga
de Cabauatan et al. vs. Uy Hoo, et al., G.R. No. L-2207, wherein we made the following
pronouncement:chanroblesvirtuallawlibrary
“We can, therefore, say that even if the Plaintiffs can still invoke the Constitution, or the doctrine in the Krivenko case, to set
aside the sale in question, they are now prevented from doing so if their purpose is to recover the lands that they have voluntarily
parted with, because of their guilty knowledge that what they were doing was in violation of the Constitution. They cannot escape
the law. As this Court well said:chanroblesvirtuallawlibrary A party to an illegal contract cannot come into a court of law and ask
to have his illegal objects carried out. The law will not aid either party to an illegal agreement; chan roblesvirtualawlibraryit
leaves the parties where it finds them.’ The rule is expressed in the maxims:chanroblesvirtuallawlibrary ‘Ex dolo malo non oritur
actio’, and ‘In pari delicto potior est conditio defendentis.’ (Bough and Bough vs. Cantiveros and Hanopol, 40 Phil., 210, 216.)’“
(Caile vs. Yu Chiaco Peng, 49 Off. Gaz. (10) 4345; chan roblesvirtualawlibrary93 Phil., 861; chan roblesvirtualawlibrarySee also
Rellosa vs. Yaw Chee Hun, 49 Off. Gaz. (10), 4321; chan roblesvirtualawlibraryRicamara vs. Ngo Ki, 92 Phil., 1084, April 29,
1953; chan roblesvirtualawlibraryArambulo vs. Chua So, et al., 95 Phil., 749., August 31, 1954; chan
roblesvirtualawlibraryTalento, et al. vs. Makiki, et al., 93 Phil., 855, September 29, 1953 and Cortes vs. O Po Poe, 93 Phil., 1117,
October 30, 1953.)
It is not necessary for us to re-examine the doctrine laid down by us in the above cases. We must add in justification of the
adoption of the doctrine that the scope of our power and authority is to interpret the law merely, leaving to the proper co-ordinate
body the function of laying down the policy that should be followed in relation to conveyances in violation of the constitutional
prohibition and in implementing said policy. The situation of these prohibited conveyances is not different from that of homestead
sold within five years from and after the issuance of the patent, (Section 118, C. A. 141, otherwise known as the Public Land
Law), for which situation the legislature has adopted the policy, not of returning the homestead sold to the original homesteader,
but of forfeiting the homestead and returning it to the public domain again subject to disposition in accordance with law. (Section
124, Id.)
The doctrine of in pari delicto bars Petitioners-Appellants from recovering the title to the property in question and renders
unnecessary the consideration of the other arguments presented in Appellants’ brief.
There is one other cause why Petitioners’ remedy cannot be entertained, that is the prescription of the action. As the sale occurred
in March, 1936, more than ten years had already elapsed from the time the cause of action accrued when the action was filed
(1948).
We take this occasion to call the attention of the legislature to the absence of a law or policy on sales in violation of the
Constitution; chan roblesvirtualawlibrarythis Court would have filled the void were we not aware of the fact that the matter falls
beyond the scope of our authority and properly belongs to a coordinate power.
The petition for certiorari is hereby denied with costs.
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,
vs.
VENANCIO CONCEPCION, defendant-appellant.
MALCOLM, J.:
By telegrams and a letter of confirmation to the manager of the Aparri branch of the Philippine National Bank, Venancio
Concepcion, President of the Philippine National Bank, between April 10, 1919, and May 7, 1919, authorized an extension of
credit in favor of "Puno y Concepcion, S. en C." in the amount of P300,000. This special authorization was essential in view of
the memorandum order of President Concepcion dated May 17, 1918, limiting the discretional power of the local manager at
Aparri, Cagayan, to grant loans and discount negotiable documents to P5,000, which, in certain cases, could be increased to
P10,000. Pursuant to this authorization, credit aggregating P300,000, was granted the firm of "Puno y Concepcion, S. en C.," the
only security required consisting of six demand notes. The notes, together with the interest, were taken up and paid by July 17,
1919.
"Puno y Concepcion, S. en C." was a copartnership capitalized at P100,000. Anacleto Concepcion contributed P5,000;
Clara Vda. de Concepcion, P5,000; Miguel S. Concepcion, P20,000; Clemente Puno, P20,000; and Rosario San Agustin, "casada
con Gral. Venancio Concepcion," P50,000. Member Miguel S. Concepcion was the administrator of the company.
On the facts recounted, Venancio Concepcion, as President of the Philippine National Bank and as member of the board of
directors of this bank, was charged in the Court of First Instance of Cagayan with a violation of section 35 of Act No. 2747. He
was found guilty by the Honorable Enrique V. Filamor, Judge of First Instance, and was sentenced to imprisonment for one year
and six months, to pay a fine of P3,000, with subsidiary imprisonment in case of insolvency, and the costs.
Section 35 of Act No. 2747, effective on February 20, 1918, just mentioned, to which reference must hereafter repeatedly
be made, reads as follows: "The National Bank shall not, directly or indirectly, grant loans to any of the members of the board of
directors of the bank nor to agents of the branch banks." Section 49 of the same Act provides: "Any person who shall violate any
of the provisions of this Act shall be punished by a fine not to exceed ten thousand pesos, or by imprisonment not to exceed five
years, or by both such fine and imprisonment." These two sections were in effect in 1919 when the alleged unlawful acts took
place, but were repealed by Act No. 2938, approved on January 30, 1921.
Counsel for the defense assign ten errors as having been committed by the trial court. These errors they have argued
adroitly and exhaustively in their printed brief, and again in oral argument. Attorney-General Villa-Real, in an exceptionally
accurate and comprehensive brief, answers the proposition of appellant one by one.
The question presented are reduced to their simplest elements in the opinion which follows:
I. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C." by Venancio Concepcion,
President of the Philippine National Bank, a "loan" within the meaning of section 35 of Act No. 2747?
Counsel argue that the documents of record do not prove that authority to make a loan was given, but only show the
concession of a credit. In this statement of fact, counsel is correct, for the exhibits in question speak of a "credito" (credit) and not
of a " prestamo" (loan).
The "credit" of an individual means his ability to borrow money by virtue of the confidence or trust reposed by a lender that
he will pay what he may promise. (Donnell vs. Jones [1848], 13 Ala., 490; Bouvier's Law Dictionary.) A "loan" means the
delivery by one party and the receipt by the other party of a given sum of money, upon an agreement, express or implied, to repay
the sum loaned, with or without interest. (Payne vs. Gardiner [1864], 29 N. Y., 146, 167.) The concession of a "credit" necessarily
involves the granting of "loans" up to the limit of the amount fixed in the "credit,"
II. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C.," by Venancio Concepcion,
President of the Philippine National Bank, a "loan" or a "discount"?
Counsel argue that while section 35 of Act No. 2747 prohibits the granting of a "loan," it does not prohibit what is
commonly known as a "discount."
In a letter dated August 7, 1916, H. Parker Willis, then President of the National Bank, inquired of the Insular Auditor
whether section 37 of Act No. 2612 was intended to apply to discounts as well as to loans. The ruling of the Acting Insular
Auditor, dated August 11, 1916, was to the effect that said section referred to loans alone, and placed no restriction upon discount
transactions. It becomes material, therefore, to discover the distinction between a "loan" and a "discount," and to ascertain if the
instant transaction comes under the first or the latter denomination.
Discounts are favored by bankers because of their liquid nature, growing, as they do, out of an actual, live, transaction. But
in its last analysis, to discount a paper is only a mode of loaning money, with, however, these distinctions: (1) In a discount,
interest is deducted in advance, while in a loan, interest is taken at the expiration of a credit; (2) a discount is always on double-
name paper; a loan is generally on single-name paper.
Conceding, without deciding, that, as ruled by the Insular Auditor, the law covers loans and not discounts, yet the
conclusion is inevitable that the demand notes signed by the firm "Puno y Concepcion, S. en C." were not discount paper but were
mere evidences of indebtedness, because (1) interest was not deducted from the face of the notes, but was paid when the notes fell
due; and (2) they were single-name and not double-name paper.
The facts of the instant case having relation to this phase of the argument are not essentially different from the facts in the
Binalbagan Estate case. Just as there it was declared that the operations constituted a loan and not a discount, so should we here
lay down the same ruling.
III. Was the granting of a credit of P300,000 to the copartnership, "Puno y Concepcion, S. en C." by Venancio Concepcion,
President of the Philippine National Bank, an "indirect loan" within the meaning of section 35 of Act No. 2747?
Counsel argue that a loan to the partnership "Puno y Concepcion, S. en C." was not an "indirect loan." In this connection, it
should be recalled that the wife of the defendant held one-half of the capital of this partnership.
In the interpretation and construction of statutes, the primary rule is to ascertain and give effect to the intention of the
Legislature. In this instance, the purpose of the Legislature is plainly to erect a wall of safety against temptation for a director of
the bank. The prohibition against indirect loans is a recognition of the familiar maxim that no man may serve two masters — that
where personal interest clashes with fidelity to duty the latter almost always suffers. If, therefore, it is shown that the husband is
financially interested in the success or failure of his wife's business venture, a loan to partnership of which the wife of a director is
a member, falls within the prohibition.
Various provisions of the Civil serve to establish the familiar relationship called a conjugal partnership. (Articles 1315,
1393, 1401, 1407, 1408, and 1412 can be specially noted.) A loan, therefore, to a partnership of which the wife of a director of a
bank is a member, is an indirect loan to such director.
That it was the intention of the Legislature to prohibit exactly such an occurrence is shown by the acknowledged fact that in
this instance the defendant was tempted to mingle his personal and family affairs with his official duties, and to permit the loan
P300,000 to a partnership of no established reputation and without asking for collateral security.
In the case of Lester and Wife vs. Howard Bank ([1870], 33 Md., 558; 3 Am. Rep., 211), the Supreme Court of Maryland
said:
What then was the purpose of the law when it declared that no director or officer should borrow of the bank, and "if any
director," etc., "shall be convicted," etc., "of directly or indirectly violating this section he shall be punished by fine and
imprisonment?" We say to protect the stockholders, depositors and creditors of the bank, against the temptation to which the
directors and officers might be exposed, and the power which as such they must necessarily possess in the control and
management of the bank, and the legislature unwilling to rely upon the implied understanding that in assuming this relation they
would not acquire any interest hostile or adverse to the most exact and faithful discharge of duty, declared in express terms that
they should not borrow, etc., of the bank.
In the case of People vs. Knapp ([1912], 206 N. Y., 373), relied upon in the Binalbagan Estate decision, it was said:
We are of opinion the statute forbade the loan to his copartnership firm as well as to himself directly. The loan was made
indirectly to him through his firm.
IV. Could Venancio Concepcion, President of the Philippine National Bank, be convicted of a violation of section 35 of Act No.
2747 in relation with section 49 of the same Act, when these portions of Act No. 2747 were repealed by Act No. 2938, prior to
the finding of the information and the rendition of the judgment?
As noted along toward the beginning of this opinion, section 49 of Act No. 2747, in relation to section 35 of the same Act,
provides a punishment for any person who shall violate any of the provisions of the Act. It is contended, however, by the
appellant, that the repeal of these sections of Act No. 2747 by Act No. 2938 has served to take away the basis for criminal
prosecution.
This same question has been previously submitted and has received an answer adverse to such contention in the cases
of United Stated vs. Cuna ([1908], 12 Phil., 241); People vs. Concepcion ([1922], 43 Phil., 653); and Ong Chang Wing and
Kwong Fok vs. United States ([1910], 218 U. S., 272; 40 Phil., 1046). In other words, it has been the holding, and it must again be
the holding, that where an Act of the Legislature which penalizes an offense, such repeals a former Act which penalized the same
offense, such repeal does not have the effect of thereafter depriving the courts of jurisdiction to try, convict, and sentenced
offenders charged with violations of the old law.
V. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C." by Venancio Concepcion,
President of the Philippine National Bank, in violation of section 35 of Act No. 2747, penalized by this law?
Counsel argue that since the prohibition contained in section 35 of Act No. 2747 is on the bank, and since section 49 of said
Act provides a punishment not on the bank when it violates any provisions of the law, but on aperson violating any provisions of
the same, and imposing imprisonment as a part of the penalty, the prohibition contained in said section 35 is without penal
sanction.lawph!l.net
The answer is that when the corporation itself is forbidden to do an act, the prohibition extends to the board of directors,
and to each director separately and individually. (People vs. Concepcion, supra.)
VI. Does the alleged good faith of Venancio Concepcion, President of the Philippine National Bank, in extending the credit of
P300,000 to the copartnership "Puno y Concepcion, S. en C." constitute a legal defense?
Counsel argue that if defendant committed the acts of which he was convicted, it was because he was misled by rulings
coming from the Insular Auditor. It is furthermore stated that since the loans made to the copartnership "Puno y Concepcion, S.
en C." have been paid, no loss has been suffered by the Philippine National Bank.
Neither argument, even if conceded to be true, is conclusive. Under the statute which the defendant has violated, criminal
intent is not necessarily material. The doing of the inhibited act, inhibited on account of public policy and public interest,
constitutes the crime. And, in this instance, as previously demonstrated, the acts of the President of the Philippine National Bank
do not fall within the purview of the rulings of the Insular Auditor, even conceding that such rulings have controlling effect.
Morse, in his work, Banks and Banking, section 125, says:
It is fraud for directors to secure by means of their trust, and advantage not common to the other stockholders. The law will
not allow private profit from a trust, and will not listen to any proof of honest intent.
JUDGMENT
On a review of the evidence of record, with reference to the decision of the trial court, and the errors assigned by the
appellant, and with reference to previous decisions of this court on the same subject, we are irresistibly led to the conclusion that
no reversible error was committed in the trial of this case, and that the defendant has been proved guilty beyond a reasonable
doubt of the crime charged in the information. The penalty imposed by the trial judge falls within the limits of the punitive
provisions of the law.

Judgment is affirmed, with the costs of this instance against the appellant. So ordered