G.R. No.

L-63915 April 24, 1985

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF

ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
[MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President ,
MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacañang Records
Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, respondents.

ESCOLIN, J.:

Invoking the people's right to be informed on matters of public concern, a right

recognized in Section 6, Article IV of the 1973 Philippine Constitution, 1 as well as the
principle that laws to be valid and enforceable must be published in the Official Gazette
or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel
respondent public officials to publish, and/or cause the publication in the Official Gazette
of various presidential decrees, letters of instructions, general orders, proclamations,
executive orders, letter of implementation and administrative orders.

Specifically, the publication of the following presidential issuances is sought:

a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200,
234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368,
404, 406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566,
573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923,
935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250,
1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840,
1842-1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150,
153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-
224, 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283,
285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357,
358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488,
498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615,
641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940,
964,997,1149-1178,1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526,
1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-
1600, 1606-1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723,
1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-
1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829,
1831-1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858,
1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963,
1965-1966, 1968-1984, 1986-2028, 2030-2044, 2046-2145, 2147-2161, 2163-
2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-
507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563,
567-568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707,
712-786, 788-852, 854-857.
 f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76,
80-81, 92, 94, 95, 107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.

The respondents, through the Solicitor General, would have this case dismissed outright
on the ground that petitioners have no legal personality or standing to bring the instant
petition. The view is submitted that in the absence of any showing that petitioners are
personally and directly affected or prejudiced by the alleged non-publication of the
presidential issuances in question 2 said petitioners are without the requisite legal
personality to institute this mandamus proceeding, they are not being "aggrieved parties"
within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:

SEC. 3. Petition for Mandamus.—When any tribunal, corporation, board or

person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use a rd enjoyment of a right or office
to which such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper court alleging the facts
with certainty and praying that judgment be rendered commanding the
defendant, immediately or at some other specified time, to do the act
required to be done to Protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the
defendant.

Upon the other hand, petitioners maintain that since the subject of the petition concerns
a public right and its object is to compel the performance of a public duty, they need not
show any specific interest for their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910 case of Severino vs.
Governor General, 3 this Court held that while the general rule is that "a writ of mandamus
would be granted to a private individual only in those cases where he has some private
or particular interest to be subserved, or some particular right to be protected,
independent of that which he holds with the public at large," and "it is for the public
officers exclusively to apply for the writ when public rights are to be subserved [Mithchell
vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and
the object of the mandamus is to procure the enforcement of a public duty, the people are
regarded as the real party in interest and the relator at whose instigation the proceedings
are instituted need not show that he has any legal or special interest in the result, it being
sufficient to show that he is a citizen and as such interested in the execution of the laws
[High, Extraordinary Legal Remedies, 3rd ed., sec. 431].

Thus, in said case, this Court recognized the relator Lope Severino, a private individual,
as a proper party to the mandamus proceedings brought to compel the Governor General
to call a special election for the position of municipal president in the town of Silay,
Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:

We are therefore of the opinion that the weight of authority supports the
proposition that the relator is a proper party to proceedings of this character
when a public right is sought to be enforced. If the general rule in America
were otherwise, we think that it would not be applicable to the case at bar
for the reason 'that it is always dangerous to apply a general rule to a
particular case without keeping in mind the reason for the rule, because, if
under the particular circumstances the reason for the rule does not exist, the
rule itself is not applicable and reliance upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by counsel
for the respondent. The circumstances which surround this case are different from those
in the United States, inasmuch as if the relator is not a proper party to these proceedings
no other person could be, as we have seen that it is not the duty of the law officer of the
Government to appear and represent the people in cases of this character.

The reasons given by the Court in recognizing a private citizen's legal personality in the
aforementioned case apply squarely to the present petition. Clearly, the right sought to
be enforced by petitioners herein is a public right recognized by no less than the
fundamental law of the land. If petitioners were not allowed to institute this proceeding,
it would indeed be difficult to conceive of any other person to initiate the same,
considering that the Solicitor General, the government officer generally empowered to
represent the people, has entered his appearance for respondents in this case.

Respondents further contend that publication in the Official Gazette is not a sine qua non
requirement for the effectivity of laws where the laws themselves provide for their own
effectivity dates. It is thus submitted that since the presidential issuances in question
contain special provisions as to the date they are to take effect, publication in the Official
Gazette is not indispensable for their effectivity. The point stressed is anchored on Article
2 of the Civil Code:

Art. 2. Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided, ...

The interpretation given by respondent is in accord with this Court's construction of said
article. In a long line of decisions,4 this Court has ruled that publication in the Official
Gazette is necessary in those cases where the legislation itself does not provide for its
effectivity date-for then the date of publication is material for determining its date of
effectivity, which is the fifteenth day following its publication-but not when the law itself
provides for the date when it goes into effect.

Respondents' argument, however, is logically correct only insofar as it equates the

effectivity of laws with the fact of publication. Considered in the light of other statutes
applicable to the issue at hand, the conclusion is easily reached that said Article 2 does
not preclude the requirement of publication in the Official Gazette, even if the law itself
provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides
as follows:

Section 1. There shall be published in the Official Gazette [1] all important
legisiative acts and resolutions of a public nature of the, Congress of the
Philippines; [2] all executive and administrative orders and proclamations,
except such as have no general applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals as may be deemed
by said courts of sufficient importance to be so published; [4] such
documents or classes of documents as may be required so to be published
by law; and [5] such documents or classes of documents as the President of
the Philippines shall determine from time to time to have general
applicability and legal effect, or which he may authorize so to be published.
...

The clear object of the above-quoted provision is to give the general public adequate
notice of the various laws which are to regulate their actions and conduct as citizens.
Without such notice and publication, there would be no basis for the application of the
maxim "ignorantia legis non excusat." It would be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law of which he had no notice
whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the publication
of laws taken so vital significance that at this time when the people have bestowed upon
the President a power heretofore enjoyed solely by the legislature. While the people are
kept abreast by the mass media of the debates and deliberations in the Batasan
Pambansa—and for the diligent ones, ready access to the legislative records—no such
publicity accompanies the law-making process of the President. Thus, without
publication, the people have no means of knowing what presidential decrees have
actually been promulgated, much less a definite way of informing themselves of the
specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la
denominacion generica de leyes, se comprenden tambien los reglamentos, Reales
decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las
mismas por el Gobierno en uso de su potestad.5

The very first clause of Section I of Commonwealth Act 638 reads: "There shall be
published in the Official Gazette ... ." The word "shall" used therein imposes upon
respondent officials an imperative duty. That duty must be enforced if the Constitutional
right of the people to be informed on matters of public concern is to be given substance
and reality. The law itself makes a list of what should be published in the Official Gazette.
Such listing, to our mind, leaves respondents with no discretion whatsoever as to what
must be included or excluded from such publication.

The publication of all presidential issuances "of a public nature" or "of general
applicability" is mandated by law. Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise impose a burden or. the people,
such as tax and revenue measures, fall within this category. Other presidential issuances
which apply only to particular persons or class of persons such as administrative and
executive orders need not be published on the assumption that they have been
circularized to all concerned. 6

It is needless to add that the publication of presidential issuances "of a public nature" or
"of general applicability" is a requirement of due process. It is a rule of law that before a
person may be bound by law, he must first be officially and specifically informed of its
contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7:

In a time of proliferating decrees, orders and letters of instructions which

all form part of the law of the land, the requirement of due process and the
Rule of Law demand that the Official Gazette as the official government
repository promulgate and publish the texts of all such decrees, orders and
instructions so that the people may know where to obtain their official and
specific contents.

The Court therefore declares that presidential issuances of general application, which
have not been published, shall have no force and effect. Some members of the Court, quite
apprehensive about the possible unsettling effect this decision might have on acts done
in reliance of the validity of those presidential decrees which were published only during
the pendency of this petition, have put the question as to whether the Court's declaration
of invalidity apply to P.D.s which had been enforced or implemented prior to their
publication. The answer is all too familiar. In similar situations in the past this Court had
taken the pragmatic and realistic course set forth in Chicot County Drainage District vs.
Baxter Bank 8 to wit:

The courts below have proceeded on the theory that the Act of Congress,
having been found to be unconstitutional, was not a law; that it was
inoperative, conferring no rights and imposing no duties, and hence
affording no basis for the challenged decree. Norton v. Shelby County, 118
U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite
clear, however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with qualifications. The
 actual existence of a statute, prior to such a determination, is an operative
fact and may have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various
aspects-with respect to particular conduct, private and official. Questions
of rights claimed to have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public policy in the
light of the nature both of the statute and of its previous application,
demand examination. These questions are among the most difficult of those
which have engaged the attention of courts, state and federal and it is
manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right
of a party under the Moratorium Law, albeit said right had accrued in his favor before
said law was declared unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior to their

publication in the Official Gazette is "an operative fact which may have consequences
which cannot be justly ignored. The past cannot always be erased by a new judicial
declaration ... that an all-inclusive statement of a principle of absolute retroactive
invalidity cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears that of the
presidential decrees sought by petitioners to be published in the Official Gazette, only
Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have
not been so published. 10 Neither the subject matters nor the texts of these PDs can be
ascertained since no copies thereof are available. But whatever their subject matter may
be, it is undisputed that none of these unpublished PDs has ever been implemented or
enforced by the government. In Pesigan vs. Angeles, 11 the Court, through Justice Ramon
Aquino, ruled that "publication is necessary to apprise the public of the contents of
[penal] regulations and make the said penalties binding on the persons affected thereby.
" The cogency of this holding is apparently recognized by respondent officials
considering the manifestation in their comment that "the government, as a matter of
policy, refrains from prosecuting violations of criminal laws until the same shall have
been published in the Official Gazette or in some other publication, even though some
criminal laws provide that they shall take effect immediately.

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all
unpublished presidential issuances which are of general application, and unless so
published, they shall have no binding force and effect.

SO ORDERED.

Relova, J., concurs.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

Separate Opinions

FERNANDO, C.J., concurring (with qualification):

There is on the whole acceptance on my part of the views expressed in the ably written
opinion of Justice Escolin. I am unable, however, to concur insofar as it would
unqualifiedly impose the requirement of publication in the Official Gazette for
unpublished "presidential issuances" to have binding force and effect.
I shall explain why.

1. It is of course true that without the requisite publication, a due process question would
arise if made to apply adversely to a party who is not even aware of the existence of any
legislative or executive act having the force and effect of law. My point is that such
publication required need not be confined to the Official Gazette. From the pragmatic
standpoint, there is an advantage to be gained. It conduces to certainty. That is too be
admitted. It does not follow, however, that failure to do so would in all cases and under
all circumstances result in a statute, presidential decree or any other executive act of the
same category being bereft of any binding force and effect. To so hold would, for me,
raise a constitutional question. Such a pronouncement would lend itself to the
interpretation that such a legislative or presidential act is bereft of the attribute of
effectivity unless published in the Official Gazette. There is no such requirement in the
Constitution as Justice Plana so aptly pointed out. It is true that what is decided now
applies only to past "presidential issuances". Nonetheless, this clarification is, to my
mind, needed to avoid any possible misconception as to what is required for any statute
or presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana.
Its first paragraph sets forth what to me is the constitutional doctrine applicable to this
case. Thus: "The Philippine Constitution does not require the publication of laws as a
prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said
though that the guarantee of due process requires notice of laws to affected Parties before
they can be bound thereby; but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. 1 I am likewise in agreement with its
closing paragraph: "In fine, I concur in the majority decision to the extent that it requires
notice before laws become effective, for no person should be bound by a law without
notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such
notice shall be by publication in the Official Gazette. 2

3. It suffices, as was stated by Judge Learned Hand, that law as the command of the
government "must be ascertainable in some form if it is to be enforced at all. 3 It would
indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if
it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not
prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure
once published therein there is the ascertainable mode of determining the exact date of
its effectivity. Still for me that does not dispose of the question of what is the jural effect
of past presidential decrees or executive acts not so published. For prior thereto, it could
be that parties aware of their existence could have conducted themselves in accordance
with their provisions. If no legal consequences could attach due to lack of publication in
the Official Gazette, then serious problems could arise. Previous transactions based on
such "Presidential Issuances" could be open to question. Matters deemed settled could
still be inquired into. I am not prepared to hold that such an effect is contemplated by our
decision. Where such presidential decree or executive act is made the basis of a criminal
prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases
though, retroactivity as such is not conclusive on the due process aspect. There must still
be a showing of arbitrariness. Moreover, where the challenged presidential decree or
executive act was issued under the police power, the non-impairment clause of the
Constitution may not always be successfully invoked. There must still be that process of
balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In
traditional terminology, there could arise then a question of unconstitutional application.
That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no further than to affirm
that publication is essential to the effectivity of a legislative or executive act of a general
application. I am not in agreement with the view that such publication must be in the
Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as
to laws taking effect after fifteen days following the completion of their publication in the
Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover,
the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not and
cannot have the juridical force of a constitutional command. A later legislative or
executive act which has the force and effect of law can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin
that presidential decrees and executive acts not thus previously published in the Official
Gazette would be devoid of any legal character. That would be, in my opinion, to go too
far. It may be fraught, as earlier noted, with undesirable consequences. I find myself
therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay
concur in this separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring:

I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme.
Justice Herrera. The Rule of Law connotes a body of norms and laws published and
ascertainable and of equal application to all similarly circumstances and not subject to
arbitrary change but only under certain set procedures. The Court has consistently
stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity
to be informed must be afforded to the people who are commanded to obey before they
can be punished for its violation,1 citing the settled principle based on due process
enunciated in earlier cases that "before the public is bound by its contents, especially its
penal provisions, a law, regulation or circular must first be published and the people
officially and specially informed of said contents and its penalties.

Without official publication in the Official Gazette as required by Article 2 of the Civil
Code and the Revised Administrative Code, there would be no basis nor justification for
the corollary rule of Article 3 of the Civil Code (based on constructive notice that the
provisions of the law are ascertainable from the public and official repository where they
are duly published) that "Ignorance of the law excuses no one from compliance therewith.

Respondents' contention based on a misreading of Article 2 of the Civil Code that "only
laws which are silent as to their effectivity [date] need be published in the Official Gazette
for their effectivity" is manifestly untenable. The plain text and meaning of the Civil Code
is that "laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity
date is provided by the law itself. This proviso perforce refers to a law that has been duly
published pursuant to the basic constitutional requirements of due process. The best
example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall
take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents'
misreading that "most laws or decrees specify the date of their effectivity and for this
reason, publication in the Official Gazette is not necessary for their effectivity 3 would be
to nullify and render nugatory the Civil Code's indispensable and essential requirement
of prior publication in the Official Gazette by the simple expedient of providing for
immediate effectivity or an earlier effectivity date in the law itself before the completion
of 15 days following its publication which is the period generally fixed by the Civil Code
for its proper dissemination.

MELENCIO-HERRERA, J., concurring:

I agree. There cannot be any question but that even if a decree provides for a date of
effectivity, it has to be published. What I would like to state in connection with that
proposition is that when a date of effectivity is mentioned in the decree but the decree
becomes effective only fifteen (15) days after its publication in the Official Gazette, it will
not mean that the decree can have retroactive effect to the date of effectivity mentioned
in the decree itself. There should be no retroactivity if the retroactivity will run counter
to constitutional rights or shall destroy vested rights.

PLANA, J., concurring (with qualification):

The Philippine Constitution does not require the publication of laws as a prerequisite for
their effectivity, unlike some Constitutions elsewhere. * It may be said though that the
guarantee of due process requires notice of laws to affected parties before they can be
bound thereby; but such notice is not necessarily by publication in the Official Gazette.
The due process clause is not that precise. Neither is the publication of laws in the Official
Gazette required by any statute as a prerequisite for their effectivity, if said laws already
provide for their effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following
the completion of their publication in the Official Gazette, unless it is otherwise provided "
Two things may be said of this provision: Firstly, it obviously does not apply to a law
with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that
each law may provide not only a different period for reckoning its effectivity date but
also a different mode of notice. Thus, a law may prescribe that it shall be published
elsewhere than in the Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the proposition that for
their effectivity, laws must be published in the Official Gazette. The said law is simply "An
Act to Provide for the Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official Gazette, determines
its frequency, provides for its sale and distribution, and defines the authority of the
Director of Printing in relation thereto. It also enumerates what shall be published in the
Official Gazette, among them, "important legislative acts and resolutions of a public
nature of the Congress of the Philippines" and "all executive and administrative orders
and proclamations, except such as have no general applicability." It is noteworthy that
not all legislative acts are required to be published in the Official Gazette but only
"important" ones "of a public nature." Moreover, the said law does not provide that
publication in the Official Gazette is essential for the effectivity of laws. This is as it should
be, for all statutes are equal and stand on the same footing. A law, especially an earlier
one of general application such as Commonwealth Act No. 638, cannot nullify or restrict
the operation of a subsequent statute that has a provision of its own as to when and how
it will take effect. Only a higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires notice before laws
become effective, for no person should be bound by a law without notice. This is
elementary fairness. However, I beg to disagree insofar as it holds that such notice shall
be by publication in the Official Gazette.

Cuevas and Alampay, JJ., concur

GUTIERREZ, Jr., J., concurring:

I concur insofar as publication is necessary but reserve my vote as to the necessity of such
publication being in the Official Gazette.

DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and issuances of a public
nature or general applicability ineffective, until due publication thereof.

Separate Opinions
FERNANDO, C.J., concurring (with qualification):

There is on the whole acceptance on my part of the views expressed in the ably written
opinion of Justice Escolin. I am unable, however, to concur insofar as it would
unqualifiedly impose the requirement of publication in the Official Gazette for
unpublished "presidential issuances" to have binding force and effect.

I shall explain why.

1. It is of course true that without the requisite publication, a due process question would
arise if made to apply adversely to a party who is not even aware of the existence of any
legislative or executive act having the force and effect of law. My point is that such
publication required need not be confined to the Official Gazette. From the pragmatic
standpoint, there is an advantage to be gained. It conduces to certainty. That is too be
admitted. It does not follow, however, that failure to do so would in all cases and under
all circumstances result in a statute, presidential decree or any other executive act of the
same category being bereft of any binding force and effect. To so hold would, for me,
raise a constitutional question. Such a pronouncement would lend itself to the
interpretation that such a legislative or presidential act is bereft of the attribute of
effectivity unless published in the Official Gazette. There is no such requirement in the
Constitution as Justice Plana so aptly pointed out. It is true that what is decided now
applies only to past "presidential issuances". Nonetheless, this clarification is, to my
mind, needed to avoid any possible misconception as to what is required for any statute
or presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana.
Its first paragraph sets forth what to me is the constitutional doctrine applicable to this
case. Thus: "The Philippine Constitution does not require the publication of laws as a
prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said
though that the guarantee of due process requires notice of laws to affected Parties before
they can be bound thereby; but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. 1 I am likewise in agreement with its
closing paragraph: "In fine, I concur in the majority decision to the extent that it requires
notice before laws become effective, for no person should be bound by a law without
notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such
notice shall be by publication in the Official Gazette. 2

3. It suffices, as was stated by Judge Learned Hand, that law as the command of the
government "must be ascertainable in some form if it is to be enforced at all. 3 It would
indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if
it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not
prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure
once published therein there is the ascertainable mode of determining the exact date of
its effectivity. Still for me that does not dispose of the question of what is the jural effect
of past presidential decrees or executive acts not so published. For prior thereto, it could
be that parties aware of their existence could have conducted themselves in accordance
with their provisions. If no legal consequences could attach due to lack of publication in
the Official Gazette, then serious problems could arise. Previous transactions based on
such "Presidential Issuances" could be open to question. Matters deemed settled could
still be inquired into. I am not prepared to hold that such an effect is contemplated by our
decision. Where such presidential decree or executive act is made the basis of a criminal
prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases
though, retroactivity as such is not conclusive on the due process aspect. There must still
be a showing of arbitrariness. Moreover, where the challenged presidential decree or
executive act was issued under the police power, the non-impairment clause of the
Constitution may not always be successfully invoked. There must still be that process of
balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In
traditional terminology, there could arise then a question of unconstitutional application.
That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no further than to affirm
that publication is essential to the effectivity of a legislative or executive act of a general
application. I am not in agreement with the view that such publication must be in the
Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as
to laws taking effect after fifteen days following the completion of their publication in the
Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover,
the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not and
cannot have the juridical force of a constitutional command. A later legislative or
executive act which has the force and effect of law can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin
that presidential decrees and executive acts not thus previously published in the Official
Gazette would be devoid of any legal character. That would be, in my opinion, to go too
far. It may be fraught, as earlier noted, with undesirable consequences. I find myself
therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay
concur in this separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring:

I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme.
Justice Herrera. The Rule of Law connotes a body of norms and laws published and
ascertainable and of equal application to all similarly circumstances and not subject to
arbitrary change but only under certain set procedures. The Court has consistently
stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity
to be informed must be afforded to the people who are commanded to obey before they
can be punished for its violation,1 citing the settled principle based on due process
enunciated in earlier cases that "before the public is bound by its contents, especially its
penal provisions, a law, regulation or circular must first be published and the people
officially and specially informed of said contents and its penalties.

Without official publication in the Official Gazette as required by Article 2 of the Civil
Code and the Revised Administrative Code, there would be no basis nor justification for
the corollary rule of Article 3 of the Civil Code (based on constructive notice that the
provisions of the law are ascertainable from the public and official repository where they
are duly published) that "Ignorance of the law excuses no one from compliance therewith.

Respondents' contention based on a misreading of Article 2 of the Civil Code that "only
laws which are silent as to their effectivity [date] need be published in the Official Gazette
for their effectivity" is manifestly untenable. The plain text and meaning of the Civil Code
is that "laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity
date is provided by the law itself. This proviso perforce refers to a law that has been duly
published pursuant to the basic constitutional requirements of due process. The best
example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall
take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents'
misreading that "most laws or decrees specify the date of their effectivity and for this
reason, publication in the Official Gazette is not necessary for their effectivity 3 would be
to nullify and render nugatory the Civil Code's indispensable and essential requirement
of prior publication in the Official Gazette by the simple expedient of providing for
immediate effectivity or an earlier effectivity date in the law itself before the completion
of 15 days following its publication which is the period generally fixed by the Civil Code
for its proper dissemination.

MELENCIO-HERRERA, J., concurring:

I agree. There cannot be any question but that even if a decree provides for a date of
effectivity, it has to be published. What I would like to state in connection with that
proposition is that when a date of effectivity is mentioned in the decree but the decree
becomes effective only fifteen (15) days after its publication in the Official Gazette, it will
not mean that the decree can have retroactive effect to the date of effectivity mentioned
in the decree itself. There should be no retroactivity if the retroactivity will run counter
to constitutional rights or shall destroy vested rights.

PLANA, J., concurring (with qualification):

The Philippine Constitution does not require the publication of laws as a prerequisite for
their effectivity, unlike some Constitutions elsewhere. * It may be said though that the
guarantee of due process requires notice of laws to affected parties before they can be
bound thereby; but such notice is not necessarily by publication in the Official Gazette.
The due process clause is not that precise. Neither is the publication of laws in the Official
Gazette required by any statute as a prerequisite for their effectivity, if said laws already
provide for their effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following
the completion of their publication in the Official Gazette, unless it is otherwise provided "
Two things may be said of this provision: Firstly, it obviously does not apply to a law
with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that
each law may provide not only a different period for reckoning its effectivity date but
also a different mode of notice. Thus, a law may prescribe that it shall be published
elsewhere than in the Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the proposition that for
their effectivity, laws must be published in the Official Gazette. The said law is simply "An
Act to Provide for the Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official Gazette, determines
its frequency, provides for its sale and distribution, and defines the authority of the
Director of Printing in relation thereto. It also enumerates what shall be published in the
Official Gazette, among them, "important legislative acts and resolutions of a public
nature of the Congress of the Philippines" and "all executive and administrative orders
and proclamations, except such as have no general applicability." It is noteworthy that
not all legislative acts are required to be published in the Official Gazette but only
"important" ones "of a public nature." Moreover, the said law does not provide that
publication in the Official Gazette is essential for the effectivity of laws. This is as it should
be, for all statutes are equal and stand on the same footing. A law, especially an earlier
one of general application such as Commonwealth Act No. 638, cannot nullify or restrict
the operation of a subsequent statute that has a provision of its own as to when and how
it will take effect. Only a higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires notice before laws
become effective, for no person should be bound by a law without notice. This is
elementary fairness. However, I beg to disagree insofar as it holds that such notice shall
be by publication in the Official Gazette.

Cuevas and Alampay, JJ., concur.

GUTIERREZ, Jr., J., concurring:

I concur insofar as publication is necessary but reserve my vote as to the necessity of such
publication being in the Official Gazette.

DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and issuances of a public
nature or general applicability ineffective, until due publication thereof.
G.R. No. 80718 January 29, 1988

FELIZA P. DE ROY and VIRGILIO RAMOS, petitioners,

vs.
COURT OF APPEALS and LUIS BERNAL, SR., GLENIA BERNAL, LUIS BERNAL,
JR., HEIRS OF MARISSA BERNAL, namely, GLICERIA DELA CRUZ BERNAL and
LUIS BERNAL, SR., respondents.

RESOLUTION

CORTES, J.:

This special civil action for certiorari seeks to declare null and void two (2) resolutions of
the Special First Division of the Court of Appeals in the case of Luis Bernal, Sr., et al. v.
Felisa Perdosa De Roy, et al., CA-G.R. CV No. 07286. The first resolution promulgated on
30 September 1987 denied petitioners' motion for extension of time to file a motion for
reconsideration and directed entry of judgment since the decision in said case had
become final; and the second Resolution dated 27 October 1987 denied petitioners'
motion for reconsideration for having been filed out of time.

At the outset, this Court could have denied the petition outright for not being verified as
required by Rule 65 section 1 of the Rules of Court. However, even if the instant petition
did not suffer from this defect, this Court, on procedural and substantive grounds, would
still resolve to deny it.

The facts of the case are undisputed. The firewall of a burned-out building owned by
petitioners collapsed and destroyed the tailoring shop occupied by the family of private
respondents, resulting in injuries to private respondents and the death of Marissa Bernal,
a daughter. Private respondents had been warned by petitioners to vacate their shop in
view of its proximity to the weakened wall but the former failed to do so. On the basis of
the foregoing facts, the Regional Trial Court. First Judicial Region, Branch XXXVIII,
presided by the Hon. Antonio M. Belen, rendered judgment finding petitioners guilty of
gross negligence and awarding damages to private respondents. On appeal, the decision
of the trial court was affirmed in toto by the Court of Appeals in a decision promulgated
on August 17, 1987, a copy of which was received by petitioners on August 25, 1987. On
September 9, 1987, the last day of the fifteen-day period to file an appeal, petitioners filed
a motion for extension of time to file a motion for reconsideration, which was eventually
denied by the appellate court in the Resolution of September 30, 1987. Petitioners filed
their motion for reconsideration on September 24, 1987 but this was denied in the
Resolution of October 27, 1987.

This Court finds that the Court of Appeals did not commit a grave abuse of discretion
when it denied petitioners' motion for extension of time to file a motion for
reconsideration, directed entry of judgment and denied their motion for reconsideration.
It correctly applied the rule laid down in Habaluyas Enterprises, Inc. v. Japzon, [G.R. No.
70895, August 5, 1985,138 SCRA 461, that the fifteen-day period for appealing or for filing
a motion for reconsideration cannot be extended. In its Resolution denying the motion
for reconsideration, promulgated on July 30, 1986 (142 SCRA 208), this Court en
banc restated and clarified the rule, to wit:

Beginning one month after the promulgation of this Resolution, the rule shall be strictly
enforced that no motion for extension of time to file a motion for reconsideration may be
filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the
Intermediate Appellate Court. Such a motion may be filed only in cases pending with the
Supreme Court as the court of last resort, which may in its sound discretion either grant
or deny the extension requested. (at p. 212)
Lacsamana v. Second Special Cases Division of the intermediate Appellate Court, [G.R. No.
73146-53, August 26, 1986, 143 SCRA 643], reiterated the rule and went further to restate
and clarify the modes and periods of appeal.

Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15, 1986,144 SCRA
161],stressed the prospective application of said rule, and explained the operation of the
grace period, to wit:

In other words, there is a one-month grace period from the promulgation

on May 30, 1986 of the Court's Resolution in the clarificatory Habaluyas
case, or up to June 30, 1986, within which the rule barring extensions of time
to file motions for new trial or reconsideration is, as yet, not strictly
enforceable.

Since petitioners herein filed their motion for extension on February 27,
1986, it is still within the grace period, which expired on June 30, 1986, and
may still be allowed.

This grace period was also applied in Mission v. Intermediate Appellate Court [G.R. No.
73669, October 28, 1986, 145 SCRA 306].]

In the instant case, however, petitioners' motion for extension of time was filed on
September 9, 1987, more than a year after the expiration of the grace period on June 30,
1986. Hence, it is no longer within the coverage of the grace period. Considering the
length of time from the expiration of the grace period to the promulgation of the decision
of the Court of Appeals on August 25, 1987, petitioners cannot seek refuge in the
ignorance of their counsel regarding said rule for their failure to file a motion for
reconsideration within the reglementary period.

Petitioners contend that the rule enunciated in the Habaluyas case should not be made to
apply to the case at bar owing to the non-publication of the Habaluyas decision in the
Official Gazette as of the time the subject decision of the Court of Appeals was
promulgated. Contrary to petitioners' view, there is no law requiring the publication of
Supreme Court decisions in the Official Gazette before they can be binding and as a
condition to their becoming effective. It is the bounden duty of counsel as lawyer in active
law practice to keep abreast of decisions of the Supreme Court particularly where issues
have been clarified, consistently reiterated, and published in the advance reports of
Supreme Court decisions (G. R. s) and in such publications as the Supreme Court Reports
Annotated (SCRA) and law journals.

This Court likewise finds that the Court of Appeals committed no grave abuse of
discretion in affirming the trial court's decision holding petitioner liable under Article
2190 of the Civil Code, which provides that "the proprietor of a building or structure is
responsible for the damage resulting from its total or partial collapse, if it should be due
to the lack of necessary repairs.

Nor was there error in rejecting petitioners argument that private respondents had the
"last clear chance" to avoid the accident if only they heeded the. warning to vacate the
tailoring shop and , therefore, petitioners prior negligence should be disregarded, since
the doctrine of "last clear chance," which has been applied to vehicular accidents, is
inapplicable to this case.

WHEREFORE, in view of the foregoing, the Court Resolved to DENY the instant petition
for lack of merit.
FORTUNE MOTORS (PHILS.) INC., petitioner, vs. METROPOLITAN BANK AND
TRUST COMPANY, and THE COURT OF APPEALS, respondents.

DECISION
HERMOSISIMA, JR., J.:

Before us is a petition for review of the decision of the Court of Appeals in CA-G.R.
CV No. 38340 entitled Fortune Motors (Phils.) Inc., v. Metropolitan Bank and Trust
Company et al.[1] The appellate courts decision reversed the decision in Civil Case No. 89-
5637 of Branch 150 of the Regional trial Court of Makati City.
It appears that Fortune Motors (Phils.) Inc. obtained the following loans from the
Metropolitan Bank and Trust company: (1) P20 Million, on March 31, 1982; (2) P8 Million,
on April 30, 1983; (3) P2,500,000.00, on June 8, 1983 and; (4) P3 Million, on August 16,
1983.
On January 6, 1984, respondent bank consolidated the loans of P8 Million and P3
Million into one promissory note, which amounted to P12,650,000.00. This included the
interest that had accrued thereon in the amount of P1,650,000.00.
To secure the obligation in the total amount of P34,150,000.00, petitioner mortgaged
certain real estate in favor of respondent bank.
Due to financial constraints, petitioner failed to pay the loan upon
maturity. Consequently on May 25, 1984, respondent bank initiated extrajudicial
foreclosure proceedings and in effect, foreclosed the real estate mortgage.
The extrajudicial foreclosure was actually conducted by Senior Deputy Sheriff Pablo
Y. Sy who had sent copies of the Notice of Extrajudicial Sale to the opposing parties by
registered mail. In accordance with law, he posted copies of the Notice of Sheriffs Sale at
three conspicuous public places in Makati -- the office of the Sheriff, the Assessors office
and the Register of Deeds in Makati. He thereafter executed the Certificates of Posting
on May 20, 1984. The said notice was in fact published on June 2, 9 and 16, 1984 in three
issues of The New Record. An affidavit of publication, dated June 19, 1984,[2] was
executed by Teddy F. Borres, publisher of the said newspaper.
Subsequently, the mortgaged property was sold at public auction for P47,899,264.91
to the mortgagee bank, the highest bidder.
Petitioner failed to redeem the mortgaged property within the one-year redemption
period and so, the titles thereto were consolidated in the name of respondent bank by
which token the latter was entitled to the possession of the property mortgaged and, in
fact possessed the same.
Petitioner then filed a complaint for the annulment of the extrajudicial foreclosure,
which covered TCT Nos. 461087, 432685, 457590, 432684, S-54185, S-54186, S-54187, and
S-54188.
On December 27, 1991, the trial court rendered judgment annulling the extrajudicial
foreclosure of the mortgage.
On May 14, 1992, an appeal was interposed by the respondent to the Court of
Appeals. Acting thereon, the Court of Appeals reversed the decision rendered by the
lower court.Subsequently, the motion for Reconsideration filed by petitioner was denied
on April 26, 1994.
Aggrieved by the decision rendered by the Court of appeals, petitioner appealed
before this Court. On May 30, 1994, however, we issued a Resolution denying said
petition. Hence, this motion for reconsideration.
Petitioner raises the following issues before us, to wit:
I
 THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE
PUBLICATION OF THE NOTICE OF EXTRAJUDICIAL FORECLOSURE WAS
VALID.[3]
II
THAT THE RESPONDENT COURT OF APPEALS ERRED IN DECLARING
THAT THE NOTICES OF EXTRAJUDICIAL FORECLOSURE,
AND SALE WERE DULY RECEIVED BY THE PETITIONER.[4]
III
THAT THE COURT OF APPEALS ERRED IN FAILING TO ADJUDGE THE
IRREGULARITIES IN THE BIDDING, POSTING, PUBLICATION, AND
THE SALE OF FORTUNEBUILDING.[5]
IV
THAT THE RESPONDENT COURT OF APPEALS ERRED IN RENDERING A
JUDGMENT BASED ON PRESUMPTION.[6]
Petitioner contends that the newspaper Daily Record[7] where the notice of
extrajudicial foreclosure was published does not qualify as a newspaper of general
circulation.
It further contends that the population that can be reached by the Daily Record is
only .004% as its circulation in Makati in 1984, was 1000 to 1500 per week. Hence, it
concludes that only 1648 out of a population of 412,069 were probable readers of the Daily
Record, and that this is not the standard contemplated by law when it refers to a
newspaper of general circulation.
In the case of Bonnevie v. Court of Appeals,[8] we had already made a ruling on this
point:
The argument that the publication of the notice in the Luzon Weekly Courier was
not in accordance with law as said newspaper is not of general circulation must
likewise be disregarded. The affidavit of publication, executed by the publisher,
business/advertising manager of the Luzon Weekly Courier, states that it is a
newspaper of general circulation in x x x Rizal; and that the notice of Sheriffs sale
was published in said paper on June 30, July 7 and July 14, 1968. This
constitutes prima facie evidence of compliance with the requisite publication.
(Sadang v. GSIS, 18 SCRA 491).
To be a newspaper of general circulation, it is enough that it is published for the
dissemination of local news and general information; that it has a bona fide
subscription list of paying subscribers; that it is published at regular intervals.
(Basa v. Mercado, 61 Phil. 632). The newspaper need not have the largest
circulation so long as it is of general circulation. (Banta v. Pacheco, 74 Phil. 67).
In the case at bench, there was sufficient compliance with the requirements of the law
regarding publication of the notice in a newspaper of general circulation. This is
evidenced by the affidavit of publication executed by the New Records publisher, Teddy
F. Borres, which stated that it is a newspaper edited in Manila and Quezon City and of
general circulation in the cities of Manila, Quezon City et al., and in the Provinces of Rizal
xxx, published every Saturday by the Daily Record, Inc. This was affirmed by Pedro
Deyto, who was the executive editor of the said newspaper and who was a witness for
petitioner. Deyto testified: a) that the New Record contains news; b) that it has
subscribers from Metro Manila and from all over the Philippines; c) that it is published
once a week or four times a month ; and d) that he had been connected with the said
paper since 1958, an indication that the said newspaper had been in existence even before
that year.[9]
Another contention posited by petitioner is that the New Record is published and
edited in Quezon City and not in Makati where the foreclosed property is situated, and
that, when New Records publisher enumerated the places where said newspaper is being
circulated, Makati was not mentioned.
This contention of petitioner is untenable. In 1984, when the publishers affidavit
relied upon by petitioner was executed, Makati, Mandaluyong, San Juan, Paraaque et.
al., were still part of the province of Rizal. Apparently, this is the reason why in the New
Records affidavit of publication executed by its publisher, the enumeration of the places
where it was being circulated, only the cities of Manila, Quezon, Caloocan, Pasay,
Tagaytay, et. al., were named. Furthermore, as aptly ratiocinated by the Court of Appeals:
The application given by the trial court to the provisions of P.D. No. 1079 is, to
our mind, too narrow and restricted and could not have been the intention of the
said law. Were the interpretation of the trial court (sic) to be followed, even the
leading dailies in the country like the Manila Bulletin, the Philippine Daily
Inquirer, or The Philippine Star which all enjoy a wide circulation throughout
the country, cannot publish legal notices that would be honored outside the place
of their publication. But this is not the interpretation given by the courts. For
what is important is that a paper should be in general circulation in the place
where the properties to be foreclosed are located in order that publication may
serve the purpose for which it was intended.[10]
Petitioner also claims that the New Record is not a daily newspaper because it is
published only once a week.
A perusal of Presidential Decree (P.D.) No. 1079 and Act 3135 shows that the said
laws do not require that the newspaper which publishes judicial notices should be a daily
newspaper. Under P.D. 1079, for a newspaper to qualify, it is enough that it be a
newspaper or periodical which is authorized by law to publish and which is regularly
published for at least one (1) year before the date of publication which requirement was
satisfied by New Record. Nor is there a requirement, as stated in the said law, that the
newspaper should have the largest circulation in the place of publication.
Petitioner claims that, when its representative went to a newspaper stand to look for
a copy of the new Record, he could not find any. This allegation can not be made a basis
to conclude that the newspaper New Record is not of general circulation. By its own
admission, petitioners representative was looking for a newspaper named Daily
Record. Naturally, he could not find a newspaper by that name as the newspapers name
is New Record and not Daily Record. Although it is the Daily Record Inc. which publishes
the New Record, it does not mean that the name of the newspaper is Daily Record.
Petitioner contends that, since it was the Executive Judge who caused the publication
of the notice of the sale and not the Sheriff, the extrajudicial foreclosure of the mortgage
should be deemed annulled.
Petitioners contention in this regard is bereft of merit, because Sec. 2 of P.D. No. 1079
clearly provides that:
The executive judge of the court of first instance shall designate a regular
working day and a definite time each week during which the said judicial notices
or advertisements shall be distributed personally by him[11] for publication to
qualified newspapers or periodicals xxx, which distribution shall be done by
raffle.
The said provision of the law is clear as to who should personally distribute the
judicial notices or advertisements to qualified newspapers for publication. There was a
substantial compliance with the requirements when it was the Executive Judge of the
Regional Trial Court of Makati who caused the publication of the said notice by the
newspaper selected by means of raffle.
With regard to the second assigned error wherein petitioner claims that it did not
personally receive the notices of extrajudicial foreclosure and sale supposedly sent to it
by Metrobank, we find the same unmeritorious.
 Settled is the rule that personal notice to the mortgagor in extrajudicial foreclosure
proceedings is not necessary. Section 3 of Act No. 3135 governing extrajudicial
foreclosure of real estate mortgages, as amended by Act No. 4118, requires only the
posting of the notice of sale in three public places and the publication of that notice in a
newspaper of general circulation. It is pristine clear from the above provision that the
lack of personal notice to the mortgagor, herein petitioner, is not a ground to set aside the
foreclosure sale.[12]
Petitioners expostulation that it did not receive the mailed notice to it of the sale of
the mortgaged property should be brushed aside. The fact that respondent was able to
receive the registry return card from the mail in regular course shows that the postal item
presented by the return card had been received by the addressee. Otherwise, as correctly
contended by respondent, the mailed item should have been stamped Returned to
Sender, still sealed with all the postal markings, and the return card still attached to it.
As to the contention that the signature appearing on the registry return card receipt
appears to be only a dot and that the photostat copy does not contain a signature at all
we find, after a close scrutiny of the registry return card, that there are strokes before and
after the dot. These strokes appear to be a signature which signifies: a) that the registry
claim card was received at the given address; b) that the addressee had authorized a
person to present the claim card at the post office and receive the registered mail matter;
and c) that the authorized person signed the return card to acknowledge his receipt of
the mail matter. Even the trial court in its decision ruled that:
x x x the Court finds no cogent reason to overcome the presumption that Sheriff
Pablo Sy performed his task regularly and in accordance with the rules. A closer
look at the assailed xerox copy of the registry receipt and the original form which
said xerox was admittedly copied would indeed show that the xerox is not a
faithful reproduction of the original since it does not bear the complete signature
of the addressee as appearing on the original. It does not, however, follow that
the xerox is a forgery. The same bears slight traces of the signature appearing on
the original but, there is no indication that the one was altered to conform to the
other. Rather, there must have been only a misprint of the xerox but not
amounting to any attempt to falsify the same.[13]
Petitioner also claims that it had transferred to a different location but the notice was
sent to its old address. Petitioner failed to notify respondent of its supposed change of
address.Needless to say, it can be surmised that respondent had sent the notice to
petitioners official address.
Anent its third assigned error, petitioner assails the posting of the notices of sale by
the Sheriff in the Office of the Sheriff, Office of the Assessor and the Register of Deeds as
these are not the conspicuous public places required by law. Furthermore, it also
questions the non-posting of the notice of sale on the property itself which was to be sold.
Apparently, this assigned error of petitioner is tantamount to a last ditch effort to
extricate itself from the quagmire it is in. Act 3135 does not require posting of the notice
of sale on the mortgaged property. Section 3 of the said law merely requires that the
notice of the sale be posted for not less than twenty days in at least three public places of
the municipality or city where the property is situated. The aforementioned places, to
wit: the Sheriffs Office, the Assessors Office and the Register of Deeds are certainly the
public places contemplated by law, as these are places where people interested in
purchasing real estate congregate.
With regard to the fourth assigned error of petitioner, we do not subscribe to the
latters view that the decision of the Court of Appeals was mainly based on the
presumption of the regularity of the performance of official function of the officers
involved. A perusal of the records indubitably shows that the requirement of Act No.
3135 on the extrajudicial foreclosure of real estate mortgage had been duly complied with
by Senior Deputy Sheriff Sy.
 WHEREFORE, the petition is DENIED and the decision rendered in CA-G.R. CV No.
38340 is hereby AFFIRMED.
SO ORDERED.
 PHILIPPINE NATIONAL BANK, G.R. No. 173615
Petitioner, Present:
PUNO, C.J., *
QUISUMBING,**
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
VELASCO, JR.,*
NACHURA,
- versus - LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,*** and
ABAD, JJ.
Promulgated:

October 16, 2009

CAYETANO A. TEJANO, JR.,

Respondent.
x--------------------------------------------------x

DECISION

PERALTA, J.:

In this petition for review,[1] the Philippine National Bank assails the January 3,
2006 Decision[2] of the Court of Appeals in CA-G.R. SP No. 50084, which reversed
Resolution Nos. 980716 and 983099 issued by the Civil Service Commission, respectively
dated April 14, 1998 and December 7, 1998, and referred the case back to said office for
further proceedings. The assailed Resolutions, in turn, dismissed respondent Cayetano
A. Tejanos appeal from the resolution of the Board of Directors of the Philippine National
Bank which found him guilty of grave misconduct in connection with a number of
transactions with certain corporate entities.

The case stems from a number of alleged irregular and fraudulent transactions made by
respondent Cayetano A. Tejano, Jr. supposedly with the participation of eight (8) other
employees of petitioner Philippine National Bank (PNB) in its branch in Cebu City
namely Ma. Teresa Chan, Marcelino Magdadaro, Douglasia Canuel, Novel Fortich,
Jacinto Ouano, Quirubin Blanco, Manuel Manzanares and Pedrito Ranile. Respondent,
together with the other employees, allegedly committed grave misconduct, gross neglect
of duty, conduct grossly prejudicial to the best interest of the service and acts violative of
Republic Act No. 3019, relative to the corporate accounts of and transactions with Pat
International Trading Corporation (PITC), Khun Tong International Trading Corporation
(KITC), Pat Garments International Corporation (PGIC), Aqua Solar Trading
Corporation, Dacebu Traders and Exporters, Mancao Mercantile Co., Inc. and V&G Better
Homes Subdivision. All of these transactions transpired at the time that PNB was still a
government-owned and controlled corporation.
Respondent, who was then the Vice-President and Manager of the bank, and the eight
other employees were administratively charged before the PNB Management Hearing
Committee on February 24 and March 17, 1994.[3] At the close of the hearing on the merits,
the Committee found that with respect to respondent, he was guilty of gross misconduct
in misappropriating the funds of V&G and of gross neglect in extending unwarranted
credit accommodations to PITC, PGIC and KITC which must serve as an aggravating
circumstance. The Committee then recommended that respondent be meted the penalty
of forced resignation without forfeiture of benefits.[4]

The PNB Board of Directors differed. In its Resolution No. 88[5] dated June 21,
1995, it found that respondents gross neglect in giving unwarranted credit to PITC, PGIC
and KITC must serve as an aggravating circumstance in relation to the offense of grave
misconduct consisting of misappropriation of V&G funds and must serve the penalty of
forced resignation with forfeiture of benefits.[6]

It appears that only herein respondent sought reconsideration but the Board of Directors,
in its Resolution No. 107,[7] denied the same. Thereafter, on September 21, 1995,
respondent appealed to the Civil Service Commission (CSC)[8] and, on October 19, 1995,
he submitted his Memorandum on Appeal.[9]

In the meantime, on May 27, 1996, the PNB had ceased to be a government-owned and
controlled corporation, and in view of its conversion into a private banking institution by
virtue of Executive Order (E.O.) No. 80.[10] Despite this development, the CSC, on April
14 1998, issued Resolution No. 980716[11] dismissing respondents appeal for being filed
out of time.

Respondent filed a motion for reconsideration[12] on which the CSC required

petitioner to comment. In its Comment, petitioner theorized that even granting
respondents appeal was filed on time, the same must, nevertheless, be dismissed on
account of the privatization of PNB which thereby removed the case from the jurisdiction
of the CSC.The CSC found this argument meritorious and, subsequently, in its Resolution
No. 983099[13] dated December 7, 1998, it denied respondents reconsideration on that
ground.

Respondent elevated the matter to the Court of Appeals on petition for

review,[14] docketed as CA-G.R. SP No. 50084.

Before the appellate court, respondent, on the one hand, ascribed error to the CSC
in denying due course to his appeal on the basis of the privatization of PNB inasmuch as
the incident subject of the case had transpired way back in 1992, when the bank was still
a government-owned and controlled corporation. He particularly noted that the CSC,
before the privatization of the bank, had already acquired jurisdiction over the appeal
upon the filing thereof and subsequent submission of the memorandum on appeal. This,
according to respondent, negated petitioners theory that the CSC could no longer assume
jurisdiction and dispose of the appeal on the merits, especially considering that
jurisdiction once acquired generally continues until the final disposition of the case.[15] On
the other hand, petitioner argued in essence that although the jurisdiction to act on the
appeal must continue until the final disposition of the case, this rule admits of exceptions
as where, in the present case, the law must be construed in a way as to operate on actions
pending before its enactment.[16]

The Court of Appeals found merit in respondents appeal. On January 3, 2006, it

issued the assailed Decision reversing the twin resolutions of the CSC. The appellate
court pointed out that respondents appeal before the CSC had been filed on time and that
the said commission had not lost jurisdiction over it despite the supervening
privatization of PNB. But inasmuch as the assailed Resolutions did not permeate the
merits of respondents appeal, the appellate court found it wise to remand the case to the
CSC for further proceedings. It disposed of the appeal as follows:

WHEREFORE, premises considered, the instant petition for review

under Rule 43 of the Rules of Court is hereby GRANTED. ACCORDINGLY,
Resolution No. 980716 dated April 14, 1998 and Resolution No. 983099
dated December 7, 1998 of the Civil Service Commission are hereby
REVERSED and the case is remanded to the Civil Service Commission for
further proceedings.

SO ORDERED.[17]
Petitioners motion for reconsideration was denied.[18] Hence, it filed the instant petition
for review bearing the same issue as that raised previously.

At the core of the controversy is the question of whether E.O. No. 80 has the effect
of removing from the jurisdiction of the CSC the appeal of respondent which was already
pending before the CSC at the time the said law converted PNB into a private banking
institution. Petitioner is insistent that, indeed, the law does have that effect, and this
argument is perched on Section 6 of E.O. No. 80, which materially provides that the bank
would cease to be a government-owned and controlled corporation upon the issuance of
its articles of incorporation by the Securities and Exchange Commission and would no
longer be subject to the coverage of both the CSC and the Commission on
Audit.[19] Petitioner believes that while indeed jurisdiction ordinarily continues until the
termination of the case, it advances the opinion that the rule does not apply where the
law provides otherwise or where the said law intends to operate on cases pending at the
time of its enactment.[20]

For his part, respondent submits that Section 6 of E.O. No. 80 does not provide for the
transfer of jurisdiction over his pending appeal from the CSC to another administrative
authority, and that neither does the provision authorize its retroactive application in a
way that would deprive the CSC of jurisdiction over cases already pending before it prior
to its effectivity.[21] Additionally, he invokes estoppel against petitioner inasmuch as the
latter has actively participated in the proceedings before the CSC and, hence, was already
barred from raising the issue of jurisdiction, and alleges that petitioners present recourse
was taken merely to cause delay in the final resolution of the controversy.[22]
We draw no merit in the petition.

In essence, Section 6 of E.O. No. 80, also known as the Revised Charter of PNB, treats
of the effects of converting the bank into a private financial and banking institution. It
states:
 Section 6. Change in Ownership of the Majority of the Voting Equity
of the Bank. - When the ownership of the majority of the issued common
voting shares passes to private investors, the stockholders shall cause the
adoption and registration with the Securities and Exchange Commission of
the appropriate Articles of Incorporation and revised by-laws within three
(3) months from such transfer of ownership. Upon the issuance of the
certificate of incorporation under the provisions of the Corporation Code,
this Charter shall cease to have force and effect, and shall be deemed
repealed. Any special privileges granted to the Bank such as the authority
to act as official government depositary, or restrictions imposed upon the
Bank, shall be withdrawn, and the Bank shall thereafter be considered a
privately organized bank subject to the laws and regulations generally
applicable to private banks. The Bank shall likewise cease to be a
government-owned or controlled corporation subject to the coverage of
service-wide agencies such as the Commission on Audit and the Civil
Service Commission.

The fact of the change of the nature of the Bank from a government-
owned and controlled financial institution to a privately-owned entity shall
be given publicity.[23]

In a language too plain to be mistaken, the quoted portion of the law only states
no more than the natural, logical and legal consequences of opening to private ownership
the majority of the banks voting equity. This is very evident in the title of the section
called Change in Ownership of the Majority of the Voting Equity of the Bank. Certainly, the
transfer of the majority of the banks voting equity from public to private hands is an
inevitable effect of privatization or, conversely, the privatization of the bank would
necessitate the opening of the voting equity thereof to private ownership. And as the
bank ceases to be government depository, it would, accordingly be coming under the
operation of the definite set of laws and rules applicable to all other private corporations
incorporated under the general incorporation law. Perhaps the aspect of more
importance in the present case is that the bank, upon its privatization, would no longer
be subject to the coverage of government service-wide agencies such as the CSC and the
Commission on Audit (COA).

By no stretch of intelligent and reasonable construction can the provisions in

Section 6 of E.O. No. 80 be interpreted in such a way as to divest the CSC of jurisdiction
over pending disciplinary cases involving acts committed by an employee of the PNB at
the time that the bank was still a government-owned and controlled corporation. Stated
otherwise, no amount of reasonable inference may be derived from the terms of the said
Section to the effect that it intends to modify the jurisdiction of the CSC in disciplinary
cases involving employees of the government.

Sound indeed is the rule that where the law is clear, plain and free from ambiguity,
it must be given its literal meaning and applied without any interpretation or even
construction.[24] This is based on the presumption that the words employed therein
correctly express its intent and preclude even the courts from giving it a different
construction.[25] Section 6 of E.O. No. 80 is explicit in terms. It speaks for itself. It does not
invite an interpretation that reads into its clear and plain language petitioners adamant
assertion that it divested the CSC of jurisdiction to finally dispose of respondents pending
appeal despite the privatization of PNB.

In the alternative, petitioner likewise posits that the portion of Section 6 of the E.O.
No. 80, which states that the PNB would no longer be subject to the coverage of both the
COA and the CSC, must be understood to be applicable to cases already pending with
the CSC at the time of the banks conversion into a private entity. We are not swayed.

While there is no denying that upon its privatization, the bank would
consequently be subject to laws, rules and regulations applicable to private corporations
which is to say that disciplinary cases involving its employees would then be placed
under the operation of the Labor Code of the Philippines still, we cannot validate
petitioners own interpretation of Section 6 of E.O. No. 80 that the same must be applied
to respondents pending appeal with the CSC and that, resultantly, the CSC must abdicate
its appellate jurisdiction without having to resolve the case to finality.

It is binding rule, conformably with Article 4 of the Civil Code, that, generally,
laws shall have only a prospective effect and must not be applied retroactively in such a
way as to apply to pending disputes and cases. This is expressed in the familiar legal
maxim lex prospicit, non respicit (the law looks forward and not backward.)[26] The
rationale against retroactivity is easy to perceive: the retroactive application of a law
usually divests rights that have already become vested or impairs the obligations of
contract and, hence, is unconstitutional.[27] Although the rule admits of certain well-
defined exceptions[28] such as, for instance, where the law itself expressly provides for
retroactivity,[29] we find that not one of such exceptions that would otherwise lend
credence to petitioners argument obtains in this case. Hence, in other words, the fact that
Section 6 of E.O. No. 80 states that PNB would be removed from the coverage of the CSC
must be taken to govern acts committed by the banks employees after privatization.

Moreover, jurisdiction is conferred by no other source than law. Once jurisdiction

is acquired, it continues until the case is finally terminated.[30] The disciplinary
jurisdiction of the CSC over government officials and employees within its coverage is
well-defined in Presidential Decree (P.D.) No. 807,[31] otherwise known as The Civil
Service Decree of the Philippines. Section 37[32] thereof materially provides that the CSC
shall have jurisdiction over appeals in administrative disciplinary cases involving the
imposition of the penalty of suspension for more than thirty days; or fine in an
amount exceeding thirty days salary; demotion in rank or salary or transfer, removal or
dismissal from office.

It bears to stress on this score that the CSC was able to acquire jurisdiction over
the appeal of respondent merely upon its filing, followed by the submission of his
memorandum on appeal. From that point, the appellate jurisdiction of the CSC at once
attached, thereby vesting it with the authority to dispose of the case on the merits until it
shall have been finally terminated.

Petitioner, however, takes exception. It notes that, while indeed the general rule is
that jurisdiction continues until the termination of the case and is not affected by new
legislation on the matter, the rule does not obtain where the new law provides otherwise,
or where said law is intended to apply to actions pending before its enactment. Again,
petitioner insists that E.O. No. 80 is a new legislation of a character belonging to one of
the exceptions inasmuch as supposedly Section 6 thereof expressly sanctions its
application to cases already pending prior to its enactment particularly that provision
which treats of the jurisdiction of the CSC.[33]

The argument is unconvincing.

In Latchme Motoomull v. Dela Paz,[34] the Court had dealt with a situation where
jurisdiction over certain cases was transferred by a supervening legislation to another
tribunal. Latchme involved a perfected appeal from the decision of the SEC and pending
with the Court of Appeals at the time P.D. No. 902-A was enacted which transferred
appellate jurisdiction over the decisions of the SEC from the Court of Appeals to the
Supreme Court. On the question of whether the tribunal with which the cases were
pending had lost jurisdiction over the appeal upon the effectivity of the new law, the
Court ruled in the negative, citing the earlier case of Bengzon v. Inciong,[35] thus:

The rule is that where a court has already obtained and is exercising
jurisdiction over a controversy, its jurisdiction to proceed to the final
determination of the cause is not affected by new legislation placing
jurisdiction over such proceedings in another tribunal. The exception to the
rule is where the statute expressly provides, or is construed to the effect
that it is intended to operate as to actions pending before its
enactment. Where a statute changing the jurisdiction of a court has no
retroactive effect, it cannot be applied to a case that was pending prior to
the enactment of the statute.[36]
Petitioner derives support from the exceptions laid down in the cases of Latchme
Motoomull and Bengzon quoted above. Yet, as discussed above, the provisions in Section
6 of E.O. No. 80 are too clear and unambiguous to be interpreted in such a way as to abort
the continued exercise by the CSC of its appellate jurisdiction over the appeal filed before
the privatization of PNB became effective. Suffice it to say that nowhere in the said
Section can we find even the slightest indication that indeed it expressly authorizes the
transfer of jurisdiction from the CSC to another tribunal over disciplinary and
administrative cases already pending with the said Commission even prior to the
enactment of the law.

All told, the Court finds that no error was committed by the Court of Appeals in
reversing the twin resolutions issued by the CSC. The Court also agrees that because the
merits of respondents appeal with the said Commission have not been completely
threshed out, it is only correct and appropriate to remand the case back to it for further
proceedings.

With this disquisition, the Court finds it unnecessary to discuss the other issues
propounded by the parties.

WHEREFORE, the petition is DENIED. The January 3, 2006 Decision of the Court
of Appeals in CA-G.R. SP No. 50084, which reversed and set aside CSC Resolution Nos.
980716 and 983099 and ordered the remand of the case to the CSC for further proceedings,
is hereby AFFIRMED.
 SO ORDERED.
[G.R. No. 129296. September 25, 2000]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ABE VALDEZ y DELA
CRUZ, accused-appellant.

DECISION
QUISUMBING, J.:

For automatic review is the decision[1] promulgated on February 18, 1997, by the
Regional Trial Court of Bayombong, Nueva Vizcaya, Branch 27, in Criminal Case No.
3105. It found appellant Abe Valdez y Dela Cruz guilty beyond reasonable doubt for
violating Section 9 of the Dangerous Drugs Act of 1972 (R.A. No. 6425), as amended by
R.A. No. 7659. He was sentenced to suffer the penalty of death by lethal injection.
In an Information dated September 26, 1996, appellant was charged as follows:"That
on or about September 25, 1996, at Sitio Bulan, Barangay Sawmill, Municipality of
Villaverde, Province of Nueva Vizcaya, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, who was caught in flagrante delicto and
without authority of law, did then and there wilfully (sic), unlawfully and feloniously
plant, cultivate and culture seven (7) fully grown marijuana plants known as Indian
Hemp weighing 2.194 kilos, from which dangerous drugs maybe (sic) manufactured or
derived, to the damage and prejudice of the government of the Republic of the
Philippines.

"That the property where the said seven (7) fully grown marijuana plants were planted,
cultivated and cultured shall be confiscated and escheated in favor of the government.

"CONTRARY TO LAW."[2]

On November 15, 1996, appellant was arraigned and, with assistance of counsel,
pleaded not guilty to the charge. Trial on the merits then ensued.
The first witness for the prosecution was SPO3 Marcelo Tipay, a member of the police
force of Villaverde, Nueva Vizcaya. He testified that at around 10:15 a.m. of September
24, 1996, he received a tip from an unnamed informer about the presence of a marijuana
plantation, allegedly owned by appellant at Sitio Bulan, Ibung, Villaverde, Nueva
Vizcaya.[3] The prohibited plants were allegedly planted close to appellant's hut. Police
Inspector Alejandro R. Parungao, Chief of Police of Villaverde, Nueva Vizcaya then
formed a reaction team from his operatives to verify the report. The team was composed
of SPO3 Marcelo M. Tipay, SPO2 Noel V. Libunao, SPO2 Pedro S. Morales, SPO1 Romulo
G. Tobias and PO2 Alfelmer I. Balut. Inspector Parungao gave them specific instructions
to "uproot said marijuana plants and arrest the cultivator of same.[4]
At approximately 5:00 o'clock A.M. the following day, said police team, accompanied
by their informer, left for the site where the marijuana plants were allegedly being
grown. After a three-hour, uphill trek from the nearest barangay road, the police
operatives arrived at the place pinpointed by their informant. The police found appellant
alone in his nipa hut. They, then, proceeded to look around the area where appellant had
his kaingin and saw seven (7) five-foot high, flowering marijuana plants in two rows,
approximately 25 meters from appellant's hut.[5] PO2 Balut asked appellant who owned
the prohibited plants and, according to Balut, the latter admitted that they were his.[6] The
police uprooted the seven marijuana plants, which weighed 2.194 kilograms.[7] The police
took photos of appellant standing beside the cannabis plants.[8] Appellant was then
arrested. One of the plants, weighing 1.090 kilograms, was sent to the Philippine National
Police Crime Laboratory in Bayombong, Nueva Vizcaya for analysis.[9] Inspector Prevy
Fabros Luwis, the Crime Laboratory forensic analyst, testified that upon microscopic
examination of said plant, she found cystolitic hairs containing calcium carbonate, a
positive indication for marijuana.[10] She next conducted a chemical examination, the
results of which confirmed her initial impressions. She found as follows:

"SPECIMEN SUBMITTED: Exh "A" - 1.090 grams of uprooted suspected marijuana plant
placed inside a white sack with markings.

xxx

"FINDINGS: Qualitative examination conducted on the above stated specimen gave

POSITIVE result to the test for Marijuana, a prohibited drug."[11]

The prosecution also presented a certification from the Department of Environment

and Natural Resources that the land cultivated by appellant, on which the growing
marijuana plants were found, was Lot 3224 of Timberland Block B, which formed part of
the Integrated Social Forestry Area in Villaverde, Nueva Vizcaya.[12] This lot was part of
the public domain.Appellant was acknowledged in the certification as the occupant of
the lot, but no Certificate of Stewardship had yet been issued in his favor.[13]
As its sole witness, the defense presented appellant. He testified that at around 10:00
o'clock A.M., September 25, 1996, he was weeding his vegetable farm in Sitio Bulan when
he was called by a person whose identity he does not know. He was asked to go with the
latter to "see something."[14] This unknown person then brought appellant to the place
where the marijuana plants were found, approximately 100 meters away from his nipa
hut.[15] Five armed policemen were present and they made him stand in front of the hemp
plants. He was then asked if he knew anything about the marijuana growing there. When
he denied any knowledge thereof, SPO2 Libunao poked a fist at him and told him to
admit ownership of the plants.[16] Appellant was so nervous and afraid that he admitted
owning the marijuana.[17]
The police then took a photo of him standing in front of one of the marijuana
plants. He was then made to uproot five of the cannabis plants, and bring them to his hut,
where another photo was taken of him standing next to a bundle of uprooted marijuana
plants.[18] The police team then brought him to the police station at Villaverde. On the
way, a certain Kiko Pascua, a barangay peace officer of Barangay Sawmill, accompanied
the police officers. Pascua, who bore a grudge against him, because of his refusal to
participate in the former's illegal logging activities, threatened him to admit owning the
marijuana, otherwise he would "be put in a bad situation."[19] At the police headquarters,
appellant reiterated that he knew nothing about the marijuana plants seized by the
police.[20]
On cross-examination, appellant declared that there were ten other houses around
the vicinity of his kaingin, the nearest house being 100 meters away.[21] The latter house
belonged to one Carlito (Lito) Pascua, an uncle of the barangay peace officer who had a
grudge against him. The spot where the marijuana plants were found was located
between his house and Carlito Pascua's.[22]
The prosecution presented SPO3 Tipay as its rebuttal witness. His testimony was
offered to rebut appellant's claim that the marijuana plants were not planted in the lot he
was cultivating.[23] Tipay presented a sketch he made,[24] which showed the location of
marijuana plants in relation to the old and new nipa huts of appellant, as well as the
closest neighbor.According to Tipay, the marijuana plot was located 40 meters away from
the old hut of Valdez and 250 meters distant from the hut of Carlito Pascua. [25] Tipay
admitted on cross-examination that no surveyor accompanied him when he made the
measurements.[26] He further stated that his basis for claiming that appellant was the
owner or planter of the seized plants was the information given him by the police
informer and the proximity of appellant's hut to the location of said plants.[27]
Finding appellant's defense insipid, the trial court held appellant liable as charged
for cultivation and ownership of marijuana plants as follows:
"WHEREFORE, finding the accused GUILTY beyond reasonable doubt of cultivating
marijuana plants punishable under section 9 of the Dangerous Drugs Act of 1972, as
amended, accused is hereby sentenced to death by lethal injection. Costs against the
accused.

"SO ORDERED."[28]

Appellant assigns the following errors for our consideration:

I

THE TRIAL COURT GRAVELY ERRED IN ADMITTING AS EVIDENCE THE

SEVEN (7) MARIJUANA PLANTS DESPITE THEIR INADMISSIBILITY BEING
PRODUCTS OF AN ILLEGAL SEARCH.

II

THE TRIAL COURT GRAVELY ERRED IN CONVICTING APPELLANT OF

VIOLATION OF SECTION 9, REPUBLIC ACT NO. 6425 DESPITE THE
INADMISSIBILITY OF THE CORPUSDELICTI AND THE FAILURE OF THE
PROSECUTION TO PROVE HIS GUILT BEYOND REASONABLE DOUBT.

III

THE TRIAL COURT GRAVELY ERRED IN IMPOSING THE SUPREME PENALTY

OF DEATH UPON APPELLANT DESPITE FAILURE OF THE PROSECUTION TO
PROVE THAT THE LAND WHERE THE MARIJUANA PLANTS WERE PLANTED
IS A PUBLIC LAND ON THE ASSUMPTION THAT INDEED APPELLANT
PLANTED THE SUBJECT MARIJUANA.[29]

Simply stated, the issues are:

(1) Was the search and seizure of the marijuana plants in the present case lawful?
(2) Were the seized plants admissible in evidence against the accused?
(3) Has the prosecution proved appellant's guilt beyond reasonable doubt?
(4) Is the sentence of death by lethal injection correct?
The first and second issues will be jointly discussed because they are interrelated.
Appellant contends that there was unlawful search. First, the records show that the
law enforcers had more than ample time to secure a search warrant. Second, that the
marijuana plants were found in an unfenced lot does not remove appellant from the
mantle of protection against unreasonable searches and seizures. He relies on the ruling
of the US Supreme Court in Terry v. Ohio, 392 US 1, 20 L. Ed 2d 898, 88 S. Ct. 1868 (1968), to
the effect that the protection against unreasonable government intrusion protects people,
not places.
For the appellee, the Office of the Solicitor General argues that the records clearly
show that there was no search made by the police team, in the first place. The OSG points
out that the marijuana plants in question were grown in an unfenced lot and as each grew
about five (5) feet tall, they were visible from afar, and were, in fact, immediately spotted
by the police officers when they reached the site. The seized marijuana plants were, thus,
in plain view of the police officers. The instant case must, therefore, be treated as a
warrantless lawful search under the "plain view" doctrine.
The court a quo upheld the validity of the search and confiscation made by the police
team on the finding that:

"...It seems there was no need for any search warrant. The policemen went to the
plantation site merely to make a verification. When they found the said plants, it was too
much to expect them to apply for a search warrant. In view of the remoteness of the
plantation site (they had to walk for six hours back and forth) and the dangers lurking in
the area if they stayed overnight, they had a valid reason to confiscate the said plants
upon discovery without any search warrant. Moreover, the evidence shows that the lot
was not legally occupied by the accused and there was no fence which evinced the
occupant's desire to keep trespassers out. There was, therefore, no privacy to protect,
hence, no search warrant was required."[30]

The Constitution[31] lays down the general rule that a search and seizure must be
carried on the strength of a judicial warrant. Otherwise, the search and seizure is deemed
"unreasonable." Evidence procured on the occasion of an unreasonable search and seizure
is deemed tainted for being the proverbial fruit of a poisonous tree and should be
excluded.[32] Such evidence shall be inadmissible in evidence for any purpose in any
proceeding.[33]
In the instant case, there was no search warrant issued by a judge after personal
determination of the existence of probable cause. From the declarations of the police
officers themselves, it is clear that they had at least one (1) day to obtain a warrant to
search appellant's farm. Their informant had revealed his name to them. The place where
the cannabis plants were planted was pinpointed. From the information in their
possession, they could have convinced a judge that there was probable cause to justify
the issuance of a warrant. But they did not. Instead, they uprooted the plants and
apprehended the accused on the excuse that the trip was a good six hours and
inconvenient to them. We need not underscore that the protection against illegal search
and seizure is constitutionally mandated and only under specific instances are searches
allowed without warrants.[34] The mantle of protection extended by the Bill of Rights
covers both innocent and guilty alike against any form of high-handedness of law
enforcers, regardless of the praiseworthiness of their intentions.
We find no reason to subscribe to Solicitor General's contention that we apply the
"plain view" doctrine. For the doctrine to apply, the following elements must be present:
(a) a prior valid intrusion based on the valid warrantless arrest in which the
police are legally present in the pursuit of their official duties;
(b) the evidence was inadvertently discovered by the police who have the right
to be where they are; and
(c) the evidence must be immediately apparent; and
(d) plain view justified mere seizure of evidence without further search.[35]
In the instant case, recall that PO2 Balut testified that they first located the marijuana
plants before appellant was arrested without a warrant.[36] Hence, there was no valid
warrantless arrest which preceded the search of appellant's premises. Note further that
the police team was dispatched to appellant's kaingin precisely to search for and uproot
the prohibited flora. The seizure of evidence in "plain view" applies only where the police
officer is not searching for evidence against the accused, but inadvertently comes across
an incriminating object.[37] Clearly, their discovery of the cannabis plants was not
inadvertent. We also note the testimony of SPO2 Tipay that upon arriving at the area,
they first had to "look around the area" before they could spot the illegal
plants.[38] Patently, the seized marijuana plants were not "immediately apparent" and a
"further search" was needed. In sum, the marijuana plants in question were not in "plain
view" or "open to eye and hand." The "plain view" doctrine, thus, cannot be made to
apply.
Nor can we sustain the trial court's conclusion that just because the marijuana plants
were found in an unfenced lot, appellant could not invoke the protection afforded by the
Charter against unreasonable searches by agents of the State. The right against
unreasonable searches and seizures is the immunity of one's person, which includes his
residence, his papers, and other possessions.[39] The guarantee refers to "the right of
personal security"[40] of the individual. As appellant correctly points out, what is sought
to be protected against the State's unlawful intrusion are persons, not places.[41] To
conclude otherwise would not only mean swimming against the stream, it would also
lead to the absurd logic that for a person to be immune against unreasonable searches
and seizures, he must be in his home or office, within a fenced yard or a private place. The
Bill of Rights belongs as much to the person in the street as to the individual in the
sanctuary of his bedroom.
We therefore hold, with respect to the first issue, that the confiscated plants were
evidently obtained during an illegal search and seizure. As to the second issue, which
involves the admissibility of the marijuana plants as evidence for the prosecution, we find
that said plants cannot, as products of an unlawful search and seizure, be used as
evidence against appellant. They are fruits of the proverbial poisoned tree. It was,
therefore, a reversible error on the part of the court a quo to have admitted and relied
upon the seized marijuana plants as evidence to convict appellant.
We now proceed to the third issue, which revolves around the sufficiency of the
prosecution's evidence to prove appellant's guilt. Having declared the seized marijuana
plants inadmissible in evidence against appellant, we must now address the question of
whether the remaining evidence for the prosecution suffices to convict appellant?
In convicting appellant, the trial court likewise relied on the testimony of the police
officers to the effect that appellant admitted ownership of the marijuana when he was
asked who planted them. It made the following observation:

"It may be true that the admission to the police by the accused that he planted the
marijuana plants was made in the absence of any independent and competent
counsel. But the accused was not, at the time of police verification; under custodial
investigation. His admission is, therefore, admissible in evidence and not violative of the
constitutional fiat that admission given during custodial investigation is not admissible
if given without any counsel."[42]

Appellant now argues that his admission of ownership of the marijuana plants in
question cannot be used against him for being violative of his right to counsel during the
police investigation. Hence, it was error for the trial court to have relied upon said
admission of ownership. He submits that the investigation conducted by the police
officers was not a general inquiry, but was meant to elicit information on the ownership
of the marijuana plants. Appellant theorizes that since the investigation had narrowed
down to him, competent and independent counsel should have assisted him, when the
police sought information from him regarding the ownership of the prohibited
plants. Appellant claims the presumption of regularity of duty of officers cannot be made
to apply to his purported voluntarily confession of ownership of the marijuana
plants. Nor can it override his constitutional right to counsel during investigation.
The Office of the Solicitor General believes otherwise. The OSG avers that appellant
was not yet under custodial investigation when he admitted to the police that he owned
the marijuana plants. His right to competent and independent counsel, accordingly, had
not yet attached. Moreover, appellants failure to impute any false motive for the police
officers to falsely accuse him indicates that the presumption of regularity in the
performance of official duties by police officers was not sufficiently rebutted.
The Constitution plainly declares that any person under investigation for the
commission of an offense shall have the right: (1) to remain silent; (2) to have competent
and independent counsel preferably of his own choice; and (3) to be informed of such
rights. These rights cannot be waived except in writing and in the presence of
counsel.[43] An investigation begins when it is no longer a general inquiry but starts to
focus on a particular person as a suspect, i.e., when the police investigator starts
interrogating or exacting a confession from the suspect in connection with an alleged
offense.[44] The moment the police try to elicit admissions or confessions or even plain
information from a person suspected of having committed an offense, he should at that
juncture be assisted by counsel, unless he waives the right in writing and in the presence
of counsel.[45]
In the instant case we find that, from the start, a tipster had furnished the police
appellant's name as well as the location of appellant's farm, where the marijuana plants
were allegedly being grown. While the police operation was supposedly meant to merely
"verify" said information, the police chief had likewise issued instructions to arrest
appellant as a suspected marijuana cultivator. Thus, at the time the police talked to
appellant in his farm, the latter was already under investigation as a suspect. The
questioning by the police was no longer a general inquiry.[46]
Under cross-examination, PO2 Balut stated, he "did not yet admit that he is the
cultivator of that marijuana so we just asked him and I think there is no need to inform
(him of) his constitutional rights because we are just asking him..."[47] In trying to elicit
information from appellant, the police was already investigating appellant as a
suspect. At this point, he was already under custodial investigation and had a right to
counsel even if he had not yet been arrested. Custodial investigation is "questioning
initiated by law enforcement officers after a person has been taken into custody or
otherwise deprived of his freedom of action in any significant way."[48] As a suspect, two
armed policemen interrogated appellant. Behind his inquisitors were a barangay peace
officer and three other armed policemen.[49] All had been dispatched to arrest
him.[50] From these circumstances, we may infer that appellant had already been deprived
of his freedom of action in a significant way, even before the actual arrest. Note that even
before he was arrested, the police made him incriminatingly pose for photos in front of
the marijuana plants.
Moreover, we find appellant's extrajudicial confession flawed with respect to its
admissibility. For a confession to be admissible, it must satisfy the following
requirements: (1) it must be voluntary; (2) it must be made with the assistance of
competent and independent counsel; (3) it must be express; and (4) it must be in
writing.[51] The records show that the admission by appellant was verbal. It was also
uncounselled. A verbal admission allegedly made by an accused during the
investigation, without the assistance of counsel at the time of his arrest and even before
his formal investigation is not only inadmissible for being violative of the right to counsel
during criminal investigations, it is also hearsay.[52] Even if the confession or admission
were "gospel truth", if it was made without assistance of counsel and without a valid
waiver of such assistance, the confession is inadmissible in evidence, regardless of the
absence of coercion or even if it had been voluntarily given.[53]
It is fundamental in criminal prosecutions that before an accused may be convicted
of a crime, the prosecution must establish by proof beyond reasonable doubt that a crime
was committed and that the accused is the author thereof.[54] The evidence arrayed
against the accused, however, must not only stand the test of reason,[55] it must likewise
be credible and competent.[56] Competent evidence is "generally admissible"
evidence.[57] Admissible evidence, in turn, is evidence "of such a character that the court
or judge is bound to receive it, that is, allow it to be introduced at trial."[58]
In the instant case, the trial court relied on two pieces of probative matter to convict
appellant of the offense charged. These were the seized marijuana plants, and appellant's
purportedly voluntary confession of ownership of said marijuana plants to the
police. Other than these proofs, there was no other evidence presented to link appellant
with the offense charged. As earlier discussed, it was error on the trial court's part to have
admitted both of these proofs against the accused and to have relied upon said proofs to
convict him. For said evidence is doubly tainted.
First, as earlier pointed out, the seized marijuana plants were obtained in violation of
appellant's constitutional rights against unreasonable searches and seizures. The search
and seizure were void ab initio for having been conducted without the requisite judicial
warrant. The prosecution's very own evidence clearly establishes that the police had
sufficient time to obtain a warrant. There was no showing of such urgency or necessity
for the warrantless search or the immediate seizure of the marijuana plants subject of this
case. To reiterate, said marijuana plants cannot be utilized to prove appellant's guilt
without running afoul of the constitutional guarantees against illegal searches and the
inadmissibility of evidence procured pursuant to an unlawful search and seizure.
Second, the confession of ownership of the marijuana plants, which appellant
allegedly made to the police during investigation, is not only hearsay but also violative
of the Bill of Rights. The purported confession was made without the assistance of
competent and independent counsel, as mandated by the Charter. Thus, said confession
cannot be used to convict appellant without running afoul of the Constitution's
requirement that a suspect in a criminal investigation must have the services of
competent and independent counsel during such investigation.
In sum, both the object evidence and the testimonial evidence as to appellant's
voluntary confession of ownership of the prohibited plants relied upon to prove
appellant's guilt failed to meet the test of Constitutional competence.
The Constitution decrees that, "In all criminal prosecutions, the accused shall be
presumed innocent until the contrary is proved..."[59] To justify the conviction of the
accused, the prosecution must adduce that quantum of evidence sufficient to overcome
the constitutional presumption of innocence. The prosecution must stand or fall on its
evidence and cannot draw strength from the weakness of the evidence for the
accused.[60] Absent the required degree of proof of an accused's guilt, he is entitled to an
acquittal.[61] In this case, the seized marijuana plants linking appellant to the crime
charged are miserably tainted with constitutional infirmities, which render these
inadmissible "for any purpose in any proceeding."[62] Nor can the confession obtained
during the uncounselled investigation be used against appellant, "it being inadmissible
in evidence against him.[63] Without these proffered but proscribed materials, we find that
the prosecution's remaining evidence did not even approximate the quantum of evidence
necessary to warrant appellant's conviction. Hence, the presumption of innocence in his
favor stands. Perforce, his acquittal is in order.
In acquitting an appellant, we are not saying that he is lily-white, or pure as driven
snow. Rather, we are declaring his innocence because the prosecution's evidence failed
to show his guilt beyond reasonable doubt. For that is what the basic law requires. Where
the evidence is insufficient to overcome the presumption of innocence in favor of the
accused, then his "acquittal must follow in faithful obeisance to the fundamental law."[64]
WHEREFORE, the decision promulgated on February 18, 1997, by the Regional Trial
Court of Bayombong, Nueva Vizcaya, Branch 27, in Criminal Case No. 3105, finding Abe
Valdez y Dela Cruz, guilty beyond reasonable doubt of violating Section 9 of the
Dangerous Drugs Act of 1972, and imposing upon him the death penalty, is hereby
REVERSED and SET ASIDE for insufficiency of evidence. Appellant is ACQUITTED and
ordered RELEASED immediately from confinement unless held for another lawful cause.
SO ORDERED.
[G.R. No. 143789. November 27, 2000]

SYSTEMS FACTORS CORPORATION and MODESTO DEAN, petitioners, vs.

NATIONAL LABOR RELATIONS COMMISSION, RONALDO LAZAGA and LUIS
C. SINGSON, respondents.

RESOLUTION
GONZAGA-REYES, J.:

The instant petition seeks to set aside the Resolution dated February 15, 2000
dismissing the petition for certiorari and the Resolution dated June 22, 2000 denying the
motion for reconsideration, both issued by the Court of Appeals in CA-G.R. SP No. 56849.
Petitioner Systems Factors Corporation is a corporation engaged in the business of
installing electrical system in buildings and infrastructure projects wherein it employs
electricians, engineers and other personnel. Private respondents Ronaldo Lazaga and
Luis Singson were employed by petitioner corporation as electricians in one of its
projects. Private respondents filed a complaint against petitioners for illegal dismissal
and non-payment of backwages, service incentive fees, premium pay, separation pay and
other allowances. The Labor Arbiter rendered judgment ordering petitioners to reinstate
private respondents to their former positions and to pay them backwages. On appeal, the
NLRC affirmed the LA-decision. Petitioners allegedly received the NLRC judgment on
August 10, 1999 and a motion for reconsideration thereto was filed on August 20, 1999.
On November 25, 1999, petitioners received the NLRC-Resolution dated November 11,
1999 denying their motion for reconsideration. Hence, on January 24, 2000, petitioners
filed a petition for certiorari pursuant to Rule 65 with the Court of Appeals. On February
15, 2000, the Court of Appeals issued a resolution denying the petition for failure of
petitioners to comply with procedural requirements, i.e., (1) the petition was filed out of
time, and (2) except for the assailed NLRC resolutions, the documents and material
portions referred to in the petition were not certified. On Motion for Reconsideration, the
Court of Appeals, in its Resolution dated June 22, 2000, applied this Courts ruling in the
case of Cadayona vs. Court of Appeals, et. al., G.R. No. 128772, February 3, 2000 and gave
weight to petitioners submission that only the questioned resolution need be certified
and not the entire records. Said motion for reconsideration was nonetheless denied in
view of its finding that the petition was filed out of time.
The Court of Appeals, in finding that the petition for certiorari was filed out of time,
reckoned the counting of the period of sixty (60) days, pursuant to Section 4, Rule 65 of
the 1997 Rules of Civil Procedure, from receipt on August 10, 1999 of the NLRC-
resolution dismissing the appeal which is interrupted by the filing on August 20, 1999 of
the Motion for Reconsideration; and the remaining period to be counted from receipt on
November 25, 1999 of the resolution denying the motion for reconsideration. As found
by the Court of Appeals, the petition was filed late as petitioners had fifty (50) days
remaining or until January 14, 2000 within which to file the petition for certiorari. The
petition for certiorari was filed only on January 24, 2000.
In the instant petition, petitioners invoke A.M. No. 00-2-03-SC, which took effect on
September 1, 2000, specifically amending Section 4, Rule 65 of the 1997 Rules of Civil
Procedure wherein the sixty-day period is reckoned from receipt of the resolution
denying the motion for reconsideration. Thus, from receipt by petitioners on November
25, 1999 of the resolution denying the motion for reconsideration, the filing of the petition
for certiorari with the Court of Appeals on January 24, 2000 would have been within the
reglementary period. Petitionersargue that before a party can file a petition for certiorari,
a motion for reconsideration is a mandatory pleading and thus, it is logical to assume that
the sixty-day period should be reckoned from notice of resolution denying the motion for
reconsideration. Petitioners likewise argue that remedial laws should be construed
liberally in order to give litigants ample opportunity to prove their respective claims and
avoid denial of substantial justice due to legal technicalities.
On September 18, 2000, this Court issued a Resolution requiring respondents to
comment on the petition.
Respondents filed their Comment alleging that the issue in the present petition is not
whether liberality should be applied. They contend that the controversy sought to be laid
to rest would multiply as similar requests for liberality, leniency and exceptions would
be filed. They argue that the Labor Code mandates that conflicts in the interpretation of
the law and the rules should be resolved in favor of the working man, respondents herein.
Moreover, the plea of liberality should be denied as there is no reason other than neglect
of counsel that may compel this Court to treat this case as an exception to the rule.
We find for the petitioners.
A.M. No. 00-2-03-SC amended Section 4, Rule 65 of the 1997 Rules of Civil Procedure
(as amended by the Resolution of July 21, 1998), which took effect September 1, 2000 and
provides:

SEC. 4. When and where petition filed. --- The petition shall be filed not later than sixty (60)
days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of
a lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may
also be filed in the Court of Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves
the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or
these rules, the petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and
in no case exceeding fifteen (15) days.

We hold that the amendment under A.M. No. 00-2-03-SC wherein the sixty-day
period to file a petition for certiorari is reckoned from receipt of the resolution denying
the motion for reconsideration should be deemed applicable. Remedial statutes or
statutes relating to remedies or modes of procedure, which do not create new or take
away vested rights, but only operate in furtherance of the remedy or confirmation of
rights already existing, do not come within the legal conception of a retroactive law, or
the general rule against retroactive operation of statutes.[1] Statutes regulating to the
procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense
and to that extent. The retroactive application of procedural laws is not violative of any
right of a person who may feel that he is adversely affected.[2] The reason is that as a
general rule, no vested right may attach to nor arise from procedural laws.[3]
The above conclusion is in consonance with the provision in Section 6, Rule 1 of the
1997 Rules of Civil Procedure that (T)hese Rules shall be liberally construed in order to
promote their objective of securing a just, speedy and inexpensive disposition of every
action and proceeding.
WHEREFORE, the petition is hereby GRANTED. The assailed Resolutions dated
February 15, 2000 and June 22, 2000 are hereby SET ASIDE and the case is REMANDED
to the Court of Appeals for further proceedings.
SO ORDERED.
[G.R. No. 104215. May 8, 1996]

ERECTORS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

HON. JULIO ANDRES, JR. and FLORENCIO BURGOS, respondents.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; JURISDICTION OVER THE SUBJECT
MATTER, DETERMINED BY LAW IN FORCE AT THE COMMENCEMENT OF
ACTION; LABOR ARBITER HAS JURISDICTION OVER MONEY CLAIMS OF
OVERSEAS WORKER FILED ON MARCH 31, 1982. - The rule is that jurisdiction
over the subject matter is determined by the law in force at the time of the
commencement of the action. On March 31, 1982, at the time private respondent filed
his complaint against the petitioner, the prevailing laws were Presidential Decree No.
1691 and Presidential Decree No. 1391 which vested the Regional Offices of the
Ministry of Labor and the Labor Arbiters with "original and exclusive jurisdiction
over all cases involving employer-employee relations including money claims arising
out of any law or contracts involving Filipino workers for overseas employment." At
the time of the filing of the complaint, the Labor Arbiter had clear jurisdiction over
the same.
2. LABOR AND SOCIAL LEGISLATION; EXECUTIVE ORDER NO. 797 CREATING
THE PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA);
WITHOUT RETROACTIVE APPLICATION; LABOR ARBITER NOT DIVESTED
OF JURISDICTION BY EFFECTIVITY OF E.O. 797. - E.O. No. 797 did not divest
the Labor Arbiter's authority to hear and decide the case filed by private respondent
prior to its effectivity. Laws should only be applied prospectively unless the
legislative intent to give them retroactive effect is expressly declared or is necessarily
implied from the language used. We fail to perceive in the language of E.O. No. 797
an intention to give it retroactive effect. The law at bar, E.O. No. 797, is not a curative
statute. It was not intended to remedy any defect in the law. It created the POEA to
assume the functions of the Overseas Employment Development Board, the National
Seamen Board and the overseas employment functions of the Bureau of Employment
Services. Accordingly, it gave the POEA "original and exclusive jurisdiction over all
cases, including money claims, involving employer-employee relations arising out of
or by virtue of any law or contract involving Filipino workers for overseas
employment, including seamen." The rule on prospectivity of laws should therefore
apply to E.O. No. 797. It should not affect jurisdiction over cases filed prior to its
effectivity.
3. STATUTORY CONSTRUCTION; STATUTES; CURATIVE STATUTE; DEFINED.
- A curative statute is enacted to cure defects in a prior law or to validate legal
proceedings, instruments or acts of public authorities which would otherwise be void
for want of conformity with certain existing legal requirements.
APPEARANCES OF COUNSEL
Bengzon, Zarraga, Narciso, Ardala, Pecson, Bengzon, and Jimenez for petitioner.
Fabian Gappi for private respondent.

DECISION
PUNO, J.:

Petitioner Erectors, Inc. challenges the jurisdiction of respondent Labor Arbiter Julio
F. Andres, Jr. to hear and decide the complaint[1] for underpayment of wages and non-
payment of overtime pay filed by private respondent Florencio Burgos, an overseas
contract worker.
The facts are undisputed:
 In September 1979, petitioner recruited private respondent to work as service
contract driver in Saudi Arabia for a period of twelve (12) months with a salary of
US$165.00 and an allowance of US$165.00 per month. They further agreed that private
respondent shall be entitled to a bonus of US$ 1,000.00 if after the 12-month period, he
renews or extends his employment contract without availing of his vacation or home
leave. Their contract dated September 20, 1979, was duly approved by the Ministry of
Labor and Employment.
The aforesaid contract was not implemented. In December, 1979, petitioner notified
private respondent that the position of service driver was no longer available. On
December 14, 1979, they executed another contract which changed the position of private
respondent into that of helper/laborer with a salary of US$105.00 and an allowance of
US$105.00 per month.The second contract was not submitted to the Ministry of Labor
and Employment for approval.
On December 18, 1979, private respondent left the country and worked at petitioner's
Buraidah Sports Complex project in Saudi Arabia, performing the job of a
helper/laborer. He received a monthly salary and allowance of US$210.00, in accordance
with the second contract. Private respondent renewed his contract of employment after
one year. His salary and allowance were increased to US$231.00.
Private respondent returned to the Philippines on August 24, 1981. He then invoked
his first employment contract. He demanded from the petitioner the difference between
his salary and allowance as indicated in the said contract, and the amount actually paid
to him, plus the contractual bonus which should have been awarded to him for not
availing of his vacation or home leave credits. Petitioner denied private respondent's
claim.
On March 31, 1982, private respondent filed with the Labor Arbiter a complaint
against the petitioner for underpayment of wages and non-payment of overtime pay and
contractual bonus.
On May 1, 1982, while the case was still in the conciliation stage, Executive Order
(E.O.) No. 797 creating the Philippine Overseas Employment Administration (POEA)
took effect.Section 4(a) of E.O. No. 797 vested the POEA with "original and exclusive
jurisdiction over all cases, including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers for
overseas employment.[2]
Despite E.O. No. 797, respondent Labor Arbiter proceeded to try the case on the
merits. On September 23, 1983, he rendered a Decision[3] in favor of private respondent,
the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered ordering the respondent to pay the

complainant as follows:

1. The sum of US$2,496.00 in its peso equivalent on August 25, 1981 as difference between
his allowance as Service Driver as against his position as Helper/Laborer;

2. The sum of US$1,000.00 in its peso equivalent as of the same date, as his contractual
bonus.

The complaints for non-payment/underpayment of overtime pay and unpaid wages or

commission are DISMISSED for lack of merit.[4]

Petitioner appealed to respondent National Labor Relations Commission (NLRC). It

questioned the jurisdiction of the Labor Arbiter over the case in view of the enactment of
E.O. No. 797.
In a Resolution dated July 17, 1991,[5] respondent NLRC dismissed the petitioner's
appeal and upheld the Labor Arbiter's jurisdiction. It ruled:
"To begin with, the Labor Arbiter has the authority to decide this case. On May 29, 1978,
the Labor Arbiters were integrated into the Regional Offices under P.D. 1391. On May 1,
1980, P.D. 1691 was promulgated giving the Regional Offices of the Ministry of Labor and
Employment the original and exclusive jurisdiction over all cases arising out of or by
virtue of any law or contract involving Filipino workers for overseas employment. There
is no dispute that the Labor Arbiter had the legal authority over the case on hand, which
accrued and was filed when the two above mentioned Presidential Decrees were in
force.[6]

Petitioner filed this special civil action for certiorari reiterating the argument that:

"The NLRC committed grave abuse of discretion tantamount to lack of jurisdiction in

affirming the Labor Arbiter's void judgment in the case a quo."[7]

It asserts that E.O. No. 797 divested the Labor Arbiter of his authority to try and
resolve cases arising from overseas employment contract. Invoking this Court's ruling
in Briad Agro Developinent Corp. vs. Dela Cerna,[8] petitioner argues that E.O. No. 797
applies retroactively to affect pending cases, including the complaint filed by private
respondent.
The petition is devoid of merit.
The rule is that jurisdiction over the subject matter is determined by the law in force
at the time of the commencement of the action.[9] On March 31, 1982, at the time private
respondent filed his complaint against the petitioner, the prevailing laws were
Presidential Decree No. 1691[10] and Presidential Decree No. 1391[11] which vested the
Regional Offices of the Ministry of Labor and the Labor Arbiters with "original and
exclusive jurisdiction over all cases involving employer-employee relations including
money claims arising out of any law or contracts involving Filipino workers for overseas
employment."[12] At the time of the filing of the complaint, the Labor Arbiter had clear
jurisdiction over the same.
E.O. No. 797 did not divest the Labor Arbiter's authority to hear and decide the case
filed by private respondent prior to its effectivity. Laws should only be applied
prospectively unless the legislative intent to give them retroactive effect is expressly
declared or is necessarily implied from the language used.[13] We fail to perceive in the
language of E.O. No. 797 an intention to give it retroactive effect.
The case of Briad Agro Development Corp. vs. Dela Cerna[14] cited by the petitioner is not
applicable to the case at bar. In Briad, the Court applied the exception rather than the
general rule. In this case, Briad Agro Development Corp. and L.M. Camus Engineering
Corp. challenged the jurisdiction of the Regional Director of the Department of Labor and
Employment over cases involving workers' money claims, since Article 217 of the Labor
Code, the law in force at the time of the filing of the complaint, vested in the Labor
Arbiters exclusive jurisdiction over such cases. The Court dismissed the petition in its
Decision dated June 29, 1989.[15] It ruled that the enactment of E.O. No. 111, amending
Article 217 of the Labor Code, cured the Regional Director's lack of jurisdiction by giving
the Labor Arbiter and the Regional Director concurrent jurisdiction over all cases
involving money claims. However, on November 9,1989, the Court, in a
Resolution,[16] reconsidered and set aside its June 29 Decision and referred the case to the
Labor Arbiter for proper proceedings, in view of the promulgation of Republic Act (R.A.)
6715 which divested the Regional Directors of the power to hear money claims. It bears
emphasis that the Court accorded E.O. No. 111 and R.A. 6715 a retroactive application
because as curative statutes, they fall under the exceptions to the rule on prospectivity of
laws.
E.O. No.111, amended Article 217 of the Labor Code to widen the workers' access to
the government for redress of grievances by giving the Regional Directors and Labor
Arbiters concurrent jurisdiction over cases involving money claims. This amendment,
however, created a situation where the jurisdiction of the Regional Directors and the
Labor Arbiters overlapped. As a remedy, R.A. 6715 further amended Article 217 by
delineating their respective jurisdictions. Under R.A. 6715, the Regional Director has
exclusive original jurisdiction over cases involving money claims provided: (1) the claim
is presented by an employer or person employed in domestic or household service, or
househelper under the Code; (2) the claimant, no longer being employed, does not seek
reinstatement; and (3) the aggregate money claim of the employee or househelper does
not exceed P5,000.00. All other cases are within the exclusive and original jurisdiction of
the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore curative statutes. A curative
statute is enacted to cure defects in a prior law or to validate legal proceedings,
instruments or acts of public authorities which would otherwise be void for want of
conformity with certain existing legal requirements.
The law at bar, E.O. No. 797, is not a curative statute. It was not intended to remedy
any defect in the law. It created the POEA to assume the functions of the Overseas
Employment Development Board, the National Seamen Board and the overseas
employment functions of the Bureau of Employment Services. Accordingly, it gave the
POEA "original and exclusive jurisdiction over all cases, including money claims,
involving employer-employee relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment, including seamen."[17] The rule on
prospectivity of laws should therefore apply to E.O. No. 797. It should not affect
jurisdiction over cases filed prior to its effectivity.
Our ruling in Philippine-Singapore Ports Corp. vs. NLRC[18] is more apt to the case at
bar. In this case, PSPC hired Jardin to work in Saudi Arabia. Jardin filed a complaint
against PSPC for illegal dismissal and recovery of backwages on January 31, 1979 with
the Labor Arbiter. PSPC questioned the jurisdiction of the Labor Arbiter because at that
time, the power to hear and decide cases involving overseas workers was vested in the
Bureau of Employment Services. We held:

"When Jardin filed the complaint for illegal dismissal on January 31, 1979, Art. 217 (5) of
the Labor Code provided that Labor Arbiters and the NLRC shall have exclusive
jurisdiction to hear and decide all cases arising from employer-employee relations unless
expressly excluded by this Code. At that time Art. 15 of the same Code had been amended
by P.D. No. 1412 which took effect on June 9, 1978. The pertinent provision of the said
presidential decree states:

Article 15. Bureau of Employment Services. -

(a) x x x x x x x x x

(b) The Bureau shall have the original and exclusive jurisdiction over all matters or cases
involving employer-employee relations including money claims, arising out of or by
virtue of any law or contracts involving Filipino workers for overseas employment,
except seamen. The decisions of the Bureau shall be final and executory subject to appeal
to the Secretary of Labor whose decision shall be final and inappealable.

Considering that private respondent Jardin's claims undeniably arose out of an

employer-employee relationship with petitioner PSPC and that private respondent
worked overseas or in Saudi Arabia, the Bureau of Employment Services and not the
Labor Arbiter had jurisdiction over the case. x x x

Art. 15 was further amended by P.D. No. 1691 which took effect on May 1, 1990. Such
amendment qualifies the jurisdiction of the Bureau of Employment Services as follows:

(b) The regional offices of the Ministry of Labor shall have the original and exclusive
jurisdiction over all matters or cases involving employer-employee relations including
money claims, arising out of or by virtue of any law or contracts involving Filipino
workers for overseas employment except seamen: Provided that the Bureau of
Employment Services may, in the case of the National Capital Region, exercise such
power, whenever the Minister of Labor deems it appropriate. The decisions of the
regional offices or the Bureau of Employment Services if so authorized by the Minister of
Labor as provided in this Article, shall be appealable to the National Labor Relations
Commission upon the same grounds provided in Article 223 hereof. The decisions of the
National Labor Relations Commission shall be final and inappealable.

Hence, as further amended, Art. 15 provided for concurrent jurisdiction between the
regional offices of the then Ministry of Labor and Bureau of Employment Services in the
National Capital Region. It is noteworthy that P.D. No. 1691, while likewise amending
Art. 217 of the Labor Code, did not alter the provision that Labor Arbiters shall have
jurisdiction over all claims arising from employer-employee relations unless expressly
excluded by this Code.

The functions of the Bureau of Employment Services were subsequently assumed

by the Philippine Overseas Employment Administration (POEA) on May 1, 1982 by
virtue of Executive Order No. 797 by granting the POEA original and exclusive
jurisdiction over all cases, including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers
for overseas employment, including seamen. (Sec. 4 (a); Eastern Shipping Lines v.
Philippine Overseas Employment Administration [POEA], 200 SCRA 663 [1991]). This
development showed the legislative authority's continuing intent to exclude from the
Labor Arbiter's jurisdiction claims arising from overseas employment.
These amendments notwithstanding, when the complaint for illegal dismissal was
filed on January 31, 1979, under Art. 15, as amended by P.D. No. 1412, it was the Bureau
of Employment Services which had jurisdiction over the case and not the Labor
Arbiters. It is a settled rule that jurisdiction is determined by the statute in force at the
time of the commencement of the action (Municipality of Sogod v. Rosal, 201 SCRA 632,
637 [1991]). P.D. 1691 which gave the regional offices of the Ministry of Labor concurrent
jurisdiction with the Bureau of Employment Services, was promulgated more than a year
after the complaint was filed. (Italics supplied)
In sum, we hold that respondent NLRC did not commit grave abuse of discretion in
upholding the jurisdiction of respondent Labor Arbiter over the complaint filed by
private respondent against the petitioner.
IN VIEW WHEREOF, the Petition is DISMISSED. Costs against petitioner.
SO ORDERED.
G.R. No. L-10806 July 6, 1918

MONICA BONA, petitioner-appellant,

vs.
HOSPICIO BRIONES, ET AL., objectors-appellees.

Ramon Pimentel for appellant.

Ocampo and De la Rosa for appellees.

TORRES, J.:

Counsel for Monica Bona, the widow by the second marriage of the deceased Francisco
Briones who died on August 14, 1913, applied for the probate of the will which the said
deceased husband on September 16, 1911, executed during his lifetime; for the fixing of a
day for the hearing and presentation of evidence after all the interested parties had been
cited; and then for the approval of the partition had been cited; and then for the approval
of the partition property made by the testator in the said will. By an order dated January
20, 1915, Monica Bona's petition was granted and a date set for the trial and other
necessary proceedings for the probate of said will.

Counsel for Hospicio, Gregoria, and Carmen, all surnamed Briones, the legitimate
children by the first marriage of the testator, by a pleading dated March 5, 1915, opposed
the probate of the will presented by the widow of the deceased Briones, alleging that the
said will was executed before two witnesses only and under unlawful and undue
pressure or influence exercised upon the person of the testator who thus signed through
fraud and deceit; and he prayed that for that reason the said will be declared null and of
no value, with costs against the petitioners.

The trial of the case opened and in the presence of counsel for both parties, Gregorio
Bustilla, one of the witnesses of the said will, was examined and he stated under oath:
That he as well as Sixto Barrameda and Domingo de la Fuente, was actually present as
attesting witness when Francisco Briones executed his will in the month of September in
his (Bustilla's) house situated in the municipality of Bao, Ambos Camarines; that
Francisco Briones knowing of the presence of notary Domingo de la Fuente in the house,
he went upstairs and announced himself; that on being asked what he wanted, Briones
stated that he wanted to execute his will; that after Briones and the notary had talked
with each other, the former left and after a while returned bringing with him some paper;
that then Domingo de la Fuente, under the direction of Francisco Briones, began to draft
the will, which when finished was signed by the latter in the presence of the notary, of
the declarant, and of another witness, Sixto Barrameda; that then the three witnesses —
the declarant, de la Fuente, and Barrameda — signed in the presence of each other. The
declarant identified the signature placed on the will by the testator Briones and those of
the other witnesses Sixto Barrameda and Domingo dela Fuente, who all signed in the
presence of the testator himself. He stated further that the testator at that moment was in
his sound judgment and not forced to execute the will. He identified the document
Exhibit A as the will executed by Francisco Briones and the signature of the latter as the
one placed by the testator. By agreement of both parties it was made to appear in the
record that, if the witnesses Sixto Barrameda and Domingo de la Fuente were called, they
would have testified in the same terms as witness Gregorio Bustilla.

In view of the above, the judge rendered judgment, dated March 27, 1915, denying
probate to the will Exhibit A as executed by Francisco Briones. From the judgment,
counsel for Monica Bona appealed and prayed to be allowed to sue further as a pauper;
whereupon, by order of March 31, 1915, the judge admitted the appeal, ordered the
original records to be brought up, and reiterated his order of December 28, 1913,
declaring Bona as a pauper, for the purposes of the appeal interposed.
The whole issue discussed by the parties and submitted for the decision of this court
resolves itself as to whether or not in the execution of the will in question the solemnities
prescribed by section 618 of Act No. 190 have been observed.

But before proceeding further it is indispensable to note that the will in question was
executed by Francisco Briones on September 16, 1911, as already stated and the order
denying probate was rendered on March 27, 1915, both dated being prior to that of Act
No. 2645 amending said section 618 and promulgated on February 24, 1916, which took
effect only from July first of the last named year: so that, in order to explain whether or
not the above-mentioned will was executed in accordance with the law then in force, the
last named law cannot be applied and the will in question should be examined in
accordance with, and under the rules of, the law in force at the time of its execution.

The oft-repeated section 618 of Act No. 190 says:

No will, except as provided in the preceding section, shall be valid to pass any
estate, real or personal, nor charge or affect the same, unless it be in writing and
signed by the testator, or by some other person in his presence, and by his express
direction, and attested and subscribed by three or more credible witnesses in the
presence of the testator and of each other. But the absence of such form of
attestation shall not render the will invalid if it is proven that the will was in fact
signed and attested as in this section provided.

A mere reading of the last four paragraphs or parts of the will Exhibit A shows in a clear
manner that the said will in its form and contents expresses without shadow of doubt the
will of the testator; and that in its execution the solemnities prescribed by the above-
mentioned section 618 of Act No. 190 have been observed.

Even though Domingo de la Fuente drafted the will and intervened in its preparation as
a notary, by the order and under the express direction of the testator, it is nevertheless
true that he did it as a witness to the execution of the said will with positive and concrete
acts, while the two other witnesses Gregorio Bustilla and Sixto Barrameda merely attested
all that appeared in the second of the four paragraphs mentioned; for in its they certify
that the foregoing testament contains the last will of the testator Francisco Briones; that
the latter told them that before and at the time that he dictated his will, there was no
inducement nor threat by anybody; and that as he did not know how to write the Spanish
language, said testator requested Domingo de la Fuente to write the will, and he did it as
it is now drafted, certifying also, that the testator Briones signed his will voluntarily with
his own hand, in the presence of the declarants who, as witnesses, signed the instrument
on the date expressed. Domingo de la Fuente on his part declared that the two said
witnesses formally swore before him on the certification which precedes the said will
and, according to this testimony as shown in the records and the testimony of the above-
mentioned witnesses, the said Domingo de la Fuente wrote and drafted the said will
Exhibit A by the order and under the direction of the testator Francisco Briones, who
signed in the presence of the witnesses, Bustilla and Barrameda and of Notary Domingo
de la Fuente, all of whom immediately signed also in the presence of the testator, each
doing it in the presence of each other. So that, although it is not shown expressly that
Domingo de la Fuente was an attesting witness to the will, yet it cannot be denied that it
was he who wrote it by the order and under the direction of the testator; that he was a
witness to its execution from the first to its last line; and that he was perfectly aware of
the fact that all that he had written in the document Exhibit A expresses the genuine and
true will of the testator. He saw and was present when the latter signed his will, as also
when the two witnesses Bustilla and Barrameda affixed their signatures; said witnesses
also saw and were present when Domingo de la Fuente signed at the end of the said
document.

The name of Domingo de la Fuente appears as that of a notary who certifies as to the
certainty of the will made by Francisco Briones and of the signatures of the testator as
well as of the witnesses at its end; and as the law does not require that one of the witnesses
must necessarily be a notary, and it cannot be denied that Domingo de la Fuente attested
the execution and the signing of the will not only by the testator but also by the attesting
witnesses, it cannot but be admitted that Domingo de la Fuente intervened, attested, and
signed the testament as a witness.

This is a case in which the judicial criterion should be inspired in the sense that it is not
defeated, and if the wish of the testator is so manifest and express as in the instant case,
it is not proper nor just to invalidate the will of Francisco Briones merely because of some
small defect in form which is not essential nor of great importance, such as the failure to
state therein that Domingo de la Fuente was also a witness to the said will when he signed
it twice. As a matter of act, he understood the contents of the will better than the two
other attesting witnesses, for he really was a witness and he attested the execution of the
will during its making until it was terminated and signed by the testator, by the
witnesses, and by himself, even though he did it in the capacity of a notary.

The last paragraph of section 618 of Act No. 190 supplies a legal basis to support the
validity of the will in question with the conditions for its probate because,
notwithstanding the existence of such defect merely in the form and not in the substance,
the certification of authenticity and the very text of the will show in a clear and
indubitable manner that the will Exhibit A contains the last will of the testator, and that
it was signed by the latter and attested as being true and legitimate not only the two
witnesses Bustilla and Barrameda but also by the one who wrote it, Domingo de la
Fuente, who was also a truthful and reliable witness, even though he be called a notary
public.

The requisites established by Act No. 2645, which amended the oft-repeated section 618
cannot be required in the probate of the will here, inasmuch as this document was
executed in September, 1911, five years before said amendatory law began to take effect
(July 1, 1916), while the testator died on August 14, 1913, two years and some months
before the enforcement of the said law; and so, the only law applicable to the present case
is the provision contained in section 618 of Act No. 190, and in accordance with the
provisions of this section, the said will should be probated; for it has been presented to
the court many months before the amendatory act went into effect.

It is well-known that the principle that a new law shall not have retroactive effect only
governs the rights arising from acts done under the rule of the former law; but if the right
be declared for the first time by a subsequent law it shall take effect from that time even
though it has arisen from acts subject to the former laws, provided that it does not
prejudice another acquired right of the same origin.

It is well-known that hereditary rights are not born nor does the will produce any effect
until the moment of the death of the person whose inheritance is concerned. (Decision
rendered in cassation by the supreme court of Spain on June 24, 1897.)

In view of these facts, it follows that the judgment appealed from should be reversed and
it should be declared as we hereby declare that the will Exhibit A has been executed in
due form by Francisco Briones on September 16, 1911, and that the said will contains and
expresses the last will and testamentary wishes of the deceased testator. Consequently,
let the records be returned to the court wherefrom they came with a certified copy of this
resolution in order that the judge, upon petition by the proper party, may provide for the
necessary proceedings with respect to the inheritance, and the clerk of the court may issue
certified copies of the said testament; without any special ruling as to costs. so ordered.
 F.F. CRUZ & CO., INC., G.R. No. 187521
Petitioner,
Present:

CARPIO, J.,
- versus - Chairperson,
BRION,
PEREZ,
SERENO, and
HR CONSTRUCTION CORP., REYES, JJ.
Respondent.
Promulgated:

March 14, 2012

x----------------------------------------------------------------------------------------x

DECISION

REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by petitioner F.F. Cruz & Co., Inc. (FFCCI) assailing the Decision[1] dated February 6, 2009
and Resolution[2] dated April 13, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP
No. 91860.

The Antecedent Facts

Sometime in 2004, FFCCI entered into a contract with the Department of Public
Works and Highways (DPWH) for the construction of the Magsaysay Viaduct, known as
the Lower Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into
a Subcontract Agreement[3] with HR Construction Corporation (HRCC) for the supply of
materials, labor, equipment, tools and supervision for the construction of a portion of the
said project called the East Bank Levee and Cut-Off Channel in accordance with the
specifications of the main contract.

The subcontract price agreed upon by the parties amounted to P31,293,532.72.

Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly
progress billing which the latter would then pay, subject to stipulated deductions, within
30 days from receipt thereof.

The parties agreed that the requests of HRCC for payment should include progress
accomplishment of its completed works as approved by FFCCI. Additionally, they
agreed to conduct a joint measurement of the completed works of HRCC together with
the representative of DPWH and consultants to arrive at a common quantity.

Thereafter, HRCC commenced the construction of the works pursuant to the

Subcontract Agreement.
 On September 17, 2004, HRCC submitted to FFCCI its first progress billing in the
amount of P2,029,081.59 covering the construction works it completed from August 16 to
September 15, 2004.[4] However, FFCCI asserted that the DPWH was then able to evaluate
the completed works of HRCC only until July 25, 2004. Thus, FFCCI only approved the
gross amount of P423,502.88 for payment. Pursuant to the Subcontract Agreement, FFCCI
deducted from the said gross amount P42,350.29 for retention and P7,700.05 for
expanded withholding tax leaving a net payment in the amount of P373,452.54. This
amount was paid by FFCCI to HRCC on December 3, 2004.[5]

FFCCI and the DPWH then jointly evaluated the completed works of HRCC for
the period of July 26 to September 25, 2004. FFCCI claimed that the gross amount due for
the completed works during the said period was P2,008,837.52. From the said gross
amount due, FFCCI deducted therefrom P200,883.75 for retention and P36,524.07 for
expanded withholding tax leaving amount of P1,771,429.45 as the approved net payment
for the said period. FFCCI paid this amount on December 21, 2004.[6]

On October 29, 2004, HRCC submitted to FFCCI its second progress billing in the
amount of P1,587,760.23 covering its completed works from September 18 to 25,
2004.[7] FFCCI did not pay the amount stated in the second progress billing, claiming that
it had already paid HRCC for the completed works for the period stated therein.

On even date, HRCC submitted its third progress billing in the amount
of P2,569,543.57 for its completed works from September 26 to October 25, 2004.[8] FFCCI
did not immediately pay the amount stated in the third progress billing, claiming that it
still had to evaluate the works accomplished by HRCC.

On November 25, 2004, HRCC submitted to FFCCI its fourth progress billing in
the amount of P1,527,112.95 for the works it had completed from October 26 to November
25, 2004.

Subsequently, FFCCI, after it had evaluated the completed works of HRCC from
September 26 to November 25, 2004, approved the payment of the gross amount
of P1,505,570.99 to HRCC. FFCCI deducted therefrom P150,557.10 for retention
and P27,374.02 for expanded withholding tax leaving a net payment of P1,327,639.87,
which amount was paid to HRCC on March 11, 2005.[9]

Meanwhile, HRCC sent FFCCI a letter[10] dated December 13, 2004 demanding the
payment of its progress billings in the total amount of P7,340,046.09, plus interests, within
three days from receipt thereof. Subsequently, HRCC completely halted the construction
of the subcontracted project after taking its Christmas break on December 18, 2004.

On March 7, 2005, HRCC, pursuant to the arbitration clause in the Subcontract

Agreement, filed with the Construction Industry Arbitration Commission (CIAC) a
Complaint[11] against FFCCI praying for the payment of the following: (1) overdue
obligation in the reduced amount of P4,096,656.53 as of December 15, 2004 plus legal
interest; (2) P1,500,000.00 as attorneys fees; (3) P80,000.00 as acceptance fee and
representation expenses; and (4) costs of litigation.
 In its Answer,[12] FFCCI claimed that it no longer has any liability on the
Subcontract Agreement as the three payments it made to HRCC, which amounted
to P3,472,521.86, already represented the amount due to the latter in view of the works
actually completed by HRCC as shown by the survey it conducted jointly with the
DPWH. FFCCI further asserted that the delay in the payment processing was primarily
attributable to HRCC inasmuch as it presented unverified work accomplishments
contrary to the stipulation in the Subcontract Agreement regarding requests for payment.

Likewise, FFCCI maintained that HRCC failed to comply with the condition stated
under the Subcontract Agreement for the payment of the latters progress billings, i.e. joint
measurement of the completed works, and, hence, it was justified in not paying the
amount stated in HRCCs progress billings.

On June 16, 2005, an Arbitral Tribunal was created composed of Engineer Ricardo
B. San Juan, Joven B. Joaquin and Attorney Alfredo F. Tadiar, with the latter being
appointed as the Chairman.

In a Preliminary Conference held on July 5, 2005, the parties defined the issues to
be resolved in the proceedings before the CIAC as follows:

1. What is the correct amount of [HRCCs] unpaid progress billing?

2. Did [HRCC] comply with the conditions set forth in subparagraph 4.3
of the Subcontract Agreement for the submission,
evaluation/processing and release of payment of its progress billings?

3. Did [HRCC] stop work on the project?

3.1 If so, is the work stoppage justified?

3.2 If so, what was the percentage and value of [HRCCs] work
accomplishment at the time it stopped work on the project?

4. Who between the parties should bear the cost of arbitration or in what
proportion should it be shared by the parties?[13]

Likewise, during the said Preliminary Conference, HRCC further reduced the
amount of overdue obligation it claimed from FFCCI to P2,768,916.66. During the course
of the proceedings before the CIAC, HRCC further reduced the said amount
to P2,635,397.77 the exact difference between the total amount of HRCCs progress billings
(P6,107,919.63) and FFCCIs total payments in favor of the latter (P3,472,521.86).

The CIAC Decision

On September 6, 2005, after due proceedings, the CIAC rendered a Decision[14] in

favor of HRCC, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the

Claimant HR CONSTRUCTION CORPORATION and AWARD made
 on its monetary claim against Respondent F.F. CRUZ & CO., INC., as
follows:

[P]2,239,452.63 as the balance of its unpaid billings and

101,161.57 as reimbursement of the arbitration costs.

[P]2,340,614.20 Total due the Claimant

Interest on the foregoing amount [P]2,239,452.63 shall be paid at the

rate of 6% per annum from the date of this Decision. After finality of this
Decision, interest at the rate of 12% per annum shall be paid thereon until
full payment of the awarded amount shall have been made x x x.

SO ORDERED.[15]

The CIAC held that the payment method adopted by FFCCI is actually what is
known as the back-to-back payment scheme which was not agreed upon under the
Subcontract Agreement. As such, the CIAC ruled that FFCCI could not impose upon
HRCC its valuation of the works completed by the latter. The CIAC gave credence to
HRCCs valuation of its completed works as stated in its progress billings. Thus:

During the trial, [FFCCIs] Aganon admitted that [HRCCs]

accomplishments are included in its own billings to the DPWH together
with a substantial mark-up to cover overhead costs and profit. He further
admitted that it is only when DPWH approves its (Respondents) billings
covering [HRCCs] scope of work and pays for them, that [FFCCI] will in
turn pay [HRCC] for its billings on the sub-contracted works.

On clarificatory questioning by the Tribunal, [FFCCI] admitted that

there is no back-to-back provision in the sub-contract as basis for
this sequential payment arrangement and, therefore, [FFCCIs] imposition
thereof by withholding payment to [HRCC] until it is first paid by the
project owner on the Main Contract, clearly violates said sub-contract. It [is]
this unauthorized implementation of a back-to-back payment scheme that
is seen to be the reason for [FFCCIs] non-payment of the third progress
billings.

It is accordingly the holding of this Arbitral Tribunal that [FFCCI] is

not justified in withholding payment of [HRCCs] third progress billing for
this scheme that [HRCC] has not agreed to in the sub-contract agreement x
x x.

xxx

The total retention money deducted by [FFCCI] from [HRCCs] three

progress billings, amounts to [P]395,945.14 x x x. The retention money is
part of [HRCCs] progress billings and must, therefore, be credited to this
account. The two amounts (deductions and net payments) total
[P]3,868,467.00 x x x. This represents the total gross payments that should
be credited and deducted from the total gross billings to arrive at what has
not been paid to the [HRCC]. This results in the amount
of [P]2,239,452.63 ([P]6,107,919.63 - [P]3,868,467.00) as the correct balance of
[HRCCs] unpaid billings.[16]
 Further, the CIAC ruled that FFCCI had already waived its right under the
Subcontract Agreement to require a joint measurement of HRCCs completed works as a
condition precedent to the payment of the latters progress billings. Hence:

[FFCCI] admits that in all three instances where it paid [HRCC] for
its progress billings, it never required compliance with the aforequoted
contractual provision of a prior joint quantification. Such repeated
omission may reasonably be construed as a waiver by [FFCCI] of its
contractual right to require compliance of said condition and it is now too
late in the day to so impose it. Article 6 of the Civil Code expressly provides
that rights may be waived unless the waiver is contrary to law, public order,
public policy, morals or good customs. The tribunal cannot see any such
violation in this case.

xxx

[FFCCIs] omission to enforce the contractually required condition of

payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has
waived the condition of joint quantification and, therefore, [FFCCI] may not
be permitted to falsify such resulting position.[17]

Likewise, the CIAC held that FFCCIs non-payment of the progress billings
submitted by HRCC gave the latter the right to rescind the Subcontract Agreement and,
accordingly, HRCCs work stoppage was justified. It further opined that, in effect, FFCCI
had ratified the right of HRCC to stop the construction works as it did not file any
counterclaim against HRCC for liquidated damages arising therefrom.

FFCCI then filed a petition for review with CA assailing the foregoing disposition
by the CIAC.

The CA Decision

On February 6, 2009, the CA rendered the herein assailed Decision[18] denying the
petition for review filed by FFCCI. The CA agreed with the CIAC that FFCCI had waived
its right under the Subcontract Agreement to require a joint quantification of HRCCs
completed works.

The CA further held that the amount due to HRCC as claimed by FFCCI could not
be given credence since the same was based on a survey of the completed works
conducted without the participation of HRCC. Likewise, being the main contractor, it
ruled that it was the responsibility of FFCCI to include HRCC in the joint measurement
of the completed works. Furthermore, the CA held that HRCC was justified in stopping
its construction works on the project as the failure of FFCCI to pay its progress billings
gave the former the right to rescind the Subcontract Agreement.

FFCCI sought a reconsideration[19] of the said February 6, 2009 Decision but it was
denied by the CA in its Resolution[20] dated April 13, 2009.

Issues
 In the instant petition, FFCCI submits the following issues for this Courts
resolution:

[I.]

x x x First, [d]oes the act of [FFCCI] in conducting a verification

survey of [HRCCs] billings in the latters presence amount to a waiver of the
right of [FFCCI] to verify and approve said billings? What, if any, is the
legal significance of said act?

[II.]

x x x Second, [d]oes the payment of [FFCCI] to [HRCC] based on the

results of the above mentioned verification survey result in the former
being obliged to accept whatever accomplishment was reported by the
latter?

[III.]

x x x Third, [d]oes the mere comparison of the payments made by

[FFCCI] with the contested progress billings of [HRCC] amount to an
adjudication of the controversy between the parties?

[IV.]

x x x Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim

against [HRCC] for liquidated damages due to the latters work stoppage,
amount to a ratification of such work stoppage?

[V.]

x x x Fifth, [d]id the [CA] disregard or overlook significant and

material facts which would affect the result of the litigation?[21]

In sum, the crucial issues for this Courts resolution are: first, what is the effect of
FFCCIs non-compliance with the stipulation in the Subcontract Agreement requiring a
joint quantification of the works completed by HRCC on the payment of the progress
billings submitted by the latter; and second, whether there was a valid rescission of the
Subcontract Agreement by HRCC.

The Courts Ruling

The petition is not meritorious.

Procedural Issue:
Finality and Conclusiveness of the CIACs Factual Findings

Before we delve into the substantial issues raised by FFCCI, we shall first address the
procedural issue raised by HRCC. According to HRCC, the instant petition merely assails
the factual findings of the CIAC as affirmed by the CA and, accordingly, not proper
subjects of an appeal under Rule 45 of the Rules of Court. It likewise pointed out that
factual findings of the CIAC, when affirmed by the CA, are final and conclusive upon
this Court.

Generally, the arbitral award of CIAC is final

and may not be appealed except on questions
of law.

Executive Order (E.O.) No. 1008[22] vests upon the CIAC original and exclusive
jurisdiction over disputes arising from, or connected with, contracts entered into by
parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the
arbitral award of CIAC "shall be final and inappealable except on questions of law which
shall be appealable to the Supreme Court."[23]

In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc.,[24] we explained raison d
etre for the rule on finality of the CIACs arbitral award in this wise:

Voluntary arbitration involves the reference of a dispute to an

impartial body, the members of which are chosen by the parties themselves,
which parties freely consent in advance to abide by the arbitral award
issued after proceedings where both parties had the opportunity to be
heard. The basic objective is to provide a speedy and inexpensive method
of settling disputes by allowing the parties to avoid the formalities, delay,
expense and aggravation which commonly accompany ordinary litigation,
especially litigation which goes through the entire hierarchy of courts.
Executive Order No. 1008 created an arbitration facility to which the
construction industry in the Philippines can have recourse. The Executive
Order was enacted to encourage the early and expeditious settlement of
disputes in the construction industry, a public policy the implementation
of which is necessary and important for the realization of national
development goals.

Aware of the objective of voluntary arbitration in the labor field, in

the construction industry, and in any other area for that matter, the Court
will not assist one or the other or even both parties in any effort to subvert
or defeat that objective for their private purposes. The Court will not review
the factual findings of an arbitral tribunal upon the artful allegation that
such body had "misapprehended the facts" and will not pass upon issues
which are, at bottom, issues of fact, no matter how cleverly disguised they
might be as "legal questions." The parties here had recourse to arbitration
and chose the arbitrators themselves; they must have had confidence in
such arbitrators. x x x[25] (Citation omitted)

Thus, in cases assailing the arbitral award rendered by the CIAC, this Court may
only pass upon questions of law. Factual findings of construction arbitrators are final and
conclusive and not reviewable by this Court on appeal. This rule, however, admits of
certain exceptions.

In Spouses David v. Construction Industry and Arbitration Commission,[26] we laid down the
instances when this Court may pass upon the factual findings of the CIAC, thus:
 We reiterate the rule that factual findings of construction arbitrators are
final and conclusive and not reviewable by this Court on appeal, except
when the petitioner proves affirmatively that: (1) the award was procured
by corruption, fraud or other undue means; (2) there was evident partiality
or corruption of the arbitrators or of any of them; (3) the arbitrators were
guilty of misconduct in refusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence pertinent and material to the
controversy; (4) one or more of the arbitrators were disqualified to act as
such under section nine of Republic Act No. 876 and willfully refrained
from disclosing such disqualifications or of any other misbehavior by which
the rights of any party have been materially prejudiced; or (5) the arbitrators
exceeded their powers, or so imperfectly executed them, that a mutual, final
and definite award upon the subject matter submitted to them was not
made. x x x[27] (Citation omitted)

Issues on the proper interpretation of the

terms of the Subcontract Agreement involve
questions of law.

A question of law arises when there is doubt as to what the law is on a certain state of
facts, while there is a question of fact when the doubt arises as to the truth or falsity of
the alleged facts. For a question to be one of law, the same must not involve an
examination of the probative value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what the law provides on the given
set of circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact.[28]

On the surface, the instant petition appears to merely raise factual questions as it
mainly puts in issue the appropriate amount that is due to HRCC. However, a more
thorough analysis of the issues raised by FFCCI would show that it actually asserts
questions of law.

FFCCI primarily seeks from this Court a determination of whether amount

claimed by HRCC in its progress billing may be enforced against it in the absence of a
joint measurement of the formers completed works. Otherwise stated, the main question
advanced by FFCCI is this: in the absence of the joint measurement agreed upon in the
Subcontract Agreement, how will the completed works of HRCC be verified and the
amount due thereon be computed?

The determination of the foregoing question entails an interpretation of the terms

of the Subcontract Agreement vis--vis the respective rights of the parties herein. On this
point, it should be stressed that where an interpretation of the true agreement between
the parties is involved in an appeal, the appeal is in effect an inquiry of the law between
the parties, its interpretation necessarily involves a question of law.[29]

Moreover, we are not called upon to examine the probative value of the evidence
presented before the CIAC. Rather, what is actually sought from this Court is an
interpretation of the terms of the Subcontract Agreement as it relates to the dispute
between the parties.
First Substantive Issue: Effect of Non-compliance with the Joint Quantification
Requirement on the Progress Billings of HRCC

Basically, the instant issue calls for a determination as to which of the parties respective
valuation of accomplished works should be given credence. FFCCI claims that its
valuation should be upheld since the same was the result of a measurement of the
completed works conducted by it and the DPWH. On the other hand, HRCC maintains
that its valuation should be upheld on account of FFCCIs failure to observe the joint
measurement requirement in ascertaining the extent of its completed works.

The terms of the Subcontract Agreement

should prevail.

In resolving the dispute as to the proper valuation of the works accomplished by HRCC,
the primordial consideration should be the terms of the Subcontract Agreement. It is basic
that if the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control.[30]

In Abad v. Goldloop Properties, Inc.,[31] we stressed that:

A courts purpose in examining a contract is to interpret the intent of the

contracting parties, as objectively manifested by them. The process of
interpreting a contract requires the court to make a preliminary inquiry as
to whether the contract before it is ambiguous. A contract provision is
ambiguous if it is susceptible of two reasonable alternative
interpretations. Where the written terms of the contract are not
ambiguous and can only be read one way, the court will interpret the
contract as a matter of law. If the contract is determined to be ambiguous,
then the interpretation of the contract is left to the court, to resolve the
ambiguity in the light of the intrinsic evidence.[32] (Emphasis supplied and
citation omitted)

Article 4 of the Subcontract Agreement, in part, contained the following stipulations:

ARTICLE 4

SUBCONTRACT PRICE
4.1 The total SUBCONTRACT Price shall be THIRTY ONE MILLION
TWO HUNDRED NINETY THREE THOUSAND FIVE HUNDRED
THIRTY TWO PESOS & 72/100 ONLY ([P]31,293,532.72) inclusive of
Value Added Tax x x x.

xxx

4.3 Terms of Payment

FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the
[HRCCs] Monthly Progress Billings subject to deductions due to ten
percent (10%) retention, and any other sums that may be due and
recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In
 all cases, however, two percent (2%) expanded withholding tax on the
[HRCCs] income will be deducted from the monthly payments.

Requests for the payment by the [HRCC] shall include progress

accomplishment of completed works (unit of work accomplished x
unit cost) as approved by [FFCCI]. Cut-off date of monthly billings
shall be every 25th of the month and joint measurement shall be
conducted with the DPWHs representative, Consultants, FFCCI and
[HRCC] to arrive at a common/agreed quantity.[33] (Emphasis
supplied)

Pursuant to the terms of payment agreed upon by the parties, FFCCI obliged itself
to pay the monthly progress billings of HRCC within 30 days from receipt of the same.
Additionally, the monthly progress billings of HRCC should indicate the extent of the
works completed by it, the same being essential to the valuation of the amount that FFCCI
would pay to HRCC.

The parties further agreed that the extent of HRCCs completed works that would
be indicated in the monthly progress billings should be determined through a joint
measurement conducted by FFCCI and HRCC together with the representative of DPWH
and the consultants.

It is the responsibility of FFCCI to call for the

joint measurement of HRCCs completed
works.

It bears stressing that the joint measurement contemplated under the Subcontract
Agreement should be conducted by the parties herein together with the representative of
the DPWH and the consultants. Indubitably, FFCCI, being the main contractor of DPWH,
has the responsibility to request the representative of DPWH to conduct the said joint
measurement.

On this score, the testimony of Engineer Antonio M. Aganon, Jr., project manager
of FFCCI, during the reception of evidence before the CIAC is telling, thus:

MR. J. B. JOAQUIN:

Engr. Aganon, earlier there was a stipulation that in all the four billings,
there never was a joint quantification.

PROF. A. F. TADIAR:

He admitted that earlier. Pinabasa ko sa kanya.

ENGR. R. B. SAN JUAN:

The joint quantification was done only between them and DPWH.

xxxx

ENGR. AGANON:
 Puwede ko po bang i-explain sandali lang po regarding lang po doon sa
quantification na iyon? Basically po as main contractor of DPWH, we are
the ones who [are] requesting for joint survey quantification with the
owner, DPWH. Ngayon po, although wala sa papel na nag-witness and
[HRCC] still the same po, nandoon din po sila during that time, kaya lang
ho . . .

MR. J. B. JOAQUIN:

Hindi pumirma?

ENGR. AGANON:

Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH

hindi sila.[34] (Emphasis supplied)

FFCCI had waived its right to demand for a

joint measurement of HRCCs completed
works under the Subcontract Agreement.

The CIAC held that FFCCI, on account of its failure to demand the joint measurement of
HRCCs completed works, had effectively waived its right to ask for the conduct of the
same as a condition sine qua non to HRCCs submission of its monthly progress billings.

We agree.

In People of the Philippines v. Donato,[35] this Court explained the doctrine of waiver in this
wise:

Waiver is defined as "a voluntary and intentional relinquishment or

abandonment of a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have enjoyed; the
voluntary abandonment or surrender, by a capable person, of a right
known by him to exist, with the intent that such right shall be surrendered
and such person forever deprived of its benefit; or such conduct as
warrants an inference of the relinquishment of such right; or the
intentional doing of an act inconsistent with claiming it."

As to what rights and privileges may be waived, the authority is

settled:

x x x the doctrine of waiver extends to rights and privileges of

any character, and, since the word waiver covers every
conceivable right, it is the general rule that a person may
waive any matter which affects his property, and any
alienable right or privilege of which he is the owner or
which belongs to him or to which he is legally entitled,
whether secured by contract, conferred with statute, or
guaranteed by constitution, provided such rights and
privileges rest in the individual, are intended for his sole
benefit, do not infringe on the rights of others, and further
provided the waiver of the right or privilege is not
forbidden by law, and does not contravene public policy;
and the principle is recognized that everyone has a right to
 waive, and agree to waive, the advantage of a law or rule
made solely for the benefit and protection of the individual in
his private capacity, if it can be dispensed with and
relinquished without infringing on any public right, and
without detriment to the community at large. x x
x[36] (Emphasis supplied and citations omitted)

Here, it is undisputed that the joint measurement of HRCCs completed works

contemplated by the parties in the Subcontract Agreement never materialized. Indeed,
HRCC, on separate occasions, submitted its monthly progress billings indicating the
extent of the works it had completed sans prior joint measurement. Thus:

Progress Billing Period Covered Amount

1st Progress Billing dated
August 16 to September 15, 2004 P2,029,081.59
September 17, 2004[37]
2nd Progress Billing dated
September 18 to 25, 2004 P1,587,760.23
October 29, 2004[38]
3rd Progress Billing dated September 26 to October 25,
P2,569,543.57
October 29, 2004[39] 2004
4th Progress Billing dated October 26 to November 25,
P1,527,112.95
November 25, 2004 2004

FFCCI did not contest the said progress billings submitted by HRCC despite the lack of
a joint measurement of the latters completed works as required under the Subcontract
Agreement. Instead, FFCCI proceeded to conduct its own verification of the works
actually completed by HRCC and, on separate dates, made the following payments to
HRCC:

Date of Payment Period Covered Amount

December 3, 2004[40] April 2 to July 25, 2004 P373,452.24
December 21, 2004[41] July 26 to September 25, 2004 P1,771,429.45
March 11, 2005[42] September 26 to November 25, 2004 P1,327,639.87

FFCCIs voluntary payment in favor of HRCC, albeit in amounts substantially different

from those claimed by the latter, is a glaring indication that it had effectively waived its
right to demand for the joint measurement of the completed works. FFCCIs failure to
demand a joint measurement of HRCCs completed works reasonably justified the
inference that it had already relinquished its right to do so. Indeed, not once did FFCCI
insist on the conduct of a joint measurement to verify the extent of HRCCs completed
works despite its receipt of the four monthly progress billings submitted by the latter.

FFCCI is already barred from contesting

HRCCs valuation of the completed works
having waived its right to demand the joint
measurement requirement.

In view of FFCCIs waiver of the joint measurement requirement, the CA,

essentially echoing the CIACs disposition, found that FFCCI is obliged to pay the amount
claimed by HRCC in its monthly progress billings. The CA reasoned thus:
 Verily, the joint measurement that [FFCCI] claims it conducted
without the participation of [HRCC], to which [FFCCI] anchors its claim of
full payment of its obligations to [HRCC], cannot be applied, nor imposed,
on [HRCC]. In other words, [HRCC] cannot be made to accept a
quantification of its works when the said quantification was made without
its participation. As a consequence, [FFCCIs] claim of full payment cannot
be upheld as this is a result of a quantification that was made contrary to
the express provisions of the Subcontract Agreement.

The Court is aware that by ruling so, [FFCCI] would seem to be

placed at a disadvantage because it would result in [FFCCI] having to pay
exactly what [HRCC] was billing the former. If, on the other hand, the Court
were to rule otherwise[,] then [HRCC] would be the one at a disadvantage
because it would be made to accept payment that is less than what it was
billing.

Circumstances considered, however, the Court deems it proper to

rule in favor of [HRCC] because of the explicit provision of the Subcontract
Agreement that requires the participation of the latter in the joint
measurement. If the Court were to rule otherwise, then the Court would, in
effect, be disregarding the explicit agreement of the parties in their
contract.[43]

Essentially, the question that should be resolved is this: In view of FFCCIs waiver of
its right to demand a joint measurement of HRCCs completed works, is FFCCI now
barred from disputing the claim of HRCC in its monthly progress billings?

We rule in the affirmative.

As intimated earlier, the joint measurement requirement is a mechanism essentially

granting FFCCI the opportunity to verify and, if necessary, contest HRCCs valuation of
its completed works prior to the submission of the latters monthly progress billings.

In the final analysis, the joint measurement requirement seeks to limit the dispute
between the parties with regard to the valuation of HRCCs completed works.
Accordingly, any issue which FFCCI may have with regard to HRCCs valuation of the
works it had completed should be raised and resolved during the said joint measurement
instead of raising the same after HRCC had submitted its monthly progress billings.
Thus, having relinquished its right to ask for a joint measurement of HRCCs completed
works, FFCCI had necessarily waived its right to dispute HRCCs valuation of the works
it had accomplished.

Second Substantive Issue:

Validity of HRCCs Rescission of the Subcontract Agreement

Both the CA and the CIAC held that the work stoppage of HRCC was justified as the
same is but an exercise of its right to rescind the Subcontract Agreement in view of
FFCCIs failure to pay the formers monthly progress billings. Further, the CIAC stated
that FFCCI could no longer assail the work stoppage of HRCC as it failed to file any
counterclaim against HRCC pursuant to the terms of the Subcontract Agreement.

For its part, FFCCI asserted that the work stoppage of HRCC was not justified and,
in any case, its failure to raise a counterclaim against HRCC for liquidated damages
before the CIAC does not amount to a ratification of the latters work stoppage.

The determination of the validity of HRCCs work stoppage depends on a determination

of the following: first, whether HRCC has the right to extrajudicially rescind the
Subcontract Agreement; and second, whether FFCCI is already barred from disputing the
work stoppage of HRCC.

HRCC had waived its right to rescind the

Subcontract Agreement.

The right of rescission is statutorily recognized in reciprocal obligations. Article

1191 of the Civil Code pertinently reads:

Art. 1191. The power to rescind obligations is implied in reciprocal

ones, in case one of the obligors should not comply with what is incumbent
upon him.

The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in either case. He
may also seek rescission, even after he has chosen fulfillment, if the latter
should become impossible.

The court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third

persons who have acquired the thing, in accordance with Articles 1385 and
1388 and the Mortgage Law.

The rescission referred to in this article, more appropriately referred to as resolution is on

the breach of faith by the defendant which is violative of the reciprocity between the
parties.[44] The right to rescind, however, may be waived, expressly or impliedly.[45]

While the right to rescind reciprocal obligations is implied, that is, that such right need
not be expressly provided in the contract, nevertheless the contracting parties may waive
the same.[46]

Contrary to the respective dispositions of the CIAC and the CA, we find that HRCC had
no right to rescind the Subcontract Agreement in the guise of a work stoppage, the latter
having waived such right. Apropos is Article 11.2 of the Subcontract Agreement, which
reads:

11.2 Effects of Disputes and Continuing Obligations

 Notwithstanding any dispute, controversy, differences or
arbitration proceedings relating directly or indirectly to this
SUBCONTRACT Agreement and without prejudice to the eventual
outcome thereof, [HRCC] shall at all times proceed with the
prompt performance of the Works in accordance with the
directives of FFCCI and this SUBCONTRACT
Agreement.[47] (Emphasis supplied)

Hence, in spite of the existence of dispute or controversy between the parties

during the course of the Subcontract Agreement, HRCC had agreed to continue the
performance of its obligations pursuant to the Subcontract Agreement. In view of the
provision of the Subcontract Agreement quoted above, HRCC is deemed to have
effectively waived its right to effect extrajudicial rescission of its contract with FFCCI.
Accordingly, HRCC, in the guise of rescinding the Subcontract Agreement, was not
justified in implementing a work stoppage.

The costs of arbitration should be shared by

the parties equally.

Section 1, Rule 142 of the Rules of Court provides:

Section 1. Costs ordinarily follow results of suit. Unless otherwise

provided in these rules, costs shall be allowed to the prevailing party as a
matter of course, but the court shall have power, for special reasons, to
adjudge that either party shall pay the costs of an action, or that the same
be divided, as may be equitable. No costs shall be allowed against the
Republic of the Philippines unless otherwise provided by law. (Emphasis
supplied)

Although, generally, costs are adjudged against the losing party, courts
nevertheless have discretion, for special reasons, to decree otherwise.

Here, considering that the work stoppage of HRCC is not justified, it is only fitting
that both parties should share in the burden of the cost of arbitration equally. HRCC had
a valid reason to institute the complaint against FFCCI in view of the latters failure to pay
the full amount of its monthly progress billings. However, we disagree with the CIAC
and the CA that only FFCCI should shoulder the arbitration costs. The arbitration costs
should be shared equally by FFCCI and HRCC in view of the latters unjustified work
stoppage.

WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated

February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R.
SP No. 91860 are hereby AFFIRMED with MODIFICATION that the arbitration costs
shall be shared equally by the parties herein.

SO ORDERED.
G.R. No. 163707 September 15, 2006

MICHAEL C. GUY, petitioner,

vs.
HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge, RTC,
Branch 138, Makati City and minors, KAREN DANES WEI and KAMILLE DANES
WEI, represented by their mother, REMEDIOS OANES,respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the January 22, 2004 Decision1 of the Court
of Appeals in CA-G.R. SP No. 79742, which affirmed the Orders dated July 21, 20002 and
July 17, 20033 of the Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No.
4549 denying petitioner's motion to dismiss; and its May 25, 2004 Resolution 4 denying
petitioner's motion for reconsideration.

The facts are as follows:

On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes Wei,
represented by their mother Remedios Oanes (Remedios), filed a petition for letters of
administration5 before the Regional Trial Court of Makati City, Branch 138. The case was
docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei(a.k.a. Rufino Guy
Susim).

Private respondents alleged that they are the duly acknowledged illegitimate children of
Sima Wei, who died intestate in Makati City on October 29, 1992, leaving an estate valued
at P10,000,000.00 consisting of real and personal properties. His known heirs are his
surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina, George and Michael,
all surnamed Guy. Private respondents prayed for the appointment of a regular
administrator for the orderly settlement of Sima Wei's estate. They likewise prayed that,
in the meantime, petitioner Michael C. Guy, son of the decedent, be appointed as Special
Administrator of the estate. Attached to private respondents' petition was a Certification
Against Forum Shopping6 signed by their counsel, Atty. Sedfrey A. Ordoñez.

In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He

asserted that his deceased father left no debts and that his estate can be settled without
securing letters of administration pursuant to Section 1, Rule 74 of the Rules of Court. He
further argued that private respondents should have established their status as
illegitimate children during the lifetime of Sima Wei pursuant to Article 175 of the Family
Code.

The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on the ground that the
certification against forum shopping should have been signed by private respondents
and not their counsel. They contended that Remedios should have executed the
certification on behalf of her minor daughters as mandated by Section 5, Rule 7 of the
Rules of Court.

In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss,9 petitioner and

his co-heirs alleged that private respondents' claim had been paid, waived, abandoned
or otherwise extinguished by reason of Remedios' June 7, 1993 Release and Waiver of
Claim stating that in exchange for the financial and educational assistance received from
petitioner, Remedios and her minor children discharge the estate of Sima Wei from any
and all liabilities.

The Regional Trial Court denied the Joint Motion to Dismiss as well as the Supplemental
Motion to Dismiss. It ruled that while the Release and Waiver of Claim was signed by
Remedios, it had not been established that she was the duly constituted guardian of her
minor daughters. Thus, no renunciation of right occurred. Applying a liberal application
of the rules, the trial court also rejected petitioner's objections on the certification against
forum shopping.

Petitioner moved for reconsideration but was denied. He filed a petition for certiorari
before the Court of Appeals which affirmed the orders of the Regional Trial Court in its
assailed Decision dated January 22, 2004, the dispositive portion of which states:

WHEREFORE, premises considered, the present petition is hereby DENIED DUE

COURSE and accordingly DISMISSED, for lack of merit. Consequently, the
assailed Orders dated July 21, 2000 and July 17, 2003 are hereby both AFFIRMED.
Respondent Judge is hereby DIRECTED to resolve the controversy over the
illegitimate filiation of the private respondents (sic) minors [-] Karen Oanes Wei
and Kamille Oanes Wei who are claiming successional rights in the intestate estate
of the deceased Sima Wei, a.k.a. Rufino Guy Susim.

SO ORDERED.10

The Court of Appeals denied petitioner's motion for reconsideration, hence, this petition.

Petitioner argues that the Court of Appeals disregarded existing rules on certification
against forum shopping; that the Release and Waiver of Claim executed by Remedios
released and discharged the Guy family and the estate of Sima Wei from any claims or
liabilities; and that private respondents do not have the legal personality to institute the
petition for letters of administration as they failed to prove their filiation during the
lifetime of Sima Wei in accordance with Article 175 of the Family Code.

Private respondents contend that their counsel's certification can be considered

substantial compliance with the rules on certification of non-forum shopping, and that
the petition raises no new issues to warrant the reversal of the decisions of the Regional
Trial Court and the Court of Appeals.

The issues for resolution are: 1) whether private respondents' petition should be
dismissed for failure to comply with the rules on certification of non-forum shopping; 2)
whether the Release and Waiver of Claim precludes private respondents from claiming
their successional rights; and 3) whether private respondents are barred by prescription
from proving their filiation.

The petition lacks merit.

Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum
shopping should be executed by the plaintiff or the principal party. Failure to comply
with the requirement shall be cause for dismissal of the case. However, a liberal
application of the rules is proper where the higher interest of justice would be served.
In Sy Chin v. Court of Appeals,11 we ruled that while a petition may have been flawed
where the certificate of non-forum shopping was signed only by counsel and not by the
party, this procedural lapse may be overlooked in the interest of substantial justice. 12 So
it is in the present controversy where the merits13 of the case and the absence of an
intention to violate the rules with impunity should be considered as compelling reasons
to temper the strict application of the rules.

As regards Remedios' Release and Waiver of Claim, the same does not bar private
respondents from claiming successional rights. To be valid and effective, a waiver must
be couched in clear and unequivocal terms which leave no doubt as to the intention of a
party to give up a right or benefit which legally pertains to him. A waiver may not be
attributed to a person when its terms do not explicitly and clearly evince an intent to
abandon a right.14
In this case, we find that there was no waiver of hereditary rights. The Release and Waiver
of Claim does not state with clarity the purpose of its execution. It merely states that
Remedios received P300,000.00 and an educational plan for her minor daughters "by way
of financial assistance and in full settlement of any and all claims of whatsoever nature
and kind x x x against the estate of the late Rufino Guy Susim."15 Considering that the
document did not specifically mention private respondents' hereditary share in the estate
of Sima Wei, it cannot be construed as a waiver of successional rights.

Moreover, even assuming that Remedios truly waived the hereditary rights of private
respondents, such waiver will not bar the latter's claim. Article 1044 of the Civil Code,
provides:

ART. 1044. Any person having the free disposal of his property may accept or
repudiate an inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by their

parents or guardians. Parents or guardians may repudiate the inheritance left to
their wards only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the persons
designated by the testator to determine the beneficiaries and distribute the
property, or in their default, to those mentioned in Article 1030. (Emphasis
supplied)

Parents and guardians may not therefore repudiate the inheritance of their wards without
judicial approval. This is because repudiation amounts to an alienation of
property16 which must pass the court's scrutiny in order to protect the interest of the
ward. Not having been judicially authorized, the Release and Waiver of Claim in the
instant case is void and will not bar private respondents from asserting their rights as
heirs of the deceased.

Furthermore, it must be emphasized that waiver is the intentional relinquishment of a

known right. Where one lacks knowledge of a right, there is no basis upon which waiver
of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be
established by a consent given under a mistake or misapprehension of fact.17

In the present case, private respondents could not have possibly waived their
successional rights because they are yet to prove their status as acknowledged illegitimate
children of the deceased. Petitioner himself has consistently denied that private
respondents are his co-heirs. It would thus be inconsistent to rule that they waived their
hereditary rights when petitioner claims that they do not have such right. Hence,
petitioner's invocation of waiver on the part of private respondents must fail.

Anent the issue on private respondents' filiation, we agree with the Court of Appeals that
a ruling on the same would be premature considering that private respondents have yet
to present evidence. Before the Family Code took effect, the governing law on actions for
recognition of illegitimate children was Article 285 of the Civil Code, to wit:

ART. 285. The action for the recognition of natural children may be brought only
during the lifetime of the presumed parents, except in the following cases:

(1) If the father or mother died during the minority of the child, in which case
the latter may file the action before the expiration of four years from the
attainment of his majority;

(2) If after the death of the father or of the mother a document should appear of
which nothing had been heard and in which either or both parents recognize the
child.
 In this case, the action must be commenced within four years from the finding of
the document. (Emphasis supplied)

We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the time
the Family Code took effect and whose putative parent died during their minority are
given the right to seek recognition for a period of up to four years from attaining majority
age. This vested right was not impaired or taken away by the passage of the Family
Code.19

On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded
Article 285 of the Civil Code, provide:

ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private

handwritten instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved
by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

ART. 173. The action to claim legitimacy may be brought by the child during his
or her lifetime and shall be transmitted to the heirs should the child die during
minority or in a state of insanity. In these cases, the heirs shall have a period of five
years within which to institute the action.

The action already commenced by the child shall survive notwithstanding the
death of either or both of the parties.

ART. 175. Illegitimate children may establish their illegitimate filiation in the same
way and on the same, evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except
when the action is based on the second paragraph of Article 172, in which case the
action may be brought during the lifetime of the alleged parent.

Under the Family Code, when filiation of an illegitimate child is established by a record
of birth appearing in the civil register or a final judgment, or an admission of filiation in
a public document or a private handwritten instrument signed by the parent concerned,
the action for recognition may be brought by the child during his or her lifetime.
However, if the action is based upon open and continuous possession of the status of an
illegitimate child, or any other means allowed by the rules or special laws, it may only be
brought during the lifetime of the alleged parent.

It is clear therefore that the resolution of the issue of prescription depends on the type of
evidence to be adduced by private respondents in proving their filiation. However, it
would be impossible to determine the same in this case as there has been no reception of
evidence yet. This Court is not a trier of facts. Such matters may be resolved only by the
Regional Trial Court after a full-blown trial.

While the original action filed by private respondents was a petition for letters of
administration, the trial court is not precluded from receiving evidence on private
respondents' filiation. Its jurisdiction extends to matters incidental and collateral to the
exercise of its recognized powers in handling the settlement of the estate, including the
determination of the status of each heir.20 That the two causes of action, one to compel
recognition and the other to claim inheritance, may be joined in one complaint is not new
in our jurisprudence.21 As held in Briz v. Briz:22

The question whether a person in the position of the present plaintiff can in any
event maintain a complex action to compel recognition as a natural child and at
the same time to obtain ulterior relief in the character of heir, is one which in the
opinion of this court must be answered in the affirmative, provided always that
the conditions justifying the joinder of the two distinct causes of action are present
in the particular case. In other words, there is no absolute necessity requiring that
the action to compel acknowledgment should have been instituted and prosecuted
to a successful conclusion prior to the action in which that same plaintiff seeks
additional relief in the character of heir. Certainly, there is nothing so peculiar to
the action to compel acknowledgment as to require that a rule should be here
applied different from that generally applicable in other cases. x x x

The conclusion above stated, though not heretofore explicitly formulated by this
court, is undoubtedly to some extent supported by our prior decisions. Thus, we
have held in numerous cases, and the doctrine must be considered well settled,
that a natural child having a right to compel acknowledgment, but who has not
been in fact acknowledged, may maintain partition proceedings for the division of
the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs.
Tiamson, 32 Phil., 62); and the same person may intervene in proceedings for the
distribution of the estate of his deceased natural father, or mother (Capistrano vs.
Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil.,
855). In neither of these situations has it been thought necessary for the plaintiff to
show a prior decree compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons who might take by
inheritance are before the court; and the declaration of heirship is appropriate to
such proceedings.

WHEREFORE, the instant petition is DENIED. The Decision dated January 22, 2004 of
the Court of Appeals in CA-G.R. SP No. 79742 affirming the denial of petitioner's motion
to dismiss; and its Resolution dated May 25, 2004 denying petitioner's motion for
reconsideration, are AFFIRMED. Let the records be REMANDED to the Regional Trial
Court of Makati City, Branch 138 for further proceedings.

SO ORDERED.
COMMISSIONER OF INTERNAL G.R. No. 162155
REVENUE and ARTURO V.
PARCERO in his official
capacity as Revenue District
Officer of Revenue District
No. 049 (Makati),
Petitioners, Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.

PRIMETOWN PROPERTY
GROUP, INC.,
Respondent. Promulgated:
August 28, 2007

x-----------------------------------------x

DECISION

CORONA, J.:

This petition for review on certiorari[1] seeks to set aside the August 1, 2003 decision[2] of

the Court of Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution

denying reconsideration.[3]

On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group,

Inc., applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter

to petitioner revenue district officer Arturo V. Parcero of Revenue District No. 049

(Makati) of the Bureau of Internal Revenue (BIR),[4] he explained that the increase in the

cost of labor and materials and difficulty in obtaining financing for projects and collecting

receivables caused the real estate industry to slowdown.[5] As a consequence, while

business was good during the first quarter of 1997, respondent suffered losses amounting
to P71,879,228 that year.[6]

According to Yap, because respondent suffered losses, it was not liable for income

taxes.[7] Nevertheless, respondent paid its quarterly corporate income tax and remitted

creditable withholding tax from real estate sales to the BIR in the total amount

of P26,318,398.32.[8] Therefore, respondent was entitled to tax refund or tax credit.[9]

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit

additional documents to support its claim.[10] Respondent complied but its claim was not

acted upon. Thus, on April 14, 2000, it filed a petition for review[11] in the Court of Tax

Appeals (CTA).

On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-

year prescriptive period for filing a judicial claim for tax refund or tax credit.[12] It invoked

Section 229 of the National Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or

proceeding shall be maintained in any court for the recovery of any
national internal revenue tax hereafter alleged to have been erroneously
or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been
excessively or in any manner wrongfully collected, until a claim for refund
or credit has been duly filed with the Commissioner; but such suit or
proceeding may be maintained, whether or not such tax, penalty, or sum
has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration
of two (2) years from the date of payment of the tax or penalty regardless
of any supervening cause that may arise after payment: Provided,
however, That the Commissioner may, even without a claim therefor,
refund or credit any tax, where on the face of the return upon which
payment was made, such payment appears clearly to have been
erroneously paid. (emphasis supplied)

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its

right to claim a refund or credit commenced on that date.[13]

The tax court applied Article 13 of the Civil Code which states:

Art. 13. When the law speaks of years, months, days or nights, it shall be
understood that years are of three hundred sixty-five days each; months,
of thirty days; days, of twenty-four hours, and nights from sunset to sunrise.

If the months are designated by their name, they shall be computed by the
number of days which they respectively have.

In computing a period, the first day shall be excluded, and the last included.
(emphasis supplied)

Thus, according to the CTA, the two-year prescriptive period under Section 229 of the

NIRC for the filing of judicial claims was equivalent to 730 days. Because the year 2000

was a leap year, respondent's petition, which was filed 731 days[14] after respondent filed
its final adjusted return, was filed beyond the reglementary period.[15]
Respondent moved for reconsideration but it was denied.[16] Hence, it filed an appeal in

the CA.[17]

On August 1, 2003, the CA reversed and set aside the decision of the CTA.[18] It ruled that

Article 13 of the Civil Code did not distinguish between a regular year and a leap year.

According to the CA:

The rule that a year has 365 days applies, notwithstanding the fact that a
particular year is a leap year.[19]

In other words, even if the year 2000 was a leap year, the periods covered by April 15,

1998 to April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365

days each or a total of 730 days. A statute which is clear and explicit shall be neither

interpreted nor construed.[20]

Petitioners moved for reconsideration but it was denied.[21] Thus, this appeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be

strictly construed against claimants.[22] Section 229 of the NIRC should be strictly applied

against respondent inasmuch as it has been consistently held that the prescriptive period

(for the filing of tax refunds and tax credits) begins to run on the day claimants file their

final adjusted returns.[23] Hence, the claim should have been filed on or before April 13,

2000 or within 730 days, reckoned from the time respondent filed its final adjusted return.

The conclusion of the CA that respondent filed its petition for review in the CTA within

the two-year prescriptive period provided in Section 229 of the NIRC is correct. Its basis,

however, is not.

The rule is that the two-year prescriptive period is reckoned from the filing of the final

adjusted return.[24] But how should the two-year prescriptive period be computed?

As already quoted, Article 13 of the Civil Code provides that when the law speaks of a

year, it is understood to be equivalent to 365 days. In National Marketing Corporation v.

Tecson,[25] we ruled that a year is equivalent to 365 days regardless of whether it is a

regular year or a leap year.[26]

However, in 1987, EO[27] 292 or the Administrative Code of 1987 was enacted. Section 31,
Chapter VIII, Book I thereof provides:
 Sec. 31. Legal Periods. Year shall be understood to be twelve calendar
months; month of thirty days, unless it refers to a specific calendar month
in which case it shall be computed according to the number of days the
specific month contains; day, to a day of twenty-four hours and; night from
sunrise to sunset. (emphasis supplied)

A calendar month is a month designated in the calendar without regard to the number of

days it may contain.[28] It is the period of time running from the beginning of a certain

numbered day up to, but not including, the corresponding numbered day of the next

month, and if there is not a sufficient number of days in the next month, then up to and

including the last day of that month.[29] To illustrate, one calendar month from December

31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month from

January 31, 2008 will be from February 1, 2008 until February 29, 2008.[30]

A law may be repealed expressly (by a categorical declaration that the law is revoked and

abrogated by another) or impliedly (when the provisions of a more recent law cannot be

reasonably reconciled with the previous one).[31] Section 27, Book VII (Final Provisions)

of the Administrative Code of 1987 states:

Sec. 27. Repealing clause. All laws, decrees, orders, rules and regulation, or
portions thereof, inconsistent with this Code are hereby repealed or
modified accordingly.

A repealing clause like Sec. 27 above is not an express repealing clause because it fails to

identify or designate the laws to be abolished.[32] Thus, the provision above

only impliedly repealed all laws inconsistent with the Administrative Code of 1987.

Implied repeals, however, are not favored. An implied repeal must have been clearly and

unmistakably intended by the legislature. The test is whether the subsequent law

encompasses entirely the subject matter of the former law and they cannot be logically or

reasonably reconciled.[33]

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the

Administrative Code of 1987 deal with the same subject matter the computation of legal

periods. Under the Civil Code, a year is equivalent to 365 days whether it be a regular

year or a leap year. Under the Administrative Code of 1987, however, a year is composed

of 12 calendar months. Needless to state, under the Administrative Code of 1987, the
number of days is irrelevant.
There obviously exists a manifest incompatibility in the manner of computing legal

periods under the Civil Code and the Administrative Code of 1987. For this reason, we

hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the

more recent law, governs the computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case,

the two-year prescriptive period (reckoned from the time respondent filed its final

adjusted return[34] on April 14, 1998) consisted of 24 calendar months, computed as

follows:

Year 1 1st calendar April 15, 1998 to May 14, 1998

month
2nd calendar May 15, 1998 to June 14, 1998
month
3rd calendar June 15, 1998 to July 14, 1998
month
4th calendar July 15, 1998 to August 14, 1998
month
5th calendar August 15, to September 14,
month 1998 1998
6th calendar September 15, to October 14,
month 1998 1998
7th calendar October 15, to November 14,
month 1998 1998
8th calendar November 15, to December 14,
month 1998 1998
9th calendar December 15, to January 14,
month 1998 1999
10th calendar January 15, to February 14,
month 1999 1999
11th calendar February 15, to March 14, 1999
month 1999
12th calendar March 15, 1999 to April 14, 1999
month
Year 2 13th calendar April 15, 1999 to May 14, 1999
month
14th calendar May 15, 1999 to June 14, 1999
month
15th calendar June 15, 1999 to July 14, 1999
month
16th calendar July 15, 1999 to August 14, 1999
month
17th calendar August 15, to September 14,
month 1999 1999
18th calendar September 15, to October 14,
month 1999 1999
19th calendar October 15, to November 14,
month 1999 1999
20th calendar November 15, to December 14,
month 1999 1999
21st calendar December 15, to January 14,
month 1999 2000
 22nd calendar January 15, to February 14,
month 2000 2000
23 rd calendar February 15, to March 14, 2000
month 2000
24th calendar March 15, 2000 to April 14, 2000
month

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last

day of the 24th calendar month from the day respondent filed its final adjusted return.

Hence, it was filed within the reglementary period.

Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of

Tax Appeals which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113

entitled Primetown Property Group, Inc. v. Commissioner of Internal Revenue and Arturo V.

Parcero.

No costs.

SO ORDERED.
G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE,
BRANCH 70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET
DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE,
BRANCH 163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE
BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD M.
TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR
RICARDO D. PAPA, JR., respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING
JUDGE, BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL;
GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and R.
J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA
and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE,
BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA
FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION,
MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE,
BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON
FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF
JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE,
BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH
VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING
JUDGE, BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA;
SEA MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR
FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and
profligate consumption and extravagance of the rich or fishing in the murky waters of
the Pasig River and the Laguna Lake or making a clearing in the forest so that he can
produce food for his family, to understand why protecting birds, fish, and trees is more
important than protecting him and keeping his family alive.

How do we strike a balance between environmental protection, on the one hand, and the
individual personal interests of people, on the other?

Towards environmental protection and ecology, navigational safety, and sustainable

development, Republic Act No. 4850 created the "Laguna Lake Development Authority."
This Government Agency is supposed to carry out and effectuate the aforesaid declared
policy, so as to accelerate the development and balanced growth of the Laguna Lake area
and the surrounding provinces, cities and towns, in the act clearly named, within the
context of the national and regional plans and policies for social and economic
development.

Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain
sections of Republic Act No. 4850 because of the concern for the rapid expansion of
Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined
with current and prospective uses of the lake for municipal-industrial water supply,
irrigation, fisheries, and the like. Concern on the part of the Government and the general
public over: — the environment impact of development on the water quality and ecology
of the lake and its related river systems; the inflow of polluted water from the Pasig River,
industrial, domestic and agricultural wastes from developed areas around the lake; the
increasing urbanization which induced the deterioration of the lake, since water quality
studies have shown that the lake will deteriorate further if steps are not taken to check
the same; and the floods in Metropolitan Manila area and the lakeshore towns which will
influence the hydraulic system of Laguna de Bay, since any scheme of controlling the
floods will necessarily involve the lake and its river systems, — likewise gave impetus to
the creation of the Authority.

Section 1 of Republic Act No. 4850 was amended to read as follows:

Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to

promote, and accelerate the development and balanced growth of the
Laguna Lake area and the surrounding provinces, cities and towns
hereinafter referred to as the region, within the context of the national and
regional plans and policies for social and economic development and to
carry out the development of the Laguna Lake region with due regard and
adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution.1

Special powers of the Authority, pertinent to the issues in this case, include:

Sec. 3. Section 4 of the same Act is hereby further amended by adding

thereto seven new paragraphs to be known as paragraphs (j), (k), (l), (m),
(n), (o), and (p) which shall read as follows:

xxx xxx xxx

(j) The provisions of existing laws to the contrary

notwithstanding, to engage in fish production and other
aqua-culture projects in Laguna de Bay and other bodies of
water within its jurisdiction and in pursuance thereof to
conduct studies and make experiments, whenever necessary,
with the collaboration and assistance of the Bureau of
Fisheries and Aquatic Resources, with the end in view of
improving present techniques and practices. Provided, that
until modified, altered or amended by the procedure
provided in the following sub-paragraph, the present laws,
rules and permits or authorizations remain in force;

(k) For the purpose of effectively regulating and monitoring

activities in Laguna de Bay, the Authority shall have exclusive
jurisdiction to issue new permit for the use of the lake waters for any
projects or activities in or affecting the said lake including
navigation, construction, and operation of fishpens, fish enclosures,
fish corrals and the like, and to impose necessary safeguards for
lake quality control and management and to collect necessary
fees for said activities and projects: Provided, That the fees
collected for fisheries may be shared between the Authority
and other government agencies and political sub-divisions in
such proportion as may be determined by the President of the
Philippines upon recommendation of the Authority's
Board: Provided, further, That the Authority's Board may
determine new areas of fishery development or activities
which it may place under the supervision of the Bureau of
Fisheries and Aquatic Resources taking into account the
overall development plans and programs for Laguna de Bay
and related bodies of water: Provided, finally, That the
Authority shall subject to the approval of the President of the
Philippines promulgate such rules and regulations which
shall govern fisheries development activities in Laguna de
Bay which shall take into consideration among others the
following: socio-economic amelioration of bonafide resident
fishermen whether individually or collectively in the form of
cooperatives, lakeshore town development, a master plan for
fishpen construction and operation, communal fishing
ground for lake shore town residents, and preference to lake
shore town residents in hiring laborer for fishery projects;

(l) To require the cities and municipalities embraced within

the region to pass appropriate zoning ordinances and other
regulatory measures necessary to carry out the objectives of
the Authority and enforce the same with the assistance of the
Authority;

(m) The provisions of existing laws to the contrary

notwithstanding, to exercise water rights over public waters
within the Laguna de Bay region whenever necessary to carry
out the Authority's projects;

(n) To act in coordination with existing governmental

agencies in establishing water quality standards for
industrial, agricultural and municipal waste discharges into
the lake and to cooperate with said existing agencies of the
government of the Philippines in enforcing such standards, or
to separately pursue enforcement and penalty actions as
provided for in Section 4 (d) and Section 39-A of this
Act: Provided, That in case of conflict on the appropriate water
quality standard to be enforced such conflict shall be resolved
thru the NEDA Board.2
To more effectively perform the role of the Authority under Republic Act No. 4850, as
though Presidential Decree No. 813 were not thought to be completely effective, the Chief
Executive, feeling that the land and waters of the Laguna Lake Region are limited natural
resources requiring judicious management to their optimal utilization to insure
renewability and to preserve the ecological balance, the competing options for the use of
such resources and conflicting jurisdictions over such uses having created undue
constraints on the institutional capabilities of the Authority in the light of the limited
powers vested in it by its charter, Executive Order No. 927 further defined and enlarged
the functions and powers of the Authority and named and enumerated the towns, cities
and provinces encompassed by the term "Laguna de Bay Region".

Also, pertinent to the issues in this case are the following provisions of Executive Order
No. 927 which include in particular the sharing of fees:

Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within
the Lake Region: To effectively regulate and monitor activities in the
Laguna de Bay region, the Authority shall have exclusive jurisdiction to
issue permit for the use of all surface water for any projects or activities in
or affecting the said region including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like.

For the purpose of this Executive Order, the term "Laguna de Bay Region"
shall refer to the Provinces of Rizal and Laguna; the Cities of San Pablo,
Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan, Sto.
Tomas and Malvar in Batangas Province; the towns of Silang and Carmona
in Cavite Province; the town of Lucban in Quezon Province; and the towns
of Marikina, Pasig, Taguig, Muntinlupa, and Pateros in Metro Manila.

Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees

for the use of the lake water and its tributaries for all beneficial purposes
including but not limited to fisheries, recreation, municipal, industrial,
agricultural, navigation, irrigation, and waste disposal purpose; Provided,
that the rates of the fees to be collected, and the sharing with other government
agencies and political subdivisions, if necessary, shall be subject to the approval of
the President of the Philippines upon recommendation of the Authority's
Board, except fishpen fee, which will be shared in the following manner; 20
percent of the fee shall go to the lakeshore local governments, 5 percent shall go
to the Project Development Fund which shall be administered by a Council
and the remaining 75 percent shall constitute the share of LLDA.
However, after the implementation within the three-year period of the Laguna
Lake Fishery Zoning and Management Plan, the sharing will be modified as
follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5
percent goes to the Project Development Fund and the remaining 60 percent
shall be retained by LLDA; Provided, however, that the share of LLDA shall
form part of its corporate funds and shall not be remitted to the National
Treasury as an exception to the provisions of Presidential Decree No. 1234.
(Emphasis supplied)

It is important to note that Section 29 of Presidential Decree No. 813 defined the term
"Laguna Lake" in this manner:

Sec 41. Definition of Terms.

(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this
Act, the same shall refer to Laguna de Bay which is that area covered by the
lake water when it is at the average annual maximum lake level of elevation
12.50 meters, as referred to a datum 10.00 meters below mean lower low
 water (M.L.L.W). Lands located at and below such elevation are public
lands which form part of the bed of said lake.

Then came Republic Act No. 7160, the Local Government Code of 1991. The
municipalities in the Laguna Lake Region interpreted the provisions of this law to mean
that the newly passed law gave municipal governments the exclusive jurisdiction to issue
fishing privileges within their municipal waters because R.A. 7160 provides:

Sec. 149. Fishery Rentals, Fees and Charges.

(a) Municipalities shall have the exclusive authority to grant fishery

privileges in the municipal waters and impose rental fees or charges
therefor in accordance with the provisions of this Section.

(b) The Sangguniang Bayan may:

(1) Grant fishing privileges to erect fish corrals, oyster, mussel

or other aquatic beds or bangus fry areas, within a definite
zone of the municipal waters, as determined by it; . . . .

(2) Grant privilege to gather, take or catch bangus fry, prawn

fry or kawag-kawag or fry of other species and fish from the
municipal waters by nets, traps or other fishing gears to
marginal fishermen free from any rental fee, charges or any
other imposition whatsoever.

xxx xxx xxx

Sec. 447. Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx

(XI) Subject to the provisions of Book II of this Code, grant

exclusive privileges of constructing fish corrals or fishpens, or
the taking or catching of bangus fry, prawn fry or kawag-
kawag or fry of any species or fish within the municipal
waters.

xxx xxx xxx

Municipal governments thereupon assumed the authority to issue fishing privileges and
fishpen permits. Big fishpen operators took advantage of the occasion to establish
fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and
fishcages, as of July, 1995, occupied almost one-third of the entire lake water surface area,
increasing the occupation drastically from 7,000 hectares in 1990 to almost 21,000 hectares
in 1995. The Mayor's permit to construct fishpens and fishcages were all undertaken in
violation of the policies adopted by the Authority on fishpen zoning and the Laguna Lake
carrying capacity.

To be sure, the implementation by the lakeshore municipalities of separate independent

policies in the operation of fishpens and fishcages within their claimed territorial
municipal waters in the lake and their indiscriminate grant of fishpen permits have
already saturated the lake area with fishpens, thereby aggravating the current
environmental problems and ecological stress of Laguna Lake.

In view of the foregoing circumstances, the Authority served notice to the general public
that:
 In compliance with the instructions of His Excellency PRESIDENT FIDEL
V. RAMOS given on June 23, 1993 at Pila, Laguna pursuant to Republic Act
4850 as amended by Presidential Decree 813 and Executive Order 927 series
of 1983 and in line with the policies and programs of the Presidential Task
Force on Illegal Fishpens and Illegal Fishing, the general public is hereby
notified that:

1. All fishpens, fishcages and other aqua-culture structures in the Laguna

de Bay Region, which were not registered or to which no application for
registration and/or permit has been filed with Laguna Lake Development
Authority as of March 31, 1993 are hereby declared outrightly as illegal.

2. All fishpens, fishcages and other aqua-culture structures so declared as

illegal shall be subject to demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal Fishing.

3. Owners of fishpens, fishcages and other aqua-culture structures declared

as illegal shall, without prejudice to demolition of their structures be
criminally charged in accordance with Section 39-A of Republic Act 4850 as
amended by P.D. 813 for violation of the same laws. Violations of these laws
carries a penalty of imprisonment of not exceeding 3 years or a fine not
exceeding Five Thousand Pesos or both at the discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures

declared as illegal in accordance with the foregoing Notice shall have one
(1) month on or before 27 October 1993 to show cause before the LLDA why
their said fishpens, fishcages and other aqua-culture structures should not
be demolished/dismantled.

One month, thereafter, the Authority sent notices to the concerned owners of the illegally
constructed fishpens, fishcages and other aqua-culture structures advising them to
dismantle their respective structures within 10 days from receipt thereof, otherwise,
demolition shall be effected.

Reacting thereto, the affected fishpen owners filed injunction cases against the Authority
before various regional trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition,
Injunction and Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by
Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction,
Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM
Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c) Civil Case No. 566, for
Declaratory Relief and Injunction, Regional Trial Court, Branch 163, Pasig, filed by
Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil
Case No. 556-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch
78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M, for
Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal,
filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-,
for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by
Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil
Case No. 64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR
Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.

The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The
motions to dismiss were invariably denied. Meanwhile, temporary restraining
order/writs of preliminary mandatory injunction were issued in Civil Cases Nos. 64124,
759 and 566 enjoining the Authority from demolishing the fishpens and similar structures
in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71,
were filed by the Authority with this court. Impleaded as parties-respondents are
concerned regional trial courts and respective private parties, and the municipalities
and/or respective Mayors of Binangonan, Taguig and Jala-jala, who issued permits for
the construction and operation of fishpens in Laguna de Bay. The Authority sought the
following reliefs, viz.:

(A) Nullification of the temporary restraining order/writs of preliminary

injunction issued in Civil Cases Nos. 64125, 759 and 566;

(B) Permanent prohibition against the regional trial courts from exercising
jurisdiction over cases involving the Authority which is a co-equal body;

(C) Judicial pronouncement that R.A. 7610 (Local Government Code of

1991) did not repeal, alter or modify the provisions of R.A. 4850, as
amended, empowering the Authority to issue permits for fishpens,
fishcages and other aqua-culture structures in Laguna de Bay and that, the
Authority the government agency vested with exclusive authority to issue
said permits.

By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were
referred to the Court of Appeals.

In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's
consolidated petitions, the Court of Appeals holding that: (A) LLDA is not among those
quasi-judicial agencies of government whose decision or order are appealable only to the
Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial functions
insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as
fishing privileges in Laguna de Bay are concerned had been repealed by the Local
Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits
devolved to and is now vested with their respective local government units concerned.

Not satisfied with the Court of Appeals decision, the Authority has returned to this Court
charging the following errors:

1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED

AN ERROR WHEN IT RULED THAT THE LAGUNA LAKE
DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.

2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS

ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813
AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT
7160. THE SAID RULING IS CONTRARY TO ESTABLISHED PRINCIPLES
AND JURISPRUDENCE OF STATUTORY CONSTRUCTION.

3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS

ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN
PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO
CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.

We take a simplistic view of the controversy. Actually, the main and only issue posed is:
Which agency of the Government — the Laguna Lake Development Authority or the
towns and municipalities comprising the region — should exercise jurisdiction over the
Laguna Lake and its environs insofar as the issuance of permits for fishery privileges is
concerned?

Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No.
4850, the provisions of Presidential Decree No. 813, and Section 2 of Executive Order No.
927, cited above, specifically provide that the Laguna Lake Development Authority shall
have exclusive jurisdiction to issue permits for the use of all surface water for any projects
or activities in or affecting the said region, including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like. On the other hand,
Republic Act No. 7160, the Local Government Code of 1991, has granted to the
municipalities the exclusive authority to grant fishery privileges in municipal waters. The
Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or
other aquatic beds or bangus fry area within a definite zone of the municipal waters.

We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the
aforementioned laws creating the Laguna Lake Development Authority and granting the
latter water rights authority over Laguna de Bay and the lake region.

The Local Government Code of 1991 does not contain any express provision which
categorically expressly repeal the charter of the Authority. It has to be conceded that there
was no intent on the part of the legislature to repeal Republic Act No. 4850 and its
amendments. The repeal of laws should be made clear and expressed.

It has to be conceded that the charter of the Laguna Lake Development Authority
constitutes a special law. Republic Act No. 7160, the Local Government Code of 1991, is
a general law. It is basic in statutory construction that the enactment of a later legislation
which is a general law cannot be construed to have repealed a special law. It is a well-
settled rule in this jurisdiction that "a special statute, provided for a particular case or
class of cases, is not repealed by a subsequent statute, general in its terms, provisions and
application, unless the intent to repeal or alter is manifest, although the terms of the
general law are broad enough to include the cases embraced in the special law."3

Where there is a conflict between a general law and a special statute, the special statute
should prevail since it evinces the legislative intent more clearly than the general statute.
The special law is to be taken as an exception to the general law in the absence of special
circumstances forcing a contrary conclusion. This is because implied repeals are not
favored and as much as possible, effect must be given to all enactments of the legislature.
A special law cannot be repealed, amended or altered by a subsequent general law by
mere implication.4

Thus, it has to be concluded that the charter of the Authority should prevail over the
Local Government Code of 1991.

Considering the reasons behind the establishment of the Authority, which are
environmental protection, navigational safety, and sustainable development, there is
every indication that the legislative intent is for the Authority to proceed with its mission.

We are on all fours with the manifestation of petitioner Laguna Lake Development
Authority that "Laguna de Bay, like any other single body of water has its own unique
natural ecosystem. The 900 km² lake surface water, the eight (8) major river tributaries
and several other smaller rivers that drain into the lake, the 2,920 km² basin or watershed
transcending the boundaries of Laguna and Rizal provinces, greater portion of Metro
Manila, parts of Cavite, Batangas, and Quezon provinces, constitute one integrated
delicate natural ecosystem that needs to be protected with uniform set of policies; if we
are to be serious in our aims of attaining sustainable development. This is an exhaustible
natural resource — a very limited one — which requires judicious management and
optimal utilization to ensure renewability and preserve its ecological integrity and
balance."

"Managing the lake resources would mean the implementation of a national policy
geared towards the protection, conservation, balanced growth and sustainable
development of the region with due regard to the inter-generational use of its resources
by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen
this need when they passed this LLDA law — the special law designed to govern the
management of our Laguna de Bay lake resources."

"Laguna de Bay therefore cannot be subjected to fragmented concepts of management

policies where lakeshore local government units exercise exclusive dominion over
specific portions of the lake water. The garbage thrown or sewage discharged into the
lake, abstraction of water therefrom or construction of fishpens by enclosing its certain
area, affect not only that specific portion but the entire 900 km² of lake water. The
implementation of a cohesive and integrated lake water resource management policy,
therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay."5

The power of the local government units to issue fishing privileges was clearly granted
for revenue purposes. This is evident from the fact that Section 149 of the New Local
Government Code empowering local governments to issue fishing permits is embodied
in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions
On The Taxing And Other Revenue Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages
and other aqua-culture structures is for the purpose of effectively regulating and
monitoring activities in the Laguna de Bay region (Section 2, Executive Order No. 927)
and for lake quality control and management.6 It does partake of the nature of police
power which is the most pervasive, the least limitable and the most demanding of all
State powers including the power of taxation. Accordingly, the charter of the Authority
which embodies a valid exercise of police power should prevail over the Local
Government Code of 1991 on matters affecting Laguna de Bay.

There should be no quarrel over permit fees for fishpens, fishcages and other aqua-
culture structures in the Laguna de Bay area. Section 3 of Executive Order No. 927
provides for the proper sharing of fees collected.

In respect to the question as to whether the Authority is a quasi-judicial agency or not, it

is our holding that, considering the provisions of Section 4 of Republic Act No. 4850 and
Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna
Lake Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:

xxx xxx xxx

As a general rule, the adjudication of pollution cases generally pertains to

the Pollution Adjudication Board (PAB), except in cases where the special
law provides for another forum. It must be recognized in this regard that
the LLDA, as a specialized administrative agency, is specifically mandated
under Republic Act No. 4850 and its amendatory laws to carry out and
make effective the declared national policy of promoting and accelerating
the development and balanced growth of the Laguna Lake area and the
surrounding provinces of Rizal and Laguna and the cities of San Pablo,
Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the
quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution. Under such a broad
grant of power and authority, the LLDA, by virtue of its special charter,
obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to
pass upon and approve or disapprove all plans, programs, and projects
proposed by local government offices/agencies within the region, public
corporations, and private persons or enterprises where such plans,
 programs and/or projects are related to those of the LLDA for the
development of the region.

xxx xxx xxx

. . . . While it is a fundamental rule that an administrative agency has only

such powers as are expressly granted to it by law, it is likewise a settled rule
that an administrative agency has also such powers as are necessarily
implied in the exercise of its express powers. In the exercise, therefore, of
its express powers under its charter, as a regulatory and quasi-judicial body
with respect to pollution cases in the Laguna Lake region, the authority of
the LLDA to issue a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless" paper agency.

there is no question that the Authority has express powers as a regulatory and
quasi-judicial body in respect to pollution cases with authority to issue a "cease
and desist order" and on matters affecting the construction of illegal fishpens,
fishcages and other aqua-culture structures in Laguna de Bay. The Authority's
pretense, however, that it is co-equal to the Regional Trial Courts such that all
actions against it may only be instituted before the Court of Appeals cannot be
sustained. On actions necessitating the resolution of legal questions affecting the
powers of the Authority as provided for in its charter, the Regional Trial Courts
have jurisdiction.

In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, has not repealed the provisions
of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, as
amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the
enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities
situated therein and the authority to exercise such powers as are by its charter vested on
it.

Removal from the Authority of the aforesaid licensing authority will render nugatory its
avowed purpose of protecting and developing the Laguna Lake Region. Otherwise
stated, the abrogation of this power would render useless its reason for being and will in
effect denigrate, if not abolish, the Laguna Lake Development Authority. This, the Local
Government Code of 1991 had never intended to do.

WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted,
insofar as they relate to the authority of the Laguna Lake Development Authority to grant
fishing privileges within the Laguna Lake Region.

The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC,
Branch 78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and
Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null
and void and ordered set aside for having been issued with grave abuse of discretion.

The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing
permits to construct and operate fishpens, fishcages and other aqua-culture structures
within the Laguna Lake Region, their previous issuances being declared null and void.
Thus, the fishing permits issued by Mayors Isidro B. Pacis, Municipality of Binangonan;
Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega, Municipality of
Jala-jala, specifically, are likewise declared null and void and ordered cancelled.

The fishpens, fishcages and other aqua-culture structures put up by operators by virtue
of permits issued by Municipal Mayors within the Laguna Lake Region, specifically,
permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life
Business Resources, Inc., represented by, Mr. Tobias Reynald M. Tiangco; Greenfield
Ventures Industrial Development Corporation and R.J. Orion Development Corporation;
IRMA Fishing And Trading Corporation, ARTM Fishing Corporation, BDR Corporation,
Mirt Corporation and Trim Corporation; Blue Lagoon Fishing Corporation and ALCRIS
Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its President Alfonso
Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR
Fishing Corporation, are hereby declared illegal structures subject to demolition by the
Laguna Lake Development Authority.

SO ORDERED.

Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only
like to stress what the decision already states, i.e., that the local government units in the
Laguna Lake area are not precluded from imposing permits on fishery operations for
revenue raising purposes of such local government units. In other words, while the
exclusive jurisdiction to determine whether or not projects or activities in the lake area
should be allowed, as well as their regulation, is with the Laguna Lake Development
Authority, once the Authority grants a permit, the permittee may still be subjected to an
additional local permit or license for revenue purposes of the local government units
concerned. This approach would clearly harmonize the special law, Rep. Act No. 4850, as
amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small
towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic
viability.

Separate Opinions

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only
like to stress what the decision already states, i.e., that the local government units in the
Laguna Lake area are not precluded from imposing permits on fishery operations for
revenue raising purposes of such local government units. In other words, while the
exclusive jurisdiction to determine whether or not projects or activities in the lake area
should be allowed, as well as their regulation, is with the Laguna Lake Development
Authority, once the Authority grants a permit, the permittee may still be subjected to an
additional local permit or license for revenue purposes of the local government units
concerned. This approach would clearly harmonize the special law, Rep. Act No. 4850, as
amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small
towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic
viability.
GR No. L-49090 February 28, 1947

TEODORA L. VDA. DE MIRANDA AND OTHERS, plaintiffs-appellants,

vs.
FELICIANO IMPERIAL AND JUAN DE IMPERIAL, defendants-appealed.

Mr. Manuel M. Calleja and Mr. Ramon C. Fernandez in representation of the appellants.
Mr. Toribio P. Perez in representation of the appellees.

BRIONES, J .:

This is a pre-war affair. The suit was filed before the Court of First Instance of Albay on
November 25, 1941, that is, almost on the eve of the outbreak of the war in the Pacific. The
Court issued its judgment on March 17, 1943. The case was brought before this Supreme
Court, in virtue of the appeal filed by the plaintiff on June 9, 1943. Before it could be
decided, the file was burned together with the other files of this Court in the conflagration
of Manila on the occasion of the battle of liberation. What we have, therefore, before us is
a reconstituted record with documents provided by the appellant's attorneys, namely:
( a ) copies of the appeal file (record on appeal); ( b) copies of the allegation submitted by
the appellant's attorneys. The appellee has not presented any plea either in itself or
through her lawyer. The attorneys of both parties were duly notified of the proceedings
of reconstitution by the commissioner of this Court, but the only ones who have appeared
have been the appellant's lawyers, delivering the copies of which mention has been made.

It is alleged in the lawsuit that before November 17, 1938 the defendants, Feliciano
Imperial and Juana de Imperial, owed Elias Imperial the amount of P1,000; that in
consideration of this debt and to guarantee its payment, they had yielded, as an
antichresis, to the aforementioned Elias Imperial the possession and enjoyment of three
parcels of rice land of his property; that on the aforementioned date, November 17, 1938,
the defendants proposed the plaintiff, Teodora L. Vda. De Miranda, who would lend
them the amount of P1,000 to rescue the land from Elias Imperial, subrogated as a creditor
instead of them under the same terms and conditions of the antichresis contract entered
into with the latter; that since the plaintiff had the amount requested and, in addition, the
defendant is his crib, being the widow of a brother of this, accepted the proposal,
effectively delivering the amount of P1,000 to the defendants, who in turn were returned
to Elias Imperial for the rescue of the farms; that, being relatives, the contract was not
reduced to writing, but after the ransom and Elias Imperial made it appear at the foot of
the property documents on the three parcels of land, these documents were delivered in
the same act of redemption to the plaintiff, who was then present in the company of the
defendant, as proof of the loan and of the transfer of the new antichresis contract; that
since then the plaintiff was enjoying the products, receiving her share in the harvests
corresponding to 1939 and 1940 at the rate of two harvests a year, and in the first harvest
of 1941, that is, a total of 5 harvests from November 17, 1938 to April, 1941; that the
plaintiff was no longer able to enjoy the second harvest of 1941, that is, the one
corresponding to October, since the defendants resolved from then on to take possession
of that harvest and of the subsequent ones so far; that the harvest collected by the
defendants in October, 1941, and that it belonged to the plaintiff, was 50 cavanes de palay,
whose market quotation was P2.50, which is digging a total amount of p120. Therefore,
the applicant requests that, "under the that the harvest collected by the defendants in
October, 1941, and that it belonged to the plaintiff, was 50 cavanes de palay, whose
market quotation was P2.50, which is digging a total amount of p120. Therefore, the
applicant requests that, "under the that the harvest collected by the defendants in
October, 1941, and that it belonged to the plaintiff, was 50 cavanes de palay, whose
market quotation was P2.50, which is digging a total amount of p120. Therefore, the
applicant requests that, "under theThe first motive for action , the defendants are ordered
to grant a mortgage document in favor of the plaintiff guaranteeing the three parcels of
land mentioned above to ensure payment to the plaintiff of the one thousand pesos paid
by her to Mr. Elias Imperial for account of said defendants, fixing in said document a
term of three months for the payment, or the term that is reasonable according to the
prudent judgment of the Court and through an interest at the rate of twelve (12%) percent
a year; "and" under the second motive of action, order the defendants to pay the plaintiff
the sum of P120 as the value of the harvest of palay raised from the parcels of land
described in this lawsuit and illegally appropriated by said defendants, in addition to the
costs of the trial; "and" requests , finally, any other just and equitable remedy. "

Regarding the first motive of action the defendants defend themselves alleging that they
only received from the plaintiff the amount of P500, to which they added other P500 to
rescue the lands of Elias Imperial; and that said P500 debt was more than paid with the
products of the lands that the plaintiff received in 5 consecutive harvests, "thus
automatically extinguishing the contractual rights and obligations of the
parties." Regarding the second motive of action, they deny it, and say that the harvest
collected in October 1941 and all those that were collected later belonged legally to them
the defendants; and that October harvest, as in previous years, I report as participation
70 cavanes de palay.

This being the explanation of how the documents went to the plaintiff's hands, retaining
them until the day of the hearing; (3) that, in addition to the 3 parcels in question, the
plaintiff enjoyed the products of a fourth parcel of the defendants, amounts to 10 cavans
of palay in each harvest; (4) that the 4 parcels of land the plaintiff received as participation
in the 5 harvests that collected a total of 400 palay caves, and that the dig was then quoted
at P2.50 in the market; (5) that, therefore, the plaintiff made no less than P1,000 with the
products received by her, and discounting from that sum the P500 owed by the
defendants, plus P100 as interest at the legal rate, is still in favor of these a balance of
P400,

After having seen the matter, the Court issued its judgment in which the following facts
are conclusively proven: (1) that for about 10 years prior to November 17, 1938 the
defendants were owed to Eleas Imperal the amount of P1,000: (2) that the accessory
contract for antichresis was concluded between the creditor and the debtors, by virtue of
which said party would enjoy, as indeed, during said 10-year period, all the products of
the 3 lands mentioned, being said products as interest on borrowed money; (3) that,
during and enjoyment of the land, not a single grain of palay produced was applied to
pay or amortize the capital of the loan; (4) that on November 17, 1938 the defendants
received from the plaintiff not P500, as they claim, but P1,000, to rescue the estates from
Elias Imperial being the agreement between the parties that the plaintiff would be
subrogated as creditor in place of said Imperial Elias under the same terms and conditions
of the antichresis contract entered into with it; that "after careful consideration of the
evidence and all concomitant circumstances, the Court concludes and, therefore, so
declares, that the plaintiff provided the defendants P1,000 at the time and that the
agreement between the parties was that the plaintiff would receive the products of the 3
plots previously placed in antichresis in favor of Elias Imperial, as interest on the loan
until it was fully paid "; whereas, in effect, the applicant was quietly receiving the
products in 5 consecutive harvests, but after the harvest of April, 1941,

Of the facts established in the judgment, as it is extracted, it is evident that the antichresis
question about this issue is defined in Article 1885 of the Civil Code that states the
following: "The contracting parties may stipulate that the interests of the debt with the
fruits of the farm given in antichresis. " However, the aforementioned Court, instead of
applying said article as it should due to the fact that it declares proven and established in
the trial, makes the following pronouncement: "However, notwithstanding this
agreement, the claim of the defendants that the amount of the products received by the
plaintiff must be applied to the payment of the capital of his debt after deducting the
interest at the legal rate, it must be sustained. " That is to say, the Court applies to the case
not the aforementioned article 1885 but Article 1881 of the Civil Code whose text is,
namely: "For the antichresis the creditor acquires the right to receive the proceeds of a
property of its debtor with the obligation to apply them to the payment of interest, if they
were due, and then to the capital of your credit. " And the Court bases its conclusion on
the judgment rendered by the previous Court of Appeals in the Santa Rosa case against
Noble (RG No. 43769, 35 Off Gaz., 2734, The Lawyer's Journal, Vol. V, No. 23, P. 1109),
presentation by Hon. Judge Jose Lopez Vito.

So the court a quo, after making the corresponding arithmetical operation applying the
products, first, to the payment of interest, and then to the capital of the debt, awards in
favor of the applicant a balance of P435.17 and orders that continue to apply to satisfy the
products of the land until full payment, or that the defendants solve it once with interest
at the rate of 6 percent a year from May 1, 1941. Against the ruling so dictated by the The
plaintiff has filed the present appeal, not raising more than issues of law, namely: that the
Court made an error by not applying to this case in all its rigor to Article 1885 of the Civil
Code; that the Court could not, from a fiat, arbitrarily create for the parties a contract not
entered into between them; that article 1885 refers specifically to one type of antichresis
and the article and article 1881 to another; that when the agreement is, as in the present
case, that the products of the farm given in antichresis are compensated with the interests
of the debt, no part of the products should be applied to the amortization of the
capital; and that, therefore, she, the appellant, has the right to receive full return of the
capital of her credit, that is, the amount of P1,000, plus the corresponding products or
interests.

The Court a quo founds its decision in the aforementioned two entirely analogous
matters, especially since both come from the same region - the bicolana - and refer to a
very common contract in that region, the contract called there vulgarly "sangla" or "
pledge, "and that in the Visayas where the Cebuano dialect is spoken and in Mindanao is
called" saop "and also" pledge "sometimes.

It seems superfluous to say that only the judgments of this Supreme Court feel
jurisprudence or doctrine in this jurisdiction. However, this does not mean that a
conclusion or ruling by the Court of Appeals that covers any point of law not yet resolved
in our jurisprudence can serve as a legal rule for the lower courts, and that this conclusion
or pronouncement rises to doctrine if, after After being tested in the analysis and judicial
review, we found that he had sufficient merits and carat for his consecration as a rule of
jurisprudence. To this end, and for this purpose, we have carefully and carefully
examined the ruling of the Court of Appeals in the aforementioned Santa Rosa case
against Noble, which, as we have already said, comes from the Bicolana region, just as
this one before us.

Without subscribing - we are not now called to do so, nor is it necessary for us to do so -
the interesting assessments that the Court of Appeals makes in that judgment, we believe,
however, that the Court will be wrong in applying it to the present case, as there is
between both fundamental differences cases, namely:

First difference : In the case of the Court of Appeals the usury was an "issue," a capital
point in controversy. That is why the Court said in its ruling: "But the defendants argue
that the contract entered in the Exhibit E is usurious, which raises the question of whether
Law No. 2655 known by Usury Law that establishes the rate of interest that it is
permissible to charge for loans, is applicable to antichresis contracts. " Although it does
not say it in a way, the Court of Appeals, when ruling that the Usuara Law was
applicable, setting the collectible interest in the legal rate of 6 percent, practically judging
and declaring as usurious the antichresis contract of I tried.

In the case before us, the question of usury is never raised neither in the allegations nor
in the trial; and in the judgment there is no de facto pronouncement on usury; and since
this appeal does not raise more than issues of law being considered established and
admitted without discussion the facts stated in the judgment, it is said that our faculty of
revision has to focus strictly and inflexibly on such facts, without us be allowed to go
beyond your radio. After all, it is not strange that the defendants have not raised any
questions about usury, because for 10 years they had been debtors of Elias Imperial
without, apparently, differences that would interfere with their relations (in fact, Elias
declared at the hearing in favor of the defendants),

Second difference : It is evident that the antichresis dealt with in the aforementioned issue
of Santa Rosa against Noble is defined in Article 1881 of the Civil Code, antichresis in
which "the creditor acquires the right to receive the proceeds of a property of his debtor
with the obligation to apply them to the payment of interest, if they are owed, and then
to the capital of their credit. " Here is what the Court of Appeals says, in its judgment that
we commented, on this matter: "As to whether the same rate established by the Law
against Usury must be applied when there is an express stipulation that the fruits be
commenced with the interest on the debt in accordance with article 1885,quaere: not being
the case that is submitted today to our consideration, having declared that Exhibit "E" falls under
the provisions of article 1881 of the Civil Code . "(The italics are ours.)

On the other hand, the antichresis on this subject is defined in Article 1885, which
provides "that the contracting parties may stipulate that the interests of the debt be
compensated with the fruits of the given farm in antichresis." Here is the final
pronouncement of the Court a quo on the particular: "After a careful consideration of the
evidence and all the circumstances, the court concludes, and then holds, that the plaintiff
actually loaned the defendants P1,000, and that the agreement between the parties was that
the plaintiff would receive the products of the three parcels of land formerly conveyed in antichresis
to Elias Imperial as interests on said loan until the same is paid . " 1(The italics are ours.)

Existing, according to the very conclusion of the tribunal a quo, that agreement that the
products of the farms are compensated with the interest of the debt, in accordance with
article 1885 of the Civil Code, it is arbitrary to change it judicially, making for the parties
an agreement that they have not celebrated, or to put it more specifically, transforming
the truly agreed-upon pact into something that falls under an article of code that was
neither in the mind nor in the will of the contracting parties. Article 1255 of the Civil Code
prescribes that "the contracting parties may establish the covenants, clauses and
conditions that they deem convenient, provided they are not contrary to the laws, morals,
or public order." This excludes fiat from contractsjudicial. Courts can interpret
contracts; what they can not do is to mold them, to mold them for the parts.

We agree with the Court of Appeals that the contract called "sangla" or "pledge" (on
property) in Bicol, "soap" or "pledge" in Visayas and Mindanao, really has the
characteristics of antichresis and, therefore, can considered as such. In addition to the sale
with retro pact, this contract is the best known and usual in our towns and rural
neighborhoods - from the hand of the peasant and laborer, either to improve and expand
their crops, or to buy new land with which to increase their possessions, already to marry
their children and endow them, and sometimes even to give a dignified and adequate
burial to their dead. And why not say so? The unhappy passion for the game also
culminates sometimes in that contract to embitter existence if nor to work the ruin of the
small owner.

The question we now have to determine is, is it automatically or ministerially applicable

to the antichresis the usury, as it seems to be part of the sentence appealed? Undoubtedly
not. Antichresis, as a contract - either under article 1881, already under article 1885 of the
Civil Code - is not necessarily usurious; it can be, yes, usury. But so that it can be declared,
not only is it absolutely necessary for usury to be an "issue," a contentious capital point
in the allegations and in the trial, so that each party has its "day in court," that is, that it
can be defended properly and properly, but that, moreover, it must be demonstrated and
established positively that the usury is of such proportions that, on disgusting the
conscience, inclines the mind to believe that, the contract has been used as a disguise or
artilugo to violate or evade the law of usury. The reason for this is quite simple: in
antichresis there is a contingent element, random, by nature. The perception of the
products by the creditor, which is its main characteristic, is subject to various
contingencies and eventualities. A bad harvest may come, or none at all, because it has
exhausted a typhoon, because the rivers have overflowed, flooding, because a flock of
locusts has devastated the crops and plantations, and because deep social convulsions
have subverted the peace and the order preventing the tillage of the fields, etcetera,
etcetera. So to the antichresis can not be applied automatically, ministerially, articles 2, 3
and 8 of Law No. 2655 on usury, because they refer to the perception of a fixed amount
of products: the debtor has to deliver them indeclinately, or its equivalent in money,
whether the harvest is good or bad, whether or not there is one. The fact that sometimes
in the antichresis the amount of the fruits, when the liquidation is made, exceeds the rates
fixed by the usury law, does not make the usury contract, because the law assumes that
such excess is the dividend that collects the creditor in exchange for the premium of risks
and contingencies that he has paid on top of the capital of his credit.

In American jurisprudence, certain types of contracts similar to our "sangla" or "saop." as

demonstrated by the following authorities:

In view, however, of the rule that a creditor's return must be limited to the
statutory rate when it is affected by a contingency putting the whole of it at hazard,
a contract is ordinarily not under which the creditor is to receive, in consideration
of his loan or forbearance, property or services of uncertainty, even though the
probable value is greater than lawful interest, unless the excess is palpable as to show
a corrupt intent to violate or evade the usury laws , unless the contract is made for the
purpose of such violation or evasion. 2(66 CJ, 212.)

Where the lender is to receive something else than money for his loan, as property
or services, the value of such a profit is uncertain, the contract is not usurious, even
though the probable value is greater than legal interest , unless the consideration is
given is so palpably in excess of the cetain profit allowed by law to show to corrupt
intent to violate the usury laws. "2 39 Cyc 959, Wright vs. McAlezander, 11 Ala.,
236, Rapier v. Gulf City Paper C. , 77 Ala., 126. (102 Southern Reporter, p.204)

So, an agreement that instead of interest, the lender of money should receive the
rents and profits of certain land for a term of years, is not usurious where no
intention to evade the statue is shown; and the fact that such rents and profits happen
to amount to more than lawful interests does not render the contract usurious . 3 (Webb
on Usury, p.85)

Manresa, lecturing on the relative conveniences of antichresis although it is sometimes

lent as an instrument of usury, makes the following wise observations:

In proceeding in this way, the authors of the Code responded with great success
to a necessity imposed by the modern principles on which the laws of mutuality
are based, according to which there is no economic or legal reason to condemn the
antichresis. In addition, they sought in this way to avoid damages and losses to
the debtor, which otherwise were unavoidable, since the experience had clearly
demonstrated that, despite the prohibition of the laws, the anticretic pact was very
frequent in practice, because circumvent the prohibitory provisions, disguising the
convention with the form or the name of sales to retro pact, with what far from
favoring the borrower, as proposed by the legislator, it caused great
breakdown, since they could not grant the creditor the enjoyment of the fruits to
apply to the amortization of interest or partial payment of capital, they were forced
to dispose of the property in the manner indicated, detaching themselves from a
property that could hardly be acquired again . (Manresa, Comm. To the Cod. Civ.
Espanol, volume 12, page 545.)

The rule, then, is, or should be, the following: (a) the antichresis that is known in this
country with the vernacular name of "sangla" or "saop" can not be prosecuted and
declared as usurious, unless the usury in itself, an "issue" arises, a contentious point
between the parties, in accordance with the procedural rules established on the
matter; ( b ) and for said contract to be considered and declared usurious, it is not enough
that the products of the property given in antichresis, when the creditor perceives it,
exceed the legal interest rates, but it is necessary that the excess be so palpable, so
repulsive and so shocking to the conscience that of necessarily the sensation that the
contract has been forged to hide the malicious intention of infringing or evading the law
of usury; (c ) not mediating these circumstances, the "sangla" or "saop" must be respected
and its compliance be expedited under article 1881 or article 1885 of the Civil Code, as
the case may be, and the courts will do nothing to change the terms of the antichresis,
which should be law between the parties.

The case before us offers some difficulties with regard to the ruling that must be
issued. The plaintiff requests that the defendants be ordered and obligated to grant a
mortgage document on the three parcels of land to guarantee the payment of the P1,000
debt, "setting a three-month period for the payment, or the term that is reasonable
according to the judgment of the Court and by means of an interest at the rate of 12
percent a year, or in its place, any other remedy that may be appropriate. " In our opinion,
this would only delay the disposition and final settlement of the matter to the detriment
of the parties and an expedited administration of justice.

Having acted the defendants of the parcels of land for them transferred in antichresis to
the plaintiffs and enjoyed its fruits from the month of October 1941 to date, and
demonstrated the plaintiffs their agreement to terminate the anti-trust contract to present
the He filed a lawsuit on November 25, 1941, not to recover those parcels of land, but to
demand the payment of the debt with the corresponding interest from the
aforementioned date, after revoking the sentence dismissed, we issued the following
ruling :.

(1) The defendants are ordered to pay the plaintiffs the amount of one thousand pesos
(P1,000), the amount of the credit of the latter, with interest at a rate of 6 percent per year
as of November 25, 1941 in that the demand was presented, and the legal costs, having to
pay such sum with their interests and the costs to the plaintiffs, or be deposited in the
Court of First Instance of Albay within the period of three months from the date when
this moratorium is officially lifted ;

(2) In default of payment, as ordered in the preceding paragraph, the three parcels of land
on which this matter relates shall be sold by the Sheriff in public auction in accordance
with the law on mortgage credit collection;

(3) In the meantime, the payment is not made, as ordered in this judgment, the amount
owed with its legal interests and the legal costs will pass as a preferential lien on the three
parcels of land in question. This is how it is ordered.

Moran, Pres., Feria, Bengzon, Padilla and Tuazon, MM., Are satisfied.

Separate Opinions

PARAS, J., dissenting:

Although the trial court held that "the plaintiff actually loaned the defendants P1,000, and
that the agreement between the parties was that the plaintiff would receive the products
of the three parcels of land formerly conveyed in antichresis to Elias Imperial as interests
on said loan until the same is paid, "it is nevertheless in effect, citing the decision of the
Court of Appeals in the case of Santa Rosa vs. Noble (35 Off Gaz., 2724), "the contention of
the defendants that the value of the products received by the plaintiff, after deducting
therefrom the interests at legal rate, should be applied to the principal of their debt."
The plaintiff has appealed; does not controvert the correctness of the appraisal made by
the trial court of the value of the products received by her from the lots in question: but
contends that said court should have applied article 1885 of the Civil Code which
provides that the contracting parties may stipulate that the interest of the debt be set off
against the fruits of the estate given in antichresis. " In other words, it is the view of the
plaintiff that the products, regardless of their value, should belong to her in payment of
the interest on the loan of P1,000. This is also the view expressed in the majority opinion.

I dissent. The right of contracting parties to establish any pacts, clauses, and conditions
they may deem advisable, is subject to the proviso that "they are not contrary to law,
morals, or public order." (Article 1255, Civil Code.) After the enactment of the Usury Law
(Act No. 2655), which fixes the rate of interest, in the absence of express stipulation, at six
per centum per annum (section 1) and provides (section 8) that "all loans under which
payment is made in agricultural products or seed or in any other kind of commodities
shall also be null and void unless they provide that such products or seeds or other
commodities shall be appraised at the time when the obligation falls due at the current
local market price, "article 1885 of the Civil Code must be considered modified, if not
repealed under the repeating clause (section 11) of the Usury Law. In other words, any
antichretic agreement, under either article 1881 or article 1885, may now be validly
enforced only in the light of the provisions of the Usury Law. The unrestricted freedom
conceded in article 1855 was good before the Government had laid down its policy
regarding interest on loans.

Article 1881 sanctions, then, the general rule that must be enforced and necessarily
provided that the special pact indicated does not exist, and 1885 establishes the
exception of that rule in the case that said pact is stipulated.

This is a consequence of the freedom granted for the fixing of interest, since the
legal rate is abolished by the law of 1856, the parties can freely determine the
amount and condition of said interests, being able to perceive them in money
rather than in kind, and, therefore, compensate the interests with the fruits. (12
Manresa, Civil Code, page 482.)

The majority argue that the Usury Law could not be applied because the defense of usury
was not set up. It appears, however, that the plaintiff made no less than P1,000 in the
proceeds received by her, and deducting from that sum the P500 owed by the defendants,
plus P100 in concept of interest at the legal rate, it is still in favor of these a balance of
P400, so they ask for judgment against the plaintiff for this last amount. " If this allegation
did not amount to a charge that the plaintiff received more than the legal interest, it was
sufficient to apprise the court and the plaintiff that it was the content of the defendant
that the plaintiff had not right to apply the products entirely in compensation of the
interest notwithstanding their agreement, and this issue should be decided in the light of
existing law which it was not necessary for the defender to specify in his answer. We
would not be digressing from the issues raised by the parties, or creating new ones, by
simply adjudicating concrete cases conformably to law.

. . . it is evident that the Courts can in each concrete case appreciate the nature of
the obligation and conditions attached thereto, if a determined pact constitutes it
for the effects that come from the law. . . . (11 Manresa, Civil Code, page 550.)

The contingent character of the arrangement contemplated by Article 1885, can not
warrant its continued existence. The Usury Law, which is of later date and therefore
controlling, protects borrowers and at the same time eliminates the element of chance
that may prove disadvantageous to lenders who are to be paid in agricultural products.

The appealed judgment should be affirmed.

G.R. No. 116719 January 18, 1996

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
PATRICIO AMIGO alias "BEBOT", accused-appellant.

DECISION

MELO, J.:

Initially, Patricio Amigo was charged with frustrated murder in an Information reading
as follows:

The undersigned accuses the above-named accused of the crime of FRUSTRATED

MURDER, under Art. 248, in relation to Art. 5 of the Revised Penal Code,
committed as follows:

That on or about December 29, 1989, in the City of Davao, Philippines, and within
the jurisdiction of this Honorable Court, the above-mentioned accused, armed
with a knife, with treachery and evident premeditation and with intent to kill
wilfully, unlawfully and feloniously attacked, assaulted and stab with said
weapon one Benito Ng Suy, thereby inflicting injuries upon the latter, the
following injuries, to wit:

MULTIPLE STAB WOUNDS-LEFT ARM, LEFT CHEST, ABDOMEN AND

LEFT THIGH WITH PENETRATION TO LEFT PLEURAL CAVITY,
DIAPHRAGM STOMACH, DUODENUM, PANCREAS AND
MIDTRANVERSE COLON.

thus performing all the acts of execution which should have produced the crime
of murder as a consequence but nevertheless, did not produce it by reason of
causes independent of his will, that is, because of the timely and able medical
assistance immediately rendered to the said Benito Ng Suy.

(p. 1, Rollo.)

to which he pleaded not guilty.

Subsequently, due to the death of the victim, an amended Information was filed charging
now the crime of murder, to wit:

That on or about December 29, 1989, in the City of Davao, Philippines, and within
the jurisdiction of this Honorable Court, the above-mentioned accused, armed
with a knife, with treachery and evident premeditation and with intent to kill
wilfully, unlawfully and feloniously attacked, assaulted and stabbed with said
weapon one Benito Ng Suy, thereby inflicting upon the latter multiple wounds
which caused his death and the consequent loss and damage to the heirs of the
victim.

(p. 3, Rollo.)

After trial on the merits, the court a quo rendered a decision, disposing:

WHEREFORE, finding the accused Patricio Amigo guilty beyond reasonable

doubt of the crime of MURDER punishable under Art. 248 of the Revised Penal
Code, with no modifying circumstance present, the accused is hereby sentenced
to the penalty of reclusion perpetua, which is the medium period of the penalty
of reclusion temporal in its maximum to death and to pay the cost; to indemnify the
 offended party the amount of P93,214.70 as actual damages and P50,000.00 as
compensatory damages and P50,000.00 as moral damages.

(p. 32, Rollo.)

Reversal thereof is now sought, with accused-appellant arguing that error was committed
by the trial court in imposing or meting out the penalty of reclusion perpetua against him
despite the fact that Sec. 19 (1), Article III of the 1987 Constitution was already in effect
when the offense was committed.

The facts of the case, as briefly summarized in the brief submitted by the Office of the
Solicitor General and as borne out by the evidence, are as follows:

On December 29, 1989, at around 1:00 P.M., after having spent half-day at their
store, located at No. 166-A, Ramon Magsaysay Avenue, Davao City, Benito Ng
Suy was driving their gray Ford Fiera back home, situated at the back of Car Asia,
Bajada, Davao City. With him during that time were his daughters, Jocelyn Ng
Suy and a younger one together with his two year old son, who were all seated at
the front seat beside him while a five year old boy was also seated at the back of
the said vehicle. (TSN, April 29, 1991, pp. 3-5; TSN, March 31, 1992)

On their way home and while traversing the National Highway of Bajada, Davao
City, an orange Toyota Tamaraw driven by one Virgilio Abogada, suddenly made
a left turn in front of the Regional Hospital, Bajada, Davao City, without noticing
the Ford Fiera coming from the opposite direction. This Tamaraw was heading for
Sterlyn Kitchenette, which was situated at the comer of the said hospital. (TSN,
April 29, 1991, p. 4; TSN, March 31, 1992, pp. 3 and 13)

With Virgilio was Patricio Amigo alias Bebot, a vulcanizer at Lingling's

vulcanizing shop owned and operated by a certain Galadua. He was also seated
at the right front seat beside Virgilio.

Due to the unexpected veer made by Virgilio, an accidental head on collision

occurred between the Fiera and the Tamaraw, causing a slight damaged to the
right bumper of the latter. (TSN, March 31, 1992, p. 4)

Right after the collision, Benito immediately alighted from the driver's seat and
confronted Virgilio Abogada who also went down from his vehicle. (TSN, April
29, 1991, p. 5)

Benito, who was a big man with a loud voice told Virgilio, "You were not looking,"
to which Virgilio retorted, I did not see you". (TSN, April 29, 1991, p. 16)

While the two drivers where having this verbal confrontation, Patricio who was
merely a passenger of Virgilio also alighted from the front seat of the Tamaraw
and instantaneously approached Benito and advised the latter to leave since it was
merely a small and minor accident. (TSN, April 29, 1991, pp. 16-18)

A bit irritated with the actuation exhibit by Patricio, Benito rebuked the former
and told him not to interfere, since he had nothing to do with the accident. (ibid. p.
7)

Irked by the comment made by Benito, Patricio sarcastically asked; "You are
Chinese, is it you?" With a ready answer Benito said; "Yes, I am a Chinese and
why?" Patricio in turn replied; So, you are a Chinese, wait for a while," then left.
(ibid. pp. 7 and 19)
 Immediately thereafter, Benito ordered Jocelyn to call a policeman, but after a
lapsed of about one minute, Patricio returned and arrogantly approached Benito,
asking the latter once again, "You are a Chinese, is it not?" To this Benito calmly
responded in the affirmative. (ibid. pp. 7, 19-20)

Upon hearing the response, Patricio mumbled "Ah, so you are a Chinese," and
suddenly took a five inch knife from his waist and simultaneously stabbed Benito
hitting him twice on the chest. (Ibid. p. 20)

After being hit, Benito wounded and sensing that his life was in peril, tried to
evade his assailant by pushing Patricio away and run around the Tamaraw but
Patricio wielding the same knife and not content with the injuries he had already
inflicted, still chased Benito and upon overtaking the latter embraced him and
thrusted his knife on the victim several times, the last of which hit Benito on the
left side of his body. (ibid. pp. 8, 10, 22)

It was at this juncture that Jocelyn who was still inside the Ford Fiera, pleading for
mercy to spare her father tried to get out of the vehicle but it was very unfortunate
that she could not open its door. (Ibid. p. 10)

Knowing that Patricio was really determined to kill her father by refusing to heed
her pleas, Joselyn shouted for help, since there were already several people around
witnessing that fatal incident, but to her consternation nobody lifted a single finger
to help them. (ibid. pp. 6, 10, 18, 21-22) Only after her father lay seated on the floor
of their Ford Fiera after being hit on the left side of his body that she was able to
open the door of the said vehicle. (Ibid. p 12)

After this precise moment, her younger sister, upon seeing their father bathing
with his own blood, embraced him, causing Patricio to cease from his ferocious
assault and noticing the presence of several people, he fled. (Ibid. p. 22)

Thereafter, an enraged Jocelyn chased him, but since the assailant ran faster than
her, she was not able to overtake him, thus, she instead decided to go back to
where her father was and carried him inside the Tamaraw who bumped them and
consequently brought him to San Pedro Hospital where he was attended to at the
Emergency Room. (ibid. p 13)

While at the Emergency Room, Benito who was on a very critical condition, due
to multiple (13) stabbed wounds, was operated by Dr. Rolando Chiu. After the
operation, he was subsequently brought to the ICU and stayed there for three (3)
weeks. (July 12, 1991, pp. 3 and 4)

In a last ditch effort to save his life, having only 10 to 20 percent survival, Benito
was airlifted to Manila and was directly confined at the Chinese General Hospital.
After three (3) weeks of confinement, Benito expired. CAUSE OF DEATH —
SEPSIS (an overwhelming infection). This means that the infection has already
circulated in the blood all over the body. (ibid. pp. 6-7)

(pp. 59-65, Rollo.)

Accused-appellant contends that under the 1987 Constitution and prior to the
promulgation of Republic Act No. 7659, the death penalty had been abolished and hence,
the penalty that should have been imposed for the crime of murder committed by
accused-appellant without the attendance of any modifying circumstances, should
be reclusion temporal in its medium period or 17 years, 4 months and 1 day, to 20 years
of reclusion temporal.

Reasons out accused-appellant:

 . . . Since the death penalty (or capital punishment) is not imposable when the
stabbing and killing happened, the computation of the penalty should be regarded
from reclusion perpetua down and not from death penalty. Indeed, the appropriate
penalty is deducible from reclusion perpetua down to reclusion temporal in its
medium period. Hence, there being no modifying circumstances present (p. 5
Decision, ibid.), the correct penalty should be in the medium period (Art. 64, par.
1, Revised Penal Code) which is 17 years, 4 months and 1 day to 20 years
of reclusion temporal.

(p. 10, Appellant's Brief, ff. p. 50, Rollo.)

The question raised by accused-appellant was settled by this Court in People

vs. Muñoz (170 SCRA 107 [1989]) thusly:

In People vs. Gavarra, Justice Pedro L. Yap declared for the Court that "in view of
the abolition of the death penalty under Section 19, Article III of the 1987
Constitution, the penalty that may be imposed for murder is reclusion temporal in
its maximum period to reclusion perpetua," thereby eliminating death as the
original maximum period. Later, without categorically saying so, the Court,
through Justice Ameurfina A. Melencio-Herrera in People vs. Masangkay and
through Justice Andres R. Narvasa in People vs. Atencio, divided the modified
penalty into three new periods, the limits of which were specified by Justice
Edgardo L. Paras in People vs. Intino, as follows: the lower half of reclusion
temporal maximum as the minimum; the upper half of reclusion temporal maximum
as the medium; and reclusion perpetua as the maximum.

The Court has reconsidered the above cases and, after extended discussion, come
to the conclusion that the doctrine announced therein does not reflect the intention
of the framers as embodied in Article III, Section 19(1) of the Constitution. This
conclusion is not unanimous, to be sure. Indeed, there is much to be said of the
opposite view, which was in fact shared by many of those now voting for its
reversal. The majority of the Court, however, is of the belief that the original
interpretation should be restored as the more acceptable reading of the
constitutional provision in question.

The advocates of the Masangkay ruling argue that the Constitution abolished the
death penalty and thereby limited the penalty for murder to the remaining
periods, to wit, the minimum and the medium. These should now be divided into
three new periods in keeping with the three-grade scheme intended by the
legislature. Those who disagree feel that Article III, Section 19(1) merely prohibits
the imposition of the death penalty and has not, by reducing it to reclusion
perpetua, also correspondingly reduced the remaining penalties. These should be
maintained intact.

A reading of Section 19(1) of Article III will readily show that here is really nothing
therein which expressly declares the abolition of the death penalty. The provision
merely says that the death penalty shall not be imposed unless for compelling
reasons involving heinous crimes the Congress hereafter provides for it and, if
already imposed, shall be reduced to reclusion perpetua. The language, while rather
awkward, is still plain enough. And it is a settled rule of legal hermeneutics that if
the language under consideration is plain, it is neither necessary nor permissible
to resort to extrinsic aids, like the records of the constitutional convention, for its
interpretation.

xxx xxx xxx

The question as we see it is not whether the framers intended to abolish the death
penalty or merely to prevent its imposition. Whatever the intention was, what we
should determine is whether or not they also meant to require a corresponding
modification in the other periods as a result of the prohibition against the death
penalty.

It is definite that such a requirement, if there really was one, is not at all expressed
in Article III, Section 19(1) of the Constitution or indicated therein by at least clear
and unmistakable implication. It would have been so easy, assuming such
intention, to state it categorically and plainly, leaving no doubts as to its meaning.

One searches in vain for such a statement, express or even implied. The writer of
this opinion makes the personal observation that this might be still another
instance where the framers meant one thing and said another or — strangely,
considering their loquacity elsewhere — did not say enough.

The original ruling as applied in the Gavarra, Masangkay, Atencio and Intino cases
represented the unanimous thinking of the Court as it was then constituted. All
but two members at that time still sit on the Court today. If we have seen fit to take
a second look at the doctrine on which we were all agreed before, it is not because
of a change in the composition of this body. It is virtually the same Court that is
changing its mind after reflecting on the question again in the light of new
perspectives. And well it might, and can, for the tenets it lays down are not
immutable. The decisions of this Court are not petrified rules grown rigid once
pronounced but vital, growing things subject to change as all life is. While we are
told that the trodden path is best, this should not prevent us from opening a fresh
trial or exploring the other side or testing a new idea in a spirit of continuing
inquiry.

Accordingly, with the hope that "as judges, (we) will be equal to (our) tasks,"
whatever that means, we hereby reverse the current doctrine providing for three
new periods for the penalty for murder as reduced by the Constitution. Instead,
we return to our original interpretation and hold that Article III, Section 19(1) does
not change the periods of the penalty prescribed by Article 248 of the Revised
Penal Code except only insofar as it prohibits the imposition of the death penalty
and reduces it to reclusion perpetua. The range of the medium and minimum
penalties remains unchanged.

The Court realizes that this interpretation may lead to certain inequities that would
not have arisen under Article 248 of the Revised Penal Code before its
modification. Thus, a person originally subject to the death penalty and another
who committed the murder without the attendance of any modifying
circumstance will now be both punishable with the same medium period although
the former is concededly more guilty than the latter. True enough. But that is the
will not of this Court but of the Constitution. That is a question of wisdom, not
construction. Of some relevance perhaps is the parable in the Bible of the workman
who was paid the stipulated daily wage of one penny although he had worked
longer than others hired later in the day also paid the same amount. When he
complained because he felt unjustly treated by the hoe jurisdiction of the court
over the person. An appearance may be madt agree with me for a penny?

The problem in any event is addressed not to this Court but to the Congress.
Penalties are prescribed by statute and are essentially and exclusively legislative.
As judges, we can only interpret and apply them and have no authority to modify
them or revise their range as determined exclusively by the legislature. We should
not encroach on this prerogative of the lawmaking body.

Coming back to the case at bar, we find that there being no generic aggravating or
mitigating circumstance attending the commission of the offenses, the applicable
sentence is the medium period of the penalty prescribed by Article 248 of the
 Revised Penal Code which, conformably to the new doctrine here adopted and
announced, is still reclusion perpetua. This is the penalty we imposed on all the
accused-appellants for each of the three murders they have committed in
conspiracy with the others. The award of civil indemnity for the heirs of each of
the victims is affirmed but the amount thereof is hereby increased to P30,000.00 in
line with the present policy.

(at pp. 120-125.)

The above ruling was reiterated in People vs. Parominog (203 SCRA 673 [1991]) and
in People vs. De la Cruz (216 SCRA 476 [1992]).

Finally, accused-appellant claims that the penalty of reclusion perpetua is too cruel and
harsh a penalty and pleads for sympathy. Courts are not the forum to plead for sympathy.
The duty of courts is to apply the law, disregarding their feeling of sympathy or pity for
an accused. DURA LEX SED LEX. The remedy is elsewhere — clemency from the
executive or an amendment of the law by the legislative, but surely, at this point, this
Court can but apply the law.

WHEREFORE, the appealed decision is hereby AFFIRMED.

SO ORDERED.
[G.R. No. 122807. July 5, 1996]

ROGELIO P. MENDIOLA, petitioner, vs. COURT OF APPEALS and PHILIPPINE

NATIONAL BANK, respondents.

RESOLUTION
HERMOSISIMA, JR., J.:

Sometime in December 1987, a certain Ms. Norma S. Nora convinced petitioner

Rogelio Mendiola to enter into a joint venture with her for the export of prawns. As
proposed by Ms. Nora, they were to secure financing from private respondent Philippine
National Bank. The credit line, it was agreed on, was to be secured by collaterals
consisting of real estate properties of the petitioner, particularly two (2) parcels of land,
situated in Marikina, and covered by Transfer Certificate of Title No. 27307 issued by the
Registry of Deeds of Marikina, Rizal.
On January 27, 1988, the petitioner signed a Special Power of Attorney authorizing
Ms. Norma S. Nora to mortgage his aforementioned properties to PNB in order to secure
the obligations of the joint venture with the said bank of up to Five (5) Million
(5,000,000.00) Pesos. The planned joint venture became a failure even before it could take
off the ground. But, in the meantime, Ms. Norma S. Nora, on the strength of the special
power of attorney issued in her favor, obtained loans from PNB in the amount of
P8,101,440.62 for the account of petitioner and secured by the parcels of land hereinabove
described.
On November 11, 1988, petitioner rather belatedly revoked the special power of
attorney in favor of Ms. Nora and requested PNB to release his properties from the
mortgage executed by Ms. Nora in its favor. The request notwithstanding, petitioner was
notified under a Notice of Sheriff Sale, dated April 20, 1989, that PNB had initiated
foreclosure proceedings against the properties of the petitioner.
On May 16, 1989, petitioner filed a case for injunction against the PNB, docketed as
Civil Case No. 58173, with Branch 162, of the Regional Trial Court of Pasig City, seeking
to enjoin the foreclosure of the properties in question. PNB filed a motion to dismiss the
case on the ground that the complaint did not state a sufficient cause of action. After
hearing, the trial court, in its Order, dated August 17, 1989, granted PNB's motion to
dismiss in this wise:

"Since the Court finds that the complaint does not state a sufficient cause of action, it
follows therefore that the prayer, for issuance of the writ of preliminary injunction has no
leg to stand on.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the complaint is hereby ordered

dismissed, without pronouncement as to costs. The temporary restraining order under
the date of May 16, 1989 is hereby lifted and set aside."[1]

Petitioner filed a Notice of Appeal from said Order, which was noted by the lower
court in an Order, dated November 16, 1989.
While Civil Case No. 58173 was pending appeal with the court a quo, aforementioned
properties were sold in an auction sale on October 3, 1990. The PNB, as the highest bidder,
acquired petitioner's properties.
On October 10, 1990, petitioner filed an action to annul the auction sale of October 3,
1990, which was docketed as Civil Case No. 60012. The case was raffled to Branch 154 of
the Regional Trial Court of Pasig City.
PNB likewise filed a motion to dismiss Civil Case No. 60012 alleging that "another
action is pending between the same parties for the same cause of action." Apparently,
PNB was referring to Civil Case No. 58173 then pending with respondent Court of
Appeals. Attached to the motion to dismiss was a copy of the complaint in Civil Case No.
58173 which had the same allegations as the complaint in Civil Case No. 60012, except
that the relief sought in the first case was to enjoin the foreclosure of the mortgaged
properties of the petitioner.
Petitioner opposed said motion to dismiss.
After due hearing, Branch 154, RTC of Pasig, issued an Order, dated February 28,
1991, granting PNB's motion to dismiss Civil Case No. 60012 on the ground of litis
pendentia. The dispositive portion of the Order reads:

"WHEREFORE, the Motion to Dismiss is hereby GRANTED, the injunction DENIED and
the instant complaint DISMISSED with prejudice, without costs."[2]

A motion for reconsideration was filed by the petitioner but the same was
denied. Petitioner appealed before the court a quo, which rendered its Decision, dated
November 15, 1995 in CA-GR. CV No. 37940, affirming the Orders issued by Branch 154
of the RTC-Pasig, to wit:

"WHEREFORE, the orders herein appealed from are hereby affirmed in toto, with costs
against the plaintiff-appellant."[3]

Hence, the instant petition submitting the following grounds.

I

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE

ORDER DATED FEBRUARY 28, 1991 BASED ON THE ORDER DATED AUGUST 17,
1989 CONSIDERING THAT THE LATTER ORDER SIMPLY RESOLVED THAT THE
MORTGAGE IN FAVOR OF THE PHILIPPINE NATIONAL BANK IS BINDING UPON
PETITIONER, BUT HAS NOT RESOLVED IN THE DECRETAL PORTION OF SUCH
LATTER ORDER WHETHER PHILIPPINE NATIONAL BANK HAS THE RIGHT TO
FORECLOSE SUCH MORTGAGE BASED ON THE DEFAULTED OBLIGATIONS OF
NORMA NORA, AND IT HAS NOT LIKEWISE RESOLVED IN THE DECRETAL
PORTION THEREOF WHETHER SUCH DEFAULTED OBLIGATIONS OF NORMA
NORA ARE SECURED BY THE MORTGAGE IN FAVOR OF PHILIPPINE NATIONAL
BANK; AND

II

ASSUMING FOR THE SAKE OF ARGUMENT THAT RES JUDICATA HAS SET IN, ITS
APPLICATION WOULD INVOLVE THE SACRIFICE OF JUSTICE TO
TECHNICALITY.[4]

We deny the petition.

The instant petition has now become moot and academic, because the first case,
docketed as Civil Case No. 58173, which is an application for injunction filed by herein
petitioner before Branch 162 of the Regional Trial Court, Pasig City against private
respondent PNB to prevent the latter from foreclosing his real properties, and which was
then pending appeal before the court a quo at the time the second action (Civil Case No.
60012) was filed, has now been finally dismissed by the respondent Court of Appeals in
CA-G.R. CV No. 29601, to wit:

"WHEREFORE, the appeal is hereby declared abandoned and is dismissed pursuant to

Section 1(d), Rule 50 of the Rules of Court."[5]
 Consequently, the instant petition which prays for the declaration of nullity of the
auction sale by PNB of private respondent's properties[6] becomes dismissible under the
principle of res judicata.
Section 49, Rule 39 of the Revised Rules of Court provides in part:

"SEC. 49. Effect of judgments. - The effect of a judgment or final order rendered by a court
or judge of the Philippines, having jurisdiction to pronounce the judgment or order, may
be as follows:

xxxxxxxxx

(b) In other cases the judgment or order is, with respect to the matter directly adjudged
or as to any other matter that could have been raised in relation thereto, conclusive
between the parties and their successors-in-interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and
under the same title and; in the same capacity;

(c) In any other litigation between the same parties of their successors-in-interest, that
only is deemed to have been adjudged in a former judgment which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto.

Section 49 (b) enunciates the first concept of res judicata known as "bar by prior judgment,"
whereas, Section 49 is referred to as "conclusiveness of judgment."

There is "bar by former judgment" when, between the first case where the judgment
was rendered, and the second case where such judgment is invoked, there is identity of
parties, subject matter and cause of action. When the three identities are present, the
judgment on the merits rendered in the first constitutes an absolute bar to subsequent
action. It is final as to the claim or demand in controversy, including the parties and those
in privity with them, not only as to every matter which was offered and received to
sustain or defeat the claim or demand, but as to any other admissible matter which might
have been offered for that purpose. But where between the first case wherein judgment
is rendered and the second case wherein such judgment is invoked, there is no identity
of cause of action, the judgment is conclusive in the second case, only as to those matters
actually and directly controverted and determined, and not as to matters merely involved
therein. This is what is termed conclusiveness of judgment.[7]
It is res judicata in the first concept which finds relevant application in the case at bar.
There are four (4) essential requisites which must concur in order for res judicata as a
"bar by former judgment" to attach, viz.:

"1. The former judgment must be final;

2. It must have been rendered by a court having jurisdiction over the subject matter and
the parties;

3. It must be a judgment or order on the merits; and

4. There must be between the first and second action identity of parties, identity of subject
matter, and identity of causes of action."[8]

All the foregoing requisites obtain in the present case. The Order of Branch 162, RTC
- Pasig, dated August 17, 1989, denying petitioner Mendiola's application for injunction
of the foreclosure of his properties in Civil Case No. 58173, had long become final and
executory in light of the Decision of the Court of Appeals in CA-G.R. CV No. 29601
affirming the trial court's order. Petitioner did not appeal the Decision of the court a quo in
CA-G.R. CV No. 29601.
 The parties do not dispute the fact that Branch 162, RTC, Pasig, had obtained
jurisdiction over the subject matter of the first case as well as over the parties thereto.
The judgment of the trial court in Civil Case No. 58173, as affirmed by the Court of
Appeals, is a judgment on the merits. A judgment is on the merits when it determines the
rights and liabilities of the parties based on the disclosed facts, irrespective of formal,
technical or dilatory objections. It is not necessary, however, that there should have been
a trial. If the judgment is general, and not based on any technical defect or objection, and
the parties had a full legal opportunity to be heard on their respective claims and
contentions, it is on the merits although there was no actual hearing or arguments on the
facts of the case.[9] In the case at bar, not only was petitioner provided an opportunity to
be heard in support of his complaint for injunction; petitioner was given an actual hearing
to argue his complaint on its merits.[10] Evidently, the Order of the trial court denying
petitioner's application for injunction was rendered only after due consideration of the
facts and evidence presented by both parties thereto. The said Order cannot be said to be
one on sheer technicality, it actually goes into the very substance of the relief sought
therein by petitioner, that is, for the issuance of a writ of injunction against the private
respondent, and must thus be regarded as an adjudication on the merits.
Finally, the fourth element is likewise extant in this case. Required in order to satisfy
this element are: (1) identity of the parties and subject matter; and (2) identity of the
causes of action. In Civil Case No. 58173, the complaint was filed by herein petitioner
Mendiola against private respondent PNB, Norma S. Nora, Eliezer L. Castillo, Norman
C. Nora, Grace S. Belvis, and Victor S. Sta. Ana, as Deputy Sheriff-In-Charge. In Civil
Case No. 60012, the complaint was filed by petitioner Mendiola against private
respondent PNB and Nilda P. Bongat in substitution of Grace S. Belvis. It is to be noted
that there is no absolute identity of parties on the two cases. This is of no consequence. We
have established jurisprudence to the effect that, in order for res judicata to apply,
absolute identity of parties is not required because substantial identity is sufficient. [11] In
any case, PNB is a defendant in both cases. The subject matter involved in both cases, the
real properties of petitioner covered by TCT No. 27307, are also identical.
The similarity between the two causes of action is only too glaring. The test of identity
of causes of action lies not in the form of an action but on whether the same evidence
would support and establish the former and the present causes of action. The difference
of actions in the aforesaid cases is of no moment.[12] In Civil Case No. 58173, the action is
to enjoin PNB from foreclosing petitioner's properties, while in Civil Case No. 60012, the
action is one to annul the auction sale over the foreclosed properties of petitioner based
on the same grounds. Notwithstanding a difference in the forms of the two actions, the
doctrine of res judicata still applies considering that the parties were litigating for the
same thing, i.e. lands covered by TCT No. 27307, and more importantly, the same
contentions and evidence as advanced by herein petitioner in this case were in fact used
to support the former cause of action.
Petitioner, now argues on equitable grounds. He maintains that, assuming for the
sake of argument that res judicata has set in, its application would involve the sacrifice of
justice for technicality.
We are not persuaded.
Equity, which has been aptly described "a justice outside legality," is applied only in
the absence of, and never against, statutory law or judicial rules of procedure. The
pertinent positive rules being present here, they should pre-empt and prevail over all
abstract arguments based only on equity.[13]
WHEREFORE, in view of the foregoing, the petition should be, as it is, hereby
DENIED.
SO ORDERED.
July 30, 1979

PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME "SYCIP,

SALAZAR, FELICIANO, HERNANDEZ & CASTILLO." LUCIANO E. SALAZAR,
FLORENTINO P. FELICIANO, BENILDO G. HERNANDEZ. GREGORIO R.
CASTILLO. ALBERTO P. SAN JUAN, JUAN C. REYES. JR., ANDRES G.
GATMAITAN, JUSTINO H. CACANINDIN, NOEL A. LAMAN, ETHELWOLDO E.
FERNANDEZ, ANGELITO C. IMPERIO, EDUARDO R. CENIZA, TRISTAN A.
CATINDIG, ANCHETA K. TAN, and ALICE V. PESIGAN, petitioners.

IN THE MATTER OF THE PETITION FOR AUTHORITY TO CONTINUE USE OF

THE FIRM NAME "OZAETA, ROMULO, DE LEON, MABANTA & REYES."
RICARDO J. ROMULO, BENJAMIN M. DE LEON, ROMAN MABANTA, JR., JOSE
MA, REYES, JESUS S. J. SAYOC, EDUARDO DE LOS ANGELES, and JOSE F.
BUENAVENTURA, petitioners.

RESOLUTION

MELENCIO-HERRERA, J.:ñé+.£ªwph!1

Two separate Petitions were filed before this Court 1) by the surviving partners of Atty.
Alexander Sycip, who died on May 5, 1975, and 2) by the surviving partners of Atty.
Herminio Ozaeta, who died on February 14, 1976, praying that they be allowed to
continue using, in the names of their firms, the names of partners who had passed away.
In the Court's Resolution of September 2, 1976, both Petitions were ordered consolidated.

Petitioners base their petitions on the following arguments:

1. Under the law, a partnership is not prohibited from continuing its business under a
firm name which includes the name of a deceased partner; in fact, Article 1840 of the Civil
Code explicitly sanctions the practice when it provides in the last paragraph
that: têñ.£îhqwâ£

The use by the person or partnership continuing the business of the

partnership name, or the name of a deceased partner as part thereof, shall not of
itself make the individual property of the deceased partner liable for any
debts contracted by such person or partnership. 1

2. In regulating other professions, such as accountancy and engineering, the legislature

has authorized the adoption of firm names without any restriction as to the use, in such
firm name, of the name of a deceased partner; 2 the legislative authorization given to
those engaged in the practice of accountancy — a profession requiring the same degree
of trust and confidence in respect of clients as that implicit in the relationship of attorney
and client — to acquire and use a trade name, strongly indicates that there is no
fundamental policy that is offended by the continued use by a firm of professionals of a
firm name which includes the name of a deceased partner, at least where such firm name
has acquired the characteristics of a "trade name." 3

3. The Canons of Professional Ethics are not transgressed by the continued use of the
name of a deceased partner in the firm name of a law partnership because Canon 33 of
the Canons of Professional Ethics adopted by the American Bar Association declares
that: têñ.£îhqwâ£

... The continued use of the name of a deceased or former partner when
permissible by local custom, is not unethical but care should be taken that
no imposition or deception is practiced through this use. ... 4

4. There is no possibility of imposition or deception because the deaths of their respective

deceased partners were well-publicized in all newspapers of general circulation for
several days; the stationeries now being used by them carry new letterheads indicating
the years when their respective deceased partners were connected with the firm;
petitioners will notify all leading national and international law directories of the fact of
their respective deceased partners' deaths. 5

5. No local custom prohibits the continued use of a deceased partner's name in a

professional firm's name; 6 there is no custom or usage in the Philippines, or at least in
the Greater Manila Area, which recognizes that the name of a law firm necessarily
Identifies the individual members of the firm. 7

6. The continued use of a deceased partner's name in the firm name of law partnerships
has been consistently allowed by U.S. Courts and is an accepted practice in the legal
profession of most countries in the world.8

The question involved in these Petitions first came under consideration by this Court in
1953 when a law firm in Cebu (the Deen case) continued its practice of including in its
firm name that of a deceased partner, C.D. Johnston. The matter was resolved with this
Court advising the firm to desist from including in their firm designation the name of C.
D. Johnston, who has long been dead."

The same issue was raised before this Court in 1958 as an incident in G. R. No. L-11964,
entitled Register of Deeds of Manila vs. China Banking Corporation. The law firm of
Perkins & Ponce Enrile moved to intervene as amicus curiae. Before acting thereon, the
Court, in a Resolution of April 15, 1957, stated that it "would like to be informed why the
name of Perkins is still being used although Atty. E. A. Perkins is already dead." In a
Manifestation dated May 21, 1957, the law firm of Perkins and Ponce Enrile, raising
substantially the same arguments as those now being raised by petitioners, prayed that the
continued use of the firm name "Perkins & Ponce Enrile" be held proper.

On June 16, 1958, this Court resolved: têñ.£îhqwâ£

After carefully considering the reasons given by Attorneys Alfonso Ponce

Enrile and Associates for their continued use of the name of the deceased
E. G. Perkins, the Court found no reason to depart from the policy it
adopted in June 1953 when it required Attorneys Alfred P. Deen and Eddy
A. Deen of Cebu City to desist from including in their firm designation, the
name of C. D. Johnston, deceased. The Court believes that, in view of the
personal and confidential nature of the relations between attorney and
client, and the high standards demanded in the canons of professional
ethics, no practice should be allowed which even in a remote degree could
give rise to the possibility of deception. Said attorneys are accordingly
advised to drop the name "PERKINS" from their firm name.

Petitioners herein now seek a re-examination of the policy thus far enunciated by the
Court.

The Court finds no sufficient reason to depart from the rulings thus laid down.

A. Inasmuch as "Sycip, Salazar, Feliciano, Hernandez and Castillo" and "Ozaeta, Romulo,
De Leon, Mabanta and Reyes" are partnerships, the use in their partnership names of the
names of deceased partners will run counter to Article 1815 of the Civil Code which
provides: têñ.£îhqwâ£

Art. 1815. Every partnership shall operate under a firm name, which may
or may not include the name of one or more of the partners.

Those who, not being members of the partnership, include their names in
the firm name, shall be subject to the liability, of a partner.
It is clearly tacit in the above provision that names in a firm name of a partnership must
either be those of living partners and. in the case of non-partners, should be living persons
who can be subjected to liability. In fact, Article 1825 of the Civil Code prohibits a third
person from including his name in the firm name under pain of assuming the liability of
a partner. The heirs of a deceased partner in a law firm cannot be held liable as the old
members to the creditors of a firm particularly where they are non-lawyers. Thus, Canon
34 of the Canons of Professional Ethics "prohibits an agreement for the payment to the
widow and heirs of a deceased lawyer of a percentage, either gross or net, of the fees
received from the future business of the deceased lawyer's clients, both because the
recipients of such division are not lawyers and because such payments will not represent
service or responsibility on the part of the recipient. " Accordingly, neither the widow nor
the heirs can be held liable for transactions entered into after the death of their lawyer-
predecessor. There being no benefits accruing, there ran be no corresponding liability.

Prescinding the law, there could be practical objections to allowing the use by law firms
of the names of deceased partners. The public relations value of the use of an old firm
name can tend to create undue advantages and disadvantages in the practice of the
profession. An able lawyer without connections will have to make a name for himself
starting from scratch. Another able lawyer, who can join an old firm, can initially ride on
that old firm's reputation established by deceased partners.

B. In regards to the last paragraph of Article 1840 of the Civil Code cited by
petitioners, supra, the first factor to consider is that it is within Chapter 3 of Title IX of the
Code entitled "Dissolution and Winding Up." The Article primarily deals with the
exemption from liability in cases of a dissolved partnership, of the individual property of
the deceased partner for debts contracted by the person or partnership which continues
the business using the partnership name or the name of the deceased partner as part
thereof. What the law contemplates therein is a hold-over situation preparatory to formal
reorganization.

Secondly, Article 1840 treats more of a commercial partnership with a good will to protect
rather than of a professional partnership, with no saleable good will but whose reputation
depends on the personal qualifications of its individual members. Thus, it has been held
that a saleable goodwill can exist only in a commercial partnership and cannot arise in a
professional partnership consisting of lawyers. 9têñ.£îhqwâ£

As a general rule, upon the dissolution of a commercial partnership the

succeeding partners or parties have the right to carry on the business under
the old name, in the absence of a stipulation forbidding it, (s)ince the name
of a commercial partnership is a partnership asset inseparable from the
good will of the firm. ... (60 Am Jur 2d, s 204, p. 115) (Emphasis supplied)

On the other hand, têñ.£îhqwâ£

... a professional partnership the reputation of which depends or; the

individual skill of the members, such as partnerships of attorneys or
physicians, has no good win to be distributed as a firm asset on its
dissolution, however intrinsically valuable such skill and reputation may
be, especially where there is no provision in the partnership agreement
relating to good will as an asset. ... (ibid, s 203, p. 115) (Emphasis supplied)

C. A partnership for the practice of law cannot be likened to partnerships formed by other
professionals or for business. For one thing, the law on accountancy specifically allows
the use of a trade name in connection with the practice of accountancy.10 têñ.£îhqwâ£

A partnership for the practice of law is not a legal entity. It is a mere

relationship or association for a particular purpose. ... It is not a partnership
formed for the purpose of carrying on trade or business or of holding
 property." 11 Thus, it has been stated that "the use of a nom de plume,
assumed or trade name in law practice is improper. 12

The usual reason given for different standards of conduct being applicable
to the practice of law from those pertaining to business is that the law is a
profession.

Dean Pound, in his recently published contribution to the Survey of the

Legal Profession, (The Lawyer from Antiquity to Modern Times, p. 5) defines a
profession as "a group of men pursuing a learned art as a common calling
in the spirit of public service, — no less a public service because it may
incidentally be a means of livelihood."

xxx xxx xxx

Primary characteristics which distinguish the legal profession from

business are:

1. A duty of public service, of which the emolument is a byproduct, and in

which one may attain the highest eminence without making much money.

2. A relation as an "officer of court" to the administration of justice involving

thorough sincerity, integrity, and reliability.

3. A relation to clients in the highest degree fiduciary.

4. A relation to colleagues at the bar characterized by candor, fairness, and

unwillingness to resort to current business methods of advertising and
encroachment on their practice, or dealing directly with their clients. 13

"The right to practice law is not a natural or constitutional right but is in the nature of a
privilege or franchise. 14 It is limited to persons of good moral character with special
qualifications duly ascertained and certified. 15 The right does not only presuppose in its
possessor integrity, legal standing and attainment, but also the exercise of a special
privilege, highly personal and partaking of the nature of a public trust." 16

D. Petitioners cited Canon 33 of the Canons of Professional Ethics of the American Bar
Association" in support of their petitions.

It is true that Canon 33 does not consider as unethical the continued use of the name of a
deceased or former partner in the firm name of a law partnership when such a practice
is permissible by local custom but the Canon warns that care should be taken that no
imposition or deception is practiced through this use.

It must be conceded that in the Philippines, no local custom permits or allows the
continued use of a deceased or former partner's name in the firm names of law
partnerships. Firm names, under our custom, Identify the more active and/or more senior
members or partners of the law firm. A glimpse at the history of the firms of petitioners and
of other law firms in this country would show how their firm names have evolved and
changed from time to time as the composition of the partnership changed. têñ.£îhqwâ£

The continued use of a firm name after the death of one or more of the
partners designated by it is proper only where sustained by local custom and not
where by custom this purports to Identify the active members. ...

There would seem to be a question, under the working of the Canon, as to

the propriety of adding the name of a new partner and at the same time
 retaining that of a deceased partner who was never a partner with the new
one. (H.S. Drinker, op. cit., supra, at pp. 207208) (Emphasis supplied).

The possibility of deception upon the public, real or consequential, where the name of a
deceased partner continues to be used cannot be ruled out. A person in search of legal
counsel might be guided by the familiar ring of a distinguished name appearing in a firm
title.

E. Petitioners argue that U.S. Courts have consistently allowed the continued use of a
deceased partner's name in the firm name of law partnerships. But that is so because it is
sanctioned by custom.

In the case of Mendelsohn v. Equitable Life Assurance Society (33 N.Y.S. 2d 733) which
petitioners Salazar, et al. quoted in their memorandum, the New York Supreme Court
sustained the use of the firm name Alexander & Green even if none of the present ten
partners of the firm bears either name because the practice was sanctioned by custom and did
not offend any statutory provision or legislative policy and was adopted by agreement
of the parties. The Court stated therein: têñ.£îhqwâ£

The practice sought to be proscribed has the sanction of custom and offends
no statutory provision or legislative policy. Canon 33 of the Canons of
Professional Ethics of both the American Bar Association and the New York
State Bar Association provides in part as follows: "The continued use of the
name of a deceased or former partner, when permissible by local custom is
not unethical, but care should be taken that no imposition or deception is
practiced through this use." There is no question as to local custom. Many firms
in the city use the names of deceased members with the approval of other attorneys,
bar associations and the courts. The Appellate Division of the First
Department has considered the matter and reached The conclusion that
such practice should not be prohibited. (Emphasis supplied)

xxx xxx xxx

Neither the Partnership Law nor the Penal Law prohibits the practice in
question. The use of the firm name herein is also sustainable by reason of
agreement between the partners. 18

Not so in this jurisdiction where there is no local custom that sanctions the practice.
Custom has been defined as a rule of conduct formed by repetition of acts, uniformly
observed (practiced) as a social rule, legally binding and obligatory. 19 Courts take no
judicial notice of custom. A custom must be proved as a fact, according to the rules of
evidence. 20 A local custom as a source of right cannot be considered by a court of justice
unless such custom is properly established by competent evidence like any other
fact. 21 We find such proof of the existence of a local custom, and of the elements requisite
to constitute the same, wanting herein. Merely because something is done as a matter of
practice does not mean that Courts can rely on the same for purposes of adjudication as
a juridical custom. Juridical custom must be differentiated from social custom. The
former can supplement statutory law or be applied in the absence of such statute. Not so
with the latter.

Moreover, judicial decisions applying or interpreting the laws form part of the legal
system. 22 When the Supreme Court in the Deen and Perkins cases issued its Resolutions
directing lawyers to desist from including the names of deceased partners in their firm
designation, it laid down a legal rule against which no custom or practice to the contrary,
even if proven, can prevail. This is not to speak of our civil law which clearly ordains that
a partnership is dissolved by the death of any partner. 23 Custom which are contrary to
law, public order or public policy shall not be countenanced. 24
The practice of law is intimately and peculiarly related to the administration of justice
and should not be considered like an ordinary "money-making trade." têñ.£îhqwâ£

... It is of the essence of a profession that it is practiced in a spirit of public

service. A trade ... aims primarily at personal gain; a profession at the
exercise of powers beneficial to mankind. If, as in the era of wide free
opportunity, we think of free competitive self assertion as the highest good,
lawyer and grocer and farmer may seem to be freely competing with their
fellows in their calling in order each to acquire as much of the world's good
as he may within the allowed him by law. But the member of a profession
does not regard himself as in competition with his professional brethren.
He is not bartering his services as is the artisan nor exchanging the products
of his skill and learning as the farmer sells wheat or corn. There should be
no such thing as a lawyers' or physicians' strike. The best service of the
professional man is often rendered for no equivalent or for a trifling
equivalent and it is his pride to do what he does in a way worthy of his
profession even if done with no expectation of reward, This spirit of public
service in which the profession of law is and ought to be exercised is a
prerequisite of sound administration of justice according to law. The other
two elements of a profession, namely, organization and pursuit of a learned
art have their justification in that they secure and maintain that spirit. 25

In fine, petitioners' desire to preserve the Identity of their firms in the eyes of the public
must bow to legal and ethical impediment.

ACCORDINGLY, the petitions filed herein are denied and petitioners advised to drop
the names "SYCIP" and "OZAETA" from their respective firm names. Those names may,
however, be included in the listing of individuals who have been partners in their firms
indicating the years during which they served as such.

SO ORDERED.

Teehankee, Concepcion, Jr., Santos, Fernandez, Guerrero and De Castro, JJ., concur

Fernando, C.J. and Abad Santos, J., took no part.

Separate Opinions

FERNANDO, C.J., concurring:

The petitions are denied, as there are only four votes for granting them, seven of the
Justices being of the contrary view, as explained in the plurality opinion of Justice
Ameurfina Melencio-Herrera. It is out of delicadeza that the undersigned did not
participate in the disposition of these petitions, as the law office of Sycip, Salazar,
Feliciano, Hernandez and Castillo started with the partnership of Quisumbing, Sycip,
and Quisumbing, the senior partner, the late Ramon Quisumbing, being the father-in-law
of the undersigned, and the most junior partner then, Norberto J. Quisumbing, being his
brother- in-law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of Justice
Ameurfina Melencio-Herrera: 'Those names [Sycip and Ozaeta] may, however, be
included in the listing of individuals wtes

AQUINO, J., dissenting:

I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano, Hernandez &
Castillo, in their petition of June 10, 1975, prayed for authority to continue the use of that
firm name, notwithstanding the death of Attorney Alexander Sycip on May 5, 1975 (May
he rest in peace). He was the founder of the firm which was originally known as the Sycip
Law Office.

On the other hand, the seven surviving partners of the law firm, Ozaeta, Romulo, De
Leon, Mabanta & Reyes, in their petition of August 13, 1976, prayed that they be allowed
to continue using the said firm name notwithstanding the death of two partners, former
Justice Roman Ozaeta and his son, Herminio, on May 1, 1972 and February 14, 1976,
respectively.

They alleged that the said law firm was a continuation of the Ozaeta Law Office which
was established in 1957 by Justice Ozaeta and his son and that, as to the said law firm,
the name Ozaeta has acquired an institutional and secondary connotation.

Article 1840 of the Civil Code, which speaks of the use by the partnership of the name of
a deceased partner as part of the partnership name, is cited to justify the petitions. Also
invoked is the canon that the continued use by a law firm of the name of a deceased
partner, "when permissible by local custom, is not unethical" as long as "no imposition or
deception is practised through this use" (Canon 33 of the Canons of Legal Ethics).

I am of the opinion that the petition may be granted with the condition that it be indicated
in the letterheads of the two firms (as the case may be) that Alexander Sycip, former
Justice Ozaeta and Herminio Ozaeta are dead or the period when they served as partners
should be stated therein.

Obviously, the purpose of the two firms in continuing the use of the names of their
deceased founders is to retain the clients who had customarily sought the legal services
of Attorneys Sycip and Ozaeta and to benefit from the goodwill attached to the names of
those respected and esteemed law practitioners. That is a legitimate motivation.

The retention of their names is not illegal per se. That practice was followed before the
war by the law firm of James Ross. Notwithstanding the death of Judge Ross the founder
of the law firm of Ross, Lawrence, Selph and Carrascoso, his name was retained in the
firm name with an indication of the year when he died. No one complained that the
retention of the name of Judge Ross in the firm name was illegal or unethical.

# Separate Opinions

FERNANDO, C.J., concurring:

The petitions are denied, as there are only four votes for granting them, seven of the
Justices being of the contrary view, as explained in the plurality opinion of Justice
Ameurfina Melencio-Herrera. It is out of delicadeza that the undersigned did not
participate in the disposition of these petitions, as the law office of Sycip, Salazar,
Feliciano, Hernandez and Castillo started with the partnership of Quisumbing, Sycip,
and Quisumbing, the senior partner, the late Ramon Quisumbing, being the father-in-law
of the undersigned, and the most junior partner then, Norberto J. Quisumbing, being his
brother- in-law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of Justice
Ameurfina Melencio-Herrera: 'Those names [Sycip and Ozaeta] may, however, be
included in the listing of individuals wtes

AQUINO, J., dissenting:

I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano, Hernandez &
Castillo, in their petition of June 10, 1975, prayed for authority to continue the use of that
firm name, notwithstanding the death of Attorney Alexander Sycip on May 5, 1975 (May
he rest in peace). He was the founder of the firm which was originally known as the Sycip
Law Office.

On the other hand, the seven surviving partners of the law firm, Ozaeta, Romulo, De
Leon, Mabanta & Reyes, in their petition of August 13, 1976, prayed that they be allowed
to continue using the said firm name notwithstanding the death of two partners, former
Justice Roman Ozaeta and his son, Herminio, on May 1, 1972 and February 14, 1976,
respectively.

They alleged that the said law firm was a continuation of the Ozaeta Law Office which
was established in 1957 by Justice Ozaeta and his son and that, as to the said law firm,
the name Ozaeta has acquired an institutional and secondary connotation.

Article 1840 of the Civil Code, which speaks of the use by the partnership of the name of
a deceased partner as part of the partnership name, is cited to justify the petitions. Also
invoked is the canon that the continued use by a law firm of the name of a deceased
partner, "when permissible by local custom, is not unethical" as long as "no imposition or
deception is practised through this use" (Canon 33 of the Canons of Legal Ethics).

I am of the opinion that the petition may be granted with the condition that it be indicated
in the letterheads of the two firms (as the case may be) that Alexander Sycip, former
Justice Ozaeta and Herminio Ozaeta are dead or the period when they served as partners
should be stated therein.

Obviously, the purpose of the two firms in continuing the use of the names of their
deceased founders is to retain the clients who had customarily sought the legal services
of Attorneys Sycip and Ozaeta and to benefit from the goodwill attached to the names of
those respected and esteemed law practitioners. That is a legitimate motivation.

The retention of their names is not illegal per se. That practice was followed before the
war by the law firm of James Ross. Notwithstanding the death of Judge Ross the founder
of the law firm of Ross, Lawrence, Selph and Carrascoso, his name was retained in the
firm name with an indication of the year when he died. No one complained that the
retention of the name of Judge Ross in the firm name was illegal or unethical.
 COMMISSIONER OF INTERNAL G.R. No. 184823
REVENUE,
Petitioner,
Present:

CORONA, C. J., Chairperson,

- versus - VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
AICHI FORGING COMPANY OF
ASIA, INC., Promulgated:
Respondent. October 6, 2010
x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

A taxpayer is entitled to a refund either by authority of a statute expressly granting such

right, privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the
return of taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only
his entitlement to a refund but also his compliance with the procedural due process as non-
observance of the prescriptive periods within which to file the administrative and the judicial
claims would result in the denial of his claim.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set
aside the July 30, 2008 Decision[1] and the October 6, 2008 Resolution[2] of the Court of Tax
Appeals (CTA) En Banc.
Factual Antecedents

Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and
existing under the laws of the Republic of the Philippines, is engaged in the manufacturing,
producing, and processing of steel and its by-products.[3] It is registered with the Bureau of
Internal Revenue (BIR) as a Value-Added Tax (VAT) entity[4] and its products, close impression
die steel forgings and tool and dies, are registered with the Board of Investments (BOI) as a
pioneer status.[5]

On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the
period July 1, 2002 to September 30, 2002 in the total amount of P3,891,123.82 with the petitioner
Commissioner of Internal Revenue (CIR), through the Department of Finance (DOF) One-Stop
Shop Inter-Agency Tax Credit and Duty Drawback Center.[6]

Proceedings before the Second Division of the CTA

On even date, respondent filed a Petition for Review[7] with the CTA for the
refund/credit of the same input VAT. The case was docketed as CTA Case No. 7065 and was
raffled to the Second Division of the CTA.
 In the Petition for Review, respondent alleged that for the period July 1, 2002 to
September 30, 2002, it generated and recorded zero-rated sales in the amount
of P131,791,399.00,[8]which was paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the
National Internal Revenue Code of 1997 (NIRC);[9] that for the said period, it incurred and paid
input VAT amounting to P3,912,088.14 from purchases and importation attributable to its zero-
rated sales;[10] and that in its application for refund/credit filed with the DOF One-Stop Shop
Inter-Agency Tax Credit and Duty Drawback Center, it only claimed the amount
of P3,891,123.82.[11]
In response, petitioner filed his Answer[12] raising the following special and affirmative
defenses, to wit:

4. Petitioners alleged claim for refund is subject to administrative

investigation by the Bureau;

5. Petitioner must prove that it paid VAT input taxes for the period in
question;

6. Petitioner must prove that its sales are export sales contemplated under
Sections 106(A) (2) (a), and 108(B) (1) of the Tax Code of 1997;

7. Petitioner must prove that the claim was filed within the two (2) year
period prescribed in Section 229 of the Tax Code;

8. In an action for refund, the burden of proof is on the taxpayer to establish

its right to refund, and failure to sustain the burden is fatal to the claim for
refund; and

9. Claims for refund are construed strictly against the claimant for the same
partake of the nature of exemption from taxation.[13]

Trial ensued, after which, on January 4, 2008, the Second Division of the CTA rendered a
Decision partially granting respondents claim for refund/credit. Pertinent portions of the
Decision read:

For a VAT registered entity whose sales are zero-rated, to validly claim a
refund, Section 112 (A) of the NIRC of 1997, as amended, provides:

SEC. 112. Refunds or Tax Credits of Input Tax.

(A) Zero-rated or Effectively Zero-rated Sales. Any VAT-

registered person, whose sales are zero-rated or effectively zero-
rated may, within two (2) years after the close of the taxable quarter
when the sales were made, apply for the issuance of a tax credit
certificate or refund of creditable input tax due or paid attributable
to such sales, except transitional input tax, to the extent that such
input tax has not been applied against output tax: x x x

Pursuant to the above provision, petitioner must comply with the

following requisites: (1) the taxpayer is engaged in sales which are zero-rated or
effectively zero-rated; (2) the taxpayer is VAT-registered; (3) the claim must be
filed within two years after the close of the taxable quarter when such sales were
made; and (4) the creditable input tax due or paid must be attributable to such
 sales, except the transitional input tax, to the extent that such input tax has not
been applied against the output tax.

The Court finds that the first three requirements have been complied
[with] by petitioner.

With regard to the first requisite, the evidence presented by petitioner,

such as the Sales Invoices (Exhibits II to II-262, JJ to JJ-431, KK to KK-394 and LL)
shows that it is engaged in sales which are zero-rated.

The second requisite has likewise been complied with. The Certificate of
Registration with OCN 1RC0000148499 (Exhibit C) with the BIR proves that
petitioner is a registered VAT taxpayer.

In compliance with the third requisite, petitioner filed its administrative

claim for refund on September 30, 2004 (Exhibit N) and the present Petition for
Review on September 30, 2004, both within the two (2) year prescriptive period
from the close of the taxable quarter when the sales were made, which is from
September 30, 2002.

As regards, the fourth requirement, the Court finds that there are some
documents and claims of petitioner that are baseless and have not been
satisfactorily substantiated.

xxxx

In sum, petitioner has sufficiently proved that it is entitled to a refund or

issuance of a tax credit certificate representing unutilized excess input VAT
payments for the period July 1, 2002 to September 30, 2002, which are attributable
to its zero-rated sales for the same period, but in the reduced amount
of P3,239,119.25, computed as follows:

Amount of Claimed Input VAT P 3,891,123.82

Less:
Exceptions as found by the ICPA 41,020.37
Net Creditable Input VAT P 3,850,103.45
Less:
Output VAT Due 610,984.20
Excess Creditable Input VAT P 3,239,119.25

WHEREFORE, premises considered, the present Petition for Review is

PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO
REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner [in] the
reduced amount of THREE MILLION TWO HUNDRED THIRTY NINE
THOUSAND ONE HUNDRED NINETEEN AND 25/100 PESOS
(P3,239,119.25), representing the unutilized input VAT incurred for the months of
July to September 2002.

SO ORDERED.[14]

Dissatisfied with the above-quoted Decision, petitioner filed a Motion for Partial
Reconsideration,[15] insisting that the administrative and the judicial claims were filed beyond
the two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of
the NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for tax
refund/credit on September 30, 2004 was beyond the two-year period, which expired on
September 29, 2004.[16] He cited as basis Article 13 of the Civil Code,[17] which provides that when
the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued that the
simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and
229 of the NIRC.[18] According to the petitioner, a prior filing of an administrative claim is a
condition precedent[19] before a judicial claim can be filed. He explained that the rationale of such
requirement rests not only on the doctrine of exhaustion of administrative remedies but also on
the fact that the CTA is an appellate body which exercises the power of judicial review over
administrative actions of the BIR. [20]

The Second Division of the CTA, however, denied petitioners Motion for Partial
Reconsideration for lack of merit. Petitioner thus elevated the matter to the CTA En Banc via a
Petition for Review.[21]

Ruling of the CTA En Banc

On July 30, 2008, the CTA En Banc affirmed the Second Divisions Decision allowing the
partial tax refund/credit in favor of respondent. However, as to the reckoning point for counting
the two-year period, the CTA En Banc ruled:

Petitioner argues that the administrative and judicial claims were filed
beyond the period allowed by law and hence, the honorable Court has no
jurisdiction over the same. In addition, petitioner further contends that
respondent's filing of the administrative and judicial [claims] effectively
eliminates the authority of the honorable Court to exercise jurisdiction over the
judicial claim.

We are not persuaded.

Section 114 of the 1997 NIRC, and We quote, to wit:

SEC. 114. Return and Payment of Value-added Tax.

(A) In General. Every person liable to pay the value-added

tax imposed under this Title shall file a quarterly return of the
amount of his gross sales or receipts within twenty-five (25) days
following the close of each taxable quarter prescribed for each
taxpayer: Provided, however, That VAT-registered persons shall
pay the value-added tax on a monthly basis.

[x x x x ]

Based on the above-stated provision, a taxpayer has twenty five (25) days
from the close of each taxable quarter within which to file a quarterly return of the
amount of his gross sales or receipts. In the case at bar, the taxable quarter
involved was for the period of July 1, 2002 to September 30, 2002. Applying
Section 114 of the 1997 NIRC, respondent has until October 25, 2002 within which
to file its quarterly return for its gross sales or receipts [with] which it complied
when it filed its VAT Quarterly Return on October 20, 2002.

In relation to this, the reckoning of the two-year period provided under

Section 229 of the 1997 NIRC should start from the payment of tax subject claim
for refund. As stated above, respondent filed its VAT Return for the taxable third
quarter of 2002 on October 20, 2002. Thus, respondent's administrative and
 judicial claims for refund filed on September 30, 2004 were filed on time because
AICHI has until October 20, 2004 within which to file its claim for refund.

In addition, We do not agree with the petitioner's contention that the 1997
NIRC requires the previous filing of an administrative claim for refund prior to
the judicial claim. This should not be the case as the law does not prohibit the
simultaneous filing of the administrative and judicial claims for refund. What is
controlling is that both claims for refund must be filed within the two-year
prescriptive period.

In sum, the Court En Banc finds no cogent justification to disturb the

findings and conclusion spelled out in the assailed January 4, 2008 Decision and
March 13, 2008 Resolution of the CTA Second Division. What the instant petition
seeks is for the Court En Banc to view and appreciate the evidence in their own
perspective of things, which unfortunately had already been considered and
passed upon.

WHEREFORE, the instant Petition for Review is hereby DENIED DUE

COURSE and DISMISSED for lack of merit. Accordingly, the January 4, 2008
Decision and March 13, 2008 Resolution of the CTA Second Division in CTA Case
No. 7065 entitled, AICHI Forging Company of Asia, Inc. petitioner vs.
Commissioner of Internal Revenue, respondent are hereby AFFIRMED in toto.

SO ORDERED.[22]

Petitioner sought reconsideration but the CTA En Banc denied[23] his Motion for
Reconsideration.

Issue

Hence, the present recourse where petitioner interposes the issue of whether respondents
judicial and administrative claims for tax refund/credit were filed within the two-
yearprescriptive period provided in Sections 112(A) and 229 of

the NIRC.[24]

Petitioners Arguments

Petitioner maintains that respondents administrative and judicial claims for tax refund/credit
were filed in violation of Sections 112(A) and 229 of the NIRC.[25] He posits that pursuant to
Article 13 of the Civil Code,[26] since the year 2004 was a leap year, the filing of the claim for tax
refund/credit on September 30, 2004 was beyond the two-year period, which expired
on September 29, 2004.[27]

Petitioner further argues that the CTA En Banc erred in applying Section 114(A) of the NIRC in
determining the start of the two-year period as the said provision pertains to the compliance
requirements in the payment of VAT.[28] He asserts that it is Section 112, paragraph (A), of the
same Code that should apply because it specifically provides for the period within which a claim
for tax refund/ credit should be made.[29]
Petitioner likewise puts in issue the fact that the administrative claim with the BIR and the
judicial claim with the CTA were filed on the same day.[30] He opines that the simultaneous filing
of the administrative and the judicial claims contravenes Section 229 of the NIRC, which requires
the prior filing of an administrative claim.[31] He insists that such procedural requirement is
based on the doctrine of exhaustion of administrative remedies and the fact that the CTA is an
appellate body exercising judicial review over administrative actions of the CIR.[32]

Respondents Arguments

For its part, respondent claims that it is entitled to a refund/credit of its unutilized input VAT
for the period July 1, 2002 to September 30, 2002 as a matter of right because it has substantially
complied with all the requirements provided by law.[33] Respondent likewise defends the
CTA En Banc in applying Section 114(A) of the NIRC in computing the prescriptive period for
the claim for tax refund/credit. Respondent believes that Section 112(A) of the NIRC must be
read together with Section 114(A) of the same Code.[34]

As to the alleged simultaneous filing of its administrative and judicial claims, respondent
contends that it first filed an administrative claim with the One-Stop Shop Inter-Agency Tax
Credit and Duty Drawback Center of the DOF before it filed a judicial claim with the CTA.[35] To
prove this, respondent points out that its Claimant Information Sheet No. 49702[36] and BIR Form
No. 1914 for the third quarter of 2002,[37] which were filed with the DOF, were attached as
Annexes M and N, respectively, to the Petition for Review filed with the CTA.[38]Respondent
further contends that the non-observance of the 120-day period given to the CIR to act on the
claim for tax refund/credit in Section 112(D) is not fatal because what is important is that both
claims are filed within the two-year prescriptive period.[39] In support thereof, respondent
cites Commissioner of Internal Revenue v. Victorias Milling Co., Inc.[40] where it was ruled that [i]f,
however, the [CIR] takes time in deciding the claim, and the period of two years is about to end,
the suit or proceeding must be started in the [CTA] before the end of the two-year period without
awaiting the decision of the [CIR].[41] Lastly, respondent argues that even if the period had
already lapsed, it may be suspended for reasons of equity considering that it is not a
jurisdictional requirement.[42]

Our Ruling

The petition has merit.

Unutilized input VAT must be claimed within two

years after the close of the taxable quarter when the
sales were made

In computing the two-year prescriptive period for claiming a refund/credit of unutilized input
VAT, the Second Division of the CTA applied Section 112(A) of the NIRC, which states:

SEC. 112. Refunds or Tax Credits of Input Tax.

(A) Zero-rated or Effectively Zero-rated Sales Any VAT-registered person, whose

sales are zero-rated or effectively zero-rated may, within two (2) years after the
 close of the taxable quarter when the sales were made, apply for the issuance of
a tax credit certificate or refund of creditable input tax due or paid attributable to
such sales, except transitional input tax, to the extent that such input tax has not
been applied against output tax: Provided, however, That in the case of zero-rated
sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the
acceptable foreign currency exchange proceeds thereof had been duly accounted
for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP): Provided, further, That where the taxpayer is engaged in zero-rated or
effectively zero-rated sale and also in taxable or exempt sale of goods or properties
or services, and the amount of creditable input tax due or paid cannot be directly
and entirely attributed to any one of the transactions, it shall be allocated
proportionately on the basis of the volume of sales. (Emphasis supplied.)

The CTA En Banc, on the other hand, took into consideration Sections 114 and 229 of the NIRC,
which read:

SEC. 114. Return and Payment of Value-Added Tax.

(A) In General. Every person liable to pay the value-added tax imposed
under this Title shall file a quarterly return of the amount of his gross sales or
receipts within twenty-five (25) days following the close of each taxable quarter
prescribed for each taxpayer: Provided, however, That VAT-registered persons
shall pay the value-added tax on a monthly basis.
Any person, whose registration has been cancelled in accordance with
Section 236, shall file a return and pay the tax due thereon within twenty-five (25)
days from the date of cancellation of registration: Provided, That only one
consolidated return shall be filed by the taxpayer for his principal place of
business or head office and all branches.
xxxx

SEC. 229. Recovery of tax erroneously or illegally collected.

No suit or proceeding shall be maintained in any court for the recovery of any
national internal revenue tax hereafter alleged to have been erroneously or
illegally assessed or collected, or of any penalty claimed to have been collected
without authority, or of any sum alleged to have been excessively or in any
manner wrongfully collected, until a claim for refund or credit has been duly filed
with the Commissioner; but such suit or proceeding may be maintained, whether
or not such tax, penalty or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration
of two (2) years from the date of payment of the tax or penalty regardless of any
supervening cause that may arise after payment: Provided, however, That the
Commissioner may, even without written claim therefor, refund or credit any tax,
where on the face of the return upon which payment was made, such payment
appears clearly to have been erroneously paid. (Emphasis supplied.)

Hence, the CTA En Banc ruled that the reckoning of the two-year period for filing a claim for
refund/credit of unutilized input VAT should start from the date of payment of tax and not
from the close of the taxable quarter when the sales were made.[43]

The pivotal question of when to reckon the running of the two-year prescriptive period,
however, has already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao
Corporation,[44] where we ruled that Section 112(A) of the NIRC is the applicable provision in
determining the start of the two-year period for claiming a refund/credit of unutilized input
VAT, and that Sections 204(C) and 229 of the NIRC are inapplicable as both provisions apply
only to instances of erroneous payment or illegal collection of internal revenue taxes.[45] We
explained that:

The above proviso [Section 112 (A) of the NIRC] clearly provides in no
uncertain terms that unutilized input VAT payments not otherwise used for
any internal revenue tax due the taxpayer must be claimed within two years
reckoned from the close of the taxable quarter when the relevant sales were
made pertaining to the input VAT regardless of whether said tax was paid or
not. As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec. 112
(A), [P]rescriptive period commences from the close of the taxable quarter when
the sales were made and not from the time the input VAT was paid nor from the
time the official receipt was issued. Thus, when a zero-rated VAT taxpayer pays
its input VAT a year after the pertinent transaction, said taxpayer only has a year
to file a claim for refund or tax credit of the unutilized creditable input VAT. The
reckoning frame would always be the end of the quarter when the pertinent sales
or transaction was made, regardless when the input VAT was paid. Be that as it
may, and given that the last creditable input VAT due for the period covering the
progress billing of September 6, 1996 is the third quarter of 1996 ending on
September 30, 1996, any claim for unutilized creditable input VAT refund or tax
credit for said quarter prescribed two years after September 30, 1996 or, to be
precise, on September 30, 1998. Consequently, MPCs claim for refund or tax credit
filed on December 10, 1999 had already prescribed.

Reckoning for prescriptive period under

Secs. 204(C) and 229 of the NIRC inapplicable

To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C)
or 229 of the NIRC which, for the purpose of refund, prescribes a different starting
point for the two-year prescriptive limit for the filing of a claim therefor. Secs.
204(C) and 229 respectively provide:

Sec. 204. Authority of the Commissioner to Compromise, Abate

and Refund or Credit Taxes. The Commissioner may

xxxx

(c) Credit or refund taxes erroneously or illegally received

or penalties imposed without authority, refund the value of
internal revenue stamps when they are returned in good condition
by the purchaser, and, in his discretion, redeem or change unused
stamps that have been rendered unfit for use and refund their
value upon proof of destruction. No credit or refund of taxes or
penalties shall be allowed unless the taxpayer files in writing with
the Commissioner a claim for credit or refund within two (2) years
after the payment of the tax or penalty: Provided, however, That a
return filed showing an overpayment shall be considered as a
written claim for credit or refund.

xxxx

Sec. 229. Recovery of Tax Erroneously or Illegally

Collected. No suit or proceeding shall be maintained in any court
for the recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or collected,
or of any penalty claimed to have been collected without authority,
 of any sum alleged to have been excessively or in any manner
wrongfully collected without authority, or of any sum alleged to
have been excessively or in any manner wrongfully collected, until
a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained,
whether or not such tax, penalty, or sum has been paid under
protest or duress.

In any case, no such suit or proceeding shall be filed after

the expiration of two (2) years from the date of payment of the tax
or penalty regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even
without a written claim therefor, refund or credit any tax, where
on the face of the return upon which payment was made, such
payment appears clearly to have been erroneously paid.

Notably, the above provisions also set a two-year prescriptive period,

reckoned from date of payment of the tax or penalty, for the filing of a claim of
refund or tax credit. Notably too, both provisions apply only to instances of
erroneous payment or illegal collection of internal revenue taxes.

MPCs creditable input VAT not erroneously paid

For perspective, under Sec. 105 of the NIRC, creditable input VAT is an
indirect tax which can be shifted or passed on to the buyer, transferee, or lessee of
the goods, properties, or services of the taxpayer. The fact that the subsequent sale
or transaction involves a wholly-tax exempt client, resulting in a zero-rated or
effectively zero-rated transaction, does not, standing alone, deprive the taxpayer
of its right to a refund for any unutilized creditable input VAT, albeit the
erroneous, illegal, or wrongful payment angle does not enter the equation.

xxxx

Considering the foregoing discussion, it is clear that Sec. 112 (A) of the
NIRC, providing a two-year prescriptive period reckoned from the close of the
taxable quarter when the relevant sales or transactions were made pertaining
to the creditable input VAT, applies to the instant case, and not to the other
actions which refer to erroneous payment of taxes.[46] (Emphasis supplied.)

In view of the foregoing, we find that the CTA En Banc erroneously applied Sections 114(A) and
229 of the NIRC in computing the two-year prescriptive period for claiming refund/credit of
unutilized input VAT. To be clear, Section 112 of the NIRC is the pertinent provision for the
refund/credit of input VAT. Thus, the two-year period should be reckoned from the close of the
taxable quarter when the sales were made.
The administrative claim was timely filed

Bearing this in mind, we shall now proceed to determine whether the administrative claim was
timely filed.

Relying on Article 13 of the Civil Code,[47] which provides that a year is equivalent to 365
days, and taking into account the fact that the year 2004 was a leap year, petitioner submits that
the two-year period to file a claim for tax refund/ credit for the period July 1, 2002 to September
30, 2002 expired on September 29, 2004.[48]
 We do not agree.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc.,[49] we said that as

between the Civil Code, which provides that a year is equivalent to 365 days, and
the Administrative Code of 1987, which states that a year is composed of 12 calendar months, it
is the latter that must prevail following the legal maxim, Lex posteriori derogat priori.[50] Thus:

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of
the Administrative Code of 1987 deal with the same subject matter the
computation of legal periods. Under the Civil Code, a year is equivalent to 365
days whether it be a regular year or a leap year. Under the Administrative Code
of 1987, however, a year is composed of 12 calendar months. Needless to state,
under the Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of

computing legal periods under the Civil Code and the Administrative Code of
1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the
computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of

1987 to this case, the two-year prescriptive period (reckoned from the time
respondent filed its final adjusted return on April 14, 1998) consisted of 24
calendar months, computed as follows:

Year 1 1st calendar April 15, 1998 to May 14, 1998

month
2nd calendar month May 15, 1998 to June 14, 1998
3rd calendar month June 15, 1998 to July 14, 1998
4th calendar month July 15, 1998 to August 14, 1998
5th calendar month August 15, 1998 to September 14, 1998
6th calendar month September 15, 1998 to October 14, 1998
7th calendar month October 15, 1998 to November 14, 1998
8th calendar month November 15, 1998 to December 14,
1998
9 calendar month
th December 15, 1998 to January 14, 1999
10 calendar month
th January 15, 1999 to February 14, 1999
11th calendar month February 15, 1999 to March 14, 1999
12 calendar month
th March 15, 1999 to April 14, 1999
Year 2 13 calendar April 15, 1999 to May 14, 1999
th

month
14th calendar month May 15, 1999 to June 14, 1999
15 calendar month
th June 15, 1999 to July 14, 1999
16 calendar month
th July 15, 1999 to August 14, 1999
17th calendar month August 15, 1999 to September 14, 1999
18 calendar month
th September 15, 1999 to October 14, 1999
19 calendar month
th October 15, 1999 to November 14, 1999
20 calendar month
th November 15, 1999 to December 14,
1999
21 calendar month
st December 15, 1999 to January 14, 2000
22 calendar month
nd January 15, 2000 to February 14, 2000
23rd calendar month February 15, 2000 to March 14, 2000
24 calendar month
th March 15, 2000 to April 14, 2000
 We therefore hold that respondent's petition (filed on April 14, 2000) was
filed on the last day of the 24th calendar month from the day respondent filed its
final adjusted return. Hence, it was filed within the reglementary period.[51]

Applying this to the present case, the two-year period to file a claim for tax
refund/credit for the period July 1, 2002 to September 30, 2002 expired on September 30,
2004. Hence, respondents administrative claim was timely filed.

The filing of the judicial claim was premature

However, notwithstanding the timely filing of the administrative claim, we

are constrained to deny respondents claim for tax refund/credit for having been filed in
violation of Section 112(D) of the NIRC, which provides that:

SEC. 112. Refunds or Tax Credits of Input Tax.

xxxx
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. In
proper cases, the Commissioner shall grant a refund or issue the tax credit
certificate for creditable input taxes within one hundred twenty (120) days from
the date of submission of complete documents in support of the application
filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure
on the part of the Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within thirty (30) days from the
receipt of the decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted claim with the
Court of Tax Appeals. (Emphasis supplied.)

Section 112(D) of the NIRC clearly provides that the CIR has 120 days, from the date of the
submission of the complete documents in support of the application [for tax refund/credit],
within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayers
recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on the application for tax
refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30
days.

In this case, the administrative and the judicial claims were simultaneously filed on
September 30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse
of the 120-day period. For this reason, we find the filing of the judicial claim with the CTA
premature.

Respondents assertion that the non-observance of the 120-day period is not fatal to the
filing of a judicial claim as long as both the administrative and the judicial claims are filed within
the two-year prescriptive period[52] has no legal basis.

There is nothing in Section 112 of the NIRC to support respondents view. Subsection (A)
of the said provision states that any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two years after the close of the taxable quarter when the sales
were made, apply for the issuance of a tax credit certificate or refund of creditable input tax
due or paid attributable to such sales. The phrase within two (2) years x x x apply for the issuance
of a tax credit certificate or refund refers to applications for refund/credit filed with the CIR and
not to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the
same provision, which states that the CIR has 120 days from the submission of complete
documents in support of the application filed in accordance with Subsections (A) and (B)
within which to decide on the claim.

In fact, applying the two-year period to judicial claims would render nugatory Section
112(D) of the NIRC, which already provides for a specific period within which a taxpayer should
appeal the decision or inaction of the CIR. The second paragraph of Section 112(D) of the NIRC
envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day
period; and (2) when no decision is made after the 120-day period. In both instances, the taxpayer
has 30 days within which to file an appeal with the CTA. As we see it then, the 120-day period
is crucial in filing an appeal with the CTA.
With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc.[53] relied upon
by respondent, we find the same inapplicable as the tax provision involved in that case is Section
306, now Section 229 of the NIRC. And as already discussed, Section 229 does not apply to
refunds/credits of input VAT, such as the instant case.

In fine, the premature filing of respondents claim for refund/credit of input VAT before
the CTA warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.

WHEREFORE, the Petition is hereby GRANTED. The assailed July 30, 2008 Decision
and the October 6, 2008 Resolution of the Court of Tax Appeals are hereby REVERSEDand SET
ASIDE. The Court of Tax Appeals Second Division is DIRECTED to dismiss CTA Case No. 7065
for having been prematurely filed.

SO ORDERED.
G.R. No. 183994 June 30, 2014

WILLIAM CO a.k.a. XU QUING HE, Petitioner,

vs.
NEW PROSPERITY PLASTIC PRODUCTS, represented by ELIZABETH
UY,1 Respondent.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the 1997 Revised Rules
on Civil Procedure (Rules) are the April 30, 20082 and August 1, 20083 Resolutions of the
Court of Appeals (CA) in CA-G.R. SP No. 102975, which dismissed the petition and
denied the motion for reconsideration, respectively. In effect, the CA affirmed the January
28, 2008 Decision4 of the Regional Trial Court (RTC) Branch 121 of Caloocan City, which
annulled and set aside the Orders dated September 4, 20065 and November 16, 20066 of
the Metropolitan Trial Court (MeTC), Branch 50 of Caloocan City, permanently
dismissing Criminal Case Nos. 206655-59, 206661-77 and 209634.

The facts are simple and undisputed:

Respondent New Prosperity Plastic Products, represented by Elizabeth Uy (Uy), is the

private complainant in Criminal Case Nos. 206655-59, 206661-77 and 209634 for Violation
of Batas Pambansa (B.P.) Bilang 22 filed against petitioner William Co (Co), which were
raffled to the MeTC Branch. 49 of Caloocan City. In the absence of Uy and the private
counsel, the cases were provisionally dismissed on June 9, 2003 in open court pursuant
to Section 8, Rule 117 of the Revised Rules of Criminal Procedure (Rules).7 Uy received a
copy of the June9, 2003 Order on July 2, 2003, while her counsel-of-record received a copy
a day after.8 On July 2, 2004, Uy, through counsel, filed a Motion to Revive the Criminal
Cases.9 Hon. Belen B. Ortiz, then Presiding Judge of the MeTC Branch 49, granted the
motion on October 14, 2004 and denied Co’s motion for reconsideration.10 When Co
moved for recusation, Judge Ortiz inhibited herself from handling the criminal cases per
Order dated January 10, 2005.11The cases were, thereafter, raffled to the MeTC Branch 50
of Caloocan City. On March 17, 2005, Co filed a petition for certiorari and prohibition
with prayer for the issuance of a temporary restraining order (TRO)/writ of preliminary
injunction (WPI) before the RTC of Caloocan City challenging the revival of the criminal
cases.12 It was, however, dismissed for lack of merit on May 23, 2005.13 Co’s motion for
reconsideration was, subsequently, denied on December 16, 2005.14 Co then filed a
petition for review on certiorari under Rule 45 before the Supreme Court, which was
docketed as G.R. No. 171096.15 We dismissed the petition per Resolution dated February
13, 2006.16There being no motion for reconsideration filed, the dismissal became final and
executory on March 20, 2006.17

Before the MeTC Branch 50 where Criminal Case Nos. 206655-59, 206661-77 and 209634
were re-raffled after the inhibition of Judge Ortiz, Co filed a "Motion for Permanent
Dismissal" on July 13, 2006.18 Uy opposed the motion, contending that the motion raised
the same issues already resolved with finality by this Court in G.R. No. 171096.19In spite
of this, Judge Esteban V. Gonzaga issued an Order dated September 4, 2006 granting Co’s
motion.20 When the court subsequently denied Uy’s motion for reconsideration on
November 16, 2006,21 Uy filed a petition for certiorari before the RTC of Caloocan City.
On January 28, 2008, Hon. Judge Adoracion G. Angeles of the RTC Branch 121 acted
favorably on the petition, annulling and setting aside the Orders dated September 4, 2006
and November 16, 2006 and directing the MeTC Branch 50 to proceed with the trial of the
criminal cases.22 Co then filed a petition for certiorari before the CA, which, as aforesaid,
dismissed the petition and denied his motion for reconsideration. Hence, this present
petition with prayer for TRO/WPI.
According to Co, the following issues need to be resolved in this petition:

1. WHETHER OR NOT THE DISMISSAL OF THE CRIMINAL CASES AGAINST

PETITIONER ONTHE GROUND OF DENIAL OF HIS RIGHT TO SPEEDY TRIAL
CONSTITUTES FINAL DISMISSAL OF THESE CASES;

2. WHETHER OR NOT THE METC ACTED WITH JURISDICTION IN REVIVING

THE CRIMINAL CASES AGAINST PETITIONER WHICH WERE DISMISSED
ON THE GROUND OF DENIAL OF HIS RIGHT TO SPEEDY TRIAL; and

3. ASSUMING POR GRATIA ARGUMENTITHE CASES WERE ONLY

PROVISIONALLY DISMISSED:

a. WHETHER THE ONE-YEAR TIMEBAR OF THEIR REVIVAL IS

COMPUTED FROM ISSUANCE OF THE ORDER OF PROVISIONAL
DISMISSAL;

b. WHETHER THE ACTUAL NUMBER OF DAYS IN A YEAR IS THE

BASIS FOR COMPUTING THE ONE-YEAR TIME BAR;

c. WHETHER THE PROVISIONALLY DISMISSED CASES AGAINST

PETITIONER ARE REVIVED IPSO FACTO BY THE FILING OF MOTION
TO REVIVE THESE CASES.23

Co argues that the June 9, 2003 Order provisionally dismissing Criminal Case Nos.
206655-59, 206661-77 and 209634 should be considered as a final dismissal on the ground
that his right to speedy trial was denied. He reasons out that from his arraignment on
March 4, 2002 until the initial trial on June 9, 2003, there was already a "vexatious,
capricious and oppressive" delay, which is in violation of Section 6 of Republic Act 8493
(Speedy Trial Act of 1998)24 and Section 2, Paragraph 2, Rule 119 of the Revised Rules of
Criminal Procedure25 mandating that the entire trial period should not exceed 180 days
from the first day of trial. As the dismissal is deemed final, Co contends that the MeTC
lost its jurisdiction over the cases and cannot reacquire jurisdiction over the same based
on a mere motion because its revival would already put him in double jeopardy.

Assuming that the criminal cases were only provisionally dismissed, Co further posits
that such dismissal became permanent one year after the issuance of the June 9, 2003
Order, not after notice to the offended party. He also insists that both the filing of the
motion to revive and the trial court’s issuance of the order granting the revival must be
within the one-year period. Lastly, even assuming that the one-year period to revive the
criminal cases started on July 2, 2003 when Uy received the June 9, 2003 Order, Co asserts
that the motion was filed one day late since year 2004 was a leap year.

The petition is unmeritorious.

At the outset, it must be noted that the issues raised in this petition were also the meat of
the controversy in Co’s previous petition in G.R. No. 171096, which We dismissed per
Resolution dated February 13, 2006. Such dismissal became final and executory on March
20, 2006. While the first petition was dismissed mainly due to procedural infirmities, this
Court nonetheless stated therein that "[i]n any event, the petition lacks sufficient showing
that respondent court had committed any reversible error in the questioned judgment to
warrant the exercise by this Court of its discretionary appellate jurisdiction in this case."
Hence, upon the finality of Our February 13, 2006 Resolution in G.R. No. 171096, the same
already constitutes as res judicata between the parties. On this ground alone, this petition
should have been dismissed outright.

Even if We are to squarely resolve the issues repeatedly raised in the present petition,
Co’s arguments are nonetheless untenable on the grounds as follows:
First, Co’s charge that his right to a speedy trial was violated is baseless. Obviously, he
failed to show any evidence that the alleged "vexatious, capricious and oppressive" delay
in the trial was attended with malice or that the same was made without good cause or
justifiable motive on the part of the prosecution. This Court has emphasized that "‘speedy
trial’ is a relative term and necessarily a flexible concept."26 In determining whether the
accused's right to speedy trial was violated, the delay should be considered in view of the
entirety of the proceedings.27 The factors to balance are the following: (a) duration of the
delay; (b) reason therefor; (c) assertion of the right or failure to assert it; and (d) prejudice
caused by such delay.28 Surely, mere mathematical reckoning of the time involved would
not suffice as the realities of everyday life must be regarded in judicial proceedings
which, after all, do not exist in a vacuum, and that particular regard must be given to the
facts and circumstances peculiar to each case.29 "While the Court recognizes the accused's
right to speedy trial and adheres to a policy of speedy administration of justice, we cannot
deprive the State of a reasonable opportunity to fairly prosecute criminals. Unjustified
postponements which prolong the trial for an unreasonable length of time are what
offend the right of the accused to speedy trial."30

Second, Co is burdened to establish the essential requisites of the first paragraph of

Section 8, Rule 117 of the Rules, which are conditions sine qua non to the application of
the time-bar in the second paragraph thereof, to wit: (1) the prosecution with the express
conformity of the accused or the accused moves for a provisional (sin perjuicio) dismissal
of the case; or both the prosecution and the accused move for a provisional dismissal of
the case; (2) the offended party is notified of the motion for a provisional dismissal of the
case; (3) the court issues an order granting the motion and dismissing the case
provisionally; and (4) the public prosecutor is served with a copy of the order of
provisional dismissal of the case.31 In this case, it is apparent from the records that there
is no notice of any motion for the provisional dismissal of Criminal Cases Nos. 206655-
59, 206661-77 and 209634 or of the hearing thereon which was served on the private
complainant at least three days before said hearing as mandated by Section 4, Rule 15 of
the Rules.32 The fact is that it was only in open court that Co moved for provisional
dismissal "considering that, as per records, complainant had not shown any interest to
pursue her complaint."33 The importance of a prior notice to the offended party of a
motion for provisional dismissal is aptly explained in People v. Lacson:34

x x x It must be borne in mind that in crimes involving private interests, the new rule
requires that the offended party or parties or the heirs of the victims must be given
adequate a priori notice of any motion for the provisional dismissal of the criminal case.
Such notice may be served on the offended party or the heirs of the victim through the
private prosecutor, if there is one, or through the public prosecutor who in turn must
relay the notice to the offended party or the heirs of the victim to enable them to confer
with him before the hearing or appear in court during the hearing. The proof of such
service must be shown during the hearing on the motion, otherwise, the requirement of
the new rule will become illusory. Such notice will enable the offended party or the heirs
of the victim the opportunity to seasonably and effectively comment on or object to the
motion on valid grounds, including: (a) the collusion between the prosecution and the
accused for the provisional dismissal of a criminal case thereby depriving the State of its
right to due process; (b) attempts to make witnesses unavailable; or (c) the provisional
dismissal of the case with the consequent release of the accused from detention would
enable him to threaten and kill the offended party or the other prosecution witnesses or
flee from Philippine jurisdiction, provide opportunity for the destruction or loss of the
prosecution’s physical and other evidence and prejudice the rights of the offended party
to recover on the civil liability of the accused by his concealment or furtive disposition of
his property or the consequent lifting of the writ of preliminary attachment against his
property.35

Third, there is evident want of jurisprudential support on Co’s supposition that the
dismissal of the cases became permanent one year after the issuance of the June 9, 2003
Order and not after notice to the offended party. When the Rules states that the
provisional dismissal shall become permanent one year after the issuance of the order
temporarily dismissing the case, it should not be literally interpreted as such. Of course,
there is a vital need to satisfy the basic requirements of due process; thus, said in one case:

Although the second paragraph of the new rule states that the order of dismissal shall
become permanent one year after the issuance thereof without the case having been
revived, the provision should be construed to mean that the order of dismissal shall
become permanent one year after service of the order of dismissal on the public
prosecutor who has control of the prosecution without the criminal case having been
revived. The public prosecutor cannot be expected to comply with the timeline unless he
is served with a copy of the order of dismissal.36

We hasten to add though that if the offended party is represented by a private counsel
the better rule is that the reckoning period should commence to run from the time such
private counsel was actually notified of the order of provisional dismissal. When a party
is represented by a counsel, notices of all kinds emanating from the court should be sent
to the latter at his/her given address.37 Section 2, Rule 13 of the Rules analogously
provides that if any party has appeared by counsel, service upon the former shall be made
upon the latter.38

Fourth, the contention that both the filing of the motion to revive the case and the court
order reviving it must be made prior to the expiration of the one-year period is
unsustainable. Such interpretation is not found in the Rules. Moreover, to permit
otherwise would definitely put the offended party at the mercy of the trial court, which
may wittingly or unwittingly not comply. Judicial notice must be taken of the fact that
most, if not all, of our trial court judges have to deal with clogged dockets in addition to
their administrative duties and functions. Hence, they could not be expected to act at all
times on all pending decisions, incidents, and related matters within the prescribed
period of time. It is likewise possible that some of them, motivated by ill-will or malice,
may simply exercise their whims and caprices in not issuing the order of revival on time.

Fifth, the fact that year 2004 was a leap year is inconsequential to determine the timeliness
of Uy’s motion to revive the criminal cases. What is material instead is Co’s categorical
admission that Uy is represented by a private counsel who only received a copy of the
June 9, 2003 Order on July 3, 2003. Therefore, the motion was not belatedly filed on July
2, 2004. Since the period for filing a motion to revive is reckoned from the private
counsel's receipt of the order of provisional dismissal, it necessarily follows that the
reckoning period for the permanent dismissal is likewise the private counsel's date of
receipt of the order of provisional dismissal.

And Sixth, granting for the sake of argument that this Court should take into account
2004 as a leap year and that the one-year period to revive the case should be reckoned
from the date of receipt of the order of provisional dismissal by Uy, We still hold that the
motion to revive the criminal cases against Co was timely filed. A year is equivalent to
365 days regardless of whether it is a regular year or a leap year.39 Equally so, under the
Administrative Code of 1987, a yearis composed of 12 calendar months. The number of
days is irrelevant. This was our ruling in Commissioner of Internal Revenue v.
Primetown Property Group, Inc.,40 which was subsequently reiterated in Commissioner
of Internal Revenue v. Aichi Forging Company of Asia, Inc.,41 thus:

x x x [In] 1987, EO 292 or the Administrative Code of 1987 was enacted. Section 31,
Chapter VIII, Book I thereof provides:

Sec. 31.Legal Periods.- "Year" shall be understood to be twelve calendar months; "month"
of thirty days, unless it refers to a specific calendar month in which case it shall be
computed according to the number of days the specific month contains; "day", to a day
of twenty-four hours and; "night" from sunrise to sunset. (emphasis supplied)
A calendar month is "a month designated in the calendar without regard to the number
of days it may contain." It is the "period of time running from the beginning of a certain
numbered day up to, but not including, the corresponding numbered day of the next
month, and if there is not a sufficient number of days in the next month, then up to and
including the last day of that month." To illustrate, one calendar month from December
31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month from
January 31, 2008 will be from February 1, 2008 until February 29, 2008.42

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case,
the one-year period reckoned from the time Uy received the order of dismissal on July2,
2003 consisted of 24 calendar months, computed as follows:

1st calendar month July 3, 2003 to August 2, 2003

2nd calendar month August 3, 2003 to September 2, 2003

3rd calendar month September 3, 2003 to October 2, 2003

4th calendar month October 3, 2003 to November 2, 2003

5th calendar month November 3, 2003 to December 2, 2003

6th calendar month December 3, 2003 to January 2, 2004

7th calendar month January 3, 2004 to February 2, 2004

8th calendar month February 3, 2004 to March 2, 2004

9th calendar month March 3, 2004 to April 2, 2004

10th calendar month April 3, 2004 to May 2, 2004

11th calendar month May 3, 2004 to June 2, 2004

12th calendar month June 3, 2004 to July 2, 2004

In the end, We find it hard to disregard the thought that the instant petition was filed as
a dilatory tactic to prosecute Criminal Case Nos. 206655-59, 206661-77 and 209634. As
correctly pointed out by Uy since the time when the "Motion for Permanent Dismissal"
was filed, the issues raised herein were already resolved with finality by this Court in
G.R. No. 171096. Verily, Co, acting through the guidance and advice of his counsel, Atty.
Oscar C. Maglaque, adopted a worthless and vexatious legal maneuver for no purpose
other than to delay the trial court proceedings. It appears that Atty. Maglaque’s conduct
contravened the Code of Professional Responsibility which enjoins lawyers to observe
the rules of procedure and not to misuse them to defeat the ends of justice (Rule 10.03,
Canon 10) as well as not to unduly delay a case or misuse court processes (Rule 12.04,
Canon 12). The Lawyer’s Oath also upholds in particular:

x x x I will not wittingly or willingly promote or sue any groundless, false or unlawful
suit, nor give aid nor consent to the same; I will delay no man for money or malice, and
will conduct myself as a lawyer according to the best of my knowledge and discretion
with all good fidelity as well to the courts as to my clients x x x.1âwphi1

This Court has repeatedly impressed upon counsels that the need for the prompt
termination of litigation is essential to an effective and efficient administration of justice.
In Spouses Aguilar v. Manila Banking Corporation,43 We said:
The Court reminds petitioners' counsel of the duty of lawyers who, as officers of the court,
must see to it that the orderly administration of justice must not be unduly impeded. It is
the duty of a counsel to advise his client, ordinarily a layman on the intricacies and
vagaries of the law, on the merit or lack of merit of his case. If he finds that his client's
cause is defenseless, then it is his bounden duty to advise the latter to acquiesce and
submit, rather than traverse the incontrovertible. A lawyer must resist the whims and
caprices of his client, and temper his client's propensity to litigate. A lawyer’s oath to
uphold the cause of justice is superior to his duty to his client; its primacy is
indisputable.44

WHEREFORE, premises considered, the Petition is DENIED. The April 30, 2008 and
August 1, 2008 Resolutions of the Court of Appeals, respectively, in CA-G.R. SP No.
102975, which affirmed the January 28, 2008 Decision of the Regional Trial Court, Branch
121 of Caloocan City, annulling and setting aside the Orders dated September 4, 2006 and
November 16, 2006 of the Metropolitan Trial Court, Branch 50 of Caloocan City that
permanently dismissed Criminal Case Nos. 206655-59, 206661-77 and 209634, are hereby
AFFIRMED. Costs of suit to be paid by the petitioner.

The Commission on Bar Discipline-Integrated Bar of the Philippines is DIRECTED to

investigate Atty. Oscar C. Maglaque for his acts that appear to have violated the Lawyer's
Oath, the Code of Professional Responsibility, and the Rule on Forum Shopping.

SO ORDERED.
G.R. No. L-44896 July 31, 1936

RODOLFO A. SCHNECKENBURGER, petitioner,

vs.
MANUEL V. MORAN, Judge of First Instance of Manila, respondent.

Cardenas and Casal for petitioner.

Office of the Solicitor-General Hilado for respondent.

ABAD SANTOS, J.:

The petitioner was duly accredited honorary consul of Uruguay at Manila, Philippine
Islands on June 11, 1934. He was subsequently charged in the Court of First Instance of
Manila with the crime of falsification of a private document. He objected to the
jurisdiction of the court on the ground that both under the Constitution of the United
States and the Constitution of the Philippines the court below had no jurisdiction to try
him. His objection having been overruled, he filed this petition for a writ of prohibition
with a view to preventing the Court of First Instance of Manila from taking cognizance
of the criminal action filed against him.

In support of this petition counsel for the petitioner contend (1) That the Court of First
Instance of Manila is without jurisdiction to try the case filed against the petitioner for
the reason that under Article III, section 2, of the Constitution of the United States, the
Supreme Court of the United States has original jurisdiction in all cases affecting
ambassadors, other public ministers, and consuls, and such jurisdiction excludes the
courts of the Philippines; and (2) that even under the Constitution of the Philippines
original jurisdiction over cases affecting ambassadors, other public ministers, and
consuls, is conferred exclusively upon the Supreme Court of the Philippines.

This case involves no question of diplomatic immunity. It is well settled that a consul is
not entitled to the privileges and immunities of an ambassador or minister, but is subject
to the laws and regulations of the country to which he is accredited. (Ex parte Baiz, 135 U.
S., 403; 34 Law. ed., 222.) A consul is not exempt from criminal prosecution for violations
of the laws of the country where he resides. (U. S. vs. Ravara, 2 Dall., 297; 1 Law. ed., 388;
Wheaton's International Law [2d ed.], 423.) The substantial question raised in this case is
one of jurisdiction.

1. We find no merit in the contention that Article III, section 2, of the Constitution
of the United States governs this case. We do not deem it necessary to discuss the
question whether the constitutional provision relied upon by the petitioner
extended ex propio vigore over the Philippines. Suffice it to say that the
inauguration of the Philippine Commonwealth on November 15, 1935, has
brought about a fundamental change in the political and legal status of the
Philippines. On the date mentioned the Constitution of the Philippines went into
full force and effect. This Constitution is the supreme law of the land. Not only the
members of this court but all other officers, legislative, executive and judicial, of
the Government of the Commonwealth, are bound by oath to support the
Constitution. (Article XIII, section 2.) This court owes its own existence to the great
instrument, and derives all its powers therefrom. In the exercise of its powers and
jurisdiction, this court is bound by the provisions of the Constitution. The
Constitution provides that the original jurisdiction of this court "shall include all
cases affecting ambassadors, other public ministers, and consuls." In deciding the
instant case this court cannot go beyond this constitutional provision.

2. It remains to consider whether the original jurisdiction thus conferred upon this
court by the Constitution over cases affecting ambassadors, other public ministers,
and consuls, is exclusive. The Constitution does not define the jurisdiction of this
court in specific terms, but merely provides that "the Supreme Court shall have
 such original and appellate jurisdiction as may be possessed and exercised by the
Supreme Court of the Philippine Islands at the time of the adoption of this
Constitution." It then goes on to provide that the original jurisdiction of this court
"shall include all cases affecting ambassadors, other public ministers, and consuls."

In the light of the constitutional provisions above adverted to, the question arises whether
the original jurisdiction possessed and exercised by the Supreme Court of the Philippine
Islands at the time of the adoption of the Constitution was exclusive.

The original jurisdiction possessed and exercised by the Supreme Court of the Philippine
Islands at the time of the adoption of the Constitution was derived from section 17 of Act
No. 136, which reads as follows: The Supreme Court shall have original jurisdiction to
issue writs of mandamus, certiorari, prohibition, habeas corpus, and quo warrantoin the
cases and in the manner prescribed in the Code of Civil Procedure, and to hear and
determine the controversies thus brought before it, and in other cases provided by law."
Jurisdiction to issue writs of quo warranto, certiorari, mandamus, prohibition, and habeas
corpus was also conferred on the Courts of First Instance by the Code of Civil Procedure.
(Act No. 190, secs. 197, 217, 222, 226, and 525.) It results that the original jurisdiction
possessed and exercised by the Supreme Court of the Philippine Islands at the time of the
adoption of the Constitution was not exclusive of, but concurrent with, that of the Courts
of First Instance. Inasmuch as this is the same original jurisdiction vested in this court by
the Constitution and made to include all cases affecting ambassadors, other public
ministers, and consuls, it follows that the jurisdiction of this court over such cases is not
exclusive.

The conclusion we have reached upon this branch of the case finds support in the
pertinent decisions of the Supreme Court of the United States. The Constitution of the
United States provides that the Supreme Court shall have "original jurisdiction" in all
cases affecting ambassadors, other public ministers, and consuls. In construing this
constitutional provision, the Supreme Court of the United States held that the "original
jurisdiction thus conferred upon the Supreme Court by the Constitution was not
exclusive jurisdiction, and that such grant of original jurisdiction did not prevent
Congress from conferring original jurisdiction in cases affecting consuls on the
subordinate courts of the Union. (U. S. vs. Ravara, supra; Bors vs. Preston, 111 U. S., 252;
28 Law. ed., 419.)

3. The laws in force in the Philippines prior to the inauguration of the Commonwealth
conferred upon the Courts of the First Instance original jurisdiction in all criminal cases
to which a penalty of more than six months' imprisonment or a fine exceeding one
hundred dollars might be imposed. (Act No. 136, sec. 56.) Such jurisdiction included the
trial of criminal actions brought against consuls for, as we have already indicated,
consuls, not being entitled to the privileges and immunities of ambassadors or ministers,
are subject to the laws and regulations of the country where they reside. By Article XV,
section 2, of the Constitution, all laws of the Philippine Islands in force at the time of the
adoption of the Constitution were to continue in force until the inauguration of the
Commonwealth; thereafter, they were to remain operative, unless inconsistent with the
Constitution until amended, altered, modified, or repealed by the National Assembly.
The original jurisdiction granted to the Courts of First Instance to try criminal cases was
not made exclusively by any, law in force prior to the inauguration of the
Commonwealth, and having reached the conclusion that the jurisdiction conferred upon
this court by the Constitution over cases affecting ambassadors, other public ministers,
and consuls, is not an exclusive jurisdiction, the laws in force at the time of the adoption
of the Constitution, granting the Courts of First Instance jurisdiction in such cases, are
not inconsistent with the Constitution, and must be deemed to remain operative and in
force, subject to the power of the National Assembly to amend alter, modify, or repeal
the same. (Asiatic P. Co. vs. Insular Collector of Customs, U. S. Supreme Court [Law. ed.],
Adv. Ops., vol. 80, No. 12, pp. 620, 623.)
We conclude, therefore, that the Court of First Instance of Manila has jurisdiction to try
the petitioner, an that the petition for a writ of prohibition must be denied. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Diaz, and Recto, JJ., concur.

Separate Opinions

LAUREL, J., concurring:

In my humble opinion, there are three reasons why the jurisdiction of this court over the
petitioner in the instant case is concurrent and not exclusive. The strictly legal reason is
set forth in the preceding illuminating opinion. The other reasons are (a) historical and
based on what I consider is the (b) theory upon which the grant of legislative authority
under our Constitution is predicated.

(a) As the provision in our Constitution regarding jurisdiction in cases affecting

ambassadors, other public ministers, and consuls, has been taken from the Constitution
of the United States, considerable light would be gained by an examination of the history
and interpretation thereof in the United States.

The fifth resolution of the New Jersey plan (Paterson resolutions of June 15, 1787) gave
the Supreme Court of the United States, the only national court under the plan, authority
to hear and determine "by way of appeal, in the dernier resort . . . all cases touching the
rights of ambassadors . . . ." This clause, however, was not approved. On July 18, the
Convention of 1787 voted an extraordinarily broad jurisdiction to the Supreme Court
extending "to cases arising under laws passed by the general legislature, and to such other
questions as involve the national peace and harmony." This general proposition was
considerably narrowed by Randolph in his draft of May 29 which, however, did not
mention anything about ambassadors, other public ministers and consuls. But the
Committee of Detail, through Rutledge, reported on August 6 as follows: "Article XI,
Section 3. The jurisdiction of the Supreme Court shall extend . . . to all cases affecting
ambassadors, other public ministers and consuls; . . . In . . . cases affecting ambassadors,
other public ministers and consuls, . . . this jurisdiction shall be original . . . ."On
September 12, the Committee on Style reported the provision as follows: "Article III,
Section 2. The judicial power shall extend . . . to all cases affecting ambassadors, other
public ministers and consuls . . . In (all) cases affecting ambassadors, other public
ministers and consuls . . . the Supreme Court shall have original jurisdiction." This
provision was approved in the convention with hardly any amendment or debate and is
now found in clause 2, section 2 of Article III of the Constitution of the United States. (The
Constitution and the Courts, Article on "Growth of the Constitution", by William M.
Meigs, New York, 1924, vol. 1, pp. 228, 229. See also Farrand, Records of the Federal
Convention of 1787, Yale University Press, 1934, 3 vols.; Warren, The Making of the
Constitution, Boston, 1928, pp. 534-537.)

The word "original", however, was early interpreted as not exclusive. Two years after the
adoption of the Federal Constitution, or in 1789, the First Judiciary Act (Act of September
24, 1789, 1 Stat., c. 20, 687) was approved by the first Congress creating the United States
District and Circuit Courts which were nisi prius courts, or courts of first instance which
dealt with different items of litigation. The district courts are now the only federal courts
of first instance, the circuit courts having been abolished by the Act of March 3, 1911,
otherwise known as the Judicial Code. The Judiciary Act of 1787 invested the district
courts with jurisdiction, exclusively of the courts of the several states, of all suits against
consuls or vice-consuls and the Supreme Court of the United States with original but not
exclusive jurisdiction of all suits in which a consul or vice-consul shall be a party. By the
passage of the Act of February 18, 1875 (18 Stat., 470, c. 137), the clause giving the federal
courts exclusive jurisdiction was repealed and, since then state courts have had
concurrent jurisdiction with the federal courts over civil or criminal proceedings against
a consul or vice-consul. At the present time, the federal courts exercise exclusive
jurisdiction "of suits or proceedings against ambassadors or other or other public
ministers, or their domestics or domestic servants, as a court of law can have consistently
with the law of nations; and original, but not exclusive, jurisdiction, of all suits brought
by ambassadors or other public ministers, or in which a consul or vice-consul is a party."
(Act of March 8, 1911, 36 Stat., 1156, reenacting sec. 687 of the Act of September 24, 1789;
28 U. S. C. A., sec. 341; Hopkins' Federal Judicial Code, 4th ed., by Babbit, 1934, sec. 233.)
The district courts now have original jurisdiction of all suits against consuls and vice-
consuls." (Act of March 3, 1911, 36 Stat., 1093; 28 U. S. C. A., sec. 41, subsec. 18; Hopkins'
Federal Judicial Code, 4th ed., by Babbit, 1934, sec. 24, par. 18.)

The Judiciary Act of 1789 was one of the early and most satisfactory acts passed by the
Congress of the United States. It has remained essentially unchanged for more than 145
years. It was prepared chiefly by Oliver Ellsworth of Connecticut (1 Ann. Cong., 18, April
7, 1789) one of the ablest jurists in the Constitutional Convention, who was later Chief
Justice of the Supreme Court of the United States (1796-1800). It is interesting to note that
10 of the 18 senators and 8 of the members of the House of the first Congress had been
among the 55 delegates who actually attended the Convention that adopted the federal
Constitution (Warren, Congress, the Constitution and the Supreme Court [Boston, 1935],
p. 99). When, therefore, the first Congress approved the Judiciary Act of 1789 vesting in
the Supreme Court original but not exclusive jurisdiction of all suits in which a consul or
a vice-consul shall be a party, express legislative interpretation as to the meaning of the
word "original" as not being exclusive was definitely made and this interpretation has
never been repudiated. As stated by the Supreme Court of the United States in
Ames vs. Kansas ([1884], 111 U. S., 449; 4 S. Ct., 437; 28 Law. ed., 482):

In view of the practical construction put on this provision of the Constitution by

Congress, at the very moment of the organization of the government, and of the
significant fact that, from 1789 until now, no court of the United States has ever in
its actual adjudications determined to the contrary, we are unable to say that it is
not within the power of Congress to grant to the inferior courts of the United States
jurisdiction in cases where the Supreme Court has been vested by the Constitution
with original jurisdiction. It rests with the legislative department of the
government to say to what extent such grants shall be made, and it may safely be
assumed that nothing will ever be done to encroach upon the high privileges of
those for whose protection the constitutional provision was intended. At any rate,
we are unwilling to say that the power to make the grant does not exist.

Dicta in some earlier cases seem to hold that the word "original" means "exclusive" and
as observed by Justice Field in United States vs. Louisiana ([1887], 123 U. S., 36; 8 S. Ct.,
17; 31 Law. ed., 69), the question has given rise to some differences of opinion among the
earlier members of the Supreme Court of the United States. (See, for instance, dissenting
opinion of Iredell, J., in U. S. vs. Ravara [1793], 2 Dall., 297; 1 Law. ed., 388.) Reliance was
had on more or less general expressions made by Chief Justice Marshall in the case of
Marbury vs. Madison ([1803], 1 Cranch, 137; 2 Law. ed., 60), where it was said:

"If congress remains at liberty to give this court appellate jurisdiction, where the
constitution has declared their jurisdiction shall be original; and original jurisdiction
where the constitution has declared it shall be appellate; the distribution of jurisdiction,
made in the constitution, is form without substance." But Chief Justice Marshall who
penned the decision in this case in 1803 had occasion later, in 1821, to explain the meaning
and extent of the pronouncements made in the Marbury case. He said:

In the case of Marbury vs. Madison ([1803], 1 Cranch [U. S.], 137, 172; 2 Law. ed.,
60), the single question before the court, so far as that case can be applied to this,
was, whether the legislature could give this court original jurisdiction in a case in
 which the Constitution had clearly not given it, and in which no doubt respecting
the construction of the article could possibly be raised. The court decided, and we
think very properly, that the legislature could not give original jurisdiction in such
a case. But, in the reasoning of the court in support of this decision, some
expressions are used which go far beyond it. The counsel for Marbury had insisted
on the unlimited discretion of the legislature in the apportionment of the judicial
power; and it is against this argument that the reasoning of the court is directed.
They say that, if such had been the intention of the article, "it would certainly have
been useless to proceed farther than to define the judicial power, and the tribunals
in which it should be vested." The court says, that such a construction would
render the clause, dividing the jurisdiction of the court into original and appellate,
totally useless; that "affirmative words are often, in their operation, negative of
other objects than those which are affirmed; and, in this case (in the case of
Marbury vs. Madison), a negative or exclusive sense must be given to them, or
they have no operation at all." "It cannot be presumed," adds the court, "that any
clause in the Constitution is intended to be without effect; and, therefore, such a
construction is inadmissible, unless the words require it." The whole reasoning of
the court proceeds upon the idea that the affirmative words of the clause giving
one sort of jurisdiction, must imply a negative of any other sort of jurisdiction,
because otherwise the words would be totally inoperative, and this reasoning is
advanced in a case to which it was strictly applicable. If in that case original
jurisdiction could have been exercised, the clause under consideration would have
been entirely useless. Having such cases only in its view, the court lays down a
principle which is generally correct, in terms much broader than the decision, and
not only much broader than the reasoning with which that decision is supported,
but in some instances contradictory to its principle. The reasoning sustains the
negative operation of the words in that case, because otherwise the clause would
have no meaning whatever, and because such operation was necessary to give
effect to the intention of the article. The effort now made is, to apply the conclusion
to which the court was conducted by that reasoning in the particular case, to one
in which the words have their full operation when understood affirmatively, and
in which the negative, or exclusive sense, is to be so used as to defeat some of the
great objects of the article. To this construction the court cannot give its assent. The
general expressions in the case of Marbury vs. Madison must be understood with
the limitations which are given to them in this opinion; limitations which in no
degree affect the decision in that case, or the tenor of its reasoning.
(Cohens vs. Virginia [1821], 6 Wheat., 264, 400; 5 Law. ed., 257.)

What the Supreme Court in the case of Marbury vs. Madison held then was that Congress
could not extend its original jurisdiction beyond the cases expressly mentioned in the
Constitution, the rule of construction being that affirmative words of the Constitution
declaring in what cases the Supreme Court shall have original jurisdiction must be
construed negatively as to all other cases. (See Ex parte Vallandigham [1864], 1 Wall., 243,
252; 17 Law. ed., 589; Martin vs. Hunter's Lessee [1816], 1 Wheat., 305, 330; 4 Law. ed., 97;
U. S. vs. Haynes [D. C. Mass., 1887], 29 Fed., 691, 696.) That was all.

It should be observed that Chief Justice Marshall concurred in the opinion in the case of
Davis vs. Packard (11833], 7 Pet., 276; 8 Law. ed., 684). In this case the jurisdiction of the
state court of New York over a civil suit against a foreign consul was denied solely on the
ground that jurisdiction had been conferred in such a case upon the district courts of the
United States exclusively of the state courts. Such a ground, says Justice Harlan in
Bors vs. Preston ([1884], 111 U. S., 252; 4 S. Ct., 407; 28 Law. ed., 419), would probably not
have been given had it been believed that the grant of original jurisdiction to the Supreme
Court deprived Congress of the power to confer concurrent original jurisdiction in such
cases upon subordinate courts of the Union, concluding that the decision in the case "may
be regarded, as an affirmance of the constitutionality of the Act of 1789, giving original
jurisdiction in such cases, also, to District Courts of the United States." Of the seven
justices who concurred in the judgment in the case of Davis, five participated in the
decision of Osborn vs. Bank of the United States ([1824], 9 Wheat., 738; 6 Law. ed., 204),
also penned by Chief Justice Marshall and relied upon as authority together with
Marbury vs. Madison, supra.

The rule enunciated in Bors vs. Preston, supra, is the one followed in the United States.
The question involved in that case was whether the Circuit Court then existing had
jurisdiction under the Constitution and laws of the United States to hear and determine
any suit whatever against the consul of a foreign government. Justice Harlan said:

The Constitution declares that "The judicial power of the United States shall extend . . . to
all cases affecting ambassadors or other public ministers and consuls;" to controversies
between citizens of a state and foreign citizens or subjects; that "In all cases affecting
ambassadors, other public ministers and consuls, . . . the Supreme Court shall have
original jurisdiction;" and that in all other cases previously mentioned in the same clause
"The Supreme Court shall have appellate jurisdiction, both as to law and fact, with such
exceptions and under such regulations as the Congress shall make." The Judiciary Act of
1789 invested the District Courts of the United States with jurisdiction, exclusively of the
courts of the several States, of all suits against consuls or vice-consuls, except for offenses
of a certain character; this court, with "Original, but not exclusive, jurisdiction of all suits
. . . in which a consul or vice-consul shall be a party;" and the circuit courts with
jurisdiction of civil suits in which an alien is a party. (l Stat. at L., 76-80.) In this act we
have an affirmance, by the first Congress — many of whose members participated in the
Convention which adopted the Constitution and were, therefore, conversant with the
purposes of its framers — of the principle that the original jurisdiction of this court of
cases in which a consul or vice-consul is a party, is not necessarily exclusive, and that the
subordinate courts of the Union may be invested with jurisdiction of cases affecting such
representatives of foreign governments. On a question of constitutional construction, this
fact is entitled to great weight.

In this case of Bors, Justice Harlan adopted the view entertained by Chief Justice Taney
in the earlier case of Gittings vs. Crawford (C. C. Md., 1838; Taney's Dec., 1, 10). In that
case of Gittings, it was held that neither public policy nor convenience would justify the
Supreme Court in implying that Congress is prohibited from giving original jurisdiction
in cases affecting consuls to the inferior judicial tribunals of the United States. Chief
Justice Taney said:

If the arrangement and classification of the subjects of jurisdiction into appellate

and original, as respects the Supreme Court, do not exclude that tribunal from
appellate power in the cases where original jurisdiction is granted, can it be right,
from the same clause, to imply words of exclusion as respects other courts whose
jurisdiction is not there limited or prescribed, but left for the future regulation of
Congress? The true rule in this case is, I think, the rule which is constantly applied
to ordinary acts of legislation, in which the grant of jurisdiction over a certain
subject-matter to one court, does not, of itself, imply that that jurisdiction is to be
exclusive. In the clause in question, there is nothing but mere affirmative words of
grant, and none that import a design to exclude the subordinate jurisdiction of
other courts of the United States on the same subject-matter. (See
also U.S. vs. Ravara [1793], 2 Dall., 297; 1 Law. ed., 388; United States vs. Louisiana
[1887], 123 U. S., 36; 8 S. Ct., 17; 31 Law. ed., 69; Ex parte Baiz [1890],135 U. S., 403;
10 S. Ct., 854; 34 Law. ed., 222, denying writ of prohibition Hollander vs. Baiz [D.
C. N. Y., 1890]; 41 Fed., 732; Iasigi vs. Van de Carr [1897], 166 U.S., 391; 17 S. Ct.,
595; 41 Law. ed., 1045; Graham vs. Strucken [C. C. N. Y., 1857]; 4 Blatchf., 58;
Lorway vs. Lousada [D. C. Mass., 1866]; Fed. Cas., No. 8517; St. Luke's
Hospital vs. Barclay [C. C. N. Y., 1855]; 3 Blatchf., 259; State of Texas vs. Lewis [C.
C. Tex., 1882], 14 Fed., 65; State of Alabama vs. Wolffe (C. C. Ala., 1883], 18 Fed.,
836, 837; Pooley vs. Luco [D. C. Cal., 1896], 76 Fed., 146.)
It is interesting to note that in the case of St. Luke's Hospital vs. Barclay, supra, the
jurisdiction of circuit courts exclusive of state courts over aliens, no exception being made
as to those who were consuls, was maintained. (See1 U. S. Stat. at L., c. 20, sec. 11, pp. 78,
79.)

From the history of, and the judicial interpretation placed on, clause 2, section 2 of Article
III of the Constitution of the United States it seems clear that the word "original" in
reference to the jurisdiction of Supreme Court of the United States over cases affecting
ambassadors, other public ministers and consuls, was never intended to be exclusive as
to prevent the Congress from vesting concurrent jurisdiction over cases affecting consuls
and vice-consuls in other federal courts.

It should be observed that the Philadelphia Convention of 1787 placed cases affecting the
official representatives of foreign powers under the jurisdiction of Federal Supreme
Court to prevent the public peace from being jeopardized. Since improper treatment of
foreign ambassadors, other public ministers and consuls may be a casus belli, it was
thought that the federal government, which is responsible for their treatment under
international law, should itself be provided with the means to meet the demands imposed
by international duty. (Tucker, The Constitution of the United States [1899], vol. II, 760,
772; vide, The Federalist, No. LXXXI, Ashley's Reprint [1917], 415.) Bearing in mind in the
distinction which international law establishes between ambassadors and other public
ministers, on the one hand, and consuls and other commercial representatives, on the
other, Congress saw it fit to provide in one case a rule different from the other, although
as far as consuls and vice-consuls are concerned, the jurisdiction of the Federal Supreme
Court, as already observed, though original is not exclusive. But in the United States,
there are two judicial systems, independent one from the other, while in the Philippines
there is but one judicial system. So that the reason in the United States for excluding
certain courts — the state courts — from taking cognizance of cases against foreign
representatives stationed in the United States does not obtain in the Philippines where
the court of the lowest grade is as much a part of an integrated system as the highest
court.

Let us now turn our own laws as they affect the case of the petitioner. Undoubtedly
Philippine courts are not federal courts and they are not governed by the Judiciary Acts
of the United States. We have a judicial system of our own, standing outside the sphere
of the American federal system and possessing powers and exercising jurisdiction
pursuant to the provisions of our own Constitution and laws.

The jurisdiction of our courts over consuls is defined and determined by our Constitution
and laws which include applicable treaties and accepted rules of the laws of nations.
There are no treaties between the United States and Uruguay exempting consuls of either
country from the operation of local criminal laws. Under the generally accepted
principles of international law, declared by our Constitution as part of the law of the
nation (Art. II sec. 3, cl. 2), consuls and vice-consuls and other commercial representatives
of foreign nations do not possess the status and can not claim the privilege and
immunities accorded to ambassadors and ministers. (Wheaton, International Law, sec.
249; Kent, Commentaries, 44; Story on the Constitution, sec. 1660; Mathews, The
American Constitutional System [1932], 204, 205; Gittings vs. Crawford, C. C. Md., 1838;
Taney's Dec., 1; Wilcox vs. Luco, 118 Cal., 639; 45 Pac., 676; 2 C. J., 9 R. C. L., 161.) The
only provisions touching the subject to which we may refer are those found in the
Constitution of the Philippines. Let us trace the history of these provisions.

The report of the committee on the Judicial Power, submitted on September 29, 1934, did
not contain any provisions regarding cases affecting ambassadors, other public ministers
and consuls. The draft of the sub-committee of seven of the Sponsorship Committee,
submitted on October 20, 1934, however, contains the following provision:
 Article X, Section 2. The Supreme Court shall have such original jurisdiction as
may be possessed and exercised by the present Supreme Court of the Philippine
Islands at the time of the adoption of this Constitution, which jurisdiction shall
include all cases affecting ambassadors, other foreign ministers and consuls . . . ."
The Special Committee on the Judiciary, composed principally of Delegates
Vicente J. Francisco and Norberto Romualdez, included in its report the provisions
which now appear in sections 2 and 3 of Article VIII of the Constitution. Section 2
provides:

The National Assembly shall have the power to define, prescribed, and apportion
the jurisdiction of the various courts, but may not deprive the Supreme Court of
its original jurisdiction over cases affecting ambassadors, other ministers and
consuls . . . . And the second sentence of section 3 provides:

The original jurisdiction of the Supreme Court shall include all cases affecting
ambassadors, other public ministers and consuls.

The provision in our Constitution in so far as it confers upon our Supreme Court "original
jurisdiction over cases affecting ambassadors, other public ministers and consuls" is
literally the same as that contained in clause 2, section 2 of Article III of the United States
Constitution.

In the course of the deliberation of the Constitutional Convention, some doubt was
expressed regarding the character of the grant of "original jurisdiction" to our Supreme
Court. An examination of the records of the proceedings of the Constitutional convention
show that the framers of our Constitution were familiar with the history of, and the
judicial construction placed on, the same provision of the United States Constitution. In
order to end what would have been a protracted discussion on the subject, a member of
the Special Committee on the Judiciary gave the following information to the members
of the Convention:

. . . Sr. Presidente, a fin de poder terminar con el Articulo 2, el Comite esta dispuesto a
hacer constar que la interpretacion que debe dard a la ultima parte de dicho articulo es la
misma interpretacion que siempre se ha dado a semejante disposicion en la Constitucion
de los Estados Unidos. (January 16,1935.) Without further discussion, the provision was
then and there approved.

It thus appears that the provision in question has been given a well-settled meaning in
the United States — the country of its origin. It has there received definite and hitherto
unaltered legislative and judicial interpretation. And the same meaning was ascribed to
it when incorporated in our own Constitution. To paraphrase Justice Gray of the Supreme
Court of the United States, we are justified in interpreting the provision of the
Constitution in the light of the principles and history with which its framers were
familiar. (United States vs. Wong Kin Ark [1897], 169 U. S., 649; 18 S. Ct., 456; 42 Law. ed.,
890, cited with approval in Kepner vs. United States, a case of Philippine origin [1904];
195 U. S., 100; 49 Law. ed., 114.)

(b) What has been said hereinabove is not unnecessary attachment to history or idolatrous
adherence to precedents. In referring to the history of this provision of our Constitution
it is realized that historical discussion while valuable is not necessarily decisive.
Rationally, however, the philosophical reason for the conclusion announced is not far to
seek if certain principles of constitutional government are borne in mind. The constitution
is both a grant of, and a limitation upon, governmental powers. In the absence of clear
and unequivocal restraint of legislative authority, the power is retained by the people and
is exercisable by their representatives in their legislature. The rule is that the legislature
possess plenary power for all purposes of civil government. A prohibition to exercise
legislative power is the exception. (Denio, C. J., in People vs. Draper, 15 N.Y., 532, 543.)
These prohibitions or restrictions are found either in the language used, or in the purpose
held in view as well as the circumstances which led to the adoption of the particular
provision as part of the fundamental law. (Ex parte Lewis, 45 Tex. Crim. Rep., 1; 73 S. W.,
811; 108 Am. St. Rep., 929.)

Subject to certain limitations, the Filipino people, through their delegates, have
committed legislative power in a most general way to the National Assembly has plenary
legislative power in all matters of legislation except as limited by the constitution. When,
therefore, the constitution vests in the Supreme Court original jurisdiction in cases
affecting ambassadors, other public ministers and consuls, without specifying the
exclusive character of the grant, the National Assembly is not deprived of its authority to
make that jurisdiction concurrent. It has been said that popular government lives because
of the inexhaustible reservoir of power behind. It is unquestionable that the mass of
powers of government is vested in the representatives of the people, and that these
representatives are no further restrained under our system than by the express language
of the instrument imposing the restraint, or by particular provisions which, by clear
intendment, have that effect. (Angara vs. Electoral Commission, p.139, ante.) What the
Constitution prohibits is merely the deprivation of the Supreme Court of its original
jurisdiction over cases affecting ambassadors, other public ministers and consuls and
while it must be admitted that original jurisdiction if made concurrent no longer remains
exclusive, it is also true that jurisdiction does not cease to be original merely because it is
concurrent.

It is also quite true that concurrent original jurisdiction in this class of cases would mean
the sharing of the Supreme Court with the most inferior courts of cases affecting
ambassadors, other public ministers and consuls such that the Supreme Court would
have concurrent jurisdiction with the lowest courts in our judicial hierarchy, the justice
of the peace of the courts, in a petty case for the instance, the violation of a municipal
ordinance affecting the parties just mentioned. However, no serious objection to these
result can be seen other that the misinterpreted unwillingness to share this jurisdiction
with a court pertaining to the lowest category in our judicial organization. Upon the other
hand, the fundamental reasoning would apply with equal force if the highest court of the
land is made to take recognizance exclusively of a case involving the violation of the
municipal ordinance simply because of the character of the parties affected. After
alluding to the fact that the position of consul of a foreign government is sometimes filled
by a citizen of the United States (and this also true in the Philippines) Chief Justice Taney,
in Gittings vs. Crawford, supra, observed:

It could hardly have been the intention of the statesmen who framed our
constitution to require that one of our citizens who had a petty claim of even less
than five dollars against another citizen, who had been clothed by some foreign
government with the consular office, should be compelled to go into the Supreme
Court to have a jury summoned in order to enable him to recover it; nor could it
have been intended, that the time of that court, with all its high duties to perform,
should be taken up with the trial of every petty offense that might be committed
by a consul by any part of the United States; that consul, too, being often one of
our own citizens.

Probably, the most serious objection to the interpretation herein advocated is, that
considering the actual distribution of jurisdiction between the different courts in our
jurisdiction, there may be cases where the Supreme Court may not actually exercise either
original — whether exclusive or concurrent — or appellate jurisdiction, notwithstanding
the grant of original jurisdiction in this class of cases to the Supreme Court. If, for instance,
a criminal case is brought either in a justice of the peace court or in a Court of First
Instance against a foreign consul and no question of law is involved, it is evident that in
case of conviction, the proceedings will terminate in the Court Appeals and will not reach
the Supreme Court. In this case, the Supreme Court will be deprived of all jurisdiction in
a case affecting a consul notwithstanding the grant thereto in the Constitution of original
jurisdiction in all cases affecting consuls. This is a situation, however, created not by the
Constitution but by existing legislation, and the remedy is in the hands of the National
Assembly. The Constitution cannot deal with every casus omissus, and in the nature of
things, must only deal with fundamental principles, leaving the detail of administration
and execution to the other branches of the government. It rests with the National
Assembly to determine the inferior courts which shall exercise concurrent original
jurisdiction with the Supreme Court in cases affecting ambassadors, other public
ministers and consuls, considering the nature of the offense and irrespective of the
amount of controversy. The National Assembly may as in the United States (Cooley,
Constitutional Law, 4th ed. [1931], sec. 4, p. 156), provide for appeal to the Supreme Court
in all cases affecting foreign diplomatic and consular representatives.

Before the approval of the Constitution, jurisdiction over consuls was exercisable by our
courts. This is more so now that the Independence Law and Constitution framed and
adopted pursuant thereto are in force. The fact that the National Assembly has not
enacted any law determining what courts of the of the Philippines shall exercise
concurrent jurisdiction with the Supreme Court is of no moment. This can not mean and
should not be interpreted to mean that the original jurisdiction vested in the Supreme
Court by the Constitution is not concurrent with other national courts of inferior category.

The respondent judge of the Court of First Instance of the City of Manila having
jurisdiction to take cognizance of the criminal case brought against the petitioner, the writ
of prohibition should be denied.