Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19650             September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-
appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

          In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived
and laid the groundwork for a promotional scheme calculated to drum up patronage for its oil
products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to
estimate the actual number of liters a hooded gas pump at each Caltex station will dispense
during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its
advertising agency, and their immediate families excepted, participation is to be open
indiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege to
participate, no fee or consideration is required to be paid, no purchase of Caltex products
required to be made. Entry forms are to be made available upon request at each Caltex station
where a sealed can will be provided for the deposit of accomplished entry stubs.

          A three-staged winner selection system is envisioned. At the station level, called "Dealer
Contest", the contestant whose estimate is closest to the actual number of liters dispensed by the
hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next,
the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a
Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and
a screwdriver set for third. The first-prize winner in each station will then be qualified to join in
the "Regional Contest" in seven different regions. The winning stubs of the qualified contestants
in each region will be deposited in a sealed can from which the first-prize, second-prize and
third-prize winners of that region will be drawn. The regional first-prize winners will be entitled
to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective
Caltex dealers, in order to take part in the "National Contest". The regional second-prize and
third-prize winners will receive cash prizes of P500 and P300, respectively. At the national level,
the stubs of the seven regional first-prize winners will be placed inside a sealed can from which
the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash
prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for
third; and P650 as consolation prize for each of the remaining four participants.

          Foreseeing the extensive use of the mails not only as amongst the media for publicizing
the contest but also for the transmission of communications relative thereto, representations were
made by Caltex with the postal authorities for the contest to be cleared in advance for mailing,
having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the
pertinent provisions of which read as follows:

          SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of

the following classes, whether sealed as first-class matter or not, shall be imported into
the Philippines through the mails, or to be deposited in or carried by the mails of the
 Philippines, or be delivered to its addressee by any officer or employee of the Bureau of
Posts:

          Written or printed matter in any form advertising, describing, or in any manner

pertaining to, or conveying or purporting to convey any information concerning any
lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or
chance, or any scheme, device, or enterprise for obtaining any money or property of any
kind by means of false or fraudulent pretenses, representations, or promises.

          "SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or

company is engaged in conducting any lottery, gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing of
any kind, or that any person or company is conducting any scheme, device, or enterprise
for obtaining money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promises, the Director of Posts may instruct any
postmaster or other officer or employee of the Bureau to return to the person, depositing
the same in the mails, with the word "fraudulent" plainly written or stamped upon the
outside cover thereof, any mail matter of whatever class mailed by or addressed to such
person or company or the representative or agent of such person or company.

          SECTION 1983. Deprivation of use of money order system and telegraphic

transfer service.—The Director of Posts may, upon evidence satisfactory to him that any
person or company is engaged in conducting any lottery, gift enterprise or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing of
any kind, or that any person or company is conducting any scheme, device, or enterprise
for obtaining money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said person or company
or to the agent of any such person or company, whether such agent is acting as an
individual or as a firm, bank, corporation, or association of any kind, and may provide by
regulation for the return to the remitters of the sums named in money orders or
telegraphic transfers drawn in favor of such person or company or its agent.

          The overtures were later formalized in a letter to the Postmaster General, dated October
31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored
to justify its position that the contest does not violate the anti-lottery provisions of the Postal
Law. Unimpressed, the then Acting Postmaster General opined that the scheme falls within the
purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's
letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that
there being involved no consideration in the part of any contestant, the contest was not, under
controlling authorities, condemnable as a lottery. Relying, however, on an opinion rendered by
the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953),
the Postmaster General maintained his view that the contest involves consideration, or that, if it
does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in
his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed
contest but as well threatened that if the contest was conducted, "a fraud order will have to be
issued against it (Caltex) and all its representatives".

          Caltex thereupon invoked judicial intervention by filing the present petition for declaratory
relief against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring
its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent
to allow petitioner the use of the mails to bring the contest to the attention of the public". After
issues were joined and upon the respective memoranda of the parties, the trial court rendered
judgment as follows:

          In view of the foregoing considerations, the Court holds that the proposed 'Caltex
Hooded Pump Contest' announced to be conducted by the petitioner under the rules
 marked as Annex B of the petitioner does not violate the Postal Law and the respondent
has no right to bar the public distribution of said rules by the mails.

          The respondent appealed.

          The parties are now before us, arrayed against each other upon two basic issues: first,
whether the petition states a sufficient cause of action for declaratory relief; and second, whether
the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in
seriatim.

          1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the
applicable legal basis for the remedy at the time it was invoked, declaratory relief is available to
any person "whose rights are affected by a statute . . . to determine any question of construction
or validity arising under the . . . statute and for a declaration of his rights thereunder" (now
section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to
established jurisprudence on the matter, laid down certain conditions sine qua non therefor, to
wit: (1) there must be a justiciable controversy; (2) the controversy must be between persons
whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in
the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs.
The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs.
Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R.
No. L-8964, July 31, 1956). The gravamen of the appellant's stand being that the petition herein
states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases
thereof upon the foregoing crucible.

          As we look in retrospect at the incidents that generated the present controversy, a number
of significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of
some consequence, concededly has the unquestioned right to exploit every legitimate means, and
to avail of all appropriate media to advertise and stimulate increased patronage for its products.
In contrast, the appellant, as the authority charged with the enforcement of the Postal Law,
admittedly has the power and the duty to suppress transgressions thereof — particularly thru the
issuance of fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code,
against legally non-mailable schemes. Obviously pursuing its right aforesaid, the appellee laid
out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties
in the dissemination of information thereon thru the mails, amongst other media, it was found
expedient to request the appellant for an advance clearance therefor. However, likewise by virtue
of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the
appellant saw a violation thereof in the proposed scheme and accordingly declined the request. A
point of difference as to the correct construction to be given to the applicable statute was thus
reached. Communications in which the parties expounded on their respective theories were
exchanged. The confidence with which the appellee insisted upon its position was matched only
by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by
the appellant's open warning to the appellee that if the proposed contest was "conducted, a fraud
order will have to be issued against it and all its representatives."

          Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's
insistent assertion of its claim to the use of the mails for its proposed contest, and the challenge
thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned
a live controversy. The justiciability of the dispute cannot be gainsaid. There is an active
antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a
real — not a mere theoretical — question or issue. The contenders are as real as their interests
are substantial. To the appellee, the uncertainty occasioned by the divergence of views on the
issue of construction hampers or disturbs its freedom to enhance its business. To the appellant,
the suppression of the appellee's proposed contest believed to transgress a law he has sworn to
uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the
appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by
the ominous shadow of an imminent and inevitable litigation unless their differences are settled
and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Philippines,
G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is
long past when it can rightly be said that merely the appellee's "desires are thwarted by its own
doubts, or by the fears of others" — which admittedly does not confer a cause of action. Doubt,
if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was
translated into a positive claim of right which is actually contested (III Moran, Comments on the
Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz.,
251, 284 Pac. 350).

          We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law to a given
set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief.
The infirmity of this pose lies in the fact that it proceeds from the assumption that, if the
circumstances here presented, the construction of the legal provisions can be divorced from the
matter of their application to the appellee's contest. This is not feasible. Construction, verily, is
the art or process of discovering and expounding the meaning and intention of the authors of the
law with respect to its application to a given case, where that intention is rendered doubtful,
amongst others, by reason of the fact that the given case is not explicitly provided for in the law
(Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme
proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law
inescapably requires an inquiry into the intended meaning of the words used therein. To our
mind, this is as much a question of construction or interpretation as any other.

          Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at
hand can amount to nothing more than an advisory opinion the handing down of which is
anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been
committed. Yet, the disagreement over the construction thereof is no longer nebulous or
contingent. It has taken a fixed and final shape, presenting clearly defined legal issues
susceptible of immediate resolution. With the battle lines drawn, in a manner of speaking, the
propriety — nay, the necessity — of setting the dispute at rest before it accumulates the asperity
distemper, animosity, passion and violence of a full-blown battle which looms ahead (III Moran,
Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded.
Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P.
2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the
situation into which it has been cast, would be to force it to choose between undesirable
alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-
lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these
choices: If it launches the contest and uses the mails for purposes thereof, it not only incurs the
risk, but is also actually threatened with the certain imposition, of a fraud order with its
concomitant stigma which may attach even if the appellee will eventually be vindicated; if it
abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into
effect a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh
these considerations in one equation and in the spirit of liberality with which the Rules of Court
are to be interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court)
— which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with
respect to, rights and duties under a law — we can see in the present case any imposition upon
our jurisdiction or any futility or prematurity in our intervention.

          The appellant, we apprehend, underrates the force and binding effect of the ruling we hand
down in this case if he believes that it will not have the final and pacifying function that a
declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But
more than this, he obviously overlooks that in this jurisdiction, "Judicial decisions applying or
interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the
Philippines). In effect, judicial decisions assume the same authority as the statute itself and, until
authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria
which must control the actuations not only of those called upon to abide thereby but also of those
in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our
resolution of this case will terminate the controversy at hand.

          It is not amiss to point out at this juncture that the conclusion we have herein just reached
is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487,
where a corporation engaged in promotional advertising was advised by the county prosecutor
that its proposed sales promotion plan had the characteristics of a lottery, and that if such sales
promotion were conducted, the corporation would be subject to criminal prosecution, it was held
that the corporation was entitled to maintain a declaratory relief action against the county
prosecutor to determine the legality of its sales promotion plan. In pari materia, see also: Bunis
vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo,
Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

          In fine, we hold that the appellee has made out a case for declaratory relief.

          2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to, any information concerning "any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these words hinges the resolution of the second issue
posed in this appeal.

          Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El
Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the
postal authorities under the abovementioned provisions of the Postal Law, this Court declared
that —

          While countless definitions of lottery have been attempted, the authoritative one for
this jurisdiction is that of the United States Supreme Court, in analogous cases having to
do with the power of the United States Postmaster General, viz.: The term "lottery"
extends to all schemes for the distribution of prizes by chance, such as policy playing,
gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The
three essential elements of a lottery are: First, consideration; second, prize; and third,
chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne
[1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and
Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel
Construction Company vs. Carmona, p. 233, ante.)

          Unanimity there is in all quarters, and we agree, that the elements of prize and chance are
too obvious in the disputed scheme to be the subject of contention. Consequently as the appellant
himself concedes, the field of inquiry is narrowed down to the existence of the element of
consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in
the same case just cited, this Court has laid down a definitive yard-stick in the following terms
—

          In respect to the last element of consideration, the law does not condemn the
gratuitous distribution of property by chance, if no consideration is derived directly or
indirectly from the party receiving the chance, but does condemn as criminal schemes in
which a valuable consideration of some kind is paid directly or indirectly for the chance
to draw a prize.

          Reverting to the rules of the proposed contest, we are struck by the clarity of the language
in which the invitation to participate therein is couched. Thus —

          No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't
have to buy anything? Simply estimate the actual number of liter the Caltex gas pump
 with the hood at your favorite Caltex dealer will dispense from — to —, and win
valuable prizes . . . ." .

          Nowhere in the said rules is any requirement that any fee be paid, any merchandise be
bought, any service be rendered, or any value whatsoever be given for the privilege to
participate. A prospective contestant has but to go to a Caltex station, request for the entry form
which is available on demand, and accomplish and submit the same for the drawing of the
winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible
consideration which would brand it as a lottery. Indeed, even as we head the stern injunction,
"look beyond the fair exterior, to the substance, in order to unmask the real element and
pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra,
p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a
gratuitous distribution of property by chance.

          There is no point to the appellant's insistence that non-Caltex customers who may buy
Caltex products simply to win a prize would actually be indirectly paying a consideration for the
privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product
or the use of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it
hardly needs reiterating, does not have to buy anything or to give anything of value.

          Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion,
would naturally benefit the sponsor in the way of increased patronage by those who will be
encouraged to prefer Caltex products "if only to get the chance to draw a prize by securing entry
blanks". The required element of consideration does not consist of the benefit derived by the
proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal.
App. (Supp.) 788, is whether the participant pays a valuable consideration for the chance, and
not whether those conducting the enterprise receive something of value in return for the
distribution of the prize. Perspective properly oriented, the standpoint of the contestant is all that
matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set
the matter at rest:

          The fact that the holder of the drawing expects thereby to receive, or in fact does
receive, some benefit in the way of patronage or otherwise, as a result of the drawing;
does not supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex.
Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

          Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump
Contest" proposed by the appellee is not a lottery that may be administratively and adversely
dealt with under the Postal Law.

          But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of any kind", which is
equally prescribed? Incidentally, while the appellant's brief appears to have concentrated on the
issue of consideration, this aspect of the case cannot be avoided if the remedy here invoked is to
achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling
that the appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953,
of the Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of
consideration, may nevertheless be a gift enterprise in which that element is not essential, the
determination of whether or not the proposed contest — wanting in consideration as we have
found it to be — is a prohibited gift enterprise, cannot be passed over sub silencio.

          While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in
explicit words, there appears to be a consensus among lexicographers and standard authorities
that the term is commonly applied to a sporting artifice of under which goods are sold for their
market value but by way of inducement each purchaser is given a chance to win a prize (54
C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary
with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs.
Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs.
State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace
the scheme at bar. As already noted, there is no sale of anything to which the chance offered is
attached as an inducement to the purchaser. The contest is open to all qualified contestants
irrespective of whether or not they buy the appellee's products.

          Going a step farther, however, and assuming that the appellee's contest can be
encompassed within the broadest sweep that the term "gift enterprise" is capable of being
extended, we think that the appellant's pose will gain no added comfort. As stated in the opinion
relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance,
even in default of the element of consideration necessary to constitute a lottery, is prohibited
(E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129
Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d.,
689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive
authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only
if it exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157
P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs.
Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo.,
20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E.,
605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent
conflict of opinions is explained by the fact that the specific statutory provisions relied upon are
not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift
enterprise" are used interchangeably (Bills vs. People, supra); in others, the necessity for the
element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-
352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater
Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is,
therefore, that every case must be resolved upon the particular phraseology of the applicable
statutory provision.

          Taking this cue, we note that in the Postal Law, the term in question is used in association
with the word "lottery". With the meaning of lottery settled, and consonant to the well-known
principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon
although only insofar as the element of chance is concerned — it is only logical that the term
under a construction should be accorded no other meaning than that which is consistent with the
nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a
consideration, so also must the term "gift enterprise" be so construed. Significantly, there is not
in the law the slightest indicium of any intent to eliminate that element of consideration from the
"gift enterprise" therein included.

          This conclusion firms up in the light of the mischief sought to be remedied by the law,
resort to the determination thereof being an accepted extrinsic aid in statutory construction. Mail
fraud orders, it is axiomatic, are designed to prevent the use of the mails as a medium for
disseminating printed matters which on grounds of public policy are declared non-mailable. As
applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized
necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals
(Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is inherent that
something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that
where no consideration is paid by the contestant to participate, the reason behind the law can
hardly be said to obtain. If, as it has been held —

          Gratuitous distribution of property by lot or chance does not constitute "lottery", if

it is not resorted to as a device to evade the law and no consideration is derived, directly
or indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words
and Phrases, perm. ed., p. 695, emphasis supplied).
          we find no obstacle in saying the same respecting a gift enterprise. In the end, we are
persuaded to hold that, under the prohibitive provisions of the Postal Law which we have
heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable
only if, like lotteries, they involve the element of consideration. Finding none in the contest here
in question, we rule that the appellee may not be denied the use of the mails for purposes thereof.

          Recapitulating, we hold that the petition herein states a sufficient cause of action for
declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the rules
submitted by the appellee does not transgress the provisions of the Postal Law.

          ACCORDINGLY, the judgment appealed from is affirmed. No costs.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar
and Sanchez, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-61236 January 31, 1984

NATIONAL FEDERATION OF LABOR and ZAMBOWOOD MONTHLY EMPLOYEES

UNION, ITS OFFICERS AND MEMBERS, petitioners,
vs.
THE HONORABLE CARLITO A. EISMA, LT. COL. JACOB CARUNCHO,
COMMANDING OFFICER, ZAMBOANGA DISTRICT COMMAND, PC, AFP, and
ZAMBOANGA WOOD PRODUCTS, respondents.

Jose C. Espina and Potenciano Flores for petitioners.

The Solicitor General for public respondents.

Gaspar V. Tagalo for private respondent Zamboanga Wood Products.

FERNANDO, C.J.:

This Court is confronted once again with the question of whether or not it is a court or a
labor arbiter that can pass on a suit for damages filed by the employer, here private
respondent Zamboanga Wood Products. Respondent Judge Carlito A. Eisma 1 then of
the Court of First Instance, now of the Regional Trial Court of Zamboanga City, was of
the view that it is a court and denied a motion to dismiss filed by petitioners National
Federation of labor and Zambowood Monthly Employees Union, its officers and
members. It was such an order dated July 20, 1982 that led to the filing of this certiorari
and prohibition proceeding. In the order assailed, it was required that the officers and
members of petitioner union appear before the court to show cause why a writ of
preliminary injunction should not be issued against them and in the meanwhile such
persons as well as any other persons acting under their command and on their behalf
were "temporarily restrained and ordered to desist and refrain from further obstructing,
impeding and impairing plaintiff's use of its property and free ingress to or egress from
plaintiff's Manufacturing Division facilities at Lumbayao, Zamboanga City and on its road
right of way leading to and from said plaintiff's facilities, pending the determination of the
litigation, and unless a contrary order is issued by this Court." 2

The record discloses that petitioner National Federation of Labor, on March 5, 1982,
filed with the Ministry of Labor and Employment, Labor Relations Division, Zamboanga
City, a petition for direct certification as the sole exclusive collective bargaining
representative of the monthly paid employees of the respondent Zamboanga Wood
Products, Inc. at its manufacturing plant in Lumbayao, Zamboanga City. 3 Such
employees, on April 17, 1982 charged respondent firm before the same office of the
Ministry of Labor for underpayment of monthly living allowances. 4 Then came, on May
3, 1982, from petitioner union, a notice of strike against private respondent, alleging
illegal termination of Dionisio Estioca, president of the said local union; unfair labor
practice, non-payment of living allowances; and "employment of oppressive alien
management personnel without proper permit. 5 It was followed by the union submitting
the minutes of the declaration of strike, "including the ninety (90) ballots, of which 79
voted for yes and three voted for no." 6 The strike began on May 23, 1982. 7 On July 9,
1982, private respondent Zambowood filed a complaint with respondent Judge against
the officers and members of petitioners union, for "damages for obstruction of private
property with prayer for preliminary injunction and/or restraining order." 8 It was alleged
that defendants, now petitioners, blockaded the road leading to its manufacturing
division, thus preventing customers and suppliers free ingress to or egress from such
premises. 9 Six days later, there was a motion for the dismissal and for the dissolution of
the restraining order and opposition to the issuance of the writ of preliminary injunction
filed by petitioners. It was contended that the acts complained of were incidents of
picketing by defendants then on strike against private respondent, and that therefore the
exclusive jurisdiction belongs to the Labor Arbiter pursuant to Batas Pambansa Blg.
227, not to a court of first instance.10 There was, as noted earlier, a motion to dismiss,
which was denied. Hence this petition for certiorari.

Four days after such petition was filed, on August 3, 1982, this Court required
respondents to answer and set the plea for a preliminary injunction to be heard on
Thursday, August 5, 1982. 11 After such hearing, a temporary restraining order was
issued, "directing respondent Judge and the commanding officer in Zamboanga and his
agents from enforcing the ex-parte order of injunction dated July 20, 1982; and to
restrain the respondent Judge from proceeding with the hearing of the until otherwise
case effective as of [that] date and continuing ordered by [the] Court. In the exercise of
the right to peaceful picketing, petitioner unions must abide strictly with Batas
Pambansa Blg. 227, specifically Section 6 thereof, amending Article 265 of the Labor
Code, which now reads: '(e) No person engaged in picketing shall commit any act of
violence, coercion or intimidation or obstruct the free ingress to or egress from the
employer's premises for lawful purposes, or obstruct public thoroughfares.' " 12

On August 13, 1982, the answer of private respondent was filed sustaining the original
jurisdiction of respondent Judge and maintaining that the order complained of was not in
excess of such jurisdiction, or issued with grave abuse of discretion. Solicitor General
Estelito P. Mendoza, 13 on the other hand, instead of filing an answer, submitted a
Manifestation in lieu thereof. He met squarely the issue of whether or not respondent
Judge had jurisdiction, and answered in the negative. He (i)ncluded that "the instant
petition has merit and should be given due course."

He traced the changes undergone by the Labor Code, citing at the same time the
decisions issued by this Court after each of such changes. As pointed out, the original
wording of Article 217 vested the labor arbiters with jurisdictional. 14 So it was applied by
this Court in Garcia v. Martinez 15 and in Bengzon v. Inciong. 16 On May 1, 1978,
however, Presidential Decree No. 1367 was issued, amending Article 217, and provided
"that the Regional Directors shall not indorse and Labor Arbiters shall not entertain
claims for moral and other forms of damages." 17 The ordinary courts were thus vested
with jurisdiction to award actual and moral damages in the case of illegal dismissal of
employees. 18 That is not, as pointed out by the Solicitor General, the end of the story,
for on May 1, 1980, Presidential Decree No. 1691 was issued, further amending Article
217, returning the original jurisdiction to the labor arbiters, thus enabling them to decide
"3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees compensation,
social security, medicare and maternity benefits; [and] (5) All other claims arising from
employer-employee relations unless expressly excluded by tills Code." 19 An equally
conclusive manifestation of the lack of jurisdiction of a court of first instance then, a
regional trial court now, is Batas Pambansa Blg. 130, amending Article 217 of the Labor
Code. It took effect on August 21, 1981. Subparagraph 2, paragraph (a) is now worded
thus: "(2) those that involve wages, hours of work and other terms and conditions of
employment." 20 This is to be compared with the former phraseology "(2) unresolved
issue in collective bargaining, including those that involve wages, hours of work and
other terms and conditions of employment." 21 It is to be noted that Batas Pambansa Blg.
130 made no change with respect to the original and exclusive jurisdiction of Labor
Arbiters with respect to money claims of workers or claims for damages arising from
employer-employee relations.

Nothing becomes clearer, therefore, than the meritorious character of this petition.
certiorari and prohibition lie, respondent Judge being devoid of jurisdiction to act on the
matter.

1. Article 217 is to be applied the way it is worded. The exclusive original jurisdiction of
a labor arbiter is therein provided for explicitly. It means, it can only mean, that a court
of first instance judge then, a regional trial court judge now, certainly acts beyond the
scope of the authority conferred on him by law when he entertained the suit for
damages, arising from picketing that accompanied a strike. That was squarely within the
express terms of the law. Any deviation cannot therefore be tolerated. So it has been
the constant ruling of this Court even prior to Lizarraga Hermanos v. Yap Tico, 22 a 1913
decision. The ringing words of the ponencia of Justice Moreland still call for obedience.
Thus, "The first and fundamental duty of courts, in our judgment, is to apply the law.
Construction and interpretation come only after it has been demonstrated that
application is impossible or inadequate without them." 23 It is so even after the lapse of
sixty years. 24

2. On the precise question at issue under the law as it now stands, this Court has
spoken in three decisions. They all reflect the utmost fidelity to the plain command of
the law that it is a labor arbiter, not a court, that ossesses original and exclusive
jurisdiction to decide a claim for damages arising from picketing or a strike. In Pepsi-
Cola Bottling Co. v. Martinez, 25 the issue was set forth in the opening paragraph, in the
ponencia of Justice Escolin: "This petition for certiorari, prohibition and mandamus
raises anew the legal question often brought to this Court: Which tribunal has exclusive
jurisdiction over an action filed by an employee against his employer for recovery of
unpaid salaries, separation benefits and damages — the court of general jurisdiction or
the Labor Arbiter of the National Labor Relations Commission [NLRC]?" 26 It was
categorically held: "We rule that the Labor Arbiter has exclusive jurisdiction over the
case." 27 Then came this portion of the opinion: "Jurisdiction over the subject matter in a
judicial proceeding is conferred by the sovereign authority which organizes the court;
and it is given only by law. Jurisdiction is never presumed; it must be conferred by law in
words that do not admit of doubt. Since the jurisdiction of courts and judicial tribunals is
derived exclusively from the statutes of the forum, the issue before us should be
resolved on the basis of the law or statute now in force. We find that law in presidential
Decree 1691 which took effect on May 1, 1980, Section 3 of which reads as follows: ...
Article 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters
shall have the original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural: ... 3. All money claims of
workers, including those based on nonpayment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social security, medicare and
maternity benefits; 4. Cases involving household services; and 5. All other claims
arising from employer-employee relations, unless expressly excluded by this Code." 28
That same month, two other cases were similarly decided, Ebon v. De Guzman 29 and
Aguda v. Vallejos. 30

3. It is regrettable that the ruling in the above three decisions, decided in March of 1982,
was not followed by private respondent when it filed the complaint for damages on July
9, 1982, more than four months later. 31 On this point, reference may be made to our
decision in National Federation of Labor, et al. v. The Honorable Minister of Labor and
Employment, 32 promulgated on September 15, 1983. In that case, the question involved
was the failure of the same private respondent, Zamboanga Wood Products, Inc., to
admit the striking petitioners, eighty-one in number, back to work after an order of
Minister Blas F. Ople certifying to the National Labor Relations Commission the labor
dispute for compulsory arbitration pursuant to Article 264 (g) of the Labor Code of the
Philippines. It was noted in the first paragraph of our opinion in that case: "On the face
of it, it seems difficult to explain why private respondent would not comply with such
order considering that the request for compulsory arbitration came from it. It ignored this
notification by the presidents of the labor unions involved to its resident manager that
the striking employees would lift their picket line and start returning to work on August
20, 1982. Then, too, Minister Ople denied a partial motion for reconsideration insofar as
the return-to-work aspect is concerned which reads: 'We find no merit in the said Motion
for Reconsideration. The Labor code, as amended, specifically Article 264 (g),
mandates that whenever a labor dispute is certified by the Minister of Labor and
Employment to the National Labor Relations Commission for compulsory arbitration and
a strike has already taken place at the time of certification, "all striking employees shall
immediately return to work and the employees shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing before the strike." ' "
33
No valid distinction can be made between the exercise of compulsory arbitration
vested in the Ministry of Labor and the jurisdiction of a labor arbiter to pass over claims
for damages in the light of the express provision of the Labor Code as set forth in Article
217. In both cases, it is the Ministry, not a court of justice, that is vested by law with
competence to act on the matter.

4. The issuance of Presidential Decree No. 1691 and the enactment of Batas
Pambansa Blg. 130, made clear that the exclusive and original jurisdiction for damages
would once again be vested in labor arbiters. It can be affirmed that even if they were
not that explicit, history has vindicated the view that in the appraisal of what was
referred to by Philippine American Management & Financing Co., Inc. v. Management &
Supervisors Association of the Philippine-American Management & Financing Co., Inc.
34
as "the rather thorny question as to where in labor matters the dividing line is to be
drawn" 35 between the power lodged in an administrative body and a court, the
unmistakable trend has been to refer it to the former. Thus: "Increasingly, this Court has
been committed to the view that unless the law speaks clearly and unequivocally, the
choice should fall on [an administrative agency]." 36 Certainly, the present Labor Code is
even more committed to the view that on policy grounds, and equally so in the interest
of greater promptness in the disposition of labor matters, a court is spared the often
onerous task of determining what essentially is a factual matter, namely, the damages
that may be incurred by either labor or management as a result of disputes or
controversies arising from employer-employee relations.

WHEREFORE, the writ of certiorari is granted and the order of July 20, 1982, issued by
respondent Judge, is nullified and set aside. The writ of prohibition is likewise granted
and respondent Judge, or whoever acts in his behalf in the Regional Trial Court to
which this case is assigned, is enjoin from taking any further action on Civil Case No.
716 (2751), except for the purpose of dismissing it. The temporary restraining order of
August 5, 1982 is hereby made permanent.

Teehankee, Makasiar, Aquino, Guerrero, Melencio-Herrera, Plana, Escolin Relova and

Gutierrez, Jr., JJ., concur.

Concepcion Jr., J., took no part.

De Castro, J., is on leave.

Separate Opinions

ABAD SANTOS, J., concurring:

I concur and express the hope that Art. 217 should not undergo repeated amendments.

Separate Opinions

ABAD SANTOS, J., concurring:

I concur and express the hope that Art. 217 should not undergo repeated amendments.

Footnotes
1 The other respondents are Lt. Col. Jacob Caruncho, Commanding Officer, Zamboanga District Command, PC, AFP
and Zamboanga Wood Products.

2 Annex K to Petition 2.

3 Manifestation of Solicitor General in Lieu of Answer, par. 1.

4 Ibid, par. 2.

5 Ibid, par. 3.

6 Ibid, par. 4.

7 Ibid, par. 5.

8 Ibid, par. 8.

9 Ibid.

10 Ibid, par. 10.

11 Resolution of this Court dated August 3, 1982.

12 Resolution of this Court dated August 5, 1982.

13 He was assisted by then Assistant Solicitor General Reynato S. Puno; Assistant Solicitor General Ruben E. Agpalo
and Solicitor Amado D. Aquino

14 Manifestation, in Lieu of Answer, 5-6, citing pars. (3) and (5) of Article 217.

15 L-47629, August 3, 1978, 84 SCRA 577.

16 L-48706-07, June 29, 1979, 91 SCRA 248.

17 Manifestation, 8.

18 Cf. Garcia v. Martinez, L-47629, May 28, 1979, 90 SCRA 331; Calderon Sr. v. Court of Appeals, L-52235, October
28, 1980, 100 SCRA 459; Abad v. Phil. American General Insurance Co., L-50563, October 30,1981, 108 SCRA 717.
In all three cases, it was made clear that money claims arising from employer-employee relations by virtue of
Presidential Decree No. 1367 were cognizable by the ordinary courts, labor arbiters being excluded from passing upon
"claims for moral and other forms of damages."

19 Manifestation, 14.

20 Batas Pambansa Blg. 130, amending Article 217 of subparagraph 2 of paragraph (a) of the Labor Code (1981).

21 Article 2l7 of the Labor Code, par .(2).

22 24 Phil. 504.

23 Ibid, 513.

24 In Asuncion, Jr. v. Segundo, G.R. No. 59593, promulgated on September 24, 1983, reference was made to
Kapisanan ng mga Manggagawa v. Manila Railroad Co., L-25316, February 28, 1979, 88 SCRA 616. The opinion
acted 13 cases starting from People v. Mapa, L- 22301, August 30, 1967, 20 SCRA 1164 to Gonzaga v. Court of
Appeals, L-27455, June 28, 1973, 51 SCRA 381. After the Manggagawa decision came two later cages of the same
tenor: Banawa v. Mirano, L-24750, May 16, 1980, 97 SCRA 517; Insular Lumber Co. v. Court of Tax Appeals, L-31057,
May 29, 1981, 104 SCRA 710. All in all, since the 1967 decision in Mapa, seventeen cases have applied the ruling in
Lizarraga Hermanos.

25 L-58877, May 15, 1982; 112 SCRA 578.

26 Ibid, 580.

27 Ibid, 581.

28 Ibid, 581-582.

29 L-58265, March 25, 1982, 113 SCRA 52.

30 L-58133, March 26, 1982, 113 SCRA 69.

31 The complaint in the lower court was signed by Alberto de la Rosa, resident manager of private respondent. He was
assisted by two members of the bar, Demosthenes S. Baban and Monico E. Luna, Annex J to Petition.

32 G.R. No. 64183.

33 Ibid, 2.

34 L-27953, November 29, 1972, 48 SCRA 187.

35 Ibid, 91.

36 Ibid. Cf. Allied Free Workers Union v. Apostol, 102 Phil. 292 (1957); Bay View Hotel Inc. v. Manila Hotel Workers
Union, L. 21803, Dec. 17, 1966, 18 SCRA 946; Republic Savings Bank v. Court of Industrial Relations, L-20303, Sept.
27, 1967, 21 SCRA 226; Seno v. Mendoza, L- 20565, Nov. 29, 1967, 21 SCRA 1124; Security Bank Employees Union
v. Security Bank and Trust Company, L-28536, April 30, 1968, 23 SCRA 503; Manila Hotel Co. v. Pines Hotel
Employees Association, L-24314, Sept. 28, 1970, 35 SCRA 96; Alhambra Industries, Inc. v. Court of Industrial
Relations, L-25984, Oct. 30, 1970, 35 SCRA 550; Espanilla v. La Carlota Sugar Central, L-23722, March 31, 1971; 38
SCRA 186; Mindanao Rapid Co., Inc. v. Omandam, L-23058, Nov. 27, 1971, 42 SCRA 250.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION
 

G.R. No. 111107 January 10, 1997

LOEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional

Executive Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as
Community Environment and Natural Resources Officer (CENRO), both of the
Department of Environment and Natural Resources (DENR), petitioners,
vs.
COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding
Judge of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES
BIENVENIDO and VICTORIA DE GUZMAN, respondents.

TORRES, JR., J.:

Without violating the principle of exhaustion of administrative remedies, may an action

for replevin prosper to recover a movable property which is the subject matter of an
administrative forfeiture proceeding in the Department of Environment and Natural
Resources pursuant to Section 68-A of P.D. 705, as amended, entitled The Revised
Forestry Code of the Philippines?

Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?

These are two fundamental questions presented before us for our resolution.

The controversy on hand had its incipiency on May 19, 1989 when the truck of private
respondent Victoria de Guzman while on its way to Bulacan from San Jose, Baggao,
Cagayan, was seized by the Department of Environment and Natural Resources
(DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver could not
produce the required documents for the forest products found concealed in the truck.
Petitioner Jovito Layugan, the Community Environment and Natural Resources Officer
(CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the
truck and gave the owner thereof fifteen (15) days within which to submit an explanation
why the truck should not be forfeited. Private respondents, however, failed to submit the
required explanation. On June 22, 1989, 1 Regional Executive Director Rogelio
Baggayan of DENR sustained petitioner Layugan's action of confiscation and ordered
the forfeiture of the truck invoking Section 68-A of Presidential Decree No. 705 as
amended by Executive Order No. 277. Private respondents filed a letter of
reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director
Baggayan, which was, however, denied in a subsequent order of July 12, 1989. 2
Subsequently, the case was brought by the petitioners to the Secretary of DENR
pursuant to private respondents' statement in their letter dated June 28, 1989 that in
case their letter for reconsideration would be denied then "this letter should be
considered as an appeal to the Secretary." 3 Pending resolution however of the appeal,
a suit for replevin, docketed as Civil Case 4031, was filed by the private respondents
against petitioner Layugan and Executive Director Baggayan 4 with the Regional Trial
Court, Branch 2 of Cagayan, 5 which issued a writ ordering the return of the truck to
private respondents. 6 Petitioner Layugan and Executive Director Baggayan filed a
motion to dismiss with the trial court contending, inter alia, that private respondents had
no cause of action for their failure to exhaust administrative remedies. The trial court
denied the motion to dismiss in an order dated December 28, 1989. 7 Their motion for
reconsideration having been likewise denied, a petition for certiorari was filed by the
petitioners with the respondent Court of Appeals which sustained the trial court's order
ruling that the question involved is purely a legal question. 8 Hence, this present petition,
9
with prayer for temporary restraining order and/or preliminary injunction, seeking to
reverse the decision of the respondent Court of Appeals was filed by the petitioners on
September 9, 1993. By virtue of the Resolution dated September 27, 1993, 10 the prayer
for the issuance of temporary restraining order of petitioners was granted by this Court.

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the
trial court could not legally entertain the suit for replevin because the truck was under
administrative seizure proceedings pursuant to Section 68-A of P.D. 705, as amended
by E.O. 277. Private respondents, on the other hand, would seek to avoid the operation
of this principle asserting that the instant case falls within the exception of the doctrine
upon the justification that (1) due process was violated because they were not given the
chance to be heard, and (2) the seizure and forfeiture was unlawful on the grounds: (a)
that the Secretary of DENR and his representatives have no authority to confiscate and
forfeit conveyances utilized in transporting illegal forest products, and (b) that the truck
as admitted by petitioners was not used in the commission of the crime.

Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the
matter, we are of the opinion that the plea of petitioners for reversal is in order.

This Court in a long line of cases has consistently held that before a party is allowed to
seek the intervention of the court, it is a pre-condition that he should have availed of all
the means of administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his jurisdiction
then such remedy should be exhausted first before court's judicial power can be sought,
The premature invocation of court's intervention is fatal to one's cause of action. 11
Accordingly, absent any finding of waiver or estoppel the case is susceptible of
dismissal for lack of cause of
action. 12 This doctrine of exhaustion of administrative remedies was not without its
practical and legal reasons, for one thing, availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies. It is no less
true to state that the courts of justice for reasons of comity and convenience will shy
away from a dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency concerned every opportunity to
correct its error and to dispose of the case. However, we are not amiss to reiterate that
the principle of exhaustion of administrative remedies as tested by a battery of cases is
not an ironclad rule. This doctrine is a relative one and its flexibility is called upon by the
peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it
is disregarded (1) when there is a violation of due process, 13 (2) when the issue involved
is purely a legal question, 14 (3) when the administrative action is patently illegal
amounting to lack or excess of jurisdiction, 15 (4) when there is estoppel on the part of
the administrative agency concerned, 16 (5) when there is irreparable injury, 17 (6) when
the respondent is a department secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter, 18 (7) when to require exhaustion
of administrative remedies would be unreasonable, 19 (8) when it would amount to a
nullification of a claim, 20 (9) when the subject matter is a private land in land case
proceedings, 21 (10) when the rule does not provide a plain, speedy and adequate
remedy, and (11) when there are circumstances indicating the urgency of judicial
intervention. 22
In the case at bar, there is no question that the controversy was pending before the
Secretary of DENR when it was forwarded to him following the denial by the petitioners
of the motion for reconsideration of private respondents through the order of July 12,
1989. In their letter of reconsideration dated June 28, 1989, 23 private respondents
clearly recognize the presence of an administrative forum to which they seek to avail, as
they did avail, in the resolution of their case. The letter, reads, thus:

xxx xxx xxx

If this motion for reconsideration does not merit your favorable action, then this letter
should be considered as an appeal to the
Secretary. 24

It was easy to perceive then that the private respondents looked up to the Secretary for
the review and disposition of their case. By appealing to him, they acknowledged the
existence of an adequate and plain remedy still available and open to them in the
ordinary course of the law. Thus, they cannot now, without violating the principle of
exhaustion of administrative remedies, seek court's intervention by filing an action for
replevin for the grant of their relief during the pendency of an administrative
proceedings.

Moreover, it is important to point out that the enforcement of forestry laws, rules and
regulations and the protection, development and management of forest lands fall within
the primary and special responsibilities of the Department of Environment and Natural
Resources. By the very nature of its function, the DENR should be given a free hand
unperturbed by judicial intrusion to determine a controversy which is well within its
jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by
private respondents constitutes an unjustified encroachment into the domain of the
administrative agency's prerogative. The doctrine of primary jurisdiction does not
warrant a court to arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of special
competence. 25 In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, 26 which
was reiterated in the recent case of Concerned Officials of MWSS vs. Vasquez, 27 this
Court held:

Thus, while the administration grapples with the complex and multifarious problems
caused by unbriddled exploitation of these resources, the judiciary will stand clear. A long
line of cases establish the basic rule that the courts will not interfere in matters which are
addressed to the sound discretion of government agencies entrusted with the regulation
of activities coming under the special technical knowledge and training of such agencies.

To sustain the claim of private respondents would in effect bring the instant controversy
beyond the pale of the principle of exhaustion of administrative remedies and fall within
the ambit of excepted cases heretofore stated. However, considering the circumstances
prevailing in this case, we can not but rule out these assertions of private respondents
to be without merit. First, they argued that there was violation of due process because
they did not receive the May 23, 1989 order of confiscation of petitioner Layugan. This
contention has no leg to stand on. Due process does not necessarily mean or require a
hearing, but simply an opportunity or right to be heard. 28 One may be heard, not solely
by verbal presentation but also, and perhaps many times more creditably and
practicable than oral argument, through pleadings. 29 In administrative proceedings
moreover, technical rules of procedure and evidence are not strictly applied;
administrative process cannot be fully equated with due process in its strict judicial
sense. 30 Indeed, deprivation of due process cannot be successfully invoked where a
party was given the chance to be heard on his motion for reconsideration, 31 as in the
instant case, when private respondents were undisputedly given the opportunity to
present their side when they filed a letter of reconsideration dated June 28, 1989 which
was, however, denied in an order of July 12, 1989 of Executive Director Baggayan, In
Navarro III vs. Damasco, 32 we ruled that :

The essence of due process is simply an opportunity to be heard, or as applied to

administrative proceedings, an opportunity to explain one's side or an opportunity to seek
a reconsideration of the action or ruling complained of. A formal or trial type hearing is not
at all times and in all instances essential. The requirements are satisfied when the parties
are afforded fair and reasonable opportunity to explain their side of the controversy at
hand. What is frowned upon is the absolute lack of notice or hearing.

Second, private respondents imputed the patent illegality of seizure and forfeiture of the
truck because the administrative officers of the DENR allegedly have no power to
perform these acts under the law. They insisted that only the court is authorized to
confiscate and forfeit conveyances used in transporting illegal forest products as can be
gleaned from the second paragraph of Section 68 of P.D. 705, as amended by E.O.
277. The pertinent provision reads as follows:

Sec. 68. . . .

xxx xxx xxx

The court shall further order the confiscation in favor of the government of the timber or
any forest products cut, gathered, collected, removed, or possessed, as well as the
machinery, equipments, implements and tools illegaly [sic] used in the area where the
timber or forest products are found. (Emphasis ours)

A reading, however, of the law persuades us not to go along with private respondents'
thinking not only because the aforequoted provision apparently does not mention nor
include "conveyances" that can be the subject of confiscation by the courts, but to a
large extent, due to the fact that private respondents' interpretation of the subject
provision unduly restricts the clear intention of the law and inevitably reduces the other
provision of Section 68-A, which is quoted herein below:

Sec. 68-A. Administrative Authority of the Department or His Duly Authorized

Representative To Order Confiscation. In all cases of violation of this Code or other forest
laws, rules and regulations, the Department Head or his duly authorized representative,
may order the confiscation of any forest products illegally cut, gathered, removed, or
possessed or abandoned, and all conveyances used either by land, water or air in the
commission of the offense and to dispose of the same in accordance with pertinent laws,
regulations and policies on the matter. (Emphasis ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any conveyances
utilized in violating the Code or other forest laws, rules and regulations. The phrase "to
dispose of the same" is broad enough to cover the act of forfeiting conveyances in favor
of the government. The only limitation is that it should be made "in accordance with
pertinent laws, regulations or policies on the matter." In the construction of statutes, it
must be read in such a way as to give effect to the purpose projected in the statute. 33
Statutes should be construed in the light of the object to be achieved and the evil or
mischief to be suppressed, and they should be given such construction as will advance
the object, suppress the mischief, and secure the benefits intended. 34 In this wise, the
observation of the Solicitor General is significant, thus:

But precisely because of the need to make forestry laws "more responsive to present
situations and realities" and in view of the "urgency to conserve the remaining resources
of the country," that the government opted to add Section 68-A. This amendatory
provision is an administrative remedy totally separate and distinct from criminal
proceedings. More than anything else, it is intended to supplant the inadequacies that
characterize enforcement of forestry laws through criminal actions. The preamble of EO
277-the law that added Section 68-A to PD 705-is most revealing:
 "WHEREAS, there is an urgency to conserve the remaining forest
resources of the country for the benefit and welfare of the present and
future generations of Filipinos;

WHEREAS, our forest resources may be effectively conserved and

protected through the vigilant enforcement and implementation of our
forestry laws, rules and regulations;

WHEREAS, the implementation of our forestry laws suffers from

technical difficulties, due to certain inadequacies in the penal provisions
of the Revised Forestry Code of the Philippines; and

WHEREAS, to overcome this difficulties, there is a need to penalize

certain acts more responsive to present situations and realities;"

It is interesting to note that Section 68-A is a new provision authorizing the DENR to
confiscate, not only "conveyances," but forest products as well. On the other hand,
confiscation of forest products by the "court" in a criminal action has long been provided
for in Section 68. If as private respondents insist, the power on confiscation cannot be
exercised except only through the court under Section 68, then Section 68-A would have
no Purpose at all. Simply put, Section 68-A would not have provided any solution to the
problem perceived in EO 277, supra. 35

Private respondents, likewise, contend that the seizure was illegal because the
petitioners themselves admitted in the Order dated July 12, 1989 of Executive Director
Baggayan that the truck of private respondents was not used in the commission of the
crime. This order, a copy of which was given to and received by the counsel of private
respondents, reads in part, viz.:

. . . while it is true that the truck of your client was not used by her in the commission of
the crime, we uphold your claim that the truck owner is not liable for the crime and in no
case could a criminal case be filed against her as provided under Article 309 and 310 of
the Revised Penal Code. . . 36

We observed that private respondents misread the content of the aforestated order and
obviously misinterpreted the intention of petitioners. What is contemplated by the
petitioners when they stated that the truck "was not used in the commission of the
crime" is that it was not used in the commission of the crime of theft, hence, in no case
can a criminal action be filed against the owner thereof for violation of Article 309 and
310 of the Revised Penal Code. Petitioners did not eliminate the possibility that the
truck was being used in the commission of another crime, that is, the breach of Section
68 of P.D. 705 as amended by E.O. 277. In the same order of July 12, 1989, petitioners
pointed out:

. . . However, under Section 68 of P.D. 705 as amended and further amended by

Executive Order No. 277 specifically provides for the confiscation of the conveyance
used in the transport of forest products not covered by the required legal documents. She
may not have been involved in the cutting and gathering of the product in question but
the fact that she accepted the goods for a fee or fare the same is therefor liable. . . 37

Private respondents, however, contended that there is no crime defined and punishable
under Section 68 other than qualified theft, so that, when petitioners admitted in the July
12, 1989 order that private respondents could not be charged for theft as provided for
under Articles 309 and 310 of the Revised Penal Code, then necessarily private
respondents could not have committed an act constituting a crime under Section 68. We
disagree. For clarity, the provision of Section 68 of P.D. 705 before its amendment by
E.O. 277 and the provision of Section 1 of E.O. No. 277 amending the aforementioned
Section 68 are reproduced herein, thus:

Sec. 68. Cutting, gathering and/or collecting timber or other products without license. —
Any person who shall cut, gather, collect, or remove timber or other forest products from
any forest land, or timber from alienable and disposable public lands, or from private
 lands, without any authority under a license agreement, lease, license or permit, shall be
guilty of qualified theft as defined and punished under Articles 309 and 310 of the
Revised Penal Code . . . (Emphasis ours; Section 68, P.D. 705 before its amendment by
E.O. 277)

Sec. 1. Section 68 of Presidential Decree No. 705, as amended, is hereby amended to

read as follows:

Sec. 68. Cutting, gathering and/or collecting timber or other forest

products without license. — Any person who shall cut, gather, collect,
remove timber or other forest products from any forest land, or timber
from alienable or disposable public land, or from private land, without any
authority, or possess timber or other forest products without the legal
documents as required under existing forest laws and regulations, shall
be punished with the penalties imposed under Articles 309 and 310 of
the Revised Penal Code . . . (Emphasis ours; Section 1, E.O. No. 277
amending Section 68, P.D. 705 as amended)

With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the
act of cutting, gathering, collecting, removing, or possessing forest products without
authority constitutes a distinct offense independent now from the crime of theft under
Articles 309 and 310 of the Revised Penal Code, but the penalty to be imposed is that
provided for under Article 309 and 310 of the Revised Penal Code. This is clear from
the language of Executive Order No. 277 when it eliminated the phrase "shall be guilty
of qualified theft as defined and punished under Articles 309 and 310 of the Revised
Penal Code" and inserted the words "shall be punished with the penalties imposed
under Article 309 and 310 of the Revised Penal Code". When the statute is clear and
explicit, there is hardly room for any extended court ratiocination or rationalization of the
law. 38

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained
against the petitioners for the subject truck taken and retained by them for
administrative forfeiture proceedings in pursuant to Section 68-A of the P.D. 705, as
amended. Dismissal of the replevin suit for lack of cause of action in view of the private
respondents' failure to exhaust administrative remedies should have been the proper
course of action by the lower court instead of assuming jurisdiction over the case and
consequently issuing the writ ordering the return of the truck. Exhaustion of the
remedies in the administrative forum, being a condition precedent prior to one's
recourse to the courts and more importantly, being an element of private respondents'
right of action, is too significant to be waylaid by the lower court.

It is worth stressing at this point, that a suit for replevin is founded solely on the claim
that the defendant wrongfully withholds the property sought to be recovered. It lies to
recover possession of personal chattels that are unlawfully detained. 39 "To detain" is
defined as to mean "to hold or keep in custody," 40 and it has been held that there is
tortious taking whenever there is an unlawful meddling with the property, or an exercise
or claim of dominion over it, without any pretense of authority or right; this, without
manual seizing of the property is sufficient. 41 Under the Rules of Court, it is
indispensable in replevin proceeding that the plaintiff must show by his own affidavit that
he is entitled to the possession of property, that the property is wrongfully detained by
the defendant, alleging the cause of detention, that the same has not been taken for tax
assessment, or seized under execution, or attachment, or if so seized, that it is exempt
from such seizure, and the actual value of the property. 42 Private respondents miserably
failed to convince this Court that a wrongful detention of the subject truck obtains in the
instant case. It should be noted that the truck was seized by the petitioners because it
was transporting forest products without the required permit of the DENR in manifest
contravention of Section 68 of P.D. 705 as amended by E.O 277. Section 68-A of P.D.
705, as amended, unquestionably warrants the confiscation as well as the disposition
by the Secretary of DENR or his duly authorized representatives of the conveyances
used in violating the provision of forestry laws. Evidently, the continued possession or
detention of the truck by the petitioners for administrative forfeiture proceeding is legally
permissible, hence, no wrongful detention exists in the case at bar.

Moreover, the suit for replevin is never intended as a procedural tool to question the
orders of confiscation and forfeiture issued by the DENR in pursuance to the authority
given under P.D. 705, as amended. Section 8 of the said law is explicit that actions
taken by the Director of the Bureau of Forest Development concerning the enforcement
of the provisions of the said law are subject to review by the Secretary of DENR and
that courts may not review the decisions of the Secretary except through a special civil
action for certiorari or prohibition. It reads:

Sec. 8. REVIEW — All actions and decisions of the Director are subject to review, motu
propio or upon appeal of any person aggrieved thereby, by the Department Head whose
decision shall be final and executory after the lapse of thirty (30) days from the receipt of
the aggrieved party of said decision, unless appealed to the President in accordance with
Executive Order No. 19, Series of 1966. The Decision of the Department Head may not
be reviewed by the courts except through a special civil action for certiorari or prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of

Appeals dated October 16, 1991 and its Resolution dated July 14, 1992 are hereby SET
ASIDE AND REVERSED; the Restraining Order promulgated on September 27, 1993 is
hereby made permanent; and the Secretary of DENR is directed to resolve the
controversy with utmost dispatch.

SO ORDERED.

Regalado, Romero, Puno and Mendoza, JJ., concur.

Footnotes

1 Rollo p. 235.

2 Rollo pp. 241-242.

3 Rollo p. 239.

4 Baggayan died during the pendency of Civil Case 4031, he was succeeded in office by
Petitioner Leonardo Paat.

5 Presided by Judge Ricardo A. Baculi.

6 Rollo pp. 251-252.

7 Rollo pp. 274-275.

8 Rollo pp. 36-46 penned by Justice Serafin V.C. Guingona, concurred by Justices Luis
A. Javellana and Jorge S. Imperial.

9 Rollo pp. 14-35.

10 Rollo pp. 117-119.

11 National Development Company v. Hervilla, L-65718, June 30, 1987; Atlas

Consolidated Mining Company vs. Mendoza, G.R. No. L -15809, August 30, 1961;
Aboitiz v. Collector of Customs, G.R. No. L-29466, May 18, 1978; Pestenas v. Dyogi,
G.R. No. L-25786, February 27, 1978.

12 Soto v. Jareno, G.R. No. 38962, September 15, 1986; Hodges v. Mun. Board, L-
18276, January 12, 1967; Abe-Abe v. Manta, L-4827, May 31, 1979; Gone v. District
Engineer, L-22782, August 29, 1975.
13 Quisumbing v. Judge Gumban, G.R. No. 85156, February 5, 1991.

14 Eastern Shipping Lines v. POEA, L-76633, October 18, 1988.

15 Industrial Power Sales, Inc. V. Sinsuat, L-29171, April 15, 1988.

16 Vda. De Tan v. Veterans Backpay Commission, L-12944, March 30, 1959.

17 De Lara v. Cloribel, G.R. No. L-21653, May 31, 1965.

18 Demaisip v. Court of Appeals, G.R. No. 13000, September 25, 1959; Bartulata v.
Peralta, G.R. No. 23155, September 9, 1974.

19 Cipriano v. Marcelino, G.R. No. L-27793, February 28, 1972.

20 Alzate v. Aldana, G.R. No. 14407, February 29, 1960.

21 Soto v. Jareno, supra.

22 Quisumbing v. Judge Gumban, supra.

23 Rollo pp. 236-240.

24 Rollo p. 239.

25 Vidad v. RTC, G.R. No. 98084, October 18, 1993.

26 G.R. No. 79538, October 18, 1990.

27 G.R. No. 109113, January 25, 1995.

28 Pepsi Cola Distributors of the Phil. V. NLRC, G.R. No. 100686, August 15, 1995.

29 Concerned Officials of MWSS vs. Vasquez, supra.

30 Ibid.

31 Rodriguez v. Project 6 Market Service Cooperative, G.R. No. 79968, August 23, 1995.

32 G.R. No. 101875, July 14, 1995.

33 Lopez, Jr. v. Court of Appeals, G.R. No. 104158, November 6, 1992.

34 De Guia v. Commission on Elections, G.R. No. 104712, May 6, 1992.

35 Rollo pp. 170-171; Memorandum pp. 12-13.

36 Rollo p. 242.

37 Ibid.

38 Libanan v. Sandiganbayan, G.R. No. 112386, June 14, 1994.

39 American Jurisprudence, Second Edition, Volume 66, p. 850, footnote 57; I.

Tanenbaum Son and Company vs. C. Ludwig Baumann and Company, 261 NY 85, 184
NE 503, 86 ALR 102.

40 Ibid., footnote 59; Anderson vs. Hapler, 34 III 436; Wails vs. Farrington, 27 Okla 754,
116 P 428.

41 Id., footnote 60 ; Haythorn vs. Rushforth, 19 NJL 160.

 42 Section 2, Rule 60 of the Rules of Court.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22301             August 30, 1967

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
MARIO MAPA Y MAPULONG, defendant-appellant.

Francisco P. Cabigao for defendant-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R. Rosete and
Solicitor O. C. Hernandez for plaintiff-appellee.

FERNANDO, J.:

The sole question in this appeal from a judgment of conviction by the lower court is whether or
not the appointment to and holding of the position of a secret agent to the provincial governor
would constitute a sufficient defense to a prosecution for the crime of illegal possession of
firearm and ammunition. We hold that it does not.

The accused in this case was indicted for the above offense in an information dated August 14,
1962 reading as follows: "The undersized accuses MARIO MAPA Y MAPULONG of a
violation of Section 878 in connection with Section 2692 of the Revised Administrative Code, as
amended by Commonwealth Act No. 56 and as further amended by Republic Act No. 4,
committed as follows: That on or about the 13th day of August, 1962, in the City of Manila,
Philippines, the said accused did then and there wilfully and unlawfully have in his possession
and under his custody and control one home-made revolver (Paltik), Cal. 22, without serial
number, with six (6) rounds of ammunition, without first having secured the necessary license or
permit therefor from the corresponding authorities. Contrary to law."

When the case was called for hearing on September 3, 1963, the lower court at the outset asked
the counsel for the accused: "May counsel stipulate that the accused was found in possession of
the gun involved in this case, that he has neither a permit or license to possess the same and that
we can submit the same on a question of law whether or not an agent of the governor can hold a
firearm without a permit issued by the Philippine Constabulary." After counsel sought from the
fiscal an assurance that he would not question the authenticity of his exhibits, the understanding
being that only a question of law would be submitted for decision, he explicitly specified such
question to be "whether or not a secret agent is not required to get a license for his firearm."
Upon the lower court stating that the fiscal should examine the document so that he could pass
on their authenticity, the fiscal asked the following question: "Does the accused admit that this
pistol cal. 22 revolver with six rounds of ammunition mentioned in the information was found in
his possession on August 13, 1962, in the City of Manila without first having secured the
necessary license or permit thereof from the corresponding authority?" The accused, now the
appellant, answered categorically: "Yes, Your Honor." Upon which, the lower court made a
statement: "The accused admits, Yes, and his counsel Atty. Cabigao also affirms that the accused
admits."

Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel
for the accused on his part presented four (4) exhibits consisting of his appointment "as secret
agent of the Hon. Feliciano Leviste," then Governor of Batangas, dated June 2, 1962;1 another
document likewise issued by Gov. Leviste also addressed to the accused directing him to proceed
to Manila, Pasay and Quezon City on a confidential mission;2 the oath of office of the accused as
such secret agent,3 a certificate dated March 11, 1963, to the effect that the accused "is a secret
agent" of Gov. Leviste.4 Counsel for the accused then stated that with the presentation of the
above exhibits he was "willing to submit the case on the question of whether or not a secret agent
duly appointed and qualified as such of the provincial governor is exempt from the requirement
of having a license of firearm." The exhibits were admitted and the parties were given time to
file their respective memoranda.1äwphï1.ñët

Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused
"of the crime of illegal possession of firearms and sentenced to an indeterminate penalty of from
one year and one day to two years and to pay the costs. The firearm and ammunition confiscated
from him are forfeited in favor of the Government."

The only question being one of law, the appeal was taken to this Court. The decision must be
affirmed.

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any
person to . . . possess any firearm, detached parts of firearms or ammunition therefor, or any
instrument or implement used or intended to be used in the manufacture of firearms, parts of
firearms, or ammunition."5 The next section provides that "firearms and ammunition regularly
and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the
Philippines], the Philippine Constabulary, guards in the employment of the Bureau of Prisons,
municipal police, provincial governors, lieutenant governors, provincial treasurers, municipal
treasurers, municipal mayors, and guards of provincial prisoners and jails," are not covered
"when such firearms are in possession of such officials and public servants for use in the
performance of their official duties."6

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt.
Our task is equally clear. The first and fundamental duty of courts is to apply the law.
"Construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them."7 The conviction of the accused must stand. It cannot be
set aside.

Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on
appeal on the assumption that the appointment "of the accused as a secret agent to assist in the
maintenance of peace and order campaigns and detection of crimes, sufficiently put him within
the category of a "peace officer" equivalent even to a member of the municipal police expressly
covered by section 879." Such reliance is misplaced. It is not within the power of this Court to
set aside the clear and explicit mandate of a statutory provision. To the extent therefore that this
decision conflicts with what was held in People v. Macarandang, it no longer speaks with
authority.

Wherefore, the judgment appealed from is affirmed.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro
and Angeles, JJ., concur.

Footnotes
1
Exhibit 1.
2
Exhibit 2.
3
Exhibit 3.
4
Exhibit 4.
5
Sec. 878 as amended by Republic Act No. 4, Revised Administrative Code.
6
Sec. 879, Revised Administrative Code.
7
Lizarraga Hermanos v. Yap Tico, (1913) 24 Phil. 504, 513.
8
L-12088, December 23, 1959.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-34568 March 28, 1988

RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO

DAOANG, petitioners,
vs.
THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY and
AMANDA RAMOS-AGONOY, respondents.

PADILLA, J.:
This is a petition for review on certiorari of the decision, dated 30 June 1971, rendered
by the respondent judge * in Spec. Proc. No. 37 of Municipal Court of San Nicolas,
Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos;
Antero Agonoy and Amanda R. Agonoy, petitioners", the dispositive part of which reads,
as follows:

Wherefore, Court renders judgment declaring that henceforth Quirino Bonilla and Wilson
Marcos be, to all legitimate intents and purposes, the children by adoption of the joint
petitioners Antero Agonoy and Amanda R. Agonoy and that the former be freed from
legal obedience and maintenance by their respective parents, Miguel Bonilla and
Laureana Agonoy for Quirino Bonilla and Modesto Marcos and Benjamina Gonzales for
Wilson Marcos and their family names 'Bonilla' and 'Marcos' be changed with "Agonoy",
which is the family name of the petitioners.

Successional rights of the children and that of their adopting parents shall be governed
by the pertinent provisions of the New Civil Code.

Let copy of this decision be furnished and entered into the records of the Local Civil
Registry of San Nicolas, Ilocos Norte, for its legal effects at the expense of the
petitioners. 1

The undisputed facts of the case are as follows:

On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a petition
with the Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption of the
minors Quirino Bonilla and Wilson Marcos. The case, entitled: "In re Adoption of the
Minors Quirino Bonilla and Wilson Marcos, Antero Agonoy and Amanda Ramos-
Agonoy, petitioners", was docketed therein as Spec. Proc. No. 37. 2

The petition was set for hearing on 24 April 1971 and notices thereof were caused to be
served upon the office of the Solicitor General and ordered published in the ILOCOS
TIMES, a weekly newspaper of general circulation in the province of Ilocos Norte, with
editorial offices in Laoag City. 3

On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father
and guardian ad litem, the petitioners herein, filed an opposition to the aforementioned
petition for adoption, claiming that the spouses Antero and Amanda Agonoy had a
legitimate daughter named Estrella Agonoy, oppositors' mother, who died on 1 March
1971, and therefore, said spouses were disqualified to adopt under Art. 335 of the Civil
Code. 4

After the required publication of notice had been accomplished, evidence was
presented. Thereafter, the Municipal Court of San Nicolas, Ilocos Norte rendred its
decision, granting the petition for adoption. 5

Hence, the present recourse by the petitioners (oppositors in the lower court).

The sole issue for consideration is one of law and it is whether or not the respondent
spouses Antero Agonoy and Amanda Ramos-Agonoy are disqualified to adopt under
paragraph (1), Art. 335 of the Civil Code.

The pertinent provision of law reads, as follows:

Art. 335. The following cannot adopt:

(1) Those who have legitimate, legitimated, acknowledged natural children, or children by
legal fiction;

xxx xxx xxx

In overruling the opposition of the herein petitioners, the respondents judge held that "to
add grandchildren in this article where no grandchil is included would violate to (sic) the
legal maxim that what is expressly included would naturally exclude what is not
included".

But, it is contended by the petitioners, citing the case of In re Adoption of Millendez, 6

that the adoption of Quirino Bonilla and Wilson Marcos would not only introduce a
foreign element into the family unit, but would result in the reduction of their legititimes.
It would also produce an indirect, permanent and irrevocable disinheritance which is
contrary to the policy of the law that a subsequent reconciliation between the offender
and the offended person deprives the latter of the right to disinherit and renders
ineffectual any disinheritance that may have been made.

We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code, in
enumerating the persons who cannot adopt, are clear and unambiguous. The children
mentioned therein have a clearly defined meaning in law and, as pointed out by the
respondent judge, do not include grandchildren.

Well known is the rule of statutory construction to the effect that a statute clear and
unambiguous on its face need not be interpreted; stated otherwise, the rule is that only
statutes with an ambiguous or doubtful meaning may be the subject of statutory
construction. 7

Besides, it appears that the legislator, in enacting the Civil Code of the Philippines,
obviously intended that only those persons who have certain classes of children, are
disqualified to adopt. The Civil Code of Spain, which was once in force in the
Philippines, and which served as the pattern for the Civil Code of the Philippines, in its
Article 174, disqualified persons who have legitimate or legitimated descendants from
adopting. Under this article, the spouses Antero and Amanda Agonoy would have been
disqualified to adopt as they have legitimate grandchildren, the petitioners herein. But,
when the Civil Code of the Philippines was adopted, the word "descendants" was
changed to "children", in paragraph (1) of Article 335.

Adoption used to be for the benefit of the adoptor. It was intended to afford to persons
who have no child of their own the consolation of having one, by creating through legal
fiction, the relation of paternity and filiation where none exists by blood relationship. 8
The present tendency, however, is geared more towards the promotion of the welfare of
the child and the enhancement of his opportunities for a useful and happy life, and
every intendment is sustained to promote that objective. 9 Under the law now in force,
having legitimate, legitimated, acknowledged natural children, or children by legal
fiction, is no longer a ground for disqualification to adopt. 10

WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San
Nicolas, Ilocos Norte in Spec. Proc. No. 37 is AFFIRMED. Without pronouncement as to
costs in this instance.

SO ORDERED.

Yap, Melencio-Herrera, Paras and Sarmiento, JJ., concur.

Footnotes
* Judge Pascual C. Barab.

1 Rollo, pp. 19-20.

 2 Id., p. 8.

3 Id., p. 12.

4 Id., p. 13.

5 Id., p. 14.

6 G.R. No. L-28195, June 10, 1971, 39 SCRA 499.

7 2 Sutherland, Statutory Construction, 3rd. ed., Section 4502, p. 316.

8 In re Adoption of Resaba, 95 Phil. 244.

9 Santos vs. Aranzanso, 123 Phil. 160.

10 Child and Welfare Code, Art. 28.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
 

G.R. No. 123169 November 4, 1996

DANILO E. PARAS, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.

RESOLUTION

FRANCISCO, J.:

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

In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled
the recall election an January 13, 1996; hence, the instant petition for certiorari with
urgent prayer for injunction. On January 12, 1996, the Court issued a temporary
restraining order and required the Office of the Solicitor General, in behalf of public
respondent, to comment on the petition. In view of the Office of the Solicitor General's
manifestation maintaining an opinion adverse to that of the COMELEC, the latter
through its law department filed the required comment. Petitioner thereafter filed a reply.
3

Petitioner's argument is simple and to the point. Citing Section 74 (b) of Republic Act
No. 7160, otherwise known as the Local Government Code, which states that "no recall
shall take place within one (1) year from the date of the official's assumption to office or
one (1) year immediately preceding a regular local election", petitioner insists that the
scheduled January 13, 1996 recall election is now barred as the Sangguniang Kabataan
(SK) election was set by Republic Act No. 7808 on the first Monday of May 1996, and
every three years thereafter. In support thereof, petitioner cites Associated Labor Union
v. Letrondo-Montejo, 237 SCRA 621, where the Court considered the SK election as a
regular local election. Petitioner maintains that as the SK election is a regular local
election, hence no recall election can be had for barely four months separate the SK
election from the recall election. We do not agree.

The subject provision of the Local Government Code provides:

Sec. 74. Limitations on Recall. — (a) Any elective local official may be the subject of a
recall election only once during his term of office for loss of confidence.

(b) No recall shall take place within one (1) year from the date of the official's assumption
to office or one (1) year immediately preceding a regular local election.

[Emphasis added]

It is a rule in statutory construction that every part of the statute must be interpreted with
reference to the context, i.e., that every part of the statute must be considered together
with the other parts, and kept subservient to the general intent of the whole enactment. 4
The evident intent of Section 74 is to subject an elective local official to recall election
once during his term of office. Paragraph (b) construed together with paragraph (a)
merely designates the period when such elective local official may be subject of a recall
election, that is, during the second year of his term of office. Thus, subscribing to
petitioner's interpretation of the phrase regular local election to include the SK election
will unduly circumscribe the novel provision of the Local Government Code on recall, a
mode of removal of public officers by initiation of the people before the end of his term.
And if the SK election which is set by R.A No. 7808 to be held every three years from
May 1996 were to be deemed within the purview of the phrase "regular local election",
as erroneously insisted by petitioner, then no recall election can be conducted rendering
inutile the recall provision of the Local Government Code.

In the interpretation of a statute, the Court should start with the assumption that the
legislature intended to enact an effective law, and the legislature is not presumed to
have done a vain thing in the enactment of a statute. 5 An interpretation should, if
possible, be avoided under which a statute or provision being construed is defeated, or
as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative or nugatory. 6

It is likewise a basic precept in statutory construction that a statute should be interpreted

in harmony with the Constitution. 7 Thus, the interpretation of Section 74 of the Local
Government Code, specifically paragraph (b) thereof, should not be in conflict with the
Constitutional mandate of Section 3 of Article X of the Constitution to "enact a local
government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective
mechanism of recall, initiative, and referendum . . . ."
Moreover, petitioner's too literal interpretation of the law leads to absurdity which we
cannot countenance. Thus, in a case, the Court made the following admonition:

We admonish against a too-literal reading of the law as this is apt to constrict rather than
fulfill its purpose and defeat the intention of its authors. That intention is usually found not
in "the letter that killeth but in the spirit that vivifieth". . . 8

The spirit, rather than the letter of a law determines its construction; hence, a
statute, as in this case, must be read according to its spirit and intent.

Finally, recall election is potentially disruptive of the normal working of the local
government unit necessitating additional expenses, hence the prohibition against the
conduct of recall election one year immediately preceding the regular local election. The
proscription is due to the proximity of the next regular election for the office of the local
elective official concerned. The electorate could choose the official's replacement in the
said election who certainly has a longer tenure in office than a successor elected
through a recall election. It would, therefore, be more in keeping with the intent of the
recall provision of the Code to construe regular local election as one referring to an
election where the office held by the local elective official sought to be recalled will be
contested and be filled by the electorate.

Nevertheless, recall at this time is no longer possible because of the limitation stated
under Section 74 (b) of the Code considering that the next regular election involving the
barangay office concerned is barely seven (7) months away, the same having been
scheduled on May 1997. 9

ACCORDINGLY, the petition is hereby dismissed for having become moot and
academic. The temporary restraining order issued by the Court on January 12, 1996,
enjoining the recall election should be as it is hereby made permanent.

SO ORDERED.

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

Separate Opinions
 

DAVIDE, JR., J., concurring:

I concur with Mr. Justice Ricardo J. Francisco in his ponencia.

However, I wish to add another reason as to why the SK election cannot be considered
a "regular local election" for purposes of recall under Section 74 of the Local
Government Code of 1991.

The term "regular local election" must be confined to the regular election of elective
local officials, as distinguished from the regular election of national officials. The elective
national officials are the President, Vice-President, Senators and Congressmen. The
elective local officials are Provincial Governors, Vice-Governors of provinces, Mayors
and Vice-Mayors of cities and municipalities, Members of the Sanggunians of provinces,
cities and municipalities, punong barangays and members of the sangguniang
barangays, and the elective regional officials of the Autonomous Region of Muslim
Mindanao. These are the only local elective officials deemed recognized by Section 2(2)
of Article IX-C of the Constitution, which provides:

Sec. 2. The Commission on Elections shall exercise the following powers and functions:

xxx xxx xxx

(2) Exercise exclusive original jurisdiction over all contests relating to the elections,
returns, and qualifications of all elective regional, provincial, and city officials, and
appellate jurisdiction over all contests involving elective municipal officials decided by trial
courts of general jurisdiction, or involving elective barangay officials decided by trial
courts of limited jurisdiction.

A regular election, whether national or local, can only refer to an election participated in
by those who possess the right of suffrage, are not otherwise disqualified by law, and
who are registered voters. One of the requirements for the exercise of suffrage under
Section 1, Article V of the Constitution is that the person must be at least 18 years of
age, and one requisite before he can vote is that he be a registered voter pursuant to
the rules on registration prescribed in the Omnibus Election Code (Section 113-118).

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

Indeed the Sangguniang Kabataan is nothing more than a youth organization, and
although fully recognized in the Local Government Code and vested with certain powers
and functions, its elective officials have not attained the status of local elective officials.
So, in Mercado vs. Board of Election Supervisors (243 SCRA 422 [1995]), this Court
ruled that although the SK Chairman is an ex-officio member of the sangguniang
barangay — an elective body — that fact does not make him "an elective barangay
official," since the law specifically provides who comprise the elective officials of the
sangguniang barangay, viz., the punong barangay and the seven (7) regular
sangguniang barangay members elected at large by those qualified to exercise the right
of suffrage under Article V of the Constitution, who are likewise registered voters of the
barangay. This shows further that the SK election is not a regular local election for
purposes of recall under Section 74 of the Local Government Code.

Separate Opinions

DAVIDE, JR., J., concurring:

I concur with Mr. Justice Ricardo J. Francisco in his ponencia.

However, I wish to add another reason as to why the SK election cannot be considered
a "regular local election" for purposes of recall under Section 74 of the Local
Government Code of 1991.

The term "regular local election" must be confined to the regular election of elective
local officials, as distinguished from the regular election of national officials. The elective
national officials are the President, Vice-President, Senators and Congressmen. The
elective local officials are Provincial Governors, Vice-Governors of provinces, Mayors
and Vice-Mayors of cities and municipalities, Members of the Sanggunians of provinces,
cities and municipalities, punong barangays and members of the sangguniang
barangays, and the elective regional officials of the Autonomous Region of Muslim
Mindanao. These are the only local elective officials deemed recognized by Section 2(2)
of Article IX-C of the Constitution, which provides:

Sec. 2. The Commission on Elections shall exercise the following powers and functions:

xxx xxx xxx

(2) Exercise exclusive original jurisdiction over all contests relating to the elections,
returns, and qualifications of all elective regional, provincial, and city officials, and
appellate jurisdiction over all contests involving elective municipal officials decided by trial
courts of general jurisdiction, or involving elective barangay officials decided by trial
courts of limited jurisdiction.

A regular election, whether national or local, can only refer to an election participated in
by those who possess the right of suffrage, are not otherwise disqualified by law, and
who are registered voters. One of the requirements for the exercise of suffrage under
Section 1, Article V of the Constitution is that the person must be at least 18 years of
age, and one requisite before he can vote is that he be a registered voter pursuant to
the rules on registration prescribed in the Omnibus Election Code (Section 113-118).

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

Indeed the Sangguniang Kabataan is nothing more than a youth organization, and
although fully recognized in the Local Government Code and vested with certain powers
and functions, its elective officials have not attained the status of local elective officials.
So, in Mercado vs. Board of Election Supervisors (243 SCRA 422 [1995]), this Court
ruled that although the SK Chairman is an ex-officio member of the sangguniang
barangay — an elective body — that fact does not make him "an elective barangay
official," since the law specifically provides who comprise the elective officials of the
sangguniang barangay, viz., the punong barangay and the seven (7) regular
sangguniang barangay members elected at large by those qualified to exercise the right
of suffrage under Article V of the Constitution, who are likewise registered voters of the
barangay. This shows further that the SK election is not a regular local election for
purposes of recall under Section 74 of the Local Government Code.

Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug and Mendoza, JJ., concur.

Footnotes

1 COMELEC Resolution No. 95-3345, September 5, 1995.

2 RTC, Cabanatuan City, Order dated December 20, 1995; Rollo, p. 28.

3 Rollo, pp. 64-66.

4 Aisporna v. Court of Appeals, 113 SCRA 464, 467.

5 Asturias Sugar Central, Inc. v. Commissioner of Customs, 29 SCRA 617, 627.

6 Id. at p. 628.

7 PLDT v. Collector of Internal Revenue, 90 Phil. 674.

8 People v. Salas, 143 SCRA 163, 167.

 9 Petition, p. 3; Rollo, p. 5; See: Evardorne v. COMELEC, 204 SCRA 464.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-30642 April 30, 1985

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors

ROMULO and NESTOR S. FLORESCA; and ERLINDA FLORESCA-GABUYO,
PEDRO S. FLORESCA, JR., CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH
S. FLORESCA and CARMEN S. FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her
minor children LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez;
and DANIEL MARTINEZ and TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her
minor children JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her
minor children EDNA, GEORGE and LARRY III, all surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of
her minor children EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and
AURELIO, JR. all surnamed LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor
children JOSE, LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA,
petitioners,
vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of
Branch XIII, Court of First Instance of Manila, respondents.

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:

This is a petition to review the order of the former Court of First Instance of Manila,
Branch XIII, dated December 16, 1968 dismissing petitioners' complaint for damages on
the ground of lack of jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining Corporation
(hereinafter referred to as Philex), who, while working at its copper mines underground
operations at Tuba, Benguet on June 28, 1967, died as a result of the cave-in that
buried them in the tunnels of the mine. Specifically, the complaint alleges that Philex, in
violation of government rules and regulations, negligently and deliberately failed to take
the required precautions for the protection of the lives of its men working underground.
Portion of the complaint reads:

xxx xxx xxx

9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross
and reckless negligence and imprudence and deliberate failure to take the required
precautions for the due protection of the lives of its men working underground at the time,
and in utter violation of the laws and the rules and regulations duly promulgated by the
Government pursuant thereto, allowed great amount of water and mud to accumulate in
an open pit area at the mine above Block 43-S-1 which seeped through and saturated the
600 ft. column of broken ore and rock below it, thereby exerting tremendous pressure on
the working spaces at its 4300 level, with the result that, on the said date, at about 4
o'clock in the afternoon, with the collapse of all underground supports due to such
enormous pressure, approximately 500,000 cubic feet of broken ores rocks, mud and
water, accompanied by surface boulders, blasted through the tunnels and flowed out and
filled in, in a matter of approximately five (5) minutes, the underground workings, ripped
timber supports and carried off materials, machines and equipment which blocked all
avenues of exit, thereby trapping within its tunnels of all its men above referred to,
including those named in the next preceding paragraph, represented by the plaintiffs
herein;

10. That out of the 48 mine workers who were then working at defendant PHILEX's mine
on the said date, five (5) were able to escape from the terrifying holocaust; 22 were
rescued within the next 7 days; and the rest, 21 in number, including those referred to in
paragraph 7 hereinabove, were left mercilessly to their fate, notwithstanding the fact that
up to then, a great many of them were still alive, entombed in the tunnels of the mine, but
were not rescued due to defendant PHILEX's decision to abandon rescue operations, in
utter disregard of its bounden legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations duly
promulgated by the duly constituted authorities as set out by the Special Committee
above referred to, in their Report of investigation, pages 7-13, Annex 'B' hereof, but also
failed completely to provide its men working underground the necessary security for the
protection of their lives notwithstanding the fact that it had vast financial resources, it
having made, during the year 1966 alone, a total operating income of P 38,220,254.00, or
net earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the year
ended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as of
December 31, 1966;

xxx xxx xxx

(pp. 42-44, rec.)

A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of
action of petitioners based on an industrial accident are covered by the provisions of the
Workmen's Compensation Act (Act 3428, as amended by RA 772) and that the former
Court of First Instance has no jurisdiction over the case. Petitioners filed an opposition
dated May 27, 1968 to the said motion to dismiss claiming that the causes of action are
not based on the provisions of the Workmen's Compensation Act but on the provisions
of the Civil Code allowing the award of actual, moral and exemplary damages,
particularly:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre- existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.

Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.

(b) Art. 1173—The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
 circumstances of the persons, of the time and of the place. When negligence shows bad
faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.

Art. 2201. x x x x x x x x x

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted
with gross negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated
June 27, 1968 dismissing the case on the ground that it falls within the exclusive
jurisdiction of the Workmen's Compensation Commission. On petitioners' motion for
reconsideration of the said order, respondent Judge, on September 23, 1968,
reconsidered and set aside his order of June 27, 1968 and allowed Philex to file an
answer to the complaint. Philex moved to reconsider the aforesaid order which was
opposed by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction
and ruled that in accordance with the established jurisprudence, the Workmen's
Compensation Commission has exclusive original jurisdiction over damage or
compensation claims for work-connected deaths or injuries of workmen or employees,
irrespective of whether or not the employer was negligent, adding that if the employer's
negligence results in work-connected deaths or injuries, the employer shall, pursuant to
Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to
50% of the compensation fixed in the Act.

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS'

COMPLAINT FOR LACK OF JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION

BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR
COMPENSATION UNDER THE WORKMEN'S COMPENSATION ACT.

In the first assignment of error, petitioners argue that the lower court has jurisdiction
over the cause of action since the complaint is based on the provisions of the Civil Code
on damages, particularly Articles 2176, 2178, 1173, 2201 and 2231, and not on the
provisions of the Workmen's Compensation Act. They point out that the complaint
alleges gross and brazen negligence on the part of Philex in failing to take the
necessary security for the protection of the lives of its employees working underground.
They also assert that since Philex opted to file a motion to dismiss in the court a quo,
the allegations in their complaint including those contained in the annexes are deemed
admitted.

In the second assignment of error, petitioners asseverate that respondent Judge failed
to see the distinction between the claims for compensation under the Workmen's
Compensation Act and the claims for damages based on gross negligence of Philex
under the Civil Code. They point out that workmen's compensation refers to liability for
compensation for loss resulting from injury, disability or death of the working man
through industrial accident or disease, without regard to the fault or negligence of the
employer, while the claim for damages under the Civil Code which petitioners pursued
in the regular court, refers to the employer's liability for reckless and wanton negligence
resulting in the death of the employees and for which the regular court has jurisdiction to
adjudicate the same.

On the other hand, Philex asserts that work-connected injuries are compensable
exclusively under the provisions of Sections 5 and 46 of the Workmen's Compensation
Act, which read:

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury ...

SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have

exclusive jurisdiction to hear and decide claims for compensation under the Workmen's
Compensation Act, subject to appeal to the Supreme Court, ...

Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was
held that "all claims of workmen against their employer for damages due to accident
suffered in the course of employment shall be investigated and adjudicated by the
Workmen's Compensation Commission," subject to appeal to the Supreme Court.

Philex maintains that the fact that an employer was negligent, does not remove the case
from the exclusive character of recoveries under the Workmen's Compensation Act;
because Section 4-A of the Act provides an additional compensation in case the
employer fails to comply with the requirements of safety as imposed by law to prevent
accidents. In fact, it points out that Philex voluntarily paid the compensation due the
petitioners and all the payments have been accepted in behalf of the deceased miners,
except the heirs of Nazarito Floresca who insisted that they are entitled to a greater
amount of damages under the Civil Code.

In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty.
Edgardo Angara, now President of the University of the Philippines, Justice Manuel
Lazaro, as corporate counsel and Assistant General Manager of the GSIS Legal Affairs
Department, and Commissioner on Elections, formerly UP Law Center Director Froilan
Bacungan, appeared as amici curiae and thereafter, submitted their respective
memoranda.

The issue to be resolved as WE stated in the resolution of November 26, 1976, is:

Whether the action of an injured employee or worker or that of his heirs in case of his
death under the Workmen's Compensation Act is exclusive, selective or cumulative, that
is to say, whether his or his heirs' action is exclusively restricted to seeking the limited
compensation provided under the Workmen's Compensation Act or whether they have a
right of selection or choice of action between availing of the worker's right under the
Workmen's Compensation Act and suing in the regular courts under the Civil Code for
higher damages (actual, moral and/or exemplary) from the employer by virtue of
negligence (or fault) of the employer or of his other employees or whether they may avail
cumulatively of both actions, i.e., collect the limited compensation under the Workmen's
Compensation Act and sue in addition for damages in the regular courts.

There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured
employee or worker, or the heirs in case of his death, may initiate a complaint to recover
damages (not compensation under the Workmen's Compensation Act) with the regular
court on the basis of negligence of an employer pursuant to the Civil Code provisions.
Atty. Angara believes otherwise. He submits that the remedy of an injured employee for
work-connected injury or accident is exclusive in accordance with Section 5 of the
Workmen's Compensation Act, while Atty. Bacungan's position is that the action is
selective. He opines that the heirs of the employee in case of his death have a right of
choice to avail themselves of the benefits provided under the Workmen's Compensation
Act or to sue in the regular court under the Civil Code for higher damages from the
employer by virtue of negligence of the latter. Atty. Bocobo's stand is the same as that
of Atty. Bacungan and adds that once the heirs elect the remedy provided for under the
Act, they are no longer entitled to avail themselves of the remedy provided for under the
Civil Code by filing an action for higher damages in the regular court, and vice versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a

motion to dismiss on the ground that they have amicably settled their claim with
respondent Philex. In the resolution of September 7, 1978, WE dismissed the petition
only insofar as the aforesaid petitioners are connected, it appearing that there are other
petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try the case,

It should be underscored that petitioners' complaint is not for compensation based on

the Workmen's Compensation Act but a complaint for damages (actual, exemplary and
moral) in the total amount of eight hundred twenty-five thousand (P825,000.00) pesos.
Petitioners did not invoke the provisions of the Workmen's Compensation Act to entitle
them to compensation thereunder. In fact, no allegation appeared in the complaint that
the employees died from accident arising out of and in the course of their employments.
The complaint instead alleges gross and reckless negligence and deliberate failure on
the part of Philex to protect the lives of its workers as a consequence of which a cave-in
occurred resulting in the death of the employees working underground. Settled is the
rule that in ascertaining whether or not the cause of action is in the nature of workmen's
compensation claim or a claim for damages pursuant to the provisions of the Civil Code,
the test is the averments or allegations in the complaint (Belandres vs. Lopez Sugar
Mill, Co., Inc., 97 Phil. 100).

In the present case, there exists between Philex and the deceased employees a
contractual relationship. The alleged gross and reckless negligence and deliberate
failure that amount to bad faith on the part of Philex, constitute a breach of contract for
which it may be held liable for damages. The provisions of the Civil Code on cases of
breach of contract when there is fraud or bad faith, read:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if
the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted
in good faith is able shall be those that are the natural and probable consequences of the
breach of the obligation, and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted.

In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of
damages, as assessed by the court.

The rationale in awarding compensation under the Workmen's Compensation Act differs
from that in giving damages under the Civil Code. The compensation acts are based on
a theory of compensation distinct from the existing theories of damages, payments
under the acts being made as compensation and not as damages (99 C.J.S. 53).
Compensation is given to mitigate the harshness and insecurity of industrial life for the
workman and his family. Hence, an employer is liable whether negligence exists or not
since liability is created by law. Recovery under the Act is not based on any theory of
actionable wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to pay
compensation benefits for loss of income, as long as the death, sickness or injury is
work-connected or work-aggravated, even if the death or injury is not due to the fault of
the employer (Murillo vs. Mendoza, 66 Phil. 689). On the other hand, damages are
awarded to one as a vindication of the wrongful invasion of his rights. It is the indemnity
recoverable by a person who has sustained injury either in his person, property or
relative rights, through the act or default of another (25 C.J.S. 452).

The claimant for damages under the Civil Code has the burden of proving the causal
relation between the defendant's negligence and the resulting injury as well as the
damages suffered. While under the Workmen's Compensation Act, there is a
presumption in favor of the deceased or injured employee that the death or injury is
work-connected or work-aggravated; and the employer has the burden to prove
otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551;
Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).

The claim of petitioners that the case is not cognizable by the Workmen's
Compensation Commission then, now Employees Compensation Commission, is
strengthened by the fact that unlike in the Civil Code, the Workmen's Compensation Act
did not contain any provision for an award of actual, moral and exemplary damages.
What the Act provided was merely the right of the heirs to claim limited compensation
for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of
two hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12
and 13, Workmen's Compensation Act), and an additional compensation of only 50% if
the complaint alleges failure on the part of the employer to "install and maintain safety
appliances or to take other precautions for the prevention of accident or occupational
disease" (Section 4-A, Ibid.). In the case at bar, the amount sought to be recovered is
over and above that which was provided under the Workmen's Compensation Act and
which cannot be granted by the Commission.

Moreover, under the Workmen's Compensation Act, compensation benefits should be

paid to an employee who suffered an accident not due to the facilities or lack of facilities
in the industry of his employer but caused by factors outside the industrial plant of his
employer. Under the Civil Code, the liability of the employer, depends on breach of
contract or tort. The Workmen's Compensation Act was specifically enacted to afford
protection to the employees or workmen. It is a social legislation designed to give relief
to the workman who has been the victim of an accident causing his death or ailment or
injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).

WE now come to the query as to whether or not the injured employee or his heirs in
case of death have a right of selection or choice of action between availing themselves
of the worker's right under the Workmen's Compensation Act and suing in the regular
courts under the Civil Code for higher damages (actual, moral and exemplary) from the
employers by virtue of that negligence or fault of the employers or whether they may
avail themselves cumulatively of both actions, i.e., collect the limited compensation
under the Workmen's Compensation Act and sue in addition for damages in the regular
courts.

In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32
SCRA 442, ruled that an injured worker has a choice of either to recover from the
employer the fixed amounts set by the Workmen's Compensation Act or to prosecute an
ordinary civil action against the tortfeasor for higher damages but he cannot pursue both
courses of action simultaneously.

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section
6 of the Workmen's Compensation Act on the injured workers' right to sue third- party
tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking for the Court,
pointed out that the injured worker has the choice of remedies but cannot pursue both
courses of action simultaneously and thus balanced the relative advantage of recourse
under the Workmen's Compensation Act as against an ordinary action.

As applied to this case, petitioner Esguerra cannot maintain his action for damages
against the respondents (defendants below), because he has elected to seek
compensation under the Workmen's Compensation Law, and his claim (case No. 44549
of the Compensation Commission) was being processed at the time he filed this action in
the Court of First Instance. It is argued for petitioner that as the damages recoverable
under the Civil Code are much more extensive than the amounts that may be awarded
under the Workmen's Compensation Act, they should not be deemed incompatible. As
already indicated, the injured laborer was initially free to choose either to recover from the
employer the fixed amounts set by the Compensation Law or else, to prosecute an
ordinary civil action against the tortfeasor for higher damages. While perhaps not as
profitable, the smaller indemnity obtainable by the first course is balanced by the
claimant's being relieved of the burden of proving the causal connection between the
defendant's negligence and the resulting injury, and of having to establish the extent of
the damage suffered; issues that are apt to be troublesome to establish satisfactorily.
Having staked his fortunes on a particular remedy, petitioner is precluded from pursuing
the alternate course, at least until the prior claim is rejected by the Compensation
Commission. Anyway, under the proviso of Section 6 aforequoted, if the employer
Franklin Baker Company recovers, by derivative action against the alleged tortfeasors, a
sum greater than the compensation he may have paid the herein petitioner, the excess
accrues to the latter.

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies
to third-party tortfeasor, said rule should likewise apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition
has been dismissed in the resolution of September 7, 1978 in view of the amicable
settlement reached by Philex and the said heirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss
dated May 14, 1968 before the court a quo, that the heirs of the deceased employees,
namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino
Martinez submitted notices and claims for compensation to the Regional Office No. 1 of
the then Department of Labor and all of them have been paid in full as of August 25,
1967, except Saturnino Martinez whose heirs decided that they be paid in installments
(pp. 106-107, rec.). Such allegation was admitted by herein petitioners in their
opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower
court, but they set up the defense that the claims were filed under the Workmen's
Compensation Act before they learned of the official report of the committee created to
investigate the accident which established the criminal negligence and violation of law
by Philex, and which report was forwarded by the Director of Mines to the then
Executive Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).

WE hold that although the other petitioners had received the benefits under the
Workmen's Compensation Act, such may not preclude them from bringing an action
before the regular court because they became cognizant of the fact that Philex has
been remiss in its contractual obligations with the deceased miners only after receiving
compensation under the Act. Had petitioners been aware of said violation of
government rules and regulations by Philex, and of its negligence, they would not have
sought redress under the Workmen's Compensation Commission which awarded a
lesser amount for compensation. The choice of the first remedy was based on
ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent
choice. The case should therefore be remanded to the lower court for further
proceedings. However, should the petitioners be successful in their bid before the lower
court, the payments made under the Workmen's Compensation Act should be deducted
from the damages that may be decreed in their favor.

Contrary to the perception of the dissenting opinion, the Court does not legislate in the
instant case. The Court merely applies and gives effect to the constitutional guarantees
of social justice then secured by Section 5 of Article 11 and Section 6 of Article XIV of
the 1935 Constitution, and now by Sections 6, 7, and 9 of Article 11 of the
DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as
amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231
and 2232 of the New Civil Code of 1950.

To emphasize, the 1935 Constitution declares that:

Sec. 5. The promotion of social justice to insure the well-being and economic security of
all the people should be the concern of the State (Art. II).

Sec. 6. The State shall afford protection to labor, especially to working women, and
minors, and shall regulate the relations between landowner and tenant, and between
labor and capital in industry and in agriculture. The State may provide for compulsory
arbitration (Art. XIV).

The 1973 Constitution likewise commands the State to "promote social justice to insure
the dignity, welfare, and security of all the people "... regulate the use ... and disposition
of private property and equitably diffuse property ownership and profits "establish,
maintain and ensure adequate social services in, the field of education, health, housing,
employment, welfare and social security to guarantee the enjoyment by the people of a
decent standard of living" (Sections 6 and 7, Art. II, 1973 Constitution); "... afford
protection to labor, ... and regulate the relations between workers and employers ...,
and assure the rights of workers to ... just and humane conditions of work" (Sec. 9, Art.
II, 1973 Constitution, emphasis supplied).

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of

Article 11 of the 1973 Constitution and re-stated as a declaration of basic policy in
Article 3 of the New Labor Code, thus:

Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work. (emphasis supplied).

The aforestated constitutional principles as implemented by the aforementioned articles

of the New Civil Code cannot be impliedly repealed by the restrictive provisions of
Article 173 of the New Labor Code. Section 5 of the Workmen's Compensation Act
(before it was amended by R.A. No. 772 on June 20, 1952), predecessor of Article 173
of the New Labor Code, has been superseded by the aforestated provisions of the New
Civil Code, a subsequent law, which took effect on August 30, 1950, which obey the
constitutional mandates of social justice enhancing as they do the rights of the workers
as against their employers. Article 173 of the New Labor Code seems to diminish the
rights of the workers and therefore collides with the social justice guarantee of the
Constitution and the liberal provisions of the New Civil Code.
The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973
Constitution are statements of legal principles to be applied and enforced by the courts.
Mr. Justice Robert Jackson in the case of West Virginia State Board of Education vs.
Barnette, with characteristic eloquence, enunciated:

The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes
of political controversy, to place them beyond the reach of majorities and officials and to
establish them as legal principles to be applied by the courts. One's right to life, liberty,
and property, to free speech, a free press, freedom of worship and assembly, and other
fundamental rights may not be submitted to vote; they depend on the outcome of no
elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code,
both the New Labor Code and the Civil Code direct that the doubts should be resolved
in favor of the workers and employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No.
442, as amended, promulgated on May 1, 1974, but which took effect six months
thereafter, provides that "all doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor" (Art. 2, Labor Code).

Article 10 of the New Civil Code states: "In case of doubt in the interpretation or
application of laws, it is presumed that the law-making body intended right and justice to
prevail. "

More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of
doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living of the laborer."

Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of
the Workmen's Compensation Act provided:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws,
because of said injury (emphasis supplied).

Employers contracting laborecsrs in the Philippine Islands for work outside the same may
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment; and all service contracts made
in the manner prescribed in this section shall be presumed to include such agreement.

Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428,
was amended by Commonwealth Act No. 772 on June 20, 1952, thus:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws,
because of said injury.

Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply to injuries
received outside the Island through accidents happening in and during the performance
of the duties of the employment. Such stipulation shall not prejudice the right of the
laborers to the benefits of the Workmen's Compensation Law of the place where the
accident occurs, should such law be more favorable to them (As amended by section 5 of
Republic Act No. 772).
Article 173 of the New Labor Code does not repeal expressly nor impliedly the
applicable provisions of the New Civil Code, because said Article 173 provides:

Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents. The payment of compensation
under this Title shall bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as
amended, Commonwealth Act Numbered One hundred eighty- six, as amended,
Commonwealth Act Numbered Six hundred ten, as amended, Republic Act Numbered
Forty-eight hundred Sixty-four, as amended, and other laws whose benefits are
administered by the System during the period of such payment for the same disability or
death, and conversely (emphasis supplied).

As above-quoted, Article 173 of the New Labor Code expressly repealed only Section
699 of the Revised Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as
amended, R.A. No. 610, as amended, R.A. No. 4864, as amended, and all other laws
whose benefits are administered by the System (referring to the GSIS or SSS).

Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the
New Labor Code does not even remotely, much less expressly, repeal the New Civil
Code provisions heretofore quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from
negligence, is not barred by Article 173 of the New Labor Code. And the damages
recoverable under the New Civil Code are not administered by the System provided for
by the New Labor Code, which defines the "System" as referring to the Government
Service Insurance System or the Social Security System (Art. 167 [c], [d] and [e] of the
New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court
form part of the law of the land.

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.

The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:

Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or
interpreting the laws or the Constitution form part of this jurisdiction's legal system. These
decisions, although in themselves not laws, constitute evidence of what the laws mean.
The application or interpretation placed by the Court upon a law is part of the law as of
the date of the enactment of the said law since the Court's application or interpretation
merely establishes the contemporaneous legislative intent that the construed law
purports to carry into effect" (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the same authority as the
statute itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).

The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before

and after it was amended by Commonwealth Act No. 772 on June 20, 1952, limited the
right of recovery in favor of the deceased, ailing or injured employee to the
compensation provided for therein. Said Section 5 was not accorded controlling
application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either
to recover from the employer the fixed amount set by the Workmen's Compensation Act
or to prosecute an ordinary civil action against the tortfeasor for greater damages; but
he cannot pursue both courses of action simultaneously. Said Pacana case penned by
Mr. Justice Teehankee, applied Article 1711 of the Civil Code as against the Workmen's
Compensation Act, reiterating the 1969 ruling in the case of Valencia vs. Manila Yacht
Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma
(104 Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred
in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-statement
of the first paragraph of Section 5 of the Workmen's Compensation Act, as amended,
and does not even refer, neither expressly nor impliedly, to the Civil Code as Section 5
of the Workmen's Compensation Act did, with greater reason said Article 173 must be
subject to the same interpretation adopted in the cases of Pacana, Valencia and
Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful to
and advances the social justice guarantees enshrined in both the 1935 and 1973
Constitutions.

It should be stressed likewise that there is no similar provision on social justice in the
American Federal Constitution, nor in the various state constitutions of the American
Union. Consequently, the restrictive nature of the American decisions on the Workmen's
Compensation Act cannot limit the range and compass of OUR interpretation of our own
laws, especially Article 1711 of the New Civil Code, vis-a-vis Article 173 of the New
Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the 1935
Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and
State Policies of Article II of the 1973 Constitution.

The dissent seems to subordinate the life of the laborer to the property rights of the
employer. The right to life is guaranteed specifically by the due process clause of the
Constitution. To relieve the employer from liability for the death of his workers arising
from his gross or wanton fault or failure to provide safety devices for the protection of
his employees or workers against the dangers which are inherent in underground
mining, is to deprive the deceased worker and his heirs of the right to recover indemnity
for the loss of the life of the worker and the consequent loss to his family without due
process of law. The dissent in effect condones and therefore encourages such gross or
wanton neglect on the part of the employer to comply with his legal obligation to provide
safety measures for the protection of the life, limb and health of his worker. Even from
the moral viewpoint alone, such attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees of the
Constitution, as implemented by the provisions of the New Civil Code, is not an exercise
of the power of law-making, but is rendering obedience to the mandates of the
fundamental law and the implementing legislation aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional provision.

The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the
New Labor Code subvert the rights of the petitioners as surviving heirs of the deceased
mining employees. Section 5 of the Workmen's Compensation Act and Article 173 of the
New Labor Code are retrogressive; because they are a throwback to the obsolete
laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise Wealth of
Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon
after the close of the 18th century due to the Industrial Revolution that generated the
machines and other mechanical devices (beginning with Eli Whitney's cotton gin of 1793
and Robert Fulton's steamboat of 1807) for production and transportation which are
dangerous to life, limb and health. The old socio-political-economic philosophy of live-
and-let-live is now superdesed by the benign Christian shibboleth of live-and-help
others to live. Those who profess to be Christians should not adhere to Cain's selfish
affirmation that he is not his brother's keeper. In this our civilization, each one of us is
our brother's keeper. No man is an island. To assert otherwise is to be as atavistic and
ante-deluvian as the 1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked
by the dissent, The Prisley case was decided in 1837 during the era of economic
royalists and robber barons of America. Only ruthless, unfeeling capitalistics and
egoistic reactionaries continue to pay obeisance to such un-Christian doctrine. The
Prisley rule humiliates man and debases him; because the decision derisively refers to
the lowly worker as "servant" and utilizes with aristocratic arrogance "master" for
"employer." It robs man of his inherent dignity and dehumanizes him. To stress this
affront to human dignity, WE only have to restate the quotation from Prisley, thus: "The
mere relation of the master and the servant never can imply an obligation on the part of
the master to take more care of the servant than he may reasonably be expected to do
himself." This is the very selfish doctrine that provoked the American Civil War which
generated so much hatred and drew so much precious blood on American plains and
valleys from 1861 to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of
the law insures man's survival and ennobles him. In the words of Shakespeare, "the
letter of the law killeth; its spirit giveth life."

It is curious that the dissenting opinion clings to the myth that the courts cannot
legislate.

That myth had been exploded by Article 9 of the New Civil Code, which provides that
"No judge or court shall decline to render judgment by reason of the silence, obscurity
or insufficiency of the laws. "

Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes
that in certain instances, the court, in the language of Justice Holmes, "do and must
legislate" to fill in the gaps in the law; because the mind of the legislator, like all human
beings, is finite and therefore cannot envisage all possible cases to which the law may
apply Nor has the human mind the infinite capacity to anticipate all situations.

But about two centuries before Article 9 of the New Civil Code, the founding fathers of
the American Constitution foresaw and recognized the eventuality that the courts may
have to legislate to supply the omissions or to clarify the ambiguities in the American
Constitution and the statutes.

'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified
but denies that the power of the Judiciary to nullify statutes may give rise to Judicial
tyranny (The Federalist, Modern Library, pp. 503-511, 1937 ed.). Thomas Jefferson
went farther to concede that the court is even independent of the Nation itself (A.F.L. vs.
American Sash Company, 1949 335 US 538).

Many of the great expounders of the American Constitution likewise share the same
view. Chief Justice Marshall pronounced: "It is emphatically the province and duty of the
Judicial department to say what the law is (Marbury vs. Madison I Cranch 127 1803),
which was re-stated by Chief Justice Hughes when he said that "the Constitution is what
the judge says it is (Address on May 3, 1907, quoted by President Franklin Delano
Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronounced
that "No doubt the limits for the judge are narrower. He legislates only between gaps.
He fills the open spaces in the law. " (The Nature of the Judicial Process, p. 113). In the
language of Chief Justice Harlan F. Stone, "The only limit to the judicial legislation is the
restraint of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view
is also entertained by Justice Frankfurter and Justice Robert Jackson. In the rhetoric of
Justice Frankfurter, "the courts breathe life, feeble or strong, into the inert pages of the
Constitution and all statute books."

It should be stressed that the liability of the employer under Section 5 of the Workmen's
Compensation Act or Article 173 of the New Labor Code is limited to death, ailment or
injury caused by the nature of the work, without any fault on the part of the employers. It
is correctly termed no fault liability. Section 5 of the Workmen's Compensation Act, as
amended, or Article 173 of the New Labor Code, does not cover the tortious liability of
the employer occasioned by his fault or culpable negligence in failing to provide the
safety devices required by the law for the protection of the life, limb and health of the
workers. Under either Section 5 or Article 173, the employer remains liable to pay
compensation benefits to the employee whose death, ailment or injury is work-
connected, even if the employer has faithfully and diligently furnished all the safety
measures and contrivances decreed by the law to protect the employee.

The written word is no longer the "sovereign talisman." In the epigrammatic language of
Mr. Justice Cardozo, "the law has outgrown its primitive stage of formalism when the
precise word was the sovereign talisman, and every slip was fatal" (Wood vs. Duff
Gordon 222 NW 88; Cardozo, The Nature of the Judicial Process 100). Justice Cardozo
warned that: "Sometimes the conservatism of judges has threatened for an interval to
rob the legislation of its efficacy. ... Precedents established in those items exert an
unhappy influence even now" (citing Pound, Common Law and Legislation 21 Harvard
Law Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted,
although with a cautionary undertone: "that judges do and must legislate, but they can
do so only interstitially they are confined from molar to molecular motions" (Southern
Pacific Company vs. Jensen, 244 US 204 1917). And in the subsequent case of
Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853), Justice
Holmes pronounced:

The great ordinances of the Constitution do not establish and divide fields of black and
white. Even the more specific of them are found to terminate in a penumbra shading
gradually from one extreme to the other. x x x. When we come to the fundamental
distinctions it is still more obvious that they must be received with a certain latitude or our
government could not go on.

To make a rule of conduct applicable to an individual who but for such action would be
free from it is to legislate yet it is what the judges do whenever they determine which of
two competing principles of policy shall prevail.

xxx xxx xxx

It does not seem to need argument to show that however we may disguise it by veiling
words we do not and cannot carry out the distinction between legislative and executive
action with mathematical precision and divide the branches into waterlight compartments,
were it ever so desirable to do so, which I am far from believing that it is, or that the
Constitution requires.

True, there are jurists and legal writers who affirm that judges should not legislate, but
grudgingly concede that in certain cases judges do legislate. They criticize the
assumption by the courts of such law-making power as dangerous for it may
degenerate into Judicial tyranny. They include Blackstone, Jeremy Bentham, Justice
Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf
Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal
commentators, who either deny the power of the courts to legislate in-between gaps of
the law, or decry the exercise of such power, have not pointed to examples of the
exercise by the courts of such law-making authority in the interpretation and application
of the laws in specific cases that gave rise to judicial tyranny or oppression or that such
judicial legislation has not protected public interest or individual welfare, particularly the
lowly workers or the underprivileged.

On the other hand, there are numerous decisions interpreting the Bill of Rights and
statutory enactments expanding the scope of such provisions to protect human rights.
Foremost among them is the doctrine in the cases of Miranda vs. Arizona (384 US 436
1964), Gideon vs. Wainright (372 US 335), Escubedo vs. Illinois (378 US 478), which
guaranteed the accused under custodial investigation his rights to remain silent and to
counsel and to be informed of such rights as even as it protects him against the use of
force or intimidation to extort confession from him. These rights are not found in the
American Bill of Rights. These rights are now institutionalized in Section 20, Article IV of
the 1973 Constitution. Only the peace-and-order adherents were critical of the activism
of the American Supreme Court led by Chief Justice Earl Warren.

Even the definition of Identical offenses for purposes of the double jeopardy provision
was developed by American judicial decisions, not by amendment to the Bill of Rights
on double jeopardy (see Justice Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And
these judicial decisions have been re-stated in Section 7 of Rule 117 of the 1985 Rules
on Criminal Procedure, as well as in Section 9 of Rule 117 of the 1964 Revised Rules of
Court. In both provisions, the second offense is the same as the first offense if the
second offense is an attempt to commit the first or frustration thereof or necessarily
includes or is necessarily included in the first offense.

The requisites of double jeopardy are not spelled out in the Bill of Rights. They were
also developed by judicial decisions in the United States and in the Philippines even
before people vs. Ylagan (58 Phil. 851-853).

Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson
(163 US 537) as securing to the Negroes equal but separate facilities, which doctrine
was revoked in the case of Brown vs. Maryland Board of Education (349 US 294),
holding that the equal protection clause means that the Negroes are entitled to attend
the same schools attended by the whites-equal facilities in the same school-which was
extended to public parks and public buses.

De-segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the case of People
vs. Pomar (46 Phil. 440) by a conservative, capitalistic court to invalidate a law granting
maternity leave to working women-according primacy to property rights over human
rights. The case of People vs. Pomar is no longer the rule.

As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937,
949), Justice Holmes had been railing against the conservatism of Judges perverting
the guarantee of due process to protect property rights as against human rights or
social justice for the working man. The law fixing maximum hours of labor was
invalidated. Justice Holmes was vindicated finally in 1936 in the case of West Coast
Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court
upheld the rights of workers to social justice in the form of guaranteed minimum wage
for women and minors, working hours not exceeding eight (8) daily, and maternity leave
for women employees.

The power of judicial review and the principle of separation of powers as well as the rule
on political questions have been evolved and grafted into the American Constitution by
judicial decisions (Marbury vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L.
ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation, penned
a separate concurring opinion in the case of Coleman vs. Miller, supra, affirming the
doctrine of political question as beyond the ambit of judicial review. There is nothing in
both the American and Philippine Constitutions expressly providing that the power of the
courts is limited by the principle of separation of powers and the doctrine on political
questions. There are numerous cases in Philippine jurisprudence applying the doctrines
of separation of powers and political questions and invoking American precedents.

Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions
expressly vest in the Supreme Court the power to review the validity or constitutionality
of any legislative enactment or executive act.

WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY

REVERSED AND SET ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER
PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE DECREED IN
FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM
PURSUANT TO THE WORKMEN'S COMPENSATION ACT SHALL BE DEDUCTED.
NO COSTS.

SO ORDERED.

Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ.,
concur.

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

Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX
Mining Corporation under the general provisions of the Civil Code. The Civil Code itself,
however, provides for its non-applicability to the complaint. It is specifically provided in
Article 2196 of the Code, found in Title XVIII-Damages that:

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH,

INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et
al., 104 Phil. 582, 586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play on
words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the
sense of indemnity for damages suffered, being awarded for a personal injury caused or
aggravated by or in the course of employment. ...
By the very provisions of the Civil Code, it is a "special law", not the Code itself, which
has to apply to the complaint involved in the instant case. That "special law", in
reference to the complaint, can be no other than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of

remedies, as the majority rules, both options cannot be exercised simultaneously, and
the exercise of one will preclude the exercise of the other. The petitioners had already
exercised their option to come under the Workmen's Compensation Act, and they have
already received compensation payable to them under that Act. Stated differently, the
remedy under the Workmen's Compensation Act had already become a "finished
transaction".

There are two considerations why it is believed petitioners should no longer be allowed
to exercise the option to sue under the Civil Code. In the first place, the proceedings
under the Workmen's Compensation Act have already become the law in regards to"
the "election of remedies", because those proceedings had become a "finished
transaction".

In the second place, it should be plainly equitable that, if a person entitled to an

"election of remedies" makes a first election and accepts the benefits thereof, he should
no longer be allowed to avail himself of the second option. At the very least, if he wants
to make a second election, in disregard of the first election he has made, when he
makes the second election he should surrender the benefits he had obtained under the
first election, This was not done in the case before the Court.

B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez
upholding "the exclusory provision of the Workmen's Compensation Act." I may further
add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10,
1927 and took effect on June 10, 1928. It was patterned from Minnesota and Hawaii
statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of
the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the
Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the
remedy under the Act is exclusive The following is stated in 1 Schneider Workmen's
Compensation Text, pp. 266, 267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment'

and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S.,
Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to injure
himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation

Act, the Philippine Legislature worded the first paragraph of Section 5 of the Act as
follows:
 SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee

by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and emphasis
supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read and
considered in their natural, ordinary, commonly-accepted and most obvious significations,
according to good and approved usage and without resorting to forced or subtle
construction Courts, therefore, as a rule, cannot presume that the law-making body does
not know the meaning of words and the rules of grammar. Consequently, the
grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs.
Cleofe 52 SCRA 92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of
the Act, subject only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other
than within the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer,
under this Act, or sue such other person for damages, in accordance with law; ...
(Emphasis supplied)

If the legislative intent under the first paragraph of Section 5 were to allow the injured
employee to sue his employer under the Civil Code, the legislator could very easily have
formulated the said first paragraph of Section 5 according to the pattern of Section 6.
That that was not done shows the legislative intent not to allow any option to an
employee to sue the employer under the Civil Code for injuries compensable under the
Act.

5. There should be no question but that the original first paragraph of Section 5 of the
Workmen's Compensation Act, formulated in 1927, provided that an injured worker or
employee, or his heirs, if entitled to compensation under the Act, cannot have
independent recourse neither to the Civil Code nor to any other law relative to the
liability of the employer. After 1927, there were occasions when the legislator had the
opportunity to amend the first paragraph of Section 5 such that the remedies under the
Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of
Section 5 unless otherwise provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

 Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment (and all service contracts made
in the manner prescribed in this section be presumed to include such agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with
the elimination of the underlined words in parentheses, and the addition of this sentence
at the end of the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such law
be more favorable to them. (Emphasis supplied)

It will be seen that, within the Act itself, the exclusory character of the Act was
amended. At that time, if he had so desired, the legislator could have amended the first
paragraph of Section 5 so that the employee would have the option to sue the employer
under the Act, or under the Civil Code, should the latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation
to an injured employee without regard to the presence or absence of negligence on the
part of the employer. The compensation is deemed an expense chargeable to the
industry (Murillo vs. Mendoza, 66 Phil. 689 [1938]).

In time, it must have been thought that it was inequitable to have the amount of
compensation, caused by negligence on the part of the employer, to be the same
amount payable when the employer was not negligent. Based on that thinking, Section
4-A 1 was included into the Act, on June 20, 1952, through RA 772. Said Section 4-A
increased the compensation payable by 50% in case there was negligence on the part
of the employer. That additional section evidenced the intent of the legislator not to give
an option to an employee, injured with negligence on the part of the employer, to sue
the latter under the provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The
legislator was again given the opportunity to provide, but he did not, the option to an
employee to sue under the Act or under the Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-
maker, the Court is unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the
Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits
based on torts would be a radical innovation not only contrary to the express provisions
of the Workmen's Compensation Act but a departure from the principles evolved in the
long history of workmen's compensation. At the very least, it should be the legislature
and not this Court which should remove the exclusory provision of the Workmen's
Compensation Act, a provision reiterated in the present Labor Code on employees'
compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in
the early years of the industrial revolution when injured workingmen had to rely on
damage suits to get recompense.
Before workmen's compensation, an injured worker seeking damages would have to
prove in a tort suit that his employer was either negligent or in bad faith, that his injury
was caused by the employer and not a fellow worker, and that he was not guilty of
contributory negligence. The employer could employ not only his wealth in defeating the
claim for damages but a host of common law defenses available to him as well. The
worker was supposed to know what he entered into when he accepted employment. As
stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may
reasonably be expected to do of himself." By entering into a contract of employment, the
worker was deemed to accept the risks of employment that he should discover and
guard against himself.

The problems associated with the application of the fellow servant rule, the assumption
of risk doctrine, the principle of contributory negligence, and the many other defenses
so easily raised in protracted damage suits illustrated the need for a system whereby
workers had only to prove the fact of covered employment and the fact of injury arising
from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and
made compulsory and where the element of fault-either the fault of the employer or the
fault of the employee-disregarded became obvious. Another objective was to have
simplified, expeditious, inexpensive, and non-litigious procedures so that victims of
industrial accidents could more readily, if not automatically, receive compensation for
work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability
acts were a major step in the desired direction. However, employers liability legislation
proved inadequate. Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a

compromise. In return for the near certainty of receiving a sum of money fixed by law,
the injured worker gives up the right to subject the employer to a tort suit for huge
amounts of damages. Thus, liability not only disregards the element of fault but it is also
a pre- determined amount based on the wages of the injured worker and in certain
cases, the actual cost of rehabilitation. The worker does not receive the total damages
for his pain and suffering which he could otherwise claim in a civil suit. The employer is
required to act swiftly on compensation claims. An administrative agency supervises the
program. And because the overwhelming mass of workingmen are benefited by the
compensation system, individual workers who may want to sue for big amounts of
damages must yield to the interests of their entire working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an

understanding of the acts and the cases interpreting them.

By the turn of the century it was apparent that the toll of industrial accidents of both the
avoidable and unavoidable variety had become enormous, and government was faced
with the problem of who was to pay for the human wreckage wrought by the dangers of
modern industry. If the accident was avoidable and could be attributed to the
carelessness of the employer, existing tort principles offered some measure of redress.
Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the
finger of blame had been pointed officially at the employer or his agents. In most cases
both the facts and the law were uncertain. The witnesses, who were usually fellow
workers of the victim, were torn between friendship or loyalty to their class, on the one
hand, and fear of reprisal by the employer, on the other. The expense and delay of
 litigation often prompted the injured employee to accept a compromise settlement for a
fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus
the employer against whom judgment was cast often paid a substantial damage bill, while
only a part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services- should
ultimately bear the cost of the injuries or deaths that are incident to the manufacture,
preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among the
ultimate consumers. So long as each competing unit in a given industry is uniformly
affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.

In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be fixed
at a figure that will not disrupt too violently the traffic in the product of the industry
affected. Thus predictability and moderateness of cost are necessary from the broad
economic viewpoint. ....

Compensation, then, differs from the conventional damage suit in two important respects:
Fault on the part of either employer or employee is eliminated; and compensation
payable according to a definitely limited schedule is substituted for damages. All
compensation acts alike work these two major changes, irrespective of how they may
differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee represents
a compromise in which each party surrenders certain advantages in order to gain others
which are of more importance both to him and to society. The employer gives up the
immunity he otherwise would enjoy in cases where he is not at fault, and the employee
surrenders his former right to full damages and accepts instead a more modest claim for
bare essentials, represented by compensation.

The importance of the compromise character of compensation cannot be

overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced greatly by
the court's reaction to the basic point of compromise established in the Act. If the court
feels that the basic compromise unduly favors the employer, it will be tempted to restore
what it regards as a proper balance by adopting an interpretation that favors the worker.
In this way, a compensation act drawn in a spirit of extreme conservatism may be
transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act
that greatly favors the laborer may be so interpreted by the courts that employers can
have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this."
(Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and
diseases, the premiums paid by employers to the present system, the actuarial stability
of the trust fund and many other interrelated parts have all been carefully studied before
the integrated scheme was enacted in to law. We have a system whose parts must
mesh harmonious with one another if it is to succeed. The basic theory has to be
followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts
some parts of the system without touching the related others, the entire structure is
endangered. For instance, I am personally against stretching the law and allowing
payment of compensation for contingencies never envisioned to be compensable when
the law was formulated. Certainly, only harmful results to the principle of workmen's
compensation can arise if workmen, whom the law allows to receive employment
compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which
reads:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the

State Insurance Fund under this Title shall be exclusive and in place of all other liabilities
of the employer to the employee his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial
studies and public hearings. If employers already required to contribute to the State
Insurance Fund will still have to bear the cost of damage suits or get insurance for that
purpose, a major study will be necessary. The issue before us is more far reaching than
the interests of the poor victims and their families. All workers covered by workmen's
compensation and all employers who employ covered employees are affected. Even as
I have deepest sympathies for the victims, I regret that I am constrained to dissent from
the majority opinion.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX
Mining Corporation under the general provisions of the Civil Code. The Civil Code itself,
however, provides for its non-applicability to the complaint. It is specifically provided in
Article 2196 of the Code, found in Title XVIII-Damages that:

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH,

INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et
al., 104 Phil. 582, 586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play on
words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the
sense of indemnity for damages suffered, being awarded for a personal injury caused or
aggravated by or in the course of employment. ...
By the very provisions of the Civil Code, it is a "special law", not the Code itself, which
has to apply to the complaint involved in the instant case. That "special law", in
reference to the complaint, can be no other than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of

remedies, as the majority rules, both options cannot be exercised simultaneously, and
the exercise of one will preclude the exercise of the other. The petitioners had already
exercised their option to come under the Workmen's Compensation Act, and they have
already received compensation payable to them under that Act. Stated differently, the
remedy under the Workmen's Compensation Act had already become a "finished
transaction".

There are two considerations why it is believed petitioners should no longer be allowed
to exercise the option to sue under the Civil Code. In the first place, the proceedings
under the Workmen's Compensation Act have already become the law in regards to"
the "election of remedies", because those proceedings had become a "finished
transaction".

In the second place, it should be plainly equitable that, if a person entitled to an

"election of remedies" makes a first election and accepts the benefits thereof, he should
no longer be allowed to avail himself of the second option. At the very least, if he wants
to make a second election, in disregard of the first election he has made, when he
makes the second election he should surrender the benefits he had obtained under the
first election, This was not done in the case before the Court.

B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez
upholding "the exclusory provision of the Workmen's Compensation Act." I may further
add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10,
1927 and took effect on June 10, 1928. It was patterned from Minnesota and Hawaii
statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of
the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the
Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the
remedy under the Act is exclusive The following is stated in 1 Schneider Workmen's
Compensation Text, pp. 266, 267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment'

and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S.,
Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to injure
himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation

Act, the Philippine Legislature worded the first paragraph of Section 5 of the Act as
follows:
 SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee

by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and emphasis
supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read and
considered in their natural, ordinary, commonly-accepted and most obvious significations,
according to good and approved usage and without resorting to forced or subtle
construction Courts, therefore, as a rule, cannot presume that the law-making body does
not know the meaning of words and the rules of grammar. Consequently, the
grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs.
Cleofe 52 SCRA 92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of
the Act, subject only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other
than within the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall be
optional with such injured employee either to claim compensation from his employer,
under this Act, or sue such other person for damages, in accordance with law; ...
(Emphasis supplied)

If the legislative intent under the first paragraph of Section 5 were to allow the injured
employee to sue his employer under the Civil Code, the legislator could very easily have
formulated the said first paragraph of Section 5 according to the pattern of Section 6.
That that was not done shows the legislative intent not to allow any option to an
employee to sue the employer under the Civil Code for injuries compensable under the
Act.

5. There should be no question but that the original first paragraph of Section 5 of the
Workmen's Compensation Act, formulated in 1927, provided that an injured worker or
employee, or his heirs, if entitled to compensation under the Act, cannot have
independent recourse neither to the Civil Code nor to any other law relative to the
liability of the employer. After 1927, there were occasions when the legislator had the
opportunity to amend the first paragraph of Section 5 such that the remedies under the
Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of
Section 5 unless otherwise provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

 Employers contracting laborers in the Philippine Islands for work outside the same shall
stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in and
during the performance of the duties of the employment (and all service contracts made
in the manner prescribed in this section be presumed to include such agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with
the elimination of the underlined words in parentheses, and the addition of this sentence
at the end of the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such law
be more favorable to them. (Emphasis supplied)

It will be seen that, within the Act itself, the exclusory character of the Act was
amended. At that time, if he had so desired, the legislator could have amended the first
paragraph of Section 5 so that the employee would have the option to sue the employer
under the Act, or under the Civil Code, should the latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation
to an injured employee without regard to the presence or absence of negligence on the
part of the employer. The compensation is deemed an expense chargeable to the
industry (Murillo vs. Mendoza, 66 Phil. 689 [1938]).

In time, it must have been thought that it was inequitable to have the amount of
compensation, caused by negligence on the part of the employer, to be the same
amount payable when the employer was not negligent. Based on that thinking, Section
4-A 1 was included into the Act, on June 20, 1952, through RA 772. Said Section 4-A
increased the compensation payable by 50% in case there was negligence on the part
of the employer. That additional section evidenced the intent of the legislator not to give
an option to an employee, injured with negligence on the part of the employer, to sue
the latter under the provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The
legislator was again given the opportunity to provide, but he did not, the option to an
employee to sue under the Act or under the Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-
maker, the Court is unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the
Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits
based on torts would be a radical innovation not only contrary to the express provisions
of the Workmen's Compensation Act but a departure from the principles evolved in the
long history of workmen's compensation. At the very least, it should be the legislature
and not this Court which should remove the exclusory provision of the Workmen's
Compensation Act, a provision reiterated in the present Labor Code on employees'
compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in
the early years of the industrial revolution when injured workingmen had to rely on
damage suits to get recompense.
Before workmen's compensation, an injured worker seeking damages would have to
prove in a tort suit that his employer was either negligent or in bad faith, that his injury
was caused by the employer and not a fellow worker, and that he was not guilty of
contributory negligence. The employer could employ not only his wealth in defeating the
claim for damages but a host of common law defenses available to him as well. The
worker was supposed to know what he entered into when he accepted employment. As
stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may
reasonably be expected to do of himself." By entering into a contract of employment, the
worker was deemed to accept the risks of employment that he should discover and
guard against himself.

The problems associated with the application of the fellow servant rule, the assumption
of risk doctrine, the principle of contributory negligence, and the many other defenses
so easily raised in protracted damage suits illustrated the need for a system whereby
workers had only to prove the fact of covered employment and the fact of injury arising
from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and
made compulsory and where the element of fault-either the fault of the employer or the
fault of the employee-disregarded became obvious. Another objective was to have
simplified, expeditious, inexpensive, and non-litigious procedures so that victims of
industrial accidents could more readily, if not automatically, receive compensation for
work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability
acts were a major step in the desired direction. However, employers liability legislation
proved inadequate. Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a

compromise. In return for the near certainty of receiving a sum of money fixed by law,
the injured worker gives up the right to subject the employer to a tort suit for huge
amounts of damages. Thus, liability not only disregards the element of fault but it is also
a pre- determined amount based on the wages of the injured worker and in certain
cases, the actual cost of rehabilitation. The worker does not receive the total damages
for his pain and suffering which he could otherwise claim in a civil suit. The employer is
required to act swiftly on compensation claims. An administrative agency supervises the
program. And because the overwhelming mass of workingmen are benefited by the
compensation system, individual workers who may want to sue for big amounts of
damages must yield to the interests of their entire working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an

understanding of the acts and the cases interpreting them.

By the turn of the century it was apparent that the toll of industrial accidents of both the
avoidable and unavoidable variety had become enormous, and government was faced
with the problem of who was to pay for the human wreckage wrought by the dangers of
modern industry. If the accident was avoidable and could be attributed to the
carelessness of the employer, existing tort principles offered some measure of redress.
Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the
finger of blame had been pointed officially at the employer or his agents. In most cases
both the facts and the law were uncertain. The witnesses, who were usually fellow
workers of the victim, were torn between friendship or loyalty to their class, on the one
hand, and fear of reprisal by the employer, on the other. The expense and delay of
 litigation often prompted the injured employee to accept a compromise settlement for a
fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus
the employer against whom judgment was cast often paid a substantial damage bill, while
only a part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services- should
ultimately bear the cost of the injuries or deaths that are incident to the manufacture,
preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among the
ultimate consumers. So long as each competing unit in a given industry is uniformly
affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.

In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be fixed
at a figure that will not disrupt too violently the traffic in the product of the industry
affected. Thus predictability and moderateness of cost are necessary from the broad
economic viewpoint. ....

Compensation, then, differs from the conventional damage suit in two important respects:
Fault on the part of either employer or employee is eliminated; and compensation
payable according to a definitely limited schedule is substituted for damages. All
compensation acts alike work these two major changes, irrespective of how they may
differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee represents
a compromise in which each party surrenders certain advantages in order to gain others
which are of more importance both to him and to society. The employer gives up the
immunity he otherwise would enjoy in cases where he is not at fault, and the employee
surrenders his former right to full damages and accepts instead a more modest claim for
bare essentials, represented by compensation.

The importance of the compromise character of compensation cannot be

overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced greatly by
the court's reaction to the basic point of compromise established in the Act. If the court
feels that the basic compromise unduly favors the employer, it will be tempted to restore
what it regards as a proper balance by adopting an interpretation that favors the worker.
In this way, a compensation act drawn in a spirit of extreme conservatism may be
transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act
that greatly favors the laborer may be so interpreted by the courts that employers can
have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this."
(Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and
diseases, the premiums paid by employers to the present system, the actuarial stability
of the trust fund and many other interrelated parts have all been carefully studied before
the integrated scheme was enacted in to law. We have a system whose parts must
mesh harmonious with one another if it is to succeed. The basic theory has to be
followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts
some parts of the system without touching the related others, the entire structure is
endangered. For instance, I am personally against stretching the law and allowing
payment of compensation for contingencies never envisioned to be compensable when
the law was formulated. Certainly, only harmful results to the principle of workmen's
compensation can arise if workmen, whom the law allows to receive employment
compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which
reads:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to
an employee by reason of a personal injury entitling him to compensation shall exclude
all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil Code and other laws
because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the

State Insurance Fund under this Title shall be exclusive and in place of all other liabilities
of the employer to the employee his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial
studies and public hearings. If employers already required to contribute to the State
Insurance Fund will still have to bear the cost of damage suits or get insurance for that
purpose, a major study will be necessary. The issue before us is more far reaching than
the interests of the poor victims and their families. All workers covered by workmen's
compensation and all employers who employ covered employees are affected. Even as
I have deepest sympathies for the victims, I regret that I am constrained to dissent from
the majority opinion.

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

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
 

G.R. No. 108763 February 13, 1997

REPUBLIC OF THE PHILIPPINES,

vs.
COURT OF APPEALS and RORIDEL OLAVIANO MOLINA, respondents.
 

PANGANIBAN, J.:

The Family Code of the Philippines provides an entirely new ground (in addition
to those enumerated in the Civil Code) to assail the validity of a marriage, namely,
"psychological incapacity." Since the Code's effectivity, our courts have been
swamped with various petitions to declare marriages void based on this ground.
Although this Court had interpreted the meaning of psychological incapacity in
the recent case of Santos vs. Court of Appeals, still many judges and lawyers find
difficulty in applying said novel provision in specific cases. In the present case
and in the context of the herein assailed Decision of the Court of Appeals, the
Solicitor General has labelled — exaggerated to be sure but nonetheless
expressive of his frustration — Article 36 as the "most liberal divorce procedure
in the world." Hence, this Court in addition to resolving the present case, finds
the need to lay down specific guidelines in the interpretation and application of
Article 36 of the Family Code.

Before us is a petition for review on certiorari under Rule 45 challenging the

January 25, 1993 Decision 1 of the Court of Appeals 2 in CA-G.R. CV No. 34858
affirming in toto the May 14, 1991 decision of the Regional Trial Court of La
Trinidad, 3 Benguet, which declared the marriage of respondent Roridel Olaviano
Molina to Reynaldo Molina void ab initio, on the ground of "psychological
incapacity" under Article 36 of the Family Code.

The Facts

This case was commenced on August 16, 1990 with the filing by respondent
Roridel O. Molina of a verified petition for declaration of nullity of her marriage to
Reynaldo Molina. Essentially, the petition alleged that Roridel and Reynaldo were
married on April 14, 1985 at the San Agustin Church 4 in Manila; that a son, Andre
O. Molina was born; that after a year of marriage, Reynaldo showed signs of
"immaturity and irresponsibility" as a husband and a father since he preferred to
spend more time with his peers and friends on whom he squandered his money;
that he depended on his parents for aid and assistance, and was never honest
with his wife in regard to their finances, resulting in frequent quarrels between
them; that sometime in February 1986, Reynaldo was relieved of his job in Manila,
and since then Roridel had been the sole breadwinner of the family; that in
October 1986 the couple had a very intense quarrel, as a result of which their
relationship was estranged; that in March 1987, Roridel resigned from her job in
Manila and went to live with her parents in Baguio City; that a few weeks later,
Reynaldo left Roridel and their child, and had since then abandoned them; that
Reynaldo had thus shown that he was psychologically incapable of complying
with essential marital obligations and was a highly immature and habitually
quarrel some individual who thought of himself as a king to be served; and that it
would be to the couple's best interest to have their marriage declared null and
void in order to free them from what appeared to be an incompatible marriage
from the start.

In his Answer filed on August 28, 1989, Reynaldo admitted that he and Roridel
could no longer live together as husband and wife, but contended that their
misunderstandings and frequent quarrels were due to (1) Roridel's strange
behavior of insisting on maintaining her group of friends even after their
marriage; (2) Roridel's refusal to perform some of her marital duties such as
cooking meals; and (3) Roridel's failure to run the household and handle their
finances.
During the pre-trial on October 17, 1990, the following were stipulated:

1. That the parties herein were legally married on April 14, 1985 at the Church of St.
Augustine, Manila;

2. That out of their marriage, a child named Albert Andre Olaviano Molina was born
on July 29, 1986;

3. That the parties are separated-in-fact for more than three years;

4. That petitioner is not asking support for her and her child;

5. That the respondent is not asking for damages;

6. That the common child of the parties is in the custody of the petitioner wife.

Evidence for herein respondent wife consisted of her own testimony and that of
her friends Rosemarie Ventura and Maria Leonora Padilla as well as of Ruth G.
Lalas, a social worker, and of Dr. Teresita Hidalgo-Sison, a psychiatrist of the
Baguio General Hospital and Medical Center. She also submitted documents
marked as Exhibits "A" to "E-1." Reynaldo did not present any evidence as he
appeared only during the pre-trial conference.

On May 14, 1991, the trial court rendered judgment declaring the marriage void.
The appeal of petitioner was denied by the Court of Appeals which affirmed in
toto the RTC's decision. Hence, the present recourse.

The Issue

In his petition, the Solicitor General insists that "the Court of Appeals made an
erroneous and incorrect interpretation of the phrase 'psychological incapacity'
(as provided under Art. 36 of the Family Code) and made an incorrect application
thereof to the facts of the case," adding that the appealed Decision tended "to
establish in effect the most liberal divorce procedure in the world which is
anathema to our culture."

In denying the Solicitor General's appeal, the respondent Court relied 5 heavily on
the trial court's findings "that the marriage between the parties broke up because
of their opposing and conflicting personalities." Then, it added it sown opinion
that "the Civil Code Revision Committee (hereinafter referred to as Committee)
intended to liberalize the application of our civil laws on personal and family
rights. . . ." It concluded that:

As ground for annulment of marriage, We view psychologically incapacity as a

broad range of mental and behavioral conduct on the part of one spouse indicative
of how he or she regards the marital union, his or her personal relationship with
the other spouse, as well as his or her conduct in the long haul for the attainment
of the principal objectives of marriage. If said conduct, observed and considered
as a whole, tends to cause the union to self-destruct because it defeats the very
objectives of marriage, then there is enough reason to leave the spouses to their
individual fates.

In the case at bar, We find that the trial judge committed no indiscretion in
analyzing and deciding the instant case, as it did, hence, We find no cogent reason
to disturb the findings and conclusions thus made.

Respondent, in her Memorandum, adopts these discussions of the Court of

Appeals.
The petitioner, on the other hand, argues that "opposing and conflicting
personalities" is not equivalent to psychological incapacity, explaining that such
ground "is not simply the neglect by the parties to the marriage of their
responsibilities and duties, but a defect in their psychological nature which
renders them incapable of performing such marital responsibilities and duties."

The Court's Ruling

The petition is meritorious.

In Leouel Santos vs. Court of Appeals 6 this Court, speaking thru Mr. Justice Jose
C. Vitug, ruled that "psychological incapacity should refer to no less than a
mental (nor physical) incapacity . . . and that (t)here is hardly any doubt that the
intendment of the law has been to confine the meaning of 'psychological
incapacity' to the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage. This psychologic condition must exist at the time
the marriage is celebrated." Citing Dr. Gerardo Veloso, a former presiding judge
of the Metropolitan Marriage Tribunal of the Catholic Archdiocese of Manila, 7
Justice Vitug wrote that "the psychological incapacity must be characterized by
(a) gravity, (b) juridical antecedence, and (c) incurability."

On the other hand, in the present case, there is no clear showing to us that the
psychological defect spoken of is an incapacity. It appears to us to be more of a
"difficulty," if not outright "refusal" or "neglect" in the performance of some
marital obligations. Mere showing of "irreconciliable differences" and "conflicting
personalities" in no wise constitutes psychological incapacity. It is not enough to
prove that the parties failed to meet their responsibilities and duties as married
persons; it is essential that they must be shown to be incapable of doing so, due
to some psychological (nor physical) illness.

The evidence adduced by respondent merely showed that she and her husband
could nor get along with each other. There had been no showing of the gravity of
the problem; neither its juridical antecedence nor its incurability. The expert
testimony of Dr. Sison showed no incurable psychiatric disorder but only
incompatibility, not psychological incapacity. Dr. Sison testified: 8

COURT

Q It is therefore the recommendation of the psychiatrist based on

your findings that it is better for the Court to annul (sic) the
marriage?

A Yes, Your Honor.

Q There is no hope for the marriage?

A There is no hope, the man is also living with another woman.

Q Is it also the stand of the psychiatrist that the parties are

psychologically unfit for each other but they are psychologically fit
with other parties?

A Yes, Your Honor.

Q Neither are they psychologically unfit for their professions?

A Yes, Your Honor.

 The Court has no more questions.

In the case of Reynaldo, there is no showing that his alleged personality traits
were constitutive of psychological incapacity existing at the time of marriage
celebration. While some effort was made to prove that there was a failure to fulfill
pre-nuptial impressions of "thoughtfulness and gentleness" on Reynaldo's part
of being "conservative, homely and intelligent" on the part of Roridel, such failure
of expectation is nor indicative of antecedent psychological incapacity. If at all, it
merely shows love's temporary blindness to the faults and blemishes of the
beloved.

During its deliberations, the Court decided to go beyond merely ruling on the
facts of this case vis-a-vis existing law and jurisprudence. In view of the novelty
of Art. 36 of the Family Code and the difficulty experienced by many trial courts
interpreting and applying it, the Court decided to invite two amici curiae, namely,
the Most Reverend Oscar V. Cruz, 9 Vicar Judicial (Presiding Judge) of the
National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines,
and Justice Ricardo C. Puno, 10 a member of the Family Code Revision
Committee. The Court takes this occasion to thank these friends of the Court for
their informative and interesting discussions during the oral argument on
December 3, 1996, which they followed up with written memoranda.

From their submissions and the Court's own deliberations, the following
guidelines in the interpretation and application of Art. 36 of the Family Code are
hereby handed down for the guidance of the bench and the bar:

(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff.
Any doubt should be resolved in favor of the existence and continuation of the
marriage and against its dissolution and nullity. This is rooted in the fact that
both our Constitution and our laws cherish the validity of marriage and unity of
the family. Thus, our Constitution devotes an entire Article on the Family, 11
recognizing it "as the foundation of the nation." It decrees marriage as legally
"inviolable," thereby protecting it from dissolution at the whim of the parties.
Both the family and marriage are to be "protected" by the state.

The Family Code 12 echoes this constitutional edict on marriage and the family
and emphasizes the permanence, inviolability and solidarity

(2) The root cause of the psychological incapacity must be (a) medically or
clinically identified, (b) alleged in the complaint, (c) sufficiently proven by experts
and (d) clearly explained in the decision. Article 36 of the Family Code requires
that the incapacity must be psychological — not physical. although its
manifestations and/or symptoms may be physical. The evidence must convince
the court that the parties, or one of them, was mentally or physically ill to such an
extent that the person could not have known the obligations he was assuming, or
knowing them, could not have given valid assumption thereof. Although no
example of such incapacity need be given here so as not to limit the application
of the provision under the principle of ejusdem generis, 13 nevertheless such root
cause must be identified as a psychological illness and its incapacitating nature
explained. Expert evidence may be given qualified psychiatrist and clinical
psychologists.

(3) The incapacity must be proven to be existing at "the time of the celebration" of
the marriage. The evidence must show that the illness was existing when the
parties exchanged their "I do's." The manifestation of the illness need not be
perceivable at such time, but the illness itself must have attached at such
moment, or prior thereto.
(4) Such incapacity must also be shown to be medically or clinically permanent or
incurable. Such incurability may be absolute or even relative only in regard to the
other spouse, not necessarily absolutely against everyone of the same sex.
Furthermore, such incapacity must be relevant to the assumption of marriage
obligations, not necessarily to those not related to marriage, like the exercise of a
profession or employment in a job. Hence, a pediatrician may be effective in
diagnosing illnesses of children and prescribing medicine to cure them but may
not be psychologically capacitated to procreate, bear and raise his/her own
children as an essential obligation of marriage.

(5) Such illness must be grave enough to bring about the disability of the party to
assume the essential obligations of marriage. Thus, "mild characteriological
peculiarities, mood changes, occasional emotional outbursts" cannot be
accepted as root causes. The illness must be shown as downright incapacity or
inability, nor a refusal, neglect or difficulty, much less ill will. In other words,
there is a natal or supervening disabling factor in the person, an adverse integral
element in the personality structure that effectively incapacitates the person from
really accepting and thereby complying with the obligations essential to
marriage.

(6) The essential marital obligations must be those embraced by Articles 68 up to

71 of the Family Code as regards the husband and wife as well as Articles 220,
221 and 225 of the same Code in regard to parents and their children. Such non-
complied marital obligation(s) must also be stated in the petition, proven by
evidence and included in the text of the decision.

(7) Interpretations given by the National Appellate Matrimonial Tribunal of the

Catholic Church in the Philippines, while not controlling or decisive, should be
given great respect by our courts. It is clear that Article 36 was taken by the
Family Code Revision Committee from Canon 1095 of the New Code of Canon
Law, which became effective in 1983 and which provides:

The following are incapable of contracting marriage: Those who are unable to
assume the essential obligations of marriage due to causes of psychological
nature. 14

Since the purpose of including such provision in our Family Code is to harmonize
our civil laws with the religious faith of our people, it stands to reason that to
achieve such harmonization, great persuasive weight should be given to decision
of such appellate tribunal. Ideally — subject to our law on evidence — what is
decreed as canonically invalid should also be decreed civilly void.

This is one instance where, in view of the evident source and purpose of the
Family Code provision, contemporaneous religious interpretation is to be given
persuasive effect. Here, the State and the Church — while remaining independent,
separate and apart from each other — shall walk together in synodal cadence
towards the same goal of protecting and cherishing marriage and the family as
the inviolable base of the nation.

(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor
General to appear as counsel for the state. No decision shall he handed down
unless the Solicitor General issues a certification, which will be quoted in the
decision, briefly staring therein his reasons for his agreement or opposition, as
the case may be, to the petition. The Solicitor General, along with the prosecuting
attorney, shall submit to the court such certification within fifteen (15) days from
the date the case is deemed submitted for resolution of the court. The Solicitor
General shall discharge the equivalent function of the defensor vinculi
contemplated under Canon 1095.

In the instant case and applying Leouel Santos, we have already ruled to grant
the petition. Such ruling becomes even more cogent with the use of the foregoing
guidelines.

WHEREFORE, the petition is GRANTED. The assailed Decision is REVERSED and

SET ASIDE. The marriage of Roridel Olaviano to Reynaldo Molina subsists and
remains valid.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Bellosillo, Melo, Puno Francisco, Hermosisima, Jr., and
Torres, Jr., JJ., concur.

Regalado, Kapunan and Mendoza, JJ., concurs in the result.

Separate Opinions

PADILLA, J., concuring opinion:

I concur in the result of the decision penned by Mr. Justice Panganiban but only
because of the peculiar facts of the case. As to whether or not the psychological
incapacity exists in a given case calling for annulment of a marriage, depends
crucially, more than in any field of the law, on the facts of the case. In Leouel
Santos v. Court of Appeals and Julia Rosario-Bedia Santos, G.R. No. 112019, 4
January 1995, 240 SCRA 20-36, I maintained, and I still maintain, that there was
psychological incapacity on the part of the wife to discharge the duties of a wife
in a valid marriage. The facts of the present case, after an indepth study, do not
support a similar conclusion. Obviously, each case must be judged, not on the
basis of a priori assumptions, predilections or generalizations but according to
its own facts. In the field of psychological incapacity as a ground for annulment
of marriage, it is trite to say that no case is on "all fours" with another case. The
trial judge must take pains in examining the actual millieu and the appellate court
must, as much as possible, avoid substituting its own judgment for that of the
trial court.

ROMERO, J., separate opinion:

The majority opinion, overturning that of the Court of Appeals which affirmed the
Regional Trial Court ruling. upheld petitioner Solicitor General's position that
"opposing and conflicting personalities" is not equivalent to psychological
incapacity, for the latter "is not simply the neglect by the parties to the marriage
of their responsibilities and duties, but a defect in their Psychological nature
which renders them incapable of performing such marital responsibilities and
duties.
In the present case, the alleged personality traits of Reynaldo, the husband, did
not constitute so much "psychological incapacity" as a "difficulty," if not outright
"refusal" or "neglect" in the performance of some marital obligations. "It is not
enough to prove that the parties failed to meet their responsibilities and duties as
married persons; it is essential that they must be shown to be incapable of doing
so, due to some psychological (not physical) illness."

I would add that neither should the incapacity be the result of mental illness. For
if it were due to insanity or defects in the mental faculties short of insanity, there
is a resultant defect of vice of consent, thus rendering the marriage annulable
under Art. 45 of the Family Code.

That the intent of the members of the U.P. Law Center's Civil Code Revision
Committee was to exclude mental inability to understand the essential nature of
marriage and focus strictly on psychological incapacity is demonstrated in the
way the provision in question underwent revisions.

At the Committee meeting of July 26, 1986, the draft provision read:

(7) Those marriages contracted by any party who, at the time of the celebration,
was wanting in the sufficient use of reason or judgment to understand the
essential nature of marriage or was psychologically or mentally incapacitated to
discharge the essential marital obligations, even if such lack of incapacity is made
manifest after the celebration.

The twists and turns which the ensuing discussion took finally produced the
following revised provision even before the session was over:

(7) That contracted by any party who, at the time of the celebration, was
psychologically incapacitated to discharge the essential marital obligations, even
if such lack or incapacity becomes manifest after the celebration.

Noticeably, the immediately preceding formulation above has dropped any

reference to "wanting in the sufficient use of reason or judgment to understand
the essential nature or marriage" and to "mentally incapacitated." It was
explained that these phrases refer to "defects in the mental faculties vitiating
consent, which is not the idea . . . but lack of appreciation of one's marital
obligation." There being a defect in consent, "it is clear that it should be a ground
for voidable marriage because there is the appearance of consent and it is
capable of convalidation for the simple reason that there are lucid intervals and
there are sanity is curable. . . . Psychological incapacity does not refer to mental
faculties and has nothing to do with consent; it refers to obligations attendant to
marriage." 1

My own position as a member of the Committee then was that psychological

incapacity is, in a sense, insanity of a lesser degree.

As to the proposal of Justice Caguioa to use the term "psychological or mental

impotence," Archbishop Oscar Cruz opined in he earlier February 9, 1984 session
that this term "is an invention of some churchmen who are moralists but not
canonists, that is why it is considered a weak phrase." He said that the Code of
Canon Law would rather express it as "psychological or mental incapacity to
discharge. . . ." Justice Ricardo C. Puno opined that sometimes a person may be
psychologically impotent with one but not with another.

One of the guidelines enumerated in the majority opinion for the interpretation
and application of Art. 36 is: "Such incapacity must also be shown to be
medically or clinically permanent or incurable. Such incurability may be absolute
or even relative only in regard to the other spouse, not necessarily absolutely
against everyone of the same sex."

The Committee, through Prof. Araceli T. Barrera, considered the inclusion of the
phrase" and is incurable" but Prof. Esteban B. Bautista commented that this
would give rise to the question of how they will determine curability and Justice
Caguioa agreed that it would be more problematic. Yet the possibility that one
may be cured after the psychological incapacity becomes manifest after the
marriage was not ruled out by Justice Puno and Justice Alice Sempio-Diy. Justice
Caguioa suggested that the remedy was to allow the afflicted spouse to remarry.

For clarity, the Committee classified the bases for determining void marriages,
viz:

1. lack of one or more of the essential requisites of

marriage as contract;

2. reasons of public policy;

3. special cases and special situations.

The ground of psychological incapacity was subsumed under "special

cases and special situations," hence its special treatment in Art. 36 in the
Family Code as finally enacted.

Nowhere in the Civil Code provisions on Marriage is there a ground for avoiding
or annulling marriages that even comes close to being psychological in nature.

Where consent is vitiated due to circumstances existing at the time of the

marriage, such marriage which stands valid until annulled is capable of
ratification or convalidation.

On the other hand, for reasons of public policy or lack of essential requisites,
some marriages are void from the beginning.

With the revision of Book I of the Civil Code, particularly the provisions on
Marriage, the drafters, now open to fresh winds of change in keeping with the
more permissive mores and practices of the time, took a leaf from the relatively
liberal provisions of Canon Law.

Canon 1095 which states, inter alia, that the following persons are incapable of
contracting marriage: "3. (those) who, because of causes of a psychological
nature, are unable to assume the essential obligations of marriage" provided the
model for what is now Art. 36 of the Family Code: "A marriage contracted by any
party who, at the time of the celebration, was psychologically incapacitated to
comply with the essential marital obligations of marriage, shall likewise be void
even if such incapacity becomes manifest only after its solemnization.

It bears stressing that unlike in Civil Law, Canon Law recognizes only two types
of marriages with respect to their validity: valid and void. Civil Law, however,
recognizes an intermediate state, the voidable or annullable marriages. When the
Ecclesiastical Tribunal "annuls" a marriage, it actually declares the marriage null
and void, i.e., it never really existed in the first place, for a valid sacramental
marriage can never be dissolved. Hence, a properly performed and consummated
marriage between two living Roman Catholics can only be nullified by the formal
annulment process which entails a full tribunal procedure with a Court selection
and a formal hearing.
Such so-called church "annulments" are not recognized by Civil Law as severing
the marriage ties as to capacitate the parties to enter lawfully into another
marriage. The grounds for nullifying civil marriage, not being congruent with
those laid down by Canon Law, the former being more strict, quite a number of
married couples have found themselves in limbo — freed from the marriage
bonds in the eyes of the Catholic Church but yet unable to contract a valid civil
marriage under state laws. Heedless of civil law sanctions, some persons
contract new marriages or enter into live-in relationships.

It was precisely to provide a satisfactory solution to such anomalous situations

that the Civil Law Revision Committee decided to engraft the Canon Law concept
of psychological incapacity into the Family Code — and classified the same as a
ground for declaring marriages void ab initio or totally in existent from the
beginning.

A brief historical note on the Old Canon Law (1917). This Old Code, while it did
not provide directly for psychological incapacity, in effect recognized the same
indirectly from a combination of three old canons: "Canon #1081 required
persons to 'be capable according to law' in order to give valid consent; Canon
#1082 required that persons 'be at least not ignorant' of the major elements
required in marriage; and Canon #1087 (the force and fear category) required that
internal and external freedom be present in order for consent to be valid. This line
of interpretation produced two distinct but related grounds for annulment, called
'lack of due discretion' and 'lack of due competence.' Lack of due discretion
means that the person did not have the ability to give valid consent at the time of
the wedding and therefore the union is invalid. Lack of due competence means
that the person was incapable of carrying out the obligations of the promise he or
she made during the wedding ceremony.

"Favorable annulment decisions by the Roman Rota in the 1950s and 1960s
involving sexual disorders such as homosexuality and nymphomania laid the
foundation for a broader approach to the kind of proof necessary for
psychological grounds for annulment. The Rota had reasoned for the first time in
several cases that the capacity to give valid consent at the time of marriage was
probably not present in persons who had displayed such problems shortly after
the marriage. The nature of this change was nothing short of revolutionary. Once
the Rota itself had demonstrated a cautious willingness to use this kind of
hindsight, the way was paved for what came after 1970. Diocesan Tribunals
began to accept proof of serious psychological problems that manifested
themselves shortly after the ceremony as proof of an inability to give valid
consent at the time of the ceremony.

Furthermore, and equally significant, the professional opinion of a psychological

expert became increasingly important in such cases. Data about the person's
entire life, both before and after the ceremony, were presented to these experts
and they were asked to give professional opinions about a party's mental at the
time of the wedding. These opinions were rarely challenged and tended to be
accepted as decisive evidence of lack of valid consent.

The Church took pains to point out that its new openness in this area did not
amount to the addition of new grounds for annulment, but rather was an
accommodation by the Church to the advances made in psychology during the
past decades. There was now the expertise to provide the all-important
connecting link between a marriage breakdown and premarital causes.

During the 1970s, the Church broadened its whole idea of marriage from that of a
legal contract to that of a covenant. The result of this was that it could no longer
be assumed in annulment cases that a person who could intellectually
understand the concept of marriage could necessarily give valid consent to
marry. The ability to both grasp and assume the real obligations of a mature,
lifelong commitment are now considered a necessary prerequisite to valid
matrimonial consent. 2

Rotal decisions continued applying the concept of incipient psychological

incapacity, "not only to sexual anomalies but to all kinds of personality disorders
that incapacitate a spouse or both spouses from assuming or carrying out the
essential obligations of marriage. For marriage . . . is not merely cohabitation or
the right of the spouses to each others' body for heterosexual acts, but is, in its
totality, the right to the community of the whole of life, i.e., the right to a
developing. lifelong relationship. Rotal decisions since 1973 have refined the
meaning of psychological or psychic capacity for marriage as presupposing the
development of an adult personality; as meaning the capacity of the spouses to
give themselves to each other and to accept the other as a distinct person; that
the spouses must be 'other oriented' since the obligations of marriage are rooted
in a self-giving love; and that the spouses must have the capacity for
interpersonal relationship because marriage is more than just a physical reality
but involves a true intertwining of personalities. The fulfillment of the obligations
of marriage depends. according to Church decisions, on the strength of this
interpersonal relationship. A serious incapacity for interpersonal sharing and
support is held to impair the relationship and consequently, the ability to fulfill
the essential marital obligations. The marital capacity of one spouse is not
considered in isolation but in reference to the fundamental relationship to the
other spouse. 3

Fr. Green, in an article in Catholic Mind, lists six elements necessary to the
mature marital relationship:

The courts consider the following elements crucial to the marital commitment: (1) a
permanent and faithful commitment to the marriage partner; (2) openness to
children and partner; (3) stability; (4) emotional maturity; (5) financial
responsibility; (6) an ability to cope with the ordinary stresses and strains of
marriage, etc.

Fr. Green goes on to speak about some of the psychological conditions that might
lead to the failure of a marriage:

At stake is a type of constitutional impairment precluding conjugal communion

even with the best intentions of the parties. Among the psychic factors possibly
giving rise to his or her inability to fulfill marital obligations are the following: (1)
antisocial personality with its fundamental lack of loyalty to persons or sense of
moral values; (2) hyperesthesia, where the individual has no real freedom of sexual
choice; (3) the inadequate personality where personal responses consistently
fallshort of reasonable expectations.

xxx xxx xxx

The psychological grounds are the best approach for anyone who doubts whether
he or she has a case for an annulment on any other terms. A situation that does
not fit into any of the more traditional categories often fits very easily into the
psychological category.

As new as the psychological grounds are, experts are already detecting a shift in
their use. Whereas originally the emphasis was on the parties' inability to exercise
proper judgment at the time of the marriage (lack of due discretion), recent cases
seem to be concentrating on the parties' to assume or carry out their
responsibilities an obligations as promised (lack of due competence). An
advantage to using the ground of lack of due competence is that the at the time the
marriage was entered into civil divorce and breakup of the family almost is of
 someone's failure out marital responsibilities as promised at the time the marriage
was entered into. 4

In the instant case, "opposing and conflicting personalities" of the spouses were
not considered equivalent to psychological incapacity. As well in Santos v. Court
of Appeals cited in the ponencia, the Court held that the failure of the wife to
return home from the U.S. or to communicate with her husband for more then five
years is not proof of her psychological incapacity as to render the marriage a
nullity. 5 Therefore, Art. 36 is inapplicable and the marriages remain valid and
subsisting.

However in the recent case of Chi Ming Tsoi v. Court of Appeals, 6 this Court
upheld both the Regional Trial Court and the Court of Appeals in declaring the
presence of psychological incapacity on the part of the husband. Said petitioner
husband, after ten (10) months' sleeping with his wife never had coitus with her, a
fact he did not deny but he alleged that it was due to the physical disorder of his
wife which, however, he failed to prove. Goaded by the indifference and stubborn
refusal of her husband to fulfill a basic marital obligation described as "to
procreate children based on the universal principle that procreation of children
through sexual cooperation is the basic end of marriage," the wife brought the
action in the lower court to declare the marriage null.

The Court, quoting Dr. Gerardo Veloso, a former Presiding Judge of the
Metropolitan Marriage Tribunal of the Catholic Archdiocese of Manila (Branch I)
on Psychological incapacity concluded:

If a spouse, although physically capable but simply refuses to perform his or her
essential marriage obligations, and the refusal is senseless and constant, Catholic
marriage tribunals attribute the causes to psychological incapacity than to
stubborn refusal. Senseless and protracted refusal is equivalent to psychological
incapacity. Thus, the prolonged refusal of a spouse to have sexual intercourse
with his or her spouse is considered a sign of psychological incapacity.

We declared:

This Court, finding the gravity of the failed relationship in which the parties found
themselves trapped in its mire of unfulfilled vows and unconsummated marital
obligations, can do no less but sustain the studied judgment of respondent
appellate court.

1 concur with the majority opinion that the herein marriage remains valid and
subsisting absent psychological incapacity (under Art. 36 of the Family Code) on
the part of either or both of the spouses.

VITUG, J., concurring:

I fully concur with my esteemed 'colleague Mr. Justice Artemio V. Panganiban in

his ponencia, and I find to be most helpful the guidelines that he prepared for the
bench and the bar in the proper appreciation of Article 36 of Executive Order No.
209 ("The Family Code of the Philippines"). The term "psychological incapacity"
was neither defined nor exemplified by the Family Code. Thus —

Art. 36. A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of
marriage, shall likewise be void even if such incapacity becomes manifest only
after its solemnization.
 The Revision Committee, constituted under the auspices of the U.P. Law
Center, which drafted the Code explained:

(T)he Committee would like the judge to interpret the provision on a case-to-case
basis, guided by experience, the findings of experts and researchers in
psychological disciplines, and by decisions of church tribunals which, although
not binding on the civil courts, may be given persuasive effect since the provision
was taken from Canon Law. 1

Article 36 of the Family Code was concededly taken from Canon 1095 of the New
Code of Canon Law —

Canon 1095. (The following persons) are incapable of contracting marriage; (those)
—

1. who lack sufficient use of reason;

2. who suffer from a grave defect of discretion of judgment concerning essential

matrimonial rights and duties, to be given and accepted mutually;

3. who for causes of psychological nature are unable to assume the essential
obligations of marriage —

that should give that much value to Canon Law jurisprudence as an aid to
the interpretation and construction of the statutory enactment. 2

The principles in the proper application of the law teach us that the several
provisions of a Code must be read like a congruent whole. Thus, in determining
the import of "psychological incapacity" under Article 36, one must also read it
along with, albeit to be taken as distinct from, the other grounds enumerated in
the Code, like Articles 35, 37, 38 and 41 that would likewise, but for distinct
reasons, render the marriage merely voidable, or Article 55 that could justify a
petition for legal separation. Care must be observed so that these various
circumstances are not applied so indiscriminately as if the law were indifferent on
the matter.

I would wish to reiterate the Court's' statement in Santos vs. Court of Appeals; 3
viz:

(T)he use of the phrase "psychological incapacity" under Article 36 of the Code
has not been meant to comprehend all such possible cases of psychoses as,
likewise mentioned by some ecclesiastical authorities, extremely low intelligence,
immaturity, and like circumstances. . . Article 36 of the Family Code cannot be
taken and construed independently of, but must stand in conjunction with, existing
precepts in our law on marriage. Thus correlated, "psychological incapacity"
should refer to no less than a mental (not physical) incapacity that causes a party
to be truly incognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage which, as so expressed by
Article 68 of the Family Code, include their mutual obligations to live together,
observe love, respect and fidelity and render help and support. There is hardly any
doubt that the intendment of the law has been to confine the meaning of
"psychological incapacity" to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability of the spouse to have
sexual relations with the other. This conclusion is implicit under Article 54 of the
Family Code which considers children conceived prior to the judicial declaration of
nullity of the void marriage to be "legitimate."

The other forms of psychoses, if existing at the inception of marriage, like the state
of a party being of unsound mind or concealment of drug addiction, habitual
alcoholism, homosexuality or lesbianism, merely renders the marriage contract
voidable pursuant to Article 46, Family Code. If drug addiction, habitual
alcoholism, lesbianism or homosexuality should occur only during the marriage,
they become mere grounds for legal separation under Article 55 of the Family
 Code. These provisions of the Code, however, do not necessarily preclude the
possibility of these various circumstances being themselves, depending on the
degree and severity of the disorder, indicia of psychological
incapacity. 4

In fine, the term "psychological incapacity," to be a ground for then nullity of

marriage under Article 36 of the Family Code, must be able to pass the following
tests; viz:

First, the incapacity must be psychological or mental, not physical, in nature;

Second, the psychological incapacity must relate to the inability, not mere
refusal, to understand, assume end discharge the basic marital obligations of
living together, observing love, respect and fidelity and rendering mutual help
and support;

Third, the psychologic condition must exist at the time the marriage is contracted
although its overt manifestations and the marriage may occur only thereafter;
and

Fourth, the mental disorder must be grave or serious and incurable.

It may well be that the Family Code Revision Committee has envisioned Article
36, as not a few observers would suspect, as another form of absolute divorce or,
as still others would also put it, to be a alternative to divorce; however, the fact
still remains that the language of the law has failed to carry out, even if true, any
such intendment. It might have indeed turned out for the better, if it were
otherwise, there could be good reasons to doubt the constitutionality of the
measure. The fundamental law itself, no less, has laid down in terse language its
unequivocal command on how the State should regard marriage and the family,
thus —

Section 2, Article XV:

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family

and shall be protected by the State.

Section 12, Article II:

Sec. 12. The State recognizes the sanctity of family life and shall protect and
strengthen the family as a basic autonomous social institution . . . .

Section 1, Article XV:

Sec. 1. The State recognizes the Filipino family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and actively promote its total
development. (The 1987 Constitution)

The case of Marcelino vs. Cruz, 121 SCRA 51, might here be significant not so
much for the specific issue there resolved but for the tone it has set. The Court
there has held that constitutional provisions are to be considered mandatory
unless by necessary implication, a different intention is manifest such that to
have them enforced strictly would cause more harm than by disregarding them. It
is quite clear to me that the constitutional mandate on marriage and the family
has not been meant to be simply directory in character, nor for mere expediency
or convenience, but one that demands a meaningful, not half-hearted, respect.

 
Separate Opinions

PADILLA, J., concuring opinion:

I concur in the result of the decision penned by Mr. Justice Panganiban but only
because of the peculiar facts of the case. As to whether or not the psychological
incapacity exists in a given case calling for annulment of a marriage, depends
crucially, more than in any field of the law, on the facts of the case. In Leouel
Santos v. Court of Appeals and Julia Rosario-Bedia Santos, G.R. No. 112019, 4
January 1995, 240 SCRA 20-36, I maintained, and I still maintain, that there was
psychological incapacity on the part of the wife to discharge the duties of a wife
in a valid marriage. The facts of the present case, after an indepth study, do not
support a similar conclusion. Obviously, each case must be judged, not on the
basis of a priori assumptions, predilections or generalizations but according to
its own facts. In the field of psychological incapacity as a ground for annulment
of marriage, it is trite to say that no case is on "all fours" with another case. The
trial judge must take pains in examining the actual millieu and the appellate court
must, as much as possible, avoid substituting its own judgment for that of the
trial court.

ROMERO, J., separate opinion:

The majority opinion, overturning that of the Court of Appeals which affirmed the
Regional Trial Court ruling. upheld petitioner Solicitor General's position that
"opposing and conflicting personalities" is not equivalent to psychological
incapacity, for the latter "is not simply the neglect by the parties to the marriage
of their responsibilities and duties, but a defect in their Psychological nature
which renders them incapable of performing such marital responsibilities and
duties.

In the present case, the alleged personality traits of Reynaldo, the husband, did
not constitute so much "psychological incapacity" as a "difficulty," if not outright
"refusal" or "neglect" in the performance of some marital obligations. "It is not
enough to prove that the parties failed to meet their responsibilities and duties as
married persons; it is essential that they must be shown to be incapable of doing
so, due to some psychological (not physical) illness."

I would add that neither should the incapacity be the result of mental illness. For
if it were due to insanity or defects in the mental faculties short of insanity, there
is a resultant defect of vice of consent, thus rendering the marriage annulable
under Art. 45 of the Family Code.

That the intent of the members of the U.P. Law Center's Civil Code Revision
Committee was to exclude mental inability to understand the essential nature of
marriage and focus strictly on psychological incapacity is demonstrated in the
way the provision in question underwent revisions.

At the Committee meeting of July 26, 1986, the draft provision read:

(7) Those marriages contracted by any party who, at the time of the celebration,
was wanting in the sufficient use of reason or judgment to understand the
essential nature of marriage or was psychologically or mentally incapacitated to
discharge the essential marital obligations, even if such lack of incapacity is made
manifest after the celebration.

The twists and turns which the ensuing discussion took finally produced the
following revised provision even before the session was over:
 (7) That contracted by any party who, at the time of the celebration, was
psychologically incapacitated to discharge the essential marital obligations, even
if such lack or incapacity becomes manifest after the celebration.

Noticeably, the immediately preceding formulation above has dropped any

reference to "wanting in the sufficient use of reason or judgment to understand
the essential nature or marriage" and to "mentally incapacitated." It was
explained that these phrases refer to "defects in the mental faculties vitiating
consent, which is not the idea . . . but lack of appreciation of one's marital
obligation." There being a defect in consent, "it is clear that it should be a ground
for voidable marriage because there is the appearance of consent and it is
capable of convalidation for the simple reason that there are lucid intervals and
there are sanity is curable. . . . Psychological incapacity does not refer to mental
faculties and has nothing to do with consent; it refers to obligations attendant to
marriage." 1

My own position as a member of the Committee then was that psychological

incapacity is, in a sense, insanity of a lesser degree.

As to the proposal of Justice Caguioa to use the term "psychological or mental

impotence," Archbishop Oscar Cruz opined in he earlier February 9, 1984 session
that this term "is an invention of some churchmen who are moralists but not
canonists, that is why it is considered a weak phrase." He said that the Code of
Canon Law would rather express it as "psychological or mental incapacity to
discharge. . . ." Justice Ricardo C. Puno opined that sometimes a person may be
psychologically impotent with one but not with another.

One of the guidelines enumerated in the majority opinion for the interpretation
and application of Art. 36 is: "Such incapacity must also be shown to be
medically or clinically permanent or incurable. Such incurability may be absolute
or even relative only in regard to the other spouse, not necessarily absolutely
against everyone of the same sex."

The Committee, through Prof. Araceli T. Barrera, considered the inclusion of the
phrase" and is incurable" but Prof. Esteban B. Bautista commented that this
would give rise to the question of how they will determine curability and Justice
Caguioa agreed that it would be more problematic. Yet the possibility that one
may be cured after the psychological incapacity becomes manifest after the
marriage was not ruled out by Justice Puno and Justice Alice Sempio-Diy. Justice
Caguioa suggested that the remedy was to allow the afflicted spouse to remarry.

For clarity, the Committee classified the bases for determining void marriages,
viz:

1. lack of one or more of the essential requisites of

marriage as contract;

2. reasons of public policy;

3. special cases and special situations.

The ground of psychological incapacity was subsumed under "special

cases and special situations," hence its special treatment in Art. 36 in the
Family Code as finally enacted.

Nowhere in the Civil Code provisions on Marriage is there a ground for avoiding
or annulling marriages that even comes close to being psychological in nature.
Where consent is vitiated due to circumstances existing at the time of the
marriage, such marriage which stands valid until annulled is capable of
ratification or convalidation.

On the other hand, for reasons of public policy or lack of essential requisites,
some marriages are void from the beginning.

With the revision of Book I of the Civil Code, particularly the provisions on
Marriage, the drafters, now open to fresh winds of change in keeping with the
more permissive mores and practices of the time, took a leaf from the relatively
liberal provisions of Canon Law.

Canon 1095 which states, inter alia, that the following persons are incapable of
contracting marriage: "3. (those) who, because of causes of a psychological
nature, are unable to assume the essential obligations of marriage" provided the
model for what is now Art. 36 of the Family Code: "A marriage contracted by any
party who, at the time of the celebration, was psychologically incapacitated to
comply with the essential marital obligations of marriage, shall likewise be void
even if such incapacity becomes manifest only after its solemnization.

It bears stressing that unlike in Civil Law, Canon Law recognizes only two types
of marriages with respect to their validity: valid and void. Civil Law, however,
recognizes an intermediate state, the voidable or annullable marriages. When the
Ecclesiastical Tribunal "annuls" a marriage, it actually declares the marriage null
and void, i.e., it never really existed in the first place, for a valid sacramental
marriage can never be dissolved. Hence, a properly performed and consummated
marriage between two living Roman Catholics can only be nullified by the formal
annulment process which entails a full tribunal procedure with a Court selection
and a formal hearing.

Such so-called church "annulments" are not recognized by Civil Law as severing
the marriage ties as to capacitate the parties to enter lawfully into another
marriage. The grounds for nullifying civil marriage, not being congruent with
those laid down by Canon Law, the former being more strict, quite a number of
married couples have found themselves in limbo — freed from the marriage
bonds in the eyes of the Catholic Church but yet unable to contract a valid civil
marriage under state laws. Heedless of civil law sanctions, some persons
contract new marriages or enter into live-in relationships.

It was precisely to provide a satisfactory solution to such anomalous situations

that the Civil Law Revision Committee decided to engraft the Canon Law concept
of psychological incapacity into the Family Code — and classified the same as a
ground for declaring marriages void ab initio or totally in existent from the
beginning.

A brief historical note on the Old Canon Law (1917). This Old Code, while it did
not provide directly for psychological incapacity, in effect recognized the same
indirectly from a combination of three old canons: "Canon #1081 required
persons to 'be capable according to law' in order to give valid consent; Canon
#1082 required that persons 'be at least not ignorant' of the major elements
required in marriage; and Canon #1087 (the force and fear category) required that
internal and external freedom be present in order for consent to be valid. This line
of interpretation produced two distinct but related grounds for annulment, called
'lack of due discretion' and 'lack of due competence.' Lack of due discretion
means that the person did not have the ability to give valid consent at the time of
the wedding and therefore the union is invalid. Lack of due competence means
that the person was incapable of carrying out the obligations of the promise he or
she made during the wedding ceremony.

"Favorable annulment decisions by the Roman Rota in the 1950s and 1960s
involving sexual disorders such as homosexuality and nymphomania laid the
foundation for a broader approach to the kind of proof necessary for
psychological grounds for annulment. The Rota had reasoned for the first time in
several cases that the capacity to give valid consent at the time of marriage was
probably not present in persons who had displayed such problems shortly after
the marriage. The nature of this change was nothing short of revolutionary. Once
the Rota itself had demonstrated a cautious willingness to use this kind of
hindsight, the way was paved for what came after 1970. Diocesan Tribunals
began to accept proof of serious psychological problems that manifested
themselves shortly after the ceremony as proof of an inability to give valid
consent at the time of the ceremony.

Furthermore, and equally significant, the professional opinion of a psychological

expert became increasingly important in such cases. Data about the person's
entire life, both before and after the ceremony, were presented to these experts
and they were asked to give professional opinions about a party's mental at the
time of the wedding. These opinions were rarely challenged and tended to be
accepted as decisive evidence of lack of valid consent.

The Church took pains to point out that its new openness in this area did not
amount to the addition of new grounds for annulment, but rather was an
accommodation by the Church to the advances made in psychology during the
past decades. There was now the expertise to provide the all-important
connecting link between a marriage breakdown and premarital causes.

During the 1970s, the Church broadened its whole idea of marriage from that of a
legal contract to that of a covenant. The result of this was that it could no longer
be assumed in annulment cases that a person who could intellectually
understand the concept of marriage could necessarily give valid consent to
marry. The ability to both grasp and assume the real obligations of a mature,
lifelong commitment are now considered a necessary prerequisite to valid
matrimonial consent. 2

Rotal decisions continued applying the concept of incipient psychological

incapacity, "not only to sexual anomalies but to all kinds of personality disorders
that incapacitate a spouse or both spouses from assuming or carrying out the
essential obligations of marriage. For marriage . . . is not merely cohabitation or
the right of the spouses to each others' body for heterosexual acts, but is, in its
totality, the right to the community of the whole of life, i.e., the right to a
developing. lifelong relationship. Rotal decisions since 1973 have refined the
meaning of psychological or psychic capacity for marriage as presupposing the
development of an adult personality; as meaning the capacity of the spouses to
give themselves to each other and to accept the other as a distinct person; that
the spouses must be 'other oriented' since the obligations of marriage are rooted
in a self-giving love; and that the spouses must have the capacity for
interpersonal relationship because marriage is more than just a physical reality
but involves a true intertwining of personalities. The fulfillment of the obligations
of marriage depends. according to Church decisions, on the strength of this
interpersonal relationship. A serious incapacity for interpersonal sharing and
support is held to impair the relationship and consequently, the ability to fulfill
the essential marital obligations. The marital capacity of one spouse is not
considered in isolation but in reference to the fundamental relationship to the
other spouse. 3
Fr. Green, in an article in Catholic Mind, lists six elements necessary to the
mature marital relationship:

The courts consider the following elements crucial to the marital commitment: (1) a
permanent and faithful commitment to the marriage partner; (2) openness to
children and partner; (3) stability; (4) emotional maturity; (5) financial
responsibility; (6) an ability to cope with the ordinary stresses and strains of
marriage, etc.

Fr. Green goes on to speak about some of the psychological conditions that might
lead to the failure of a marriage:

At stake is a type of constitutional impairment precluding conjugal communion

even with the best intentions of the parties. Among the psychic factors possibly
giving rise to his or her inability to fulfill marital obligations are the following: (1)
antisocial personality with its fundamental lack of loyalty to persons or sense of
moral values; (2) hyperesthesia, where the individual has no real freedom of sexual
choice; (3) the inadequate personality where personal responses consistently
fallshort of reasonable expectations.

xxx xxx xxx

The psychological grounds are the best approach for anyone who doubts whether
he or she has a case for an annulment on any other terms. A situation that does
not fit into any of the more traditional categories often fits very easily into the
psychological category.

As new as the psychological grounds are, experts are already detecting a shift in
their use. Whereas originally the emphasis was on the parties' inability to exercise
proper judgment at the time of the marriage (lack of due discretion), recent cases
seem to be concentrating on the parties' to assume or carry out their
responsibilities an obligations as promised (lack of due competence). An
advantage to using the ground of lack of due competence is that the at the time the
marriage was entered into civil divorce and breakup of the family almost is of
someone's failure out marital responsibilities as promised at the time the marriage
was entered into. 4

In the instant case, "opposing and conflicting personalities" of the spouses were
not considered equivalent to psychological incapacity. As well in Santos v. Court
of Appeals cited in the ponencia, the Court held that the failure of the wife to
return home from the U.S. or to communicate with her husband for more then five
years is not proof of her psychological incapacity as to render the marriage a
nullity. 5 Therefore, Art. 36 is inapplicable and the marriages remain valid and
subsisting.

However in the recent case of Chi Ming Tsoi v. Court of Appeals, 6 this Court
upheld both the Regional Trial Court and the Court of Appeals in declaring the
presence of psychological incapacity on the part of the husband. Said petitioner
husband, after ten (10) months' sleeping with his wife never had coitus with her, a
fact he did not deny but he alleged that it was due to the physical disorder of his
wife which, however, he failed to prove. Goaded by the indifference and stubborn
refusal of her husband to fulfill a basic marital obligation described as "to
procreate children based on the universal principle that procreation of children
through sexual cooperation is the basic end of marriage," the wife brought the
action in the lower court to declare the marriage null.

The Court, quoting Dr. Gerardo Veloso, a former Presiding Judge of the
Metropolitan Marriage Tribunal of the Catholic Archdiocese of Manila (Branch I)
on Psychological incapacity concluded:

If a spouse, although physically capable but simply refuses to perform his or her
essential marriage obligations, and the refusal is senseless and constant, Catholic
 marriage tribunals attribute the causes to psychological incapacity than to
stubborn refusal. Senseless and protracted refusal is equivalent to psychological
incapacity. Thus, the prolonged refusal of a spouse to have sexual intercourse
with his or her spouse is considered a sign of psychological incapacity.

We declared:

This Court, finding the gravity of the failed relationship in which the parties found
themselves trapped in its mire of unfulfilled vows and unconsummated marital
obligations, can do no less but sustain the studied judgment of respondent
appellate court.

1 concur with the majority opinion that the herein marriage remains valid and
subsisting absent psychological incapacity (under Art. 36 of the Family Code) on
the part of either or both of the spouses.

VITUG, J., concurring:

I fully concur with my esteemed 'colleague Mr. Justice Artemio V. Panganiban in

his ponencia, and I find to be most helpful the guidelines that he prepared for the
bench and the bar in the proper appreciation of Article 36 of Executive Order No.
209 ("The Family Code of the Philippines"). The term "psychological incapacity"
was neither defined nor exemplified by the Family Code. Thus —

Art. 36. A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of
marriage, shall likewise be void even if such incapacity becomes manifest only
after its solemnization.

The Revision Committee, constituted under the auspices of the U.P. Law
Center, which drafted the Code explained:

(T)he Committee would like the judge to interpret the provision on a case-to-case
basis, guided by experience, the findings of experts and researchers in
psychological disciplines, and by decisions of church tribunals which, although
not binding on the civil courts, may be given persuasive effect since the provision
was taken from Canon Law. 1

Article 36 of the Family Code was concededly taken from Canon 1095 of the New
Code of Canon Law —

Canon 1095. (The following persons) are incapable of contracting marriage; (those)
—

1. who lack sufficient use of reason;

2. who suffer from a grave defect of discretion of judgment concerning essential

matrimonial rights and duties, to be given and accepted mutually;

3. who for causes of psychological nature are unable to assume the essential
obligations of marriage —

that should give that much value to Canon Law jurisprudence as an aid to
the interpretation and construction of the statutory enactment. 2

The principles in the proper application of the law teach us that the several
provisions of a Code must be read like a congruent whole. Thus, in determining
the import of "psychological incapacity" under Article 36, one must also read it
along with, albeit to be taken as distinct from, the other grounds enumerated in
the Code, like Articles 35, 37, 38 and 41 that would likewise, but for distinct
reasons, render the marriage merely voidable, or Article 55 that could justify a
petition for legal separation. Care must be observed so that these various
circumstances are not applied so indiscriminately as if the law were indifferent on
the matter.

I would wish to reiterate the Court's' statement in Santos vs. Court of Appeals; 3
viz:

(T)he use of the phrase "psychological incapacity" under Article 36 of the Code
has not been meant to comprehend all such possible cases of psychoses as,
likewise mentioned by some ecclesiastical authorities, extremely low intelligence,
immaturity, and like circumstances. . . Article 36 of the Family Code cannot be
taken and construed independently of, but must stand in conjunction with, existing
precepts in our law on marriage. Thus correlated, "psychological incapacity"
should refer to no less than a mental (not physical) incapacity that causes a party
to be truly incognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage which, as so expressed by
Article 68 of the Family Code, include their mutual obligations to live together,
observe love, respect and fidelity and render help and support. There is hardly any
doubt that the intendment of the law has been to confine the meaning of
"psychological incapacity" to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability of the spouse to have
sexual relations with the other. This conclusion is implicit under Article 54 of the
Family Code which considers children conceived prior to the judicial declaration of
nullity of the void marriage to be "legitimate."

The other forms of psychoses, if existing at the inception of marriage, like the state
of a party being of unsound mind or concealment of drug addiction, habitual
alcoholism, homosexuality or lesbianism, merely renders the marriage contract
voidable pursuant to Article 46, Family Code. If drug addiction, habitual
alcoholism, lesbianism or homosexuality should occur only during the marriage,
they become mere grounds for legal separation under Article 55 of the Family
Code. These provisions of the Code, however, do not necessarily preclude the
possibility of these various circumstances being themselves, depending on the
degree and severity of the disorder, indicia of psychological
incapacity. 4

In fine, the term "psychological incapacity," to be a ground for then nullity of

marriage under Article 36 of the Family Code, must be able to pass the following
tests; viz:

First, the incapacity must be psychological or mental, not physical, in nature;

Second, the psychological incapacity must relate to the inability, not mere
refusal, to understand, assume end discharge the basic marital obligations of
living together, observing love, respect and fidelity and rendering mutual help
and support;

Third, the psychologic condition must exist at the time the marriage is contracted
although its overt manifestations and the marriage may occur only thereafter;
and

Fourth, the mental disorder must be grave or serious and incurable.

It may well be that the Family Code Revision Committee has envisioned Article
36, as not a few observers would suspect, as another form of absolute divorce or,
as still others would also put it, to be a alternative to divorce; however, the fact
still remains that the language of the law has failed to carry out, even if true, any
such intendment. It might have indeed turned out for the better, if it were
otherwise, there could be good reasons to doubt the constitutionality of the
measure. The fundamental law itself, no less, has laid down in terse language its
unequivocal command on how the State should regard marriage and the family,
thus —

Section 2, Article XV:

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family

and shall be protected by the State.

Section 12, Article II:

Sec. 12. The State recognizes the sanctity of family life and shall protect and
strengthen the family as a basic autonomous social institution . . . .

Section 1, Article XV:

Sec. 1. The State recognizes the Filipino family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and actively promote its total
development. (The 1987 Constitution)

The case of Marcelino vs. Cruz, 121 SCRA 51, might here be significant not so
much for the specific issue there resolved but for the tone it has set. The Court
there has held that constitutional provisions are to be considered mandatory
unless by necessary implication, a different intention is manifest such that to
have them enforced strictly would cause more harm than by disregarding them. It
is quite clear to me that the constitutional mandate on marriage and the family
has not been meant to be simply directory in character, nor for mere expediency
or convenience, but one that demands a meaningful, not half-hearted, respect.

Footnotes

1 Rollo pp. 25-33.

2 Sixteenth Division composed of J., Segundino G. Chua, ponente and chairman

JJ., Serafin V.C. Guingona and Ricardo P. Galvez, concurring.

3 Presided by Judge Heilia S. Mallare-Phillipps.

4 Solemnized by Fr. Jesus C. Encinas.

5 The Court of Appeals reproduced in its Decision a substantial portion of the RTC
Decision is follows:

"To sustain her claim that respondent is psychologically incapacitated to comply

with his marital obligations, petitioner testified that he is immature, irresponsible,
dependent, disrespectful, arrogant, a chronic liar, and an infidel. These
characteristics of respondent are based on petitioner's testimony that the former
failed to be gainfully employed after he was relieved from the office of the
Government Corporate Counsel sometime in February, 1986. leaving petitioner as
the sole breadwinner of the family. Also when they were separated in fact,
respondent practically abandoned both petitioner-mother and son except during
the first few months of separation when respondent regularly visited his son and
gave him a monthly allowance of P1,000.00 for about two to four months.
Respondent is likewise dependent on his parents for financial aid and support as
he has no savings, preferring to spend his money with his friends and peers. A
year after their marriage, respondent informed petitioner that he bought a house
and lot at BF Homes, Parañaque for about a million pesos. They then transferred
there only for the petitioner to discover a few months later that they were actually
renting the house with the respondent's parents responsible for the payment of the
rentals. Aside from this. respondent would also lie about his salary and ability. And
that at present, respondent is living with his mistress and their child. which fact he
does not deny.
It is unfortunate that the marriage between petitioner and respondent turned sour if
we look at the background of their relationship. During their college days, when
they were still going steady, respondent observed petitioner to be conservative,
homely, and intelligent causing him to believe then that she would make an ideal
wife and mother. Likewise, petitioner fell in love with respondent because of his
thoughtfulness and gentleness. After a year, however, they decided to break their
relationship because of some differences in their personalities. Almost five (5)
years later, while they were working in Manila, petitioner and respondent rekindled
their love affair. They became very close and petitioner was glad to observe a more
mature respondent. Believing that they know each other much better after two
years of going steady, they decided to settle down and get married. It would seem.
therefore, that petitioner and respondent knew each other well and were then
prepared for married life.

During their marriage, however, the true personalities of the parties cropped-up
and dominated their life together. Unexpectedly on both their parts, petitioner and
respondent failed to respond properly to the situation. This failure resulted in their
frequent arguments and fighting's. In fact, even with the intervention and help of
their parents who arranged for their possible reconciliation, the parties could not
come to terms.

It seems clear at this stage that the marriage between the parties broke-up because
of their opposing and conflicting personalities (sic). Neither of them can accept
and understand the weakness of the other. No one gives in and instead, blame
each other for whatever problem or misunderstanding/s they encounter. In fine,
respondent cannot be solely responsible for the failure of other (sic) marriage.
Rather, this resulted because both parties cannot relate to each other as husband
and wife which is unique and requisite in marriage.

Marriage is a special contract of permanent union between a man and a woman

with the basic objective of establishing a conjugal and family life. (Article 1, Family
Code). The unique element of permanency of union signifies a continuing,
developing, and lifelong relationship between the parties. Towards this end, the
parties must fully understand and accept the (implications and consequences of
being permanently) united in marriage. And the maintenance of this relationship
demands from the parties, among others, determination to succeed in their
marriage as well as heartfelt understanding, acceptance, cooperation, and support
for each other. Thus, the Family Code requires them to live together, to observe
mutual (love, respect and fidelity, and render mutual help and support. Failure to
observe) and perform these fundamental roles of a husband and a wife will most
likely lead to the break-up of the marriage. Such is the unfortunate situation in this
case. (Decision, pp. 5-8; Original Records, pp. 70-73).

6 240 SCRA 20, 34, January 4, 1995.

7 Quoted from Justice Alicia Sempio-Diy, Handbook on the Family Code, First
Edition, 1988.

8 TSN, April 6, 1991, p. 5.

9 The National Appellate Matrimonial Tribunal reviews all decisions of the marriage
tribunals of each archdiocese in the country. Aside from heading the Appellate
Tribunal, Most. Rev. Cruz is also incumbent president of the Catholic Bishops'
Conference of the Philippines, Archbishop of Dagupan-Lingayen, and holds the
degrees of Doctor of Canon Law and Doctor of Divinity. Archbishop Cruz was also
Secretary-General of the Second Plenary Council of the Philippines — PCP II —
held from January 20, 1991 to February 17, 1991, which is the rough equivalent of a
parliament or a constitutional convention in the Philippine Church, and where the
ponente, who was a Council member, had the privilege of being overwhelmed by
his keen mind and prayerful discernments.

10 Justice Puno was a former member of the Court of Appeals, retired Minister of
Justice, author, noted civil law professor and the law practitioner.

Article XV
 THE FAMILY

Sec. 1. The State recognizes the Filipino Family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and actively promote its total
development.

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family

and shall be protected by the state.

Sec. 3. The State shall defend:

(1) The right of spouses to found a family in accordance with their religious
connections and the demands of responsible parenthood;

(2) The right of children to assistance, including proper care and nutrition, and
special protection from all forms of neglect, abuse, cruelty. exploitation, and other
conditions prejudicial to their development;

(3) The right of the family to a family living wage and income;

(4) The right of families or family associations to participate in the planning and
implementation of policies and programs that affect them.

Sec. 4. The family has the duty to care for its elderly members but the state may
also do so through just programs of social security.

Art. 1 Marriage is a special contract of permanent union between a man and a

woman entered into in accordance with law for the establishment of conjugal and
family life. It is the foundation of the family and an inviolable social institution
whose nature, consequences, and incidents are governed by law and not subject
to stipulation, except that marriage settlements may fix the property relations
during the marriage within the limits provided by this Code.

13 Salita vs. Magtolis, 233 SCRA 100, June 13, 1994.

14 This text is taken from the Memorandum of Archbishop Cruz. On the other
hand, the text used in Santos v. CA reads:

"Canon 1095. They are incapable of contracting marriage:

xxx xxx xxx

3. Who for causes of psychological nature are unable to assume the essential
obligations of marriage.

The difference in wording between this and that in Arch. Cruz's Memorandum is
due to the fact that the original Canon is written in Latin and both versions are
differently-worded English translations.

ROMERO, J., separate opinion:

1 Justice Caguioa's explanation in the Minutes of July 26, 1986 of the Civil Code
Revision Committee of the U.P. Law Center.

2 Zwack , Joseph P. Annulment, A Step-by-Step Guide.

3 The Code of Canon Law, A Text and Commentary, The Canon Law Society of
America, Paulist Press, New York, 1985.

4 Zwack, ibid., p. 47.

5 G.R. No. 112019, 240 SCRA 20 (1995).

6 G.R. No. 119190 (1997).

 VITUG, J., concurring:

1 Mr. Justice Josue N. Bellosillo, quoting Mme. Justice Alicia V. Sempio-Diy, In

Salita vs. Hon. Magtolis, 233 SCRA 100.

2 In Santos vs. Court Appeals, 240 SCRA 20.

3 Supra.

4 At pages 34-35.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-39419 April 12, 1982

MAPALAD AISPORNA, petitioner,

vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.:

In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the
decision dated August 14, 1974 1 in CA-G.R. No. 13243-CR entitled "People of the
Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of respondent
Court of Appeals affirming the judgment of the City Court of Cabanatuan 2 rendered on
August 2, 1971 which found the petitioner guilty for having violated Section 189 of the
Insurance Act (Act No. 2427, as amended) and sentenced her to pay a fine of P500.00
with subsidiary imprisonment in case of insolvency, and to pay the costs.

Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section
189 of the Insurance Act on November 21, 1970 in an information 3 which reads as
follows:

That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the
Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, did then and there, wilfully, unlawfully and feloniously act as agent in the
solicitation or procurement of an application for insurance by soliciting therefor the
application of one Eugenio S. Isidro, for and in behalf of Perla Compania de Seguros,
Inc., a duly organized insurance company, registered under the laws of the Republic of
the Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-
RSA 0001 in the amount not exceeding FIVE THOUSAND PESOS (P5,000.00) dated
June 21, 1969, without said accused having first secured a certificate of authority to act
as such agent from the office of the Insurance Commissioner, Republic of the Philippines.

CONTRARY TO LAW.

The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:

IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June,
1969, appellant's husband, Rodolfo S. Aisporna was duly licensed by Insurance
Commission as agent to Perla Compania de Seguros, with license to expire on 30 June,
1970, Exh. C; on that date, at Cabanatuan City, Personal Accident Policy, Exh. D was
 issued by Perla thru its author representative, Rodolfo S. Aisporna, for a period of twelve
(12) months with beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured
died by violence during lifetime of policy, and for reasons not explained in record, present
information was filed by Fiscal, with assistance of private prosecutor, charging wife of
Rodolfo with violation of Sec. 189 of Insurance Law for having, wilfully, unlawfully, and
feloniously acted, "as agent in the solicitation for insurance by soliciting therefore the
application of one Eugenio S. Isidro for and in behalf of Perla Compaña de Seguros, ...
without said accused having first secured a certificate of authority to act as such agent
from the office of the Insurance Commission, Republic of the Philippines."

and in the trial, People presented evidence that was hardly disputed, that aforementioned
policy was issued with active participation of appellant wife of Rodolfo, against which
appellant in her defense sought to show that being the wife of true agent, Rodolfo, she
naturally helped him in his work, as clerk, and that policy was merely a renewal and was
issued because Isidro had called by telephone to renew, and at that time, her husband,
Rodolfo, was absent and so she left a note on top of her husband's desk to renew ...

Consequently, the trial court found herein petitioner guilty as charged. On appeal, the
trial court's decision was affirmed by the respondent appellate court finding the
petitioner guilty of a violation of the first paragraph of Section 189 of the Insurance Act.
Hence, this present recourse was filed on October 22, 1974. 5

In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to
this instant petition, to require the respondent to comment on the aforesaid petition. In
the comment 7 filed on December 20, 1974, the respondent, represented by the Office
of the Solicitor General, submitted that petitioner may not be considered as having
violated Section 189 of the Insurance Act. 8 On April 3, 1975, petitioner submitted his
Brief 9 while the Solicitor General, on behalf of the respondent, filed a manifestation 10 in
lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not violated
Section 189 of the Insurance Act.

In seeking reversal of the judgment of conviction, petitioner assigns the following errors
11
allegedly committed by the appellate court:

1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF

COMPENSATION IS NOT AN ESSENTIAL ELEMENT OF THE CRIME DEFINED BY
THE FIRST PARAGRAPH OF SECTION 189 OF THE INSURANCE ACT.

2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO

EXHIBITS F, F-1, TO F-17, INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S
GUILT BEYOND REASONABLE DOUBT.

3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN

PETITIONER.

We find the petition meritorious.

The main issue raised is whether or not a person can be convicted of having violated
the first paragraph of Section 189 of the Insurance Act without reference to the second
paragraph of the same section. In other words, it is necessary to determine whether or
not the agent mentioned in the first paragraph of the aforesaid section is governed by
the definition of an insurance agent found on its second paragraph.

The pertinent provision of Section 189 of the Insurance Act reads as follows:

No insurance company doing business within the Philippine Islands, nor any agent
thereof, shall pay any commission or other compensation to any person for services in
obtaining new insurance, unless such person shall have first procured from the Insurance
Commissioner a certificate of authority to act as an agent of such company as hereinafter
provided. No person shall act as agent, sub-agent, or broker in the solicitation of
procurement of applications for insurance, or receive for services in obtaining new
insurance, any commission or other compensation from any insurance company doing
 business in the Philippine Islands, or agent thereof, without first procuring a certificate of
authority so to act from the Insurance Commissioner, which must be renewed annually
on the first day of January, or within six months thereafter. Such certificate shall be
issued by the Insurance Commissioner only upon the written application of persons
desiring such authority, such application being approved and countersigned by the
company such person desires to represent, and shall be upon a form approved by the
Insurance Commissioner, giving such information as he may require. The Insurance
Commissioner shall have the right to refuse to issue or renew and to revoke any such
certificate in his discretion. No such certificate shall be valid, however, in any event after
the first day of July of the year following the issuing of such certificate. Renewal
certificates may be issued upon the application of the company.

Any person who for compensation solicits or obtains insurance on behalf of any
insurance company, or transmits for a person other than himself an application for a
policy of insurance to or from such company or offers or assumes to act in the negotiating
of such insurance, shall be an insurance agent within the intent of this section, and shall
thereby become liable to all the duties, requirements, liabilities, and penalties to which an
agent of such company is subject.

Any person or company violating the provisions of this section shall be fined in the sum of
five hundred pesos. On the conviction of any person acting as agent, sub-agent, or
broker, of the commission of any offense connected with the business of insurance, the
Insurance Commissioner shall immediately revoke the certificate of authority issued to
him and no such certificate shall thereafter be issued to such convicted person.

A careful perusal of the above-quoted provision shows that the first paragraph thereof
prohibits a person from acting as agent, sub-agent or broker in the solicitation or
procurement of applications for insurance without first procuring a certificate of authority
so to act from the Insurance Commissioner, while its second paragraph defines who is
an insurance agent within the intent of this section and, finally, the third paragraph
thereof prescribes the penalty to be imposed for its violation.

The respondent appellate court ruled that the petitioner is prosecuted not under the
second paragraph of Section 189 of the aforesaid Act but under its first paragraph. Thus
—

... it can no longer be denied that it was appellant's most active endeavors that resulted in
issuance of policy to Isidro, she was there and then acting as agent, and received the pay
thereof — her defense that she was only acting as helper of her husband can no longer
be sustained, neither her point that she received no compensation for issuance of the
policy because

any person who for compensation solicits or obtains insurance on behalf

of any insurance company or transmits for a person other than himself an
application for a policy of insurance to or from such company or offers or
assumes to act in the negotiating of such insurance, shall be an
insurance agent within the intent of this section, and shall thereby
become liable to all the duties, requirements, liabilities, and penalties, to
which an agent of such company is subject. paragraph 2, Sec. 189,
Insurance Law,

now it is true that information does not even allege that she had obtained the insurance,

for compensation

which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph,
but what appellant apparently overlooks is that she is prosecuted not under the 2nd but
under the 1st paragraph of Sec. 189 wherein it is provided that,

No person shall act as agent, sub-agent, or broker, in the solicitation or

procurement of applications for insurance, or receive for services in
obtaining new insurance any commission or other compensation from
any insurance company doing business in the Philippine Island, or agent
thereof, without first procuring a certificate of authority to act from the
 insurance commissioner, which must be renewed annually on the first
day of January, or within six months thereafter.

therefore, there was no technical defect in the wording of the charge, so that Errors 2 and
4 must be overruled. 12

From the above-mentioned ruling, the respondent appellate court seems to imply that
the definition of an insurance agent under the second paragraph of Section 189 is not
applicable to the insurance agent mentioned in the first paragraph. Parenthetically, the
respondent court concludes that under the second paragraph of Section 189, a person
is an insurance agent if he solicits and obtains an insurance for compensation, but, in its
first paragraph, there is no necessity that a person solicits an insurance for
compensation in order to be called an insurance agent.

We find this to be a reversible error. As correctly pointed out by the Solicitor General,
the definition of an insurance agent as found in the second paragraph of Section 189 is
intended to define the word "agent" mentioned in the first and second paragraphs of the
aforesaid section. More significantly, in its second paragraph, it is explicitly provided that
the definition of an insurance agent is within the intent of Section 189. Hence —

Any person who for compensation ... shall be an insurance agent within the intent of this
section, ...

Patently, the definition of an insurance agent under the second paragraph holds true
with respect to the agent mentioned in the other two paragraphs of the said section. The
second paragraph of Section 189 is a definition and interpretative clause intended to
qualify the term "agent" mentioned in both the first and third paragraphs of the aforesaid
section.

Applying the definition of an insurance agent in the second paragraph to the agent
mentioned in the first and second paragraphs would give harmony to the aforesaid three
paragraphs of Section 189. Legislative intent must be ascertained from a consideration
of the statute as a whole. The particular words, clauses and phrases should not be
studied as detached and isolated expressions, but the whole and every part of the
statute must be considered in fixing the meaning of any of its parts and in order to
produce harmonious whole. 13 A statute must be so construed as to harmonize and give
effect to all its provisions whenever possible. 14 The meaning of the law, it must be borne
in mind, is not to be extracted from any single part, portion or section or from isolated
words and phrases, clauses or sentences but from a general consideration or view of
the act as a whole. 15 Every part of the statute must be interpreted with reference to the
context. This means that every part of the statute must be considered together with the
other parts, and kept subservient to the general intent of the whole enactment, not
separately and independently. 16 More importantly, the doctrine of associated words
(Noscitur a Sociis) provides that where a particular word or phrase in a statement is
ambiguous in itself or is equally susceptible of various meanings, its true meaning may
be made clear and specific by considering the company in which it is found or with
which it is associated. 17

Considering that the definition of an insurance agent as found in the second paragraph
is also applicable to the agent mentioned in the first paragraph, to receive a
compensation by the agent is an essential element for a violation of the first paragraph
of the aforesaid section. The appellate court has established ultimately that the
petitioner-accused did not receive any compensation for the issuance of the insurance
policy of Eugenio Isidro. Nevertheless, the accused was convicted by the appellate
court for, according to the latter, the receipt of compensation for issuing an insurance
policy is not an essential element for a violation of the first paragraph of Section 189 of
the Insurance Act.
We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a
misdemeanor for any person for direct or indirect compensation to solicit insurance
without a certificate of authority to act as an insurance agent, an information, failing to
allege that the solicitor was to receive compensation either directly or indirectly, charges
no offense. 18 In the case of Bolen vs. Stake, 19 the provision of Section 3750, Snyder's
Compiled Laws of Oklahoma 1909 is intended to penalize persons only who acted as
insurance solicitors without license, and while acting in such capacity negotiated and
concluded insurance contracts for compensation. It must be noted that the information,
in the case at bar, does not allege that the negotiation of an insurance contracts by the
accused with Eugenio Isidro was one for compensation. This allegation is essential, and
having been omitted, a conviction of the accused could not be sustained. It is well-
settled in Our jurisprudence that to warrant conviction, every element of the crime must
be alleged and proved. 20

After going over the records of this case, We are fully convinced, as the Solicitor
General maintains, that accused did not violate Section 189 of the Insurance Act.

WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of
the crime charged, with costs de oficio.

SO ORDERED.

Teehankee (Acting C.J.,) Makasiar, De Castro, Fernandez, Guerrero and Melencio-

Herrera, JJ., concur.

Plana, J., took no part.

Footnotes
1 p. 21, Rollo.

2 p. 11, CA Rollo.

3 p. 10, CA Rollo.

4 pp. 21-22, Rollo.

5 p. 7, Rollo.

6 p. 36, Rollo.

7 p. 51, Rollo.

8 p. 58, Rollo.

9 p. 69, Rollo.

10 p. 71, Rollo.

11 p. 69, Rollo; p. 6, Brief for the Petitioner.

12 pp. 25 and 26, Rollo.

13 Araneta vs. Concepcion, 99 Phil. 709; Tamayo vs. Gsell, 35 Phil. 953; Lopez vs. El Hogar Filipino, 47 Phil. 249;
Chartered Bank vs. Imperial, 48 Phil. 931.

14 People vs. Polmon 86 Phil. 350.

15 82 C.J.S., Section 345, pp. 699-700.

16 Tamayo vs. Gsell, 35 Phil. 953.

 17 Co Kim Cham vs. Valdez Tan Keh & Dizon, 75 Phil. 371.

18 Jasper vs. State, 73 Tex. Cr. R 197; 164 S.W. 851.

19 149 p. 1074, 11 Okla. Crim. 594.

20 People vs. Sy Gesiong, 60 Phil. 614.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
 

G.R. No. L-34964 January 31, 1973

CHINA BANKING CORPORATION and TAN KIM LIONG, petitioners-appellants,

vs.
HON. WENCESLAO ORTEGA, as Presiding Judge of the Court of First Instance of
Manila, Branch VIII, and VICENTE G. ACABAN, respondents-appellees.

Sy Santos, Del Rosario and Associates for petitioners-appellants.

Tagalo, Gozar and Associates for respondents-appellees.

MAKALINTAL, J.:

The only issue in this petition for certiorari to review the orders dated March 4, 1972 and
March 27, 1972, respectively, of the Court of First Instance of Manila in its Civil Case
No. 75138, is whether or not a banking institution may validly refuse to comply with a
court process garnishing the bank deposit of a judgment debtor, by invoking the
provisions of Republic Act No. 1405. *

On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against
Bautista Logging Co., Inc., B & B Forest Development Corporation and Marino Bautista
for the collection of a sum of money. Upon motion of the plaintiff the trial court declared
the defendants in default for failure to answer within the reglementary period, and
authorized the Branch Clerk of Court and/or Deputy Clerk to receive the plaintiff's
evidence. On January 20, 1970 judgment by default was rendered against the
defendants.

To satisfy the judgment, the plaintiff sought the garnishment of the bank deposit of the
defendant B & B Forest Development Corporation with the China Banking Corporation.
Accordingly, a notice of garnishment was issued by the Deputy Sheriff of the trial court
and served on said bank through its cashier, Tan Kim Liong. In reply, the bank' cashier
invited the attention of the Deputy Sheriff to the provisions of Republic Act No. 1405
which, it was alleged, prohibit the disclosure of any information relative to bank
deposits. Thereupon the plaintiff filed a motion to cite Tan Kim Liong for contempt of
court.
In an order dated March 4, 1972 the trial court denied the plaintiff's motion. However,
Tan Kim Liong was ordered "to inform the Court within five days from receipt of this
order whether or not there is a deposit in the China Banking Corporation of defendant B
& B Forest Development Corporation, and if there is any deposit, to hold the same intact
and not allow any withdrawal until further order from this Court." Tan Kim Liong moved
to reconsider but was turned down by order of March 27, 1972. In the same order he
was directed "to comply with the order of this Court dated March 4, 1972 within ten (10)
days from the receipt of copy of this order, otherwise his arrest and confinement will be
ordered by the Court." Resisting the two orders, the China Banking Corporation and Tan
Kim Liong instituted the instant petition.

The pertinent provisions of Republic Act No. 1405 relied upon by the petitioners reads:

Sec. 2. All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the Philippines,
its political subdivisions and its instrumentalities, are hereby considered as of absolutely
confidential nature and may not be examined, inquired or looked into by any person,
government official, bureau or office, except upon written permission of the depositor, or
in cases of impeachment, or upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases where the money deposited or invested is
the subject matter of the litigation.

Sec 3. It shall be unlawful for any official or employee of a banking institution to disclose
to any person other than those mentioned in Section two hereof any information
concerning said deposits.

Sec. 5. Any violation of this law will subject offender upon conviction, to an imprisonment
of not more than five years or a fine of not more than twenty thousand pesos or both, in
the discretion of the court.

The petitioners argue that the disclosure of the information required by the court does
not fall within any of the four (4) exceptions enumerated in Section 2, and that if the
questioned orders are complied with Tan Kim Liong may be criminally liable under
Section 5 and the bank exposed to a possible damage suit by B & B Forest
Development Corporation. Specifically referring to this case, the position of the
petitioners is that the bank deposit of judgment debtor B & B Forest Development
Corporation cannot be subject to garnishment to satisfy a final judgment against it in
view of the aforequoted provisions of law.

We do not view the situation in that light. The lower court did not order an examination
of or inquiry into the deposit of B & B Forest Development Corporation, as contemplated
in the law. It merely required Tan Kim Liong to inform the court whether or not the
defendant B & B Forest Development Corporation had a deposit in the China Banking
Corporation only for purposes of the garnishment issued by it, so that the bank would
hold the same intact and not allow any withdrawal until further order. It will be noted
from the discussion of the conference committee report on Senate Bill No. 351 and
House Bill No. 3977, which later became Republic Act 1405, that it was not the intention
of the lawmakers to place bank deposits beyond the reach of execution to satisfy a final
judgment. Thus:

Mr. MARCOS. Now, for purposes of the record, I should like the Chairman of the
Committee on Ways and Means to clarify this further. Suppose an individual has a tax
case. He is being held liable by the Bureau of Internal Revenue for, say, P1,000.00 worth
of tax liability, and because of this the deposit of this individual is attached by the Bureau
of Internal Revenue.

Mr. RAMOS. The attachment will only apply after the court has pronounced sentence
declaring the liability of such person. But where the primary aim is to determine whether
he has a bank deposit in order to bring about a proper assessment by the Bureau of
Internal Revenue, such inquiry is not authorized by this proposed law.
Mr. MARCOS. But under our rules of procedure and under the Civil Code, the attachment
or garnishment of money deposited is allowed. Let us assume, for instance, that there is
a preliminary attachment which is for garnishment or for holding liable all moneys
deposited belonging to a certain individual, but such attachment or garnishment will bring
out into the open the value of such deposit. Is that prohibited by this amendment or by
this law?

Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather, the
inquiry is made only for the purpose of satisfying a tax liability already declared for the
protection of the right in favor of the government; but when the object is merely to inquire
whether he has a deposit or not for purposes of taxation, then this is fully covered by the
law.

Mr. MARCOS. And it protects the depositor, does it not?

Mr. RAMOS. Yes, it protects the depositor.

Mr. MARCOS. The law prohibits a mere investigation into the existence and the amount
of the deposit.

Mr. RAMOS. Into the very nature of such deposit.

Mr. MARCOS. So I come to my original question. Therefore, preliminary garnishment or

attachment of the deposit is not allowed?

Mr. RAMOS. No, without judicial authorization.

Mr. MARCOS. I am glad that is clarified. So that the established rule of procedure as well
as the substantive law on the matter is amended?

Mr. RAMOS. Yes. That is the effect.

Mr. MARCOS. I see. Suppose there has been a decision, definitely establishing the
liability of an individual for taxation purposes and this judgment is sought to be
executed ... in the execution of that judgment, does this bill, or this proposed law, if
approved, allow the investigation or scrutiny of the bank deposit in order to execute the
judgment?

Mr. RAMOS. To satisfy a judgment which has become executory.

Mr. MARCOS. Yes, but, as I said before, suppose the tax liability is P1,000,000 and the
deposit is half a million, will this bill allow scrutiny into the deposit in order that the
judgment may be executed?

Mr. RAMOS. Merely to determine the amount of such money to satisfy that obligation to
the Government, but not to determine whether a deposit has been made in evasion of
taxes.

xxx xxx xxx

Mr. MACAPAGAL. But let us suppose that in an ordinary civil action for the recovery of a
sum of money the plaintiff wishes to attach the properties of the defendant to insure the
satisfaction of the judgment. Once the judgment is rendered, does the gentleman mean
that the plaintiff cannot attach the bank deposit of the defendant?

Mr. RAMOS. That was the question raised by the gentleman from Pangasinan to which I
replied that outside the very purpose of this law it could be reached by attachment.

Mr. MACAPAGAL. Therefore, in such ordinary civil cases it can be attached?

Mr. RAMOS. That is so.

(Vol. II, Congressional Record, House of Representatives, No. 12, pp. 3839-3840, July
27, 1955).
It is sufficiently clear from the foregoing discussion of the conference committee report
of the two houses of Congress that the prohibition against examination of or inquiry into
a bank deposit under Republic Act 1405 does not preclude its being garnished to insure
satisfaction of a judgment. Indeed there is no real inquiry in such a case, and if the
existence of the deposit is disclosed the disclosure is purely incidental to the execution
process. It is hard to conceive that it was ever within the intention of Congress to enable
debtors to evade payment of their just debts, even if ordered by the Court, through the
expedient of converting their assets into cash and depositing the same in a bank.

WHEREFORE, the orders of the lower court dated March 4 and 27, 1972, respectively,
are hereby affirmed, with costs against the petitioners-appellants.

Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

Concepcion, C.J. and Teehankee, J., took no part.

Footnotes
* An Act Probihiting Disclosure of or Inquiry into, Deposits with any Banking Institution and Providing Penalty Therefor.