G.R. No.
98382 May 17, 1993
PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE COURT OF APPEALS and EPIFANIO DE LA CRUZ, respondents.
MELO, J.:
The notices of sale under Section 3 of Act No. 3135, as amended by
Act No. 4118, on extra-judicial foreclosure of real estate mortgage are
required to be posted for not less than twenty days in at least three
public places of the municipality or city where the property is situated,
and if such property is worth more than four hundred pesos, such
notices shall also be published once a week for at least three
consecutive weeks in a newspaper of general circulation in the
municipality or city.
Respondent court, through Justice Filemon Mendoza with whom
Justices Campos, Jr. and Aldecoa, Jr. concurred, construed the
publication of the notices on March 28, April 11 and l2, 1969 as a fatal
announcement and reversed the judgment appealed from by declaring
void, inter alia, the auction sale of the foreclosed pieces of realty, the
final deed of sale, and the consolidation of ownership (p. 27, Rollo).
Hence, the petition at bar, premised on the following backdrop lifted
from the text of the challenged decision:
The facts of the case as related by the trial court are, as follows:
This is a verified complaint brought by the plaintiff for the
reconveyance to him (and resultant damages) of two (2) parcels of
land mortgaged by him to the defendant Philippine National Bank
(Manila), which the defendant allegedly unlawfully foreclosed. The
defendant then consolidated ownership unto itself, and subsequently
sold the parcels to third parties. The amended Answer of the
defendant states on the other hand that the extrajudicial foreclosure,
consolidation of ownership, and subsequent sale to the third parties
were all valid, the bank therefore counterclaims for damages and
other equitable remedies.
xxx xxx xxx
From the evidence and exhibits presented by both parties, the Court is
of the opinion that the following facts have been proved: Two lots,
located at Bunlo, Bocaue, Bulacan (the first covered by Torrens
Certificate No. 16743 and possessed of an area of approximately 3,109
square meters: the second covered by Torrens Certificate No. 5787,
possessed of an area of around 610 square meters, and upon which
stood a residential-commercial building were mortgaged to the
defendant Philippine National Bank. The lots were under the common
names of the plaintiff (Epifanio dela Cruz), his brother (Delfin) and his
sister (Maria). The mortgage was made possible because of the grant
by the latter two to the former of a special power of attorney to
mortgage the lots to the defendant. The lots were mortgaged to
guarantee the following promissory notes:
(1) a promissory note for Pl2,000.00, dated September 2, 1958, and
payable within 69 days (date of maturity — Nov. l0, 1958);
(2) a promissory note for P4,000.00, dated September 22, 1958, and
payable within 49 days (date of maturity — Nov. 10, 1958);
(3) a promissory note for P4,000.00, dated June 30, 1.9581 and
payable within 120 days (date of maturity — Nov. 10, 1958) See also
Annex C of the complaint itself).
[1 This date of June 30, 1958 is disputed by the plaintiff who claims
that the correct date is June 30, 1961, which is the date actually
mentioned in the promissory note. It is however difficult to believe the
plaintiff's contention since if it were true and correct, this would mean
that nearly three (3) years elapsed between the second and the third
promissory note; that at the time the third note was executed, the first
two had not yet been paid by the plaintiff despite the fact that the first
two were supposed to be payable within 69 and 49 days respectively.
This state of affairs would have necessitated the renewal of said two
promissory notes. No such renewal was proved, nor was the renewal
ever alleged. Finally, and this is very significant: the third mentioned
promissory note states that the maturity date is Nov. 10, 1958. Now
then, how could the loan have been contracted on June 30, 1961? It
will be observed that in the bank records, the third mentioned
promissory note was really executed on June 30, 1958 (See Exhs. 9 and
9-A). The Court is therefore inclined to believe that the date "June 30,
1961" was a mere clerical error and hat the true and correct date is
June 1958. However, even assuming that the true and correct date is
June 30, 1961, the fact still remains that the first two promissory notes
had been guaranteed by the mortgage of the two lots, and therefore,
it was legal and proper to foreclose on the lots for failure to pay said
two promissory notes.
On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB)
presented under Act No. 3135 a foreclosure petition of the two
mortgaged lots before the Sheriff's Office at Malolos, Bulacan;
accordingly, the two lots were sold or auctioned off on October 20,
1961 with the defendant PNB as the highest bidder for P28,908.46. On
March 7, 1963, Sheriff Leopoldo Palad executed a Final Deed of Sale, in
response to a letter-request by the Manager of the PNB (Malolos
Branch). On January 15, 1963 a Certificate of Sale in favor of the
defendant was executed by Sheriff Palad. The final Deed of Sale was
registered in the Bulacan Registry of Property on March 19, 1963.
Inasmuch as the plaintiff did not volunteer to buy back from the PNB
the two lots, the PNB sold on June 4, 1970 the same to spouses
Conrado de Vera and Marina de Vera in a "Deed of Conditional Sale".
(Decision, pp.3-5; Amended Record on Appeal, pp. 96-98).
After due consideration of the evidence, the CFI on January 22, 1978
rendered its Decision, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, the instant complaint against
the defendant Philippine National Bank is hereby ordered DISMISSED,
with costs against the plaintiff. The Counterclaim against the plaintiff is
likewise DISMISSED, for the Court does not believe that the complaint
had been made in bad faith.
SO ORDERED. (Decision, p. B.; Amended Record on Appeal, p. 100)
Not satisfied with the judgment, plaintiff interposed the present
appeal assigning as errors the following:
I.
THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE I OF ITS
DECISION THAT IT IS THEREFORE INCLINED TO BELIEVE THAT THE DATE
"JUNE 30, 1962" WAS A MERE CLERICAL ERROR AND THAT THE TRUE
AND CORRECT DATE IS JUNE 30, 1958. IT ALSO ERRED IN HOLDING IN
THE SAME FOOTNOTE I THAT "HOWEVER, EVEN ASSUMING THAT THE
TRUE AND CORRECT DATE IS JUNE 30, 1961, THE FACT STILL REMAINS
THAT THE FIRST TWO PROMISSORY NOTES HAD BEEN GUARANTEED
BY THE MORTGAGE OF THE TWO LOTS, AND THEREFORE, IT WAS
LEGAL AND PROPER TO FORECLOSE ON THE LOTS FOR FAILURE TO PAY
SAID TWO PROMISSORY NOTES". (page 115, Amended Record on
Appeal)
II.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE PETITION FOR
EXTRAJUDICIAL FORECLOSURE WAS PREMATURELY FILED AND IS A
MERE SCRAP OF PAPER BECAUSE IT MERELY FORECLOSED THE
ORIGINAL AND NOT THE AMENDED MORTGAGE.
III.
THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THAT THE
AUCTION SALE WAS NOT PREMATURE". (page 117, Amended Record
on Appeal)
IV.
THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO STATE
THAT ACTUALLY THE POWER OF ATTORNEY GIVEN TO THE PNB WAS
EMBODIED IN THE REAL ESTATE MORTGAGE (EXB. 10) WHICH WAS
REGISTERED IN THE REGISTRY OF PROPERTY OF BULACAN AND WAS
ANNOTATED ON THE TWO TORRENS CERTIFICATES INVOLVED" (page
118, Amended Record on Appeal).
V.
THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES REQUIRED
UNDER SEC. 3 OF ACT NO. 3135 WERE ALL COMPLIED WITH" AND
"THAT THE DAILY RECORD . . . IS A NEWSPAPER OF GENERAL
CIRCULATION (pages 117-118, Amended Record on Appeal).
VI.
THE LOWER COURT ERRED IN NOT DECLARING THE CERTIFICATE OF
SALE, FINAL DEED OF SALE AND AFFIDAVIT OF CONSOLIDATION, NULL
AND VOID.
VII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO
RECONVEY TO PLAINTIFF THE PARCELS OF LAND COVERED BY T.C.T.
NOS. 40712 AND 40713 OF BULACAN (page 8, Amended Record on
Appeal)
VIII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO PAY TO
PLAINTIFF REASONABLE AMOUNTS OF MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES (page 8. Amended Record on
Appeal).
IX.
THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT
AGAINST THE PHILIPPINE NATIONAL BANK WITH COSTS AGAINST THE
PLAINTIFF. (page 118, Amended Record on Appeal)." (Brief for Plaintiff-
Appellant, pp. 1-4) (pp. 17-21, Rollo)
With reference to the pertinent issue at hand, respondent court
opined:
The Notices of Sale of appellant's foreclosed properties were
published on March 228, April 11 and April 12, 1969 issues of the
newspaper "Daily Record" (Amended Record on Appeal, p. 108). The
date March 28, 1969 falls on a Friday while the dates April 11 and 12,
1969 are on a Friday and Saturday, respectively. Section 3 of Act No.
3135 requires that the notice of auction sale shall be "published once
a week for at least three consecutive weeks". Evidently, defendant-
appellee bank failed to comly with this legal requirement. The
Supreme Court has held that:
The rule is that statutory provisions governing publication of notice of
mortgage foreclosure sales must be strictly complied with, and that
even slight deviations therefrom will invalidate the notice and render
the sale at least voidable (Jalandoni vs. Ledesma, 64 Phil. l058. G.R.
No. 42589, August 1937 and October 29, 1937). Interpreting Sec. 457
of the Code of Civil Procedure (reproduced in Sec. 18(c) of Rule 39,
Rules of Court and in Sec. 3 of Act No. 3135) in Campomanes vs.
Bartolome and German & Co. (38 Phil. 808, G.R. No. 1309, October 18,
1918), this Court held that if a sheriff sells without notice prescribed
by the Code of Civil Procedure induced thereto by the judgment
creditor, and the purchaser at the sale is the judgment creditor, the
sale is absolutely void and no title passes. This is regarded as the
settled doctrine in this jurisdiction whatever the rule may be
elsewhere (Boria vs. Addison, 14 Phil. 895, G.R. No. 18010, June 21,
1922).
. . . It has been held that failure to advertise a mortgage foreclosure
sale in compliance with statutory requirements constitutes a
jurisdictional defect invalidating the sale and that a substantial error or
omission in a notice of sale will render the notice insufticient and
vitiate the sale (59 C.J.S. 1314). (Tambunting vs. Court of Appeals, L-
48278, November 8, 1988; 167 SCRA 16, 23-24).
In view of the admission of defendant-appellee in its pleading showing
that there was no compliance of the notice prescribed in Section 3 of
Act No. 3135, as amended by Act 4118, with respect to the notice of
sale of the foreclosed real properties in this case, we have no choice
but to declare the auction sale as absolutely void in view of the fact
that the highest bidder and purchaser in said auction sale was
defendant-appellee bank. Consequently, the Certificate of Sale, the
Final Deed of Sale and Affidavit of Consolidation are likewise of no
legal efffect. (pp. 24-25, Rollo)
Before we focus our attention on the subject of whether or not there
was valid compliance in regard to the required publication, we shall
briefly discuss the other observations of respondent court vis-a-vis
herein private respondent's ascriptions raised with the appellate court
when his suit for reconveyance was dismissed by the court of origin
even as private respondent does not impugn the remarks of
respondent court along this line.
Although respondent court acknowledged that there was an ambiguity
on the date of execution of the third promissory note (June 30, 1961)
and the date of maturity thereof (October 28, 1958), it was
nonetheless established that the bank introduced sufficient proof to
show that the discrepancy was a mere clerical error pursuant to
Section 7, Rule l30 of the Rules of Court. Anent the second disputation
aired by private respondent, the appellate court observed that
inasmuch as the original as well as the subsequent mortgage were
foreclosed only after private respondent's default, the procedure
pursued by herein petitioner in foreclosing the collaterals was thus
appropriate albeit the petition therefor contained only a copy of the
original mortgage.
It was only on the aspect of publication of the notices of sale under
Act No. 3135, as amended, and attorney's fees where herein private
respondent scored points which eliminated in the reversal of the trial
court's decision. Respondent court was of the impression that herein
petitioner failed to comply with the legal requirement and the sale
effected thereafter must be adjudged invalid following the ruling of
this Court in Tambunting vs. Court of Appeals (167 SCRA 16 [1988]); p.
8, Decision, p. 24, Rollo). In view of petitioner's so-called indifference
to the rules set forth under Act No. 3135, as amended, respondent
court expressly authorized private respondent to recover attorney's
fees because he was compelled to incur expenses to protect his
interest.
Immediately upon the submission of a supplemental petition, the
spouses Conrado and Marina De Vera filed a petition in intervention
claiming that the two parcels of land involved herein were sold to
them on June 4, 1970 by petitioner for which transfer certificates of
title were issued in their favor (p. 40, Rollo). On the other hand,
private respondent pressed the idea that the alleged intervenors have
no more interest in the disputed lots in view of the sale effected by
them to Teresa Castillo, Aquilino and Antonio dela Cruz in 1990 (pp.
105-106, Rollo).
On March 9, 1992, the Court resolved to give due course to the
petition and required the parties to submit their respective
memoranda (p. 110, Rollo).
Now, in support of the theory on adherence to the conditions spelled
in the preliminary portion of this discourse, the pronouncement of this
Court in Bonnevie vs. Court of Appeals (125 SCRA [1983]; p. 135, Rollo)
is sought to be utilized to press the point that the notice need not be
published for three full weeks. According to petitioner, there is no
breach of the proviso since after the first publication on March 28,
1969, the second notice was published on April 11, 1969 (the last day
of the second week), while the third publication on April 12, 1969 was
announced on the first day of the third week. Petitioner thus
concludes that there was no violation from the mere happenstance
that the third publication was made only a day after the second
publication since it is enough that the second publication be made on
any day within the second week and the third publication, on any day
within the third week. Moreover, in its bid to rectify its admission in
judicio, petitioner asseverates that said admission alluded to refers
only to the dates of publications, not that there was non-compliance
with the publication requirement.
Private respondent, on the other hand, views the legal question from a
different perspective. He believes that the period between each
publication must never be less than seven consecutive days (p. 4,
Memorandum; p. 124, Rollo).
We are not convinced by petitioner's submissions because the
disquisition in support thereof rests on the erroneous impression that
the day on which the first publication was made, or on March 28,
1969, should be excluded pursuant to the third paragraph of Article 17
of the New Civil Code.
It must be conceded that Article 17 is completely silent as to the
definition of what is a "week". In Concepcion vs. Zandueta (36 O.G.
3139 [1938]; Moreno, Philippine Law Dictionary, Second Ed., 1972, p.
660), this term was interpreted to mean as a period of time consisting
of seven consecutive days — a definition which dovetails with the
ruling in E.M. Derby and Co. vs. City of Modesto, et al. (38 Pac. Rep.
900 [1984]; 1 Paras, Civil Code of the Philippines Annotated, Twelfth
Ed., 1989, p. 88; 1 Tolentino, Commentaries and Jurisprudence on th
Civil Code, 1990, p. 46). Following the interpretation in Derby as to the
publication of an ordinance for "at least two weeks" in some
newspaper that:
. . . here there is no date or event suggesting the exclusion of the first
day's publication from the computation, and the cases above cited
take this case out of the rule stated in Section 12, Code Civ. Proc.
which excludes the first day and includes the last;
the publication effected on April 11, 1969 cannot be construed as
sufficient advertisement for the second week because the period for
the first week should be reckoned from March 28, 1969 until April 3,
1969 while the second week should be counted from April 4, 1969
until April 10, 1969. It is clear that the announcement on April 11,
1969 was both theoretically and physically accomplished during the
first day of the third week and cannot thus be equated with
compliance in law. Indeed, where the word is used simply as a
measure of duration of time and without reference to the calendar, it
means a period of seven consecutive days without regard to the day of
the week on which it begins (1 Tolentino, supra at p. 467 citing Derby).
Certainly, it would have been absurd to exclude March 28, 1969 as
reckoning point in line with the third paragraph of Article 13 of the
New Civil Code, for the purpose of counting the first week of
publication as to the last day thereof fall on April 4, 1969 because this
will have the effect of extending the first week by another day. This
incongruous repercussion could not have been the unwritten intention
of the lawmakers when Act No. 3135 was enacted. Verily, inclusion of
the first day of publication is in keeping with the computation in
Bonnevie vs. Court of Appeals (125 SCRA 122 [1983]) where this Court
had occasion to pronounce, through Justice Guerrero, that the
publication of notice on June 30, July 7 and July 14, 1968 satisfied the
publication requirement under Act No. 3135. Respondent court
cannot, therefore, be faulted for holding that there was no compliance
with the strict requirements of publication independently of the so-
called admission in judicio.
WHEREFORE, the petitions for certiorari and intervention are hereby
dismissed and the decision of the Court of Appeals dated April 17,
1991 is hereby affirmed in toto.
SO ORDERED.
G.R. No. 109902 August 2, 1994
ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others,
namely: ENGR. ALAN G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE,
EDUARD H. FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS,
JERRY BONTILAO, EUSEBIO MARIN, JR., LEONIDO ECHAVEZ,
BONIFACIO MEJOS, EDGAR S. BONTUYAN, JOSE G. GARGUENA, JR.,
OSIAS B. DANDASAN, and GERRY I. FETALVERO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL
CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.
FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the
National Labor Relations Commission ("NLRC") dated 8 January 1993
which declared petitioners to be project employees of private
respondent National Steel Corporation ("NSC"), and the NLRC's
subsequent Resolution of 15 February 1993, denying petitioners'
motion for reconsideration.
Petitioners plead that they had been employed by respondent NSC in
connection with its Five Year Expansion Program (FAYEP I & II) 1 for
varying lengths of time when they were separated from NSC's service:
Employee Date Nature of Separated
The law on the matter is Article 280 of the Labor Code which reads in
full:
Art. 280. Regular and Casual Employment — The provisions of the
written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, and employment shall be deemed
to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
duration of the season.

Employed Employment An employment shall be deemed to be casual if it is not covered by

the preceding paragraph: Provided, That, any employee who has
1. Alan Barinque 5-14-82 Engineer 1 8-31-91 rendered at least one year service, whether such service is continuous
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92 or broken, shall be considered a regular employee with respect to the
3. Edgar Bontuyan 11-03-82 Chairman to present activity in which he is employed and his employment shall continue
4. Osias Dandasan 9-21-82 Utilityman 1991 while such actually exists. (Emphasis supplied)
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91 Petitioners argue that they are "regular" employees of NSC because:
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized (i) their jobs are "necessary, desirable and work-related to private
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91 respondent's main business, steel-making"; and (ii) they have
9. Russell Gacus 1-30-85 Engineer 1 6-30-92 rendered service for six (6) or more years to private respondent NSC. 4
10. Jose Garguena 3-02-81 Warehouseman to present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91 The basic issue is thus whether or not petitioners are properly
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992 characterized as "project employees" rather than "regular employees"
13. Romeo Sarona 2-26-83 Machine Operator 8-31-912 of NSC. This issue relates, of course, to an important consequence: the
services of project employees are co-terminous with the project and
On 5 July 1990, petitioners filed separate complaints for unfair labor may be terminated upon the end or completion of the project for
practice, regularization and monetary benefits with the NLRC, Sub- which they were hired. 5 Regular employees, in contract, are legally
Regional Arbitration Branch XII, Iligan City. entitled to remain in the service of their employer until that service is
terminated by one or another of the recognized modes of termination
The complaints were consolidated and after hearing, the Labor Arbiter of service under the Labor Code. 6
in a Decision dated 7 June 1991, declared petitioners "regular project
employees who shall continue their employment as such for as long as It is evidently important to become clear about the meaning and
such [project] activity exists," but entitled to the salary of a regular scope of the term "project" in the present context. The "project" for
employee pursuant to the provisions in the collective bargaining the carrying out of which "project employees" are hired would
agreement. It also ordered payment of salary differentials. 3 ordinarily have some relationship to the usual business of the
employer. Exceptionally, the "project" undertaking might not have an
Both parties appealed to the NLRC from that decision. Petitioners ordinary or normal relationship to the usual business of the employer.
argued that they were regular, not project, employees. Private In this latter case, the determination of the scope and parameeters of
respondent, on the other hand, claimed that petitioners are project the "project" becomes fairly easy. It is unusual (but still conceivable)
employees as they were employed to undertake a specific project — for a company to undertake a project which has absolutely no
NSC's Five Year Expansion Program (FAYEP I & II). relationship to the usual business of the company; thus, for instance, it
would be an unusual steel-making company which would undertake
The NLRC in its questioned resolutions modified the Labor Arbiter's the breeding and production of fish or the cultivation of vegetables.
decision. It affirmed the Labor Arbiter's holding that petitioners were From the viewpoint, however, of the legal characterization problem
project employees since they were hired to perform work in a specific here presented to the Court, there should be no difficulty in
undertaking — the Five Years Expansion Program, the completion of designating the employees who are retained or hired for the purpose
which had been determined at the time of their engagement and of undertaking fish culture or the production of vegetables as "project
which operation was not directly related to the business of steel employees," as distinguished from ordinary or "regular employees," so
manufacturing. The NLRC, however, set aside the award to petitioners long as the duration and scope of the project were determined or
of the same benefits enjoyed by regular employees for lack of legal specified at the time of engagement of the "project employees." 7 For,
and factual basis. as is evident from the provisions of Article 280 of the Labor Code,
quoted earlier, the principal test for determining whether particular
Deliberating on the present Petition for Certiorari, the Court considers employees are properly characterized as "project employees" as
that petitioners have failed to show any grave abuse of discretion or distinguished from "regular employees," is whether or not the "project
any act without or in excess of jurisdiction on the part of the NLRC in employees" were assigned to carry out a "specific project or
rendering its questioned resolutions of 8 January 1993 and 15 undertaking," the duration (and scope) of which were specified at the
February 1993. time the employees were engaged for that project.
In the realm of business and industry, we note that "project" could
refer to one or the other of at least two (2) distinguishable types of
activities. Firstly, a project could refer to a particular job or
undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and identifiable
as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times.
The typical example of this first type of project is a particular
construction job or project of a construction company. A construction
company ordinarily carries out two or more discrete identifiable
construction projects: e.g., a twenty-five- storey hotel in Makati; a
residential condominium building in Baguio City; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of
one of these separate projects, the scope and duration of which has
been determined and made known to the employees at the time of
employment, are properly treated as "project employees," and their
services may be lawfully terminated at completion of the project.
The term "project" could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation.
Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined
or determinable times. The case at bar presents what appears to our
mind as a typical example of this kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II
with the ultimate end in view of expanding the volume and increasing
the kinds of products that it may offer for sale to the public. The Five
Year Expansion Program had a number of component projects: e.g., (a)
the setting up of a "Cold Rolling Mill Expansion Project"; (b) the
establishment of a "Billet Steel-Making Plant" (BSP); (c) the acquisition
and installation of a "Five Stand TDM"; and (d) the "Cold Mill
Peripherals Project." 8 Instead of contracting out to an outside or
independent contractor the tasks of constructing the buildings with
related civil and electrical works that would house the new machinery
and equipment, the installation of the newly acquired mill or plant
machinery and equipment and the commissioning of such machinery
and equipment, NSC opted to execute and carry out its Five Yeear
Expansion Projects "in house," as it were, by administration. The
carrying out of the Five Year Expansion Program (or more precisely,
each of its component projects) constitutes a distinct undertaking
identifiable from the ordinary business and activity of NSC. Each
component project, of course, begins and ends at specified times,
which had already been determined by the time petitioners were
engaged. We also note that NSC did the work here involved — the
construction of buildings and civil and electrical works, installation of
machinery and equipment and the commissioning of such machinery
— only for itself. Private respondent NSC was not in the business of
constructing buildings and installing plant machinery for the general
business community, i.e., for unrelated, third party, corporations. NSC
did not hold itself out to the public as a construction company or as an
engineering corporation.
Which ever type of project employment is found in a particular case, a
common basic requisite is that the designation of named employees
as "project employees" and their assignment to a specific project, are
effected and implemented in good faith, and not merely as a means of
evading otherwise applicable requirements of labor laws.
Thus, the particular component projects embraced in the Five Year
Expansion Program, to which petitioners were assigned, were
distinguishable from the regular or ordinary business of NSC which, of
course, is the production or making and marketing of steel products.
During the time petitioners rendered services to NSC, their work was
limited to one or another of the specific component projects which
made up the FAYEP I and II. There is nothing in the record to show that
petitioners were hired for, or in fact assigned to, other purposes, e.g.,
for operating or maintaining the old, or previously installed and
commissioned, steel-making machinery and equipment, or for selling
the finished steel products.
We, therefore, agree with the basic finding of the NLRC (and the Labor
Arbiter) that the petitioners were indeed "project employees:"
It is well established by the facts and evidence on record that herein
13 complainants were hired and engaged for specific activities or
undertaking the period of which has been determined at time of hiring
or engagement. It is of public knowledge and which this Commission
can safely take judicial notice that the expansion program (FAYEP) of
respondent NSC consist of various phases [of] project components
which are being executed or implemented independently or
simultaneously from each other . . .
In other words, the employment of each "project worker" is
dependent and co-terminous with the completion or termination of
the specific activity or undertaking [for which] he was hired which has
been pre-determined at the time of engagement. Since, there is no
showing that they (13 complainants) were engaged to perform work-
related activities to the business of respondent which is steel-making,
there is no logical and legal sense of applying to them the proviso
under the second paragraph of Article 280 of the Labor Code, as
amended.
xxx xxx xxx
The present case therefore strictly falls under the definition of "project
employees" on paragraph one of Article 280 of the Labor Code, as
amended. Moreover, it has been held that the length of service of a
project employee is not the controlling test of employment tenure but
whether or not "the employment has been fixed for a specific project
or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee". (See
Hilario Rada v. NLRC, G.R. No. 96078, January 9, 1992; and Sandoval
Shipping, Inc. v. NLRC, 136 SCRA 674 (1985). 9
Petitioners next claim that their service to NSC of more than six (6)
years should qualify them as regular employees. We believe this claim
is without legal basis. The simple fact that the employment of
petitioners as project employees had gone beyond one (1) year, does
not detract from, or legally dissolve, their status as project employees.
10 The second paragraph of Article 280 of the Labor Code, quoted
above, providing that an employee who has served for at least one (1)
year, shall be considered a regular employee, relates to casual
employees, not to project employees.
In the case of Mercado, Sr. vs. National Labor Relations Commission,
11 this Court ruled that the proviso in the second paragraph of Article
280 relates only to casual employees and is not applicable to those
who fall within the definition of said Article's first paragraph, i.e.,
project employees. The familiar grammatical rule is that a proviso is to
be construed with reference to the immediately preceding part of the
provision to which it is attached, and not to other sections thereof,
unless the clear legislative intent is to restrict or qualify not only the
phrase immediately preceding the proviso but also earlier provisions
of the statute or even the statute itself as a whole. No such intent is
observable in Article 280 of the Labor Code, which has been quoted
earlier.
ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is
hereby DISMISSED for lack of merit. The Resolutions of the NLRC dated
8 January 1993 and 15 February 1993 are hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 90501 August 5, 1991
ARIS (PHIL.) INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FELIPE
GARDUQUE III, LEODEGARIO DE GUZMAN, LILIA PEREZ, ROBERTO
BESTAMONTE, AIDA OPENA, REYNALDO TORIADO, APOLINARIO
GAGAHINA, RUFINO DE CASTRO, FLORDELIZA RAYOS DEL SOL, STEVE
SANCHO, ESTER CAIRO, MARIETA MAGALAD, and MARY B. NADALA,
respondents.
DAVIDE, JR., J.:
Petitioner assails the constitutionality of the amendment introduced
by Section 12 of Republic Act No. 6715 to Article 223 of the Labor
Code of the Philippines (PD No. 442, as amended) allowing execution
pending appeal of the reinstatement aspect of a decision of a labor
arbiter reinstating a dismissed or separated employee and of Section 2
of the NLRC Interim Rules on Appeals under R.A. No. 6715
implementing the same. It also questions the validity of the Transitory
Provision (Section 17) of the said Interim Rules.
The challenged portion of Section 12 of Republic Act No. 6715, which
took effect on 21 March 1989, reads as follows:
SEC 12. Article 223 of the same code is amended to read as
follows:
ART. 223. Appeal.
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed
or separated employee, in so far as the reinstatement aspect is
concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution for
reinstatement provided therein.
This is a new paragraph ingrafted into the Article.
Sections 2 and 17 of the "NLRC Interim Rules On Appeals Under R.A.
No. 6715, Amending the Labor Code", which the National Labor
Relations Commission (NLRC) promulgated on 8 August 1989, provide
as follows:
Section 2. Order of Reinstatement and Effect of Bond. — In so far as
the reinstatement aspect is concerned, the decision of the Labor
Arbiter reinstating a dismissed or separated employee shall
immediately be executory even pending appeal. The employee shall
either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation, or, at the option of the
employer, merely be reinstated in the payroll.
The posting of a bond by the employer shall not stay the execution for
reinstatement.
xxx xxx xxx
Section 17. Transitory provision. — Appeals filed on or after March 21,
1989, but prior to the effectivity of these Interim Rules must conform
to the requirements as herein set forth or as may be directed by the
Commission.
The antecedent facts and proceedings which gave rise to this petition
are not disputed:
On 11 April 1988, private respondents, who were employees of
petitioner, aggrieved by management's failure to attend to their
complaints concerning their working surroundings which had become
detrimental and hazardous, requested for a grievance conference. As
none was arranged, and believing that their appeal would be fruitless,
they grouped together after the end of their work that day with other
employees and marched directly to the management's office to
protest its long silence and inaction on their complaints.
On 12 April 1988, the management issued a memorandum to each of
the private respondents, who were identified by the petitioner's
supervisors as the most active participants in the rally requiring them
to explain why they should not be terminated from the service for
their conduct. Despite their explanation, private respondents were
dismissed for violation of company rules and regulations, more
specifically of the provisions on security and public order and on
inciting or participating in illegal strikes or concerted actions.
Private respondents lost no time in filing a complaint for illegal
dismissal against petitioner and Mr. Gavino Bayan with the regional
office of the NLRC at the National Capital Region, Manila, which was
docketed therein as NLRC-NCR-00-0401630-88.
After due trial, Labor Arbiter Felipe Garduque III handed down on 22
June 1989 a decision' the dispositive portion of which reads:
ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered to
reinstate within ten (10) days from receipt hereof, herein complainants
Leodegario de Guzman, Rufino de Castro, Lilia M. Perez, Marieta
Magalad, Flordeliza Rayos del Sol, Reynaldo Toriado, Roberto
Besmonte, Apolinario Gagahina, Aidam (sic) Opena, Steve C. Sancho
Ester Cairo, and Mary B. Nadala to their former respective positions or
any substantial equivalent positions if already filled up, without loss of
seniority right and privileges but with limited backwages of six (6)
months except complainant Leodegario de Guzman.
All other claims and prayers are hereby denied for lack of merit.
SO ORDERED.
On 19 July 1989, complainants (herein private respondents) filed a
Motion For Issuance of a Writ of Execution2 pursuant to the above-
quoted Section 12 of R.A. No. 6715.
On 21 July 1989, petitioner filed its Appeal.3
On 26 July 1989, the complainants, except Flor Rayos del Sol, filed a
Partial Appeal.4
On 10 August 1989, complainant Flor Rayos del Sol filed a Partial
Appeal.5
On 29 August 1989, petitioner filed an Opposition6 to the motion for
execution alleging that Section 12 of R.A. No. 6715 on execution
pending appeal cannot be applied retroactively to cases pending at
the time of its effectivity because it does not expressly provide that it
shall be given retroactive effect7 and to give retroactive effect to
Section 12 thereof to pending cases would not only result in the
imposition of an additional obligation on petitioner but would also
dilute its right to appeal since it would be burdened with the
consequences of reinstatement without the benefit of a final
judgment. In their Reply8 filed on 1 September 1989, complainants
argued that R.A. No. 6715 is not sought to be given retroactive effect
in this case since the decision to be executed pursuant to it was
rendered after the effectivity of the Act. The said law took effect on 21
March 1989, while the decision was rendered on 22 June 1989.
Petitioner submitted a Rejoinder to the Reply on 5 September 1989.9
On 5 October 1989, the Labor Arbiter issued an Order granting the
motion for execution and the issuance of a partial writ of execution10
as far as reinstatement of herein complainants is concerned in
consonance with the provision of Section 2 of the rules particularly the
last sentence thereof.
In this Order, the Labor Arbiter also made reference to Section 17 of
the NLRC Interim Rules in this wise:
Since Section 17 of the said rules made mention of appeals filed on or
after March 21, 1989, but prior to the effectivity of these interim rules
which must conform with the requirements as therein set forth
(Section 9) or as may be directed by the Commission, it obviously
treats of decisions of Labor Arbiters before March 21,1989. With more
reason these interim rules be made to apply to the instant case since
the decision hereof (sic) was rendered thereafter.11
Unable to accept the above Order, petitioner filed the instant petition
on 26 October 198912 raising the issues adverted to in the
introductory portion of this decision under the following assignment
of errors:
A. THE LABOR ARBITER A QUO AND THE NLRC, IN ORDERING THE
REINSTATEMENT OF THE PRIVATE RESPONDENTS PENDING APPEAL
AND IN PROVIDING FOR SECTION 2 OF THE INTERIM RULES,
RESPECTIVELY, ACTED WITHOUT AND IN EXCESS OF JURISDICTION
SINCE THE BASIS FOR SAID ORDER AND INTERIM RULE, i.e., SECTION
12 OF R.A. 6715 IS VIOLATIVE OF THE CONSTITUTIONAL GUARANTY OF
DUE PROCESS IT BEING OPPRESSIVE AND UNREASONABLE.
B. GRANTING ARGUENDO THAT THE PROVISION IN(SIC)
REINSTATEMENT PENDING APPEAL IS VALID, NONETHELESS, THE
LABOR ARBITER A QUO AND THE NLRC STILL ACTED IN EXCESS AND
WITHOUT JURISDICTION IN RETROACTIVELY APPLYING SAID
PROVISION TO PENDING LABOR CASES.
In Our resolution of 7 March 1989, We required the respondents to
comment on the petition.
Respondent NLRC, through the Office of the Solicitor General, filed its
Comment on 20 November 1989.13 Meeting squarely the issues
raised by petitioner, it submits that the provision concerning the
mandatory and automatic reinstatement of an employee whose
dismissal is found unjustified by the labor arbiter is a valid exercise of
the police power of the state and the contested provision "is then a
police legislation."
As regards the retroactive application thereof, it maintains that being
merely procedural in nature, it can apply to cases pending at the time
of its effectivity on the theory that no one can claim a vested right in a
rule of procedure. Moreover, such a law is compatible with the
constitutional provision on protection to labor.
On 11 December 1989, private respondents filed a Manifestation14
informing the Court that they are adopting the Comment filed by the
Solicitor General and stressing that petitioner failed to comply with
the requisites for a valid petition for certiorari under Rule 65 of the
Rules of Court.
On 20 December 1989, petitioner filed a Rejoinder15 to the Comment
of the Solicitor General.
In the resolution of 11 January 1990,16 We considered the Comments
as respondents' Answers, gave due course to the petition, and directed
that the case be calendared for deliberation.
In urging Us to declare as unconstitutional that portion of Section 223
of the Labor Code introduced by Section 12 of R.A. No. 6715, as well
as the implementing provision covered by Section 2 of the NLRC
Interim Rules, allowing immediate execution, even pending appeal, of
the reinstatement aspect of a decision of a labor arbiter reinstating a
dismissed or separated employee, petitioner submits that said portion
violates the due process clause of the Constitution in that it is
oppressive and unreasonable. It argues that a reinstatement pending
appeal negates the right of the employer to self-protection for it has
been ruled that an employer cannot be compelled to continue in
employment an employee guilty of acts inimical to the interest of the
employer; the right of an employer to dismiss is consistent with the
legal truism that the law, in protecting the rights of the laborer,
authorizes neither the oppression nor the destruction of the employer.
For, social justice should be implemented not through mistaken
sympathy for or misplaced antipathy against any group, but even-
handedly and fairly.17
To clinch its case, petitioner tries to demonstrate the oppressiveness
of reinstatement pending appeal by portraying the following
consequences: (a) the employer would be compelled to hire additional
employees or adjust the duties of other employees simply to have
someone watch over the reinstated employee to prevent the
commission of further acts prejudicial to the employer, (b)
reinstatement of an undeserving, if not undesirable, employee may
demoralize the rank and file, and (c) it may encourage and embolden
not only the reinstated employees but also other employees to
commit similar, if not graver infractions.
These rationalizations and portrayals are misplaced and are purely
conjectural which, unfortunately, proceed from a misunderstanding of
the nature and scope of the relief of execution pending appeal.
Execution pending appeal is interlinked with the right to appeal. One
cannot be divorced from the other. The latter may be availed of by the
losing party or a party who is not satisfied with a judgment, while the
former may be applied for by the prevailing party during the pendency
of the appeal. The right to appeal, however, is not a constitutional,
natural or inherent right. It is a statutory privilege of statutory origin18
and, therefore, available only if granted or provided by statute. The
law may then validly provide limitations or qualifications thereto or
relief to the prevailing party in the event an appeal is interposed by
the losing party. Execution pending appeal is one such relief long
recognized in this jurisdiction. The Revised Rules of Court allows
execution pending appeal and the grant thereof is left to the discretion
of the court upon good reasons to be stated in a special order.19
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of
the Labor Code already allowed execution of decisions of the NLRC
pending their appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the reinstatement aspect
of a decision of the Labor Arbiter reinstating a dismissed or separated
employee, the law itself has laid down a compassionate policy which,
once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working-man.
These provisions are the quintessence of the aspirations of the
workingman for recognition of his role in the social and economic life
of the nation, for the protection of his rights, and the promotion of his
welfare. Thus, in the Article on Social Justice and Human Rights of the
Constitution,20 which principally directs Congress to give highest
priority to the enactment of measures that protect and enhance the
right of all people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power for the common good, the State is
mandated to afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and
equality of employment opportunities for all; to guarantee the rights
of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to
strike in accordance with law, security of tenure, human conditions of
work, and a living wage, to participate in policy and decision-making
processes affecting their rights and benefits as may be provided by
law; and to promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes. Incidentally, a study of the Constitutions of various
nations readily reveals that it is only our Constitution which devotes a
separate article on Social Justice and Human Rights. Thus, by no less
than its fundamental law, the Philippines has laid down the strong
foundations of a truly just and humane society. This Article addresses
itself to specified areas of concern labor, agrarian and natural
resources reform, urban land reform and housing, health, working
women, and people's organizations and reaches out to the
underprivileged sector of society, for which reason the President of
the Constitutional Commission of 1986, former Associate Justice of
this Court Cecilia Muñoz-Palma, aptly describes this Article as the
"heart of the new Charter."21
These duties and responsibilities of the State are imposed not so much
to express sympathy for the workingman as to forcefully and
meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms With equal intensity.22
Labor is an indispensable partner for the nation's progress and
stability.
If in ordinary civil actions execution of judgment pending appeal is
authorized for reasons the determination of which is merely left to the
discretion of the judge, We find no plausible reason to withhold it in
cases of decisions reinstating dismissed or separated employees. In
such cases, the poor employees had been deprived of their only
source of livelihood, their only means of support for their family their
very lifeblood. To Us, this special circumstance is far better than any
other which a judge, in his sound discretion, may determine. In short,
with respect to decisions reinstating employees, the law itself has
determined a sufficiently overwhelming reason for its execution
pending appeal.
The validity of the questioned law is not only supported and sustained
by the foregoing considerations. As contended by the Solicitor
General, it is a valid exercise of the police power of the State.
Certainly, if the right of an employer to freely discharge his employees
is subject to regulation by the State, basically in the exercise of its
permanent police power on the theory that the preservation of the
lives of the citizens is a basic duty of the State, that is more vital than
the preservation of corporate profits.23 Then, by and pursuant to the
same power, the State may authorize an immediate implementation,
pending appeal, of a decision reinstating a dismissed or separated
employee since that saving act is designed to stop, although
temporarily since the appeal may be decided in favor of the appellant,
a continuing threat or danger to the survival or even the life of the
dismissed or separated employee and its family.
The charge then that the challenged law as well as the implementing
rule are unconstitutional is absolutely baseless.1âwphi1 Laws are
presumed constitutional.24 To justify nullification of a law, there must
be a clear and unequivocal breach of the Constitution, not a doubtful
and argumentative implication; a law shall not be declared invalid
unless the conflict with the constitution is clear beyond reasonable
doubt.25 In Parades, et al. vs. Executive Secretary26 We stated:
2. For one thing, it is in accordance with the settled doctrine that
between two possible constructions, one avoiding a finding of
unconstitutionality and the other yielding such a result, the former is
to be preferred. That which will save, not that which will destroy,
commends itself for acceptance. After all, the basic presumption all
these years is one of validity. The onerous task of proving otherwise is
on the party seeking to nullify a statute. It must be proved by clear and
convincing evidence that there is an infringement of a constitutional
provision, save in those cases where the challenged act is void on its
face. Absent such a showing, there can be no finding of
unconstitutionality. A doubt, even if well-founded, does not suffice.
Justice Malcolm's aphorism is apropos: To doubt is to sustain.27
The reason for this:
... can be traced to the doctrine of separation of powers which enjoins
on each department a proper respect for the acts of the other
departments. ... The theory is that, as the joint act of the legislative
and executive authorities, a law is supposed to have been carefully
studied and determined to be constitution before it was finally
enacted. Hence, as long as there is some other basis that can be used
by the courts for its decision, the constitutionality of the challenged
law will not be touched upon and the case will be decided on other
available grounds.28
The issue concerning Section 17 of the NLRC Interim Rules does not
deserve a measure of attention. The reference to it in the Order of the
Labor Arbiter of 5 October 1989 was unnecessary since the procedure
of the appeal proper is not involved in this case. Moreover, the
questioned interim rules of the NLRC, promulgated on 8 August 1989,
can validly be given retroactive effect. They are procedural or remedial
in character, promulgated pursuant to the authority vested upon it
under Article 218(a) of the Labor Code of the Philippines, as amended.
Settled is the rule that procedural laws may be given retroactive
effect.29 There are no vested rights in rules of procedure.30 A
remedial statute may be made applicable to cases pending at the time
of its enactment.31
WHEREFORE, the petition is hereby DISMISSED for lack of merit. Costs
against petitioner.
[G.R. No. 149276. September 27, 2002]
JOVENCIO LIM and TERESITA LIM, petitioners, vs. THE PEOPLE OF THE
PHILIPPINES, THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH
217, THE CITY PROSECUTOR OF QUEZON CITY, AND WILSON CHAM,
respondents.
DECISION
CORONA, J.:
The constitutionality of PD 818, a decree which amended Article 315
of the Revised Penal Code by increasing the penalties for estafa
committed by means of bouncing checks, is being challenged in this
petition for certiorari, for being violative of the due process clause, the
right to bail and the provision against cruel, degrading or inhuman
punishment enshrined under the Constitution.
The antecedents of this case, as gathered from the parties pleadings
and documentary proofs, follow.
In December 1991, petitioner spouses issued to private respondent
two postdated checks, namely, Metrobank check no. 464728 dated
January 15, 1992 in the amount of P365,750 and Metrobank check no.
464743 dated January 22, 1992 in the amount of P429,000. Check no.
464728 was dishonored upon presentment for having been drawn
against insufficient funds while check no. 464743 was not presented
for payment upon request of petitioners who promised to replace the
dishonored check.
When petitioners reneged on their promise to cover the amount of
check no. 464728, the private respondent filed a complaint-affidavit
before the Office of the City Prosecutor of Quezon City charging
petitioner spouses with the crime of estafa under Article 315, par. 2 (d)
of the Revised Penal Code, as amended by PD 818.
On February 16, 2001, the City Prosecutor issued a resolution finding
probable cause against petitioners and recommending the filing of an
information for estafa with no bail recommended. On the same day,
an information for the crime of estafa was filed with Branch 217 of the
Regional Trial Court of Quezon City against petitioners. The case was
docketed as Criminal Case No. Q-01-101574. Thereafter, the trial court
issued a warrant for the arrest of herein petitioners, thus:
It appearing on the face of the information and from supporting
affidavit of the complaining witness and its annexes that probable
cause exists, that the crime charged was committed and accused is
probably guilty thereof, let a warrant for the arrest of the accused be
issued.
No Bail Recommended.
SO ORDERED.[1]
On July 18, 2001, petitioners filed an Urgent Motion to Quash
Information and Warrant of Arrest which was denied by the trial court.
Likewise, petitioners motion for bail filed on July 24, 2001 was denied
by the trial court on the same day. Petitioner Jovencio Lim was
arrested by virtue of the warrant of arrest issued by the trial court and
was detained at the Quezon City Jail. However, petitioner Teresita Lim
remained at large.
On August 22, 2001, petitioners filed the instant petition for certiorari
imputing grave abuse of discretion on the part of the lower court and
the Office of the City Prosecutor of Quezon City, arguing that PD 818
violates the constitutional provisions on due process, bail and
imposition of cruel, degrading or inhuman punishment.
In a resolution dated February 26, 2002, this Court granted the
petition of Jovencio Lim to post bail pursuant to Department of Justice
Circular No. 74 dated November 6, 2001 which amended the 2000 Bail
Bond Guide involving estafa under Article 315, par. 2 (d), and qualified
theft. Said Circular specifically provides as follows:
xxx xxx xxx
3) Where the amount of fraud is P32,000.00 or over in which the
imposable penalty is reclusion temporal to reclusion perpetua, bail
shall be based on reclusion temporal maximum, pursuant to Par. 2 (a)
of the 2000 Bail Bond Guide, multiplied by P2,000.00, plus an
additional of P2,000.00 for every P10,000.00 in excess of P22,000.00;
Provided, however, that the total amount of bail shall not exceed
P60,000.00.
In view of the aforementioned resolution, the matter concerning bail
shall no longer be discussed. Thus, this decision will focus on whether
or not PD 818 violates Sections 1 and 19 of Article III of the
Constitution, which respectively provide:
Section 1. No person shall be deprived of life, liberty or property
without due process of law, nor shall any person be denied the equal
protection of the laws.
xxx
Section 19 (1) Excessive fines shall not be imposed, nor cruel,
degrading or inhuman punishment inflicted. x x x.
We shall deal first with the issue of whether PD 818 was enacted in
contravention of Section 19 of Article III of the Constitution. In this
regard, the impugned provision of PD 818 reads as follows:
SECTION 1. Any person who shall defraud another by means of false
pretenses or fraudulent acts as defined in paragraph 2(d) of Article
315 of the Revised Penal Code, as amended by Republic Act No. 4885,
shall be punished by:
1st. The penalty of reclusion temporal if the amount of the fraud is
over 12,000 pesos but does not exceed 22,000 pesos, and if such
amount exceeds the later sum, the penalty provided in this paragraph
shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos but the total penalty which may be imposed
shall in no case exceed thirty years. In such cases, and in connection
with the accessory penalties which may be imposed under the Revised
Penal Code, the penalty shall be termed reclusion perpetua;
2nd. The penalty of prision mayor in its maximum period, if the
amount of the fraud is over 6,000 pesos but does not exceed 12,000
pesos.
3rd. The penalty of prision mayor in its medium period, if such amount
is over 200 pesos but does not exceed 6,000 pesos; and
4th. By prision mayor in its minimum period, if such amount does not
exceed 200 pesos.
Petitioners contend that, inasmuch as the amount of the subject check
is P365,750, they can be penalized with reclusion perpetua or 30 years
of imprisonment. This penalty, according to petitioners, is too severe
and disproportionate to the crime they committed and infringes on
the express mandate of Article III, Section 19 of the Constitution which
prohibits the infliction of cruel, degrading and inhuman punishment.
Settled is the rule that a punishment authorized by statute is not cruel,
degrading or disproportionate to the nature of the offense unless it is
flagrantly and plainly oppressive and wholly disproportionate to the
nature of the offense as to shock the moral sense of the community. It
takes more than merely being harsh, excessive, out of proportion or
severe for a penalty to be obnoxious to the Constitution.[2] Based on
this principle, the Court has consistently overruled contentions of the
defense that the penalty of fine or imprisonment authorized by the
statute involved is cruel and degrading.
In People vs. Tongko,[3] this Court held that the prohibition against
cruel and unusual punishment is generally aimed at the form or
character of the punishment rather than its severity in respect of its
duration or amount, and applies to punishments which never existed
in America or which public sentiment regards as cruel or obsolete. This
refers, for instance, to those inflicted at the whipping post or in the
pillory, to burning at the stake, breaking on the wheel, disemboweling
and the like. The fact that the penalty is severe provides insufficient
basis to declare a law unconstitutional and does not, by that
circumstance alone, make it cruel and inhuman.
Petitioners also argue that while PD 818 increased the imposable
penalties for estafa committed under Article 315, par. 2 (d) of the
Revised Penal Code, it did not increase the amounts corresponding to
the said new penalties. Thus, the original amounts provided for in the
Revised Penal Code have remained the same notwithstanding that
they have become negligible and insignificant compared to the
present value of the peso.
This argument is without merit. The primary purpose of PD 818 is
emphatically and categorically stated in the following:
WHEREAS, reports received of late indicate an upsurge of estafa
(swindling) cases committed by means of bouncing checks;
WHEREAS, if not checked at once, these criminal acts would erode the
peoples confidence in the use of negotiable instruments as a medium
of commercial transaction and consequently result in the retardation
of trade and commerce and the undermining of the banking system of
the country;
WHEREAS, it is vitally necessary to arrest and curb the rise in this kind
of estafa cases by increasing the existing penalties provided therefor.
Clearly, the increase in the penalty, far from being cruel and degrading,
was motivated by a laudable purpose, namely, to effectuate the
repression of an evil that undermines the countrys commercial and
economic growth, and to serve as a necessary precaution to deter
people from issuing bouncing checks. The fact that PD 818 did not
increase the amounts corresponding to the new penalties only proves
that the amount is immaterial and inconsequential. What the law
sought to avert was the proliferation of estafa cases committed by
means of bouncing checks. Taking into account the salutary purpose
for which said law was decreed, we conclude that PD 818 does not
violate Section 19 of Article III of the Constitution.
Moreover, when a law is questioned before the Court, the
presumption is in favor of its constitutionality. To justify its
nullification, there must be a clear and unmistakable breach of the
Constitution, not a doubtful and argumentative one.[4] The burden of
proving the invalidity of a law rests on those who challenge it. In this
case, petitioners failed to present clear and convincing proof to defeat
the presumption of constitutionality of PD 818.
With respect to the issue of whether PD 818 infringes on Section 1 of
Article III of the Constitution, petitioners claim that PD 818 is violative
of the due process clause of the Constitution as it was not published in
the Official Gazette. This claim is incorrect and must be rejected.
Publication, being an indispensable part of due process, is imperative
to the validity of laws, presidential decrees and executive orders.[5] PD
818 was published in the Official Gazette on December 1, 1975.[6]
With the foregoing considerations in mind, this Court upholds the
constitutionality of PD 818.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
G.R. No. 94723 August 21, 1997
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father
and Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and
EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION
and GREG BARTELLI y NORTHCOTT, respondents.
TORRES, JR., J.:
In our predisposition to discover the "original intent" of a statute,
courts become the unfeeling pillars of the status quo. Ligle do we
realize that statutes or even constitutions are bundles of compromises
thrown our way by their framers. Unless we exercise vigilance, the
statute may already be out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:
a.) Immediately upon the filing of this petition, an Order be issued
restraining the respondents from applying and enforcing Section 113
of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of petitioners and
respondents;
2.) Adjudging Section 113 of Central Bank Circular No. 960 as
contrary to the provisions of the Constitution, hence void; because its
provision that "Foreign currency deposits shall be exempt from
attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body
whatsoever
i.) has taken away the right of petitioners to have the bank deposit
of defendant Greg Bartelli y Northcott garnished to satisfy the
judgment rendered in petitioners' favor in violation of substantive due
process guaranteed by the Constitution;
ii.) has given foreign currency depositors an undue favor or a class
privilege in violation of the equal protection clause of the Constitution;
iii.) has provided a safe haven for criminals like the herein
respondent Greg Bartelli y Northcott since criminals could escape civil
liability for their wrongful acts by merely converting their money to a
foreign currency and depositing it in a foreign currency deposit
account with an authorized bank.
The antecedent facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist,
coaxed and lured petitioner Karen Salvacion, then 12 years old to go
with him to his apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days, or up to February 7, 1989 and was able to rape
the child once on February 4, and three times each day on February 5,
6, and 7, 1989. On February 7, 1989, after policemen and people living
nearby, rescued Karen, Greg Bartelli was arrested and detained at the
Makati Municipal Jail. The policemen recovered from Bartelli the
following items: 1.) Dollar Check No. 368, Control No. 021000678-
1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-
8 (Peso Acct.); 3.) Dollar Account — China Banking Corp.,
US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money
(P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear)
used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya
filed against Greg Bartelli, Criminal Case No. 801 for Serious Illegal
Detention and Criminal Cases Nos. 802, 803, 804, and 805 for four (4)
counts of Rape. On the same day, petitioners filed with the Regional
Trial Court of Makati Civil Case No. 89-3214 for damages with
preliminary attachment against Greg Bartelli. On February 24, 1989,
the day there was a scheduled hearing for Bartelli's petition for bail
the latter escaped from jail.
On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte
Motion for the Issuance of Warrant of Arrest and Hold Departure
Order. Pending the arrest of the accused Greg Bartelli y Northcott, the
criminal cases were archived in an Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated
February 22, 1989 granting the application of herein petitioners, for
the issuance of the writ of preliminary attachment. After petitioners
gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the
amount of P100,000.00, a Writ of Preliminary Attachment was issued
by the trial court on February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of
Garnishment on China Banking Corporation. In a letter dated March
13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation
invoked Republic Act No. 1405 as its answer to the notice of
garnishment served on it. On March 15, 1989, Deputy Sheriff of
Makati Armando de Guzman sent his reply to China Banking
Corporation saying that the garnishment did not violate the secrecy of
bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order
which has placed the subject deposits in custodia legis. In answer to
this letter of the Deputy Sheriff of Makati, China Banking Corporation,
in a letter dated March 20, 1989, invoked Section 113 of Central Bank
Circular No. 960 to the effect that the dollar deposits or defendant
Greg Bartelli are exempt from attachment, garnishment, or any other
order or process of any court, legislative body, government agency or
any administrative body, whatsoever.
This prompted the counsel for petitioners to make an inquiry with the
Central Bank in a letter dated April 25, 1989 on whether Section 113 of
CB Circular No. 960 has any exception or whether said section has
been repealed or amended since said section has rendered nugatory
the substantive right of the plaintiff to have the claim sought to be
enforced by the civil action secured by way of the writ of preliminary
attachment as granted to the plaintiff under Rule 57 of the Revised
Rules of Court. The Central Bank responded as follows:
May 26, 1989
Ms. Erlinda S. Carolino
12 Pres. Osmena Avenue
South Admiral Village
Paranaque, Metro Manila
Dear Ms. Carolino:
This is in reply to your letter dated April 25, 1989 regarding your
inquiry on Section 113, CB Circular No. 960 (1983).
The cited provision is absolute in application. It does not admit of any
exception, nor has the same been repealed nor amended.
The purpose of the law is to encourage dollar accounts within the
country's banking system which would help in the development of the
economy. There is no intention to render futile the basic rights of a
person as was suggested in your subject letter. The law may be harsh
as some perceive it, but it is still the law. Compliance is, therefore,
enjoined.
Very truly yours,
(SGD) AGAPITO S. FAJARDO
Director1
Meanwhile, on April 10, 1989, the trial court granted petitioners'
motion for leave to serve summons by publication in the Civil Case No.
89-3214 entitled "Karen Salvacion, et al. vs. Greg Bartelli y Northcott."
Summons with the complaint was a published in the Manila Times
once a week for three consecutive weeks. Greg Bartelli failed to file his
answer to the complaint and was declared in default on August 7,
1989. After hearing the case ex-parte, the court rendered judgment in
favor of petitioners on March 29, 1990, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs and
against defendant, ordering the latter:
1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as
moral damages;
2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr.,
and Evelina E. Salvacion the amount of P150,000.00 each or a total of
P300,000.00 for both of them;
3. To pay plaintiffs exemplary damages of P100,000.00; and
4. To pay attorney's fees in an amount equivalent to 25% of the
total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The heinous acts of respondent Greg Bartelli which gave rise to the
award were related in graphic detail by the trial court in its decision as
follows:
The defendant in this case was originally detained in the municipal jail
of Makati but was able to escape therefrom on February 24, 1989 as
per report of the Jail Warden of Makati to the Presiding Judge,
Honorable Manuel M. Cosico of the Regional Trial Court of Makati,
Branch 136, where he was charged with four counts of Rape and
Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly,
upon motion of plaintiffs, through counsel, summons was served upon
defendant by publication in the Manila Times, a newspaper of general
circulation as attested by the Advertising Manager of the Metro Media
Times, Inc., the publisher of the said newspaper. Defendant, however,
failed to file his answer to the complaint despite the lapse of the
period of sixty (60) days from the last publication; hence, upon motion
of the plaintiffs, through counsel, defendant was declared in default
and plaintiffs were authorized to present their evidence ex parte.
In support of the complaint, plaintiffs presented as witnesses the
minor Karen E. Salvacion, her father, Federico N. Salvacion, Jr., a
certain Joseph Aguilar and a certain Liberato Madulio, who gave the
following testimony:
Karen took her first year high school in St. Mary's Academy in Pasay
City but has recently transferred to Arellano University for her second
year.
In the afternoon of February 4, 1989, Karen was at the Plaza Fair
Makati Cinema Square, with her friend Edna Tangile whiling away her
free time. At about 3:30 p.m. while she was finishing her snack on a
concrete bench in front of Plaza Fair, an American approached her. She
was then alone because Edna Tangile had already left, and she was
about to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)
The American asked her name and introduced himself as Greg Bartelli.
He sat beside her when he talked to her. He said he was a Math
teacher and told her that he has a sister who is a nurse in New York.
His sister allegedly has a daughter who is about Karen's age and who
was with him in his house along Kalayaan Avenue. (TSN, Aug. 15, 1989,
pp. 4-5)
The American asked Karen what was her favorite subject and she told
him it's Pilipino. He then invited her to go with him to his house where
she could teach Pilipino to his niece. He even gave her a stuffed toy to
persuade her to teach his niece. (Id., pp. 5-6)
They walked from Plaza Fair along Pasong Tamo, turning right to reach
the defendant's house along Kalayaan Avenue. (Id., p. 6)
When they reached the apartment house, Karen noticed that
defendant's alleged niece was not outside the house but defendant
told her maybe his niece was inside. When Karen did not see the
alleged niece inside the house, defendant told her maybe his niece
was upstairs, and invited Karen to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door.
Karen became nervous because his niece was not there. Defendant
got a piece of cotton cord and tied Karen's hands with it, and then he
undressed her. Karen cried for help but defendant strangled her. He
took a packing tape and he covered her mouth with it and he circled it
around her head. (Id., p. 7)
Then, defendant suddenly pushed Karen towards the bed which was
just near the door. He tied her feet and hands spread apart to the bed
posts. He knelt in front of her and inserted his finger in her sex organ.
She felt severe pain. She tried to shout but no sound could come out
because there were tapes on her mouth. When defendant withdrew
his finger it was full of blood and Karen felt more pain after the
withdrawal of the finger. (Id., p. 8)
He then got a Johnson's Baby Oil and he applied it to his sex organ as
well as to her sex organ. After that he forced his sex organ into her but
he was not able to do so. While he was doing it, Karen found it difficult
to breathe and she perspired a lot while feeling severe pain. She
merely presumed that he was able to insert his sex organ a little,
because she could not see. Karen could not recall how long the
defendant was in that position. (Id. pp. 8-9)
After that, he stood up and went to the bathroom to wash. He also
told Karen to take a shower and he untied her hands. Karen could only
hear the sound of the water while the defendant, she presumed, was
in the bathroom washing his sex organ. When she took a shower more
blood came out from her. In the meantime, defendant changed the
mattress because it was full of blood. After the shower, Karen was
allowed by defendant to sleep. She fell asleep because she got tired
crying. The incident happened at about 4:00 p.m. Karen had no way of
determining the exact time because defendant removed her watch.
Defendant did not care to give her food before she went to sleep.
Karen woke up at about 8:00 o'clock the following morning. (Id., pp. 9-
10)
The following day, February 5, 1989, a Sunday, after a breakfast of
biscuit and coke at about 8:30 to 9:00 a.m. defendant raped Karen
while she was still bleeding. For lunch, they also took biscuit and coke.
She was raped for the second time at about 12:00 to 2:00 p.m. In the
evening, they had rice for dinner which defendant had stored
downstairs; it was he who cooked the rice that is why it looks like
"lugaw". For the third time, Karen was raped again during the night.
During those three times defendant succeeded in inserting his sex
organ but she could not say whether the organ was inserted wholly.
Karen did not see any firearm or any bladed weapon. The defendant
did not tie her hands and feet nor put a tape on her mouth anymore
but she did not cry for help for fear that she might be killed; besides,
all the windows and doors were closed. And even if she shouted for
help, nobody would hear her. She was so afraid that if somebody
would hear her and would be able to call the police, it was still
possible that as she was still inside the house, defendant might kill her.
Besides, the defendant did not leave that Sunday, ruling out her
chance to call for help. At nighttime he slept with her again. (TSN, Aug.
15, 1989, pp. 12-14)
On February 6, 1989, Monday, Karen was raped three times, once in
the morning for thirty minutes after a breakfast of biscuits; again in
the afternoon; and again in the evening. At first, Karen did not know
that there was a window because everything was covered by a carpet,
until defendant opened the window for around fifteen minutes or less
to let some air in, and she found that the window was covered by
styrofoam and plywood. After that, he again closed the window with a
hammer and he put the styrofoam, plywood, and carpet back. (Id., pp.
14-15)
That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom
and saw a small window covered by styrofoam and she also spotted a
small hole. She stepped on the bowl and she cried for help through
the hole. She cried: "Maawa no po kayo so akin. Tulungan n'yo akong
makalabas dito. Kinidnap ako!" Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was "istorbo".
Karen pleaded for help and the woman told her to sleep and she will
call the police. She finally fell asleep but no policeman came. (TSN,
Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 o'clock the following morning, and she saw
defendant in bed, this time sleeping. She waited for him to wake up.
When he woke up, he again got some food but he always kept the
door locked. As usual, she was merely fed with biscuit and coke. On
that day, February 7, 1989, she was again raped three times. The first
at about 6:30 to 7:00 a.m., the second at about 8:30 — 9:00, and the
third was after lunch at 12:00 noon. After he had raped her for the
second time he left but only for a short while. Upon his return, he
caught her shouting for help but he did not understand what she was
shouting about. After she was raped the third time, he left the house.
(TSN, Aug. 15, 1989, pp. 16-17) She again went to the bathroom and
shouted for help. After shouting for about five minutes, she heard
many voices. The voices were asking for her name and she gave her
name as Karen Salvacion. After a while, she heard a voice of a woman
saying they will just call the police. They were also telling her to
change her clothes. She went from the bathroom to the room but she
did not change her clothes being afraid that should the neighbors call
for the police and the defendant see her in different clothes, he might
kill her. At that time she was wearing a T-shirt of the American because
the latter washed her dress. (Id., p. 16)
Afterwards, defendant arrived and he opened the door. He asked her if
she had asked for help because there were many policemen outside
and she denied it. He told her to change her clothes, and she did
change to the one she was wearing on Saturday. He instructed her to
tell the police that she left home and willingly; then he went
downstairs but he locked the door. She could hear people conversing
but she could not understand what they were saying. (Id., p. 19)
When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she could.
She heard somebody going upstairs and when the door was opened,
she saw a policeman. The policeman asked her name and the reason
why she was there. She told him she was kidnapped. Downstairs, he
saw about five policemen in uniform and the defendant was talking to
them. "Nakikipag-areglo po sa mga pulis," Karen added. "The
policeman told him to just explain at the precinct. (Id., p. 20)
They went out of the house and she saw some of her neighbors in
front of the house. They rode the car of a certain person she called
Kuya Boy together with defendant, the policeman, and two of her
neighbors whom she called Kuya Bong Lacson and one Ate Nita. They
were brought to Sub-Station I and there she was investigated by a
policeman. At about 2:00 a.m., her father arrived, followed by her
mother together with some of their neighbors. Then they were
brought to the second floor of the police headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the
investigator. The written statement she gave to the police was marked
as Exhibit A. Then they proceeded to the National Bureau of
Investigation together with the investigator and her parents. At the
NBI, a doctor, a medico-legal officer, examined her private parts. It was
already 3:00 in the early morning of the following day when they
reached the NBI. (TSN, Aug. 15, 1989, p. 22) The findings of the
medico-legal officer has been marked as Exhibit B.
She was studying at the St. Mary's Academy in Pasay City at the time
of the incident but she subsequently transferred to Apolinario Mabini,
Arellano University, situated along Taft Avenue, because she was
ashamed to be the subject of conversation in the school. She first
applied for transfer to Jose Abad Santos, Arellano University along Taft
Avenue near the Light Rail Transit Station but she was denied
admission after she told the school the true reason for her transfer.
The reason for their denial was that they might be implicated in the
case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx
After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she
has been absent-minded and is ashamed even to go out of the house.
(TSN, Sept. 12, 1989, p. 10) She appears to be restless or sad, (Id., p.
11) The father prays for P500,000.00 moral damages for Karen for this
shocking experience which probably, she would always recall until she
reaches old age, and he is not sure if she could ever recover from this
experience. (TSN, Sept. 24, 1989, pp. 10-11)
Pursuant to an Order granting leave to publish notice of decision, said
notice was published in the Manila Bulletin once a week for three
consecutive weeks. After the lapse of fifteen (15) days from the date of
the last publication of the notice of judgment and the decision of the
trial court had become final, petitioners tried to execute on Bartelli's
dollar deposit with China Banking Corporation. Likewise, the bank
invoked Section 113 of Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil
down to two:
May this Court entertain the instant petition despite the fact that
original jurisdiction in petitions for declaratory relief rests with the
lower court? Should Section 113 of Central Bank Circular No. 960 and
Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known as
the Foreign Currency Deposit Act be made applicable to a foreign
transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank
Circular No. 960 providing that "Foreign currency deposits shall be
exempt from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any
administrative body whatsoever." should be adjudged as
unconstitutional on the grounds that: 1.) it has taken away the right of
petitioners to have the bank deposit of defendant Greg Bartelli y
Northcott garnished to satisfy the judgment rendered in petitioners'
favor in violation of substantive due process guaranteed by the
Constitution; 2.) it has given foreign currency depositors an undue
favor or a class privilege in violation of the equal protection clause of
the Constitution; 3.) it has provided a safe haven for criminals like the
herein respondent Greg Bartelli y Northcott since criminals could
escape civil liability for their wrongful acts by merely converting their
money to a foreign currency and depositing it in a foreign currency
deposit account with an authorized bank; and 4.) The Monetary Board,
in issuing Section 113 of Central Bank Circular No. 960 has exceeded
its delegated quasi-legislative power when it took away: a.) the
plaintiffs substantive right to have the claim sought to be enforced by
the civil action secured by way of the writ of preliminary attachment
as granted by Rule 57 of the Revised Rules of Court; b.) the plaintiffs
substantive right to have the judgment credit satisfied by way of the
writ of execution out of the bank deposit of the judgment debtor as
granted to the judgment creditor by Rule 39 of the Revised Rules of
Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges
that the Monetary Board in issuing Section 113 of CB Circular No. 960
did not exceed its power or authority because the subject Section is
copied verbatim from a portion of R.A. No. 6426 as amended by P.D.
1246. Hence, it was not the Monetary Board that grants exemption
from attachment or garnishment to foreign currency deposits, but the
law (R.A. 6426 as amended) itself; that it does not violate the
substantive due process guaranteed by the Constitution because a.) it
was based on a law; b.) the law seems to be reasonable; c.) it is
enforced according to regular methods of procedure; and d.) it applies
to all members of a class.
Expanding, the Central Bank said; that one reason for exempting the
foreign currency deposits from attachment, garnishment or any other
order or process of any court, is to assure the development and
speedy growth of the Foreign Currency Deposit System and the
Offshore Banking System in the Philippines; that another reason is to
encourage the inflow of foreign currency deposits into the banking
institutions thereby placing such institutions more in a position to
properly channel the same to loans and investments in the Philippines,
thus directly contributing to the economic development of the
country; that the subject section is being enforced according to the
regular methods of procedure; and that it applies to all foreign
currency deposits made by any person and therefore does not violate
the equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision
is needed to promote the public interest and the general welfare; that
the State cannot just stand idly by while a considerable segment of the
society suffers from economic distress; that the State had to take some
measures to encourage economic development; and that in so doing
persons and property may be subjected to some kinds of restraints or
burdens to secure the general welfare or public interest. Respondent
Central Bank also alleges that Rule 39 and Rule 57 of the Revised Rules
of Court provide that some properties are exempted from
execution/attachment especially provided by law and R.A. No. 6426 as
amended is such a law, in that it specifically provides, among others,
that foreign currency deposits shall be exempted from attachment,
garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving
reasons similar to that of respondent Central Bank, also stated that
respondent China Bank is not unmindful of the inhuman sufferings
experienced by the minor Karen E. Salvacion from the beastly hands of
Greg Bartelli; that it is only too willing to release the dollar deposit of
Bartelli which may perhaps partly mitigate the sufferings petitioner
has undergone; but it is restrained from doing so in view of R.A. No.
6426 and Section 113 of Central Bank Circular No. 960; and that
despite the harsh effect of these laws on petitioners, CBC has no other
alternative but to follow the same.
This Court finds the petition to be partly meritorious.
Petitioner deserves to receive the damages awarded to her by the
court. But this petition for declaratory relief can only be entertained
and treated as a petition for mandamus to require respondents to
honor and comply with the writ of execution in Civil Case No. 89-3214.
This Court has no original and exclusive jurisdiction over a petition for
declaratory relief.2 However, exceptions to this rule have been
recognized. Thus, where the petition has far-reaching implications and
raises questions that should be resolved, it may be treated as one for
mandamus.3
Here is a child, a 12-year old girl, who in her belief that all Americans
are good and in her gesture of kindness by teaching his alleged niece
the Filipino language as requested by the American, trustingly went
with said stranger to his apartment, and there she was raped by said
American tourist Greg Bartelli. Not once, but ten times. She was
detained therein for four (4) days. This American tourist was able to
escape from the jail and avoid punishment. On the other hand, the
child, having received a favorable judgment in the Civil Case for
damages in the amount of more than P1,000,000.00, which amount
could alleviate the humiliation, anxiety, and besmirched reputation
she had suffered and may continue to suffer for a long, long time; and
knowing that this person who had wronged her has the money, could
not, however get the award of damages because of this unreasonable
law. This questioned law, therefore makes futile the favorable
judgment and award of damages that she and her parents fully
deserve. As stated by the trial court in its decision,
Indeed, after hearing the testimony of Karen, the Court believes that it
was undoubtedly a shocking and traumatic experience she had
undergone which could haunt her mind for a long, long time, the mere
recall of which could make her feel so humiliated, as in fact she had
been actually humiliated once when she was refused admission at the
Abad Santos High School, Arellano University, where she sought to
transfer from another school, simply because the school authorities of
the said High School learned about what happened to her and
allegedly feared that they might be implicated in the case.
xxx xxx xxx
The reason for imposing exemplary or corrective damages is due to
the wanton and bestial manner defendant had committed the acts of
rape during a period of serious illegal detention of his hapless victim,
the minor Karen Salvacion whose only fault was in her being so naive
and credulous to believe easily that defendant, an American national,
could not have such a bestial desire on her nor capable of committing
such a heinous crime. Being only 12 years old when that unfortunate
incident happened, she has never heard of an old Filipino adage that
in every forest there is a
snake, . . . .4
If Karen's sad fate had happened to anybody's own kin, it would be
difficult for him to fathom how the incentive for foreign currency
deposit could be more important than his child's rights to said award
of damages; in this case, the victim's claim for damages from this alien
who had the gall to wrong a child of tender years of a country where
he is a mere visitor. This further illustrates the flaw in the questioned
provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a
time when the country's economy was in a shambles; when foreign
investments were minimal and presumably, this was the reason why
said statute was enacted. But the realities of the present times show
that the country has recovered economically; and even if not, the
questioned law still denies those entitled to due process of law for
being unreasonable and oppressive. The intention of the questioned
law may be good when enacted. The law failed to anticipate the
iniquitous effects producing outright injustice and inequality such as
the case before us.
It has thus been said that —
But I also know,5 that laws and institutions must go hand in hand with
the progress of the human mind. As that becomes more developed,
more enlightened, as new discoveries are made, new truths are
disclosed and manners and opinions change with the change of
circumstances, institutions must advance also, and keep pace with the
times. . . We might as well require a man to wear still the coat which
fitted him when a boy, as civilized society to remain ever under the
regimen of their barbarous ancestors.
In his Comment, the Solicitor General correctly opined, thus:
The present petition has far-reaching implications on the right of a
national to obtain redress for a wrong committed by an alien who
takes refuge under a law and regulation promulgated for a purpose
which does not contemplate the application thereof envisaged by the
alien. More specifically, the petition raises the question whether the
protection against attachment, garnishment or other court process
accorded to foreign currency deposits by PD No. 1246 and CB Circular
No. 960 applies when the deposit does not come from a lender or
investor but from a mere transient or tourist who is not expected to
maintain the deposit in the bank for long.
The resolution of this question is important for the protection of
nationals who are victimized in the forum by foreigners who are
merely passing through.
xxx xxx xxx
. . . Respondents China Banking Corporation and Central Bank of the
Philippines refused to honor the writ of execution issued in Civil Case
No. 89-3214 on the strength of the following provision of Central Bank
Circular No. 960:
Sec. 113. Exemption from attachment. — Foreign currency deposits
shall be exempt from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any
administrative body whatsoever.
Central Bank Circular No. 960 was issued pursuant to Section 7 of
Republic Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary Board of the Central
Bank shall promulgate such rules and regulations as may be necessary
to carry out the provisions of this Act which shall take effect after the
publication of such rules and regulations in the Official Gazette and in
a newspaper of national circulation for at least once a week for three
consecutive weeks. In case the Central Bank promulgates new rules
and regulations decreasing the rights of depositors, the rules and
regulations at the time the deposit was made shall govern.
The aforecited Section 113 was copied from Section 8 of Republic Act
NO. 6426, as amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. — All foreign
currency deposits authorized under this Act, as amended by
Presidential Decree No. 1035, as well as foreign currency deposits
authorized under Presidential Decree No. 1034, are hereby declared as
and considered of an absolutely confidential nature and, except upon
the written permission of the depositor, in no instance shall such
foreign currency deposits be examined, inquired or looked into by any
person, government official, bureau or office whether judicial or
administrative or legislative or any other entity whether public or
private: Provided, however, that said foreign currency deposits shall be
exempt from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any
administrative body whatsoever.
The purpose of PD 1246 in according protection against attachment,
garnishment and other court process to foreign currency deposits is
stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as amended by Presidential
Decree No. 1035, certain Philippine banking institutions and branches
of foreign banks are authorized to accept deposits in foreign currency;
WHEREAS, under the provisions of Presidential Decree No. 1034
authorizing the establishment of an offshore banking system in the
Philippines, offshore banking units are also authorized to receive
foreign currency deposits in certain cases;
WHEREAS, in order to assure the development and speedy growth of
the Foreign Currency Deposit System and the Offshore Banking System
in the Philippines, certain incentives were provided for under the two
Systems such as confidentiality of deposits subject to certain
exceptions and tax exemptions on the interest income of depositors
who are nonresidents and are not engaged in trade or business in the
Philippines;
WHEREAS, making absolute the protective cloak of confidentiality over
such foreign currency deposits, exempting such deposits from tax, and
guaranteeing the vested rights of depositors would better encourage
the inflow of foreign currency deposits into the banking institutions
authorized to accept such deposits in the Philippines thereby placing
such institutions more in a position to properly channel the same to
loans and investments in the Philippines, thus directly contributing to
the economic development of the country;
Thus, one of the principal purposes of the protection accorded to
foreign currency deposits is "to assure the development and speedy
growth of the Foreign Currency Deposit system and the Offshore
Banking in the Philippines" (3rd Whereas).
The Offshore Banking System was established by PD No. 1034. In turn,
the purposes of PD No. 1034 are as follows:
WHEREAS, conditions conducive to the establishment of an offshore
banking system, such as political stability, a growing economy and
adequate communication facilities, among others, exist in the
Philippines;
WHEREAS, it is in the interest of developing countries to have as wide
access as possible to the sources of capital funds for economic
development;
WHEREAS, an offshore banking system based in the Philippines will be
advantageous and beneficial to the country by increasing our links
with foreign lenders, facilitating the flow of desired investments into
the Philippines, creating employment opportunities and expertise in
international finance, and contributing to the national development
effort.
WHEREAS, the geographical location, physical and human resources,
and other positive factors provide the Philippines with the clear
potential to develop as another financial center in Asia;
On the other hand, the Foreign Currency Deposit system was created
by PD. No. 1035. Its purposes are as follows:
WHEREAS, the establishment of an offshore banking system in the
Philippines has been authorized under a separate decree;
WHEREAS, a number of local commercial banks, as depository bank
under the Foreign Currency Deposit Act (RA No. 6426), have the
resources and managerial competence to more actively engage in
foreign exchange transactions and participate in the grant of foreign
currency loans to resident corporations and firms;

WHEREAS, it is timely to expand the foreign currency lending authority
of the said depository banks under RA 6426 and apply to their
transactions the same taxes as would be applicable to transaction of
the proposed offshore banking units;
It is evident from the above [Whereas clauses] that the Offshore
Banking System and the Foreign Currency Deposit System were
designed to draw deposits from foreign lenders and investors (Vide
second Whereas of PD No. 1034; third Whereas of PD No. 1035). It is
these deposits that are induced by the two laws and given protection
and incentives by them.
Obviously, the foreign currency deposit made by a transient or a
tourist is not the kind of deposit encouraged by PD Nos. 1034 and
1035 and given incentives and protection by said laws because such
depositor stays only for a few days in the country and, therefore, will
maintain his deposit in the bank only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a transient. He
deposited his dollars with respondent China Banking Corporation only
for safekeeping during his temporary stay in the Philippines.
For the reasons stated above, the Solicitor General thus submits that
the dollar deposit of respondent Greg Bartelli is not entitled to the
protection of Section 113 of Central Bank Circular No. 960 and PD No.
1246 against attachment, garnishment or other court processes.6
In fine, the application of the law depends on the extent of its justice.
Eventually, if we rule that the questioned Section 113 of Central Bank
Circular No. 960 which exempts from attachment, garnishment, or any
other order or process of any court, legislative body, government
agency or any administrative body whatsoever, is applicable to a
foreign transient, injustice would result especially to a citizen
aggrieved by a foreign guest like accused Greg Bartelli. This would
negate Article 10 of the New Civil Code which provides that "in case of
doubt in the interpretation or application of laws, it is presumed that
the lawmaking body intended right and justice to prevail. "Ninguno
non deue enriquecerse tortizeramente con dano de otro." Simply
stated, when the statute is silent or ambiguous, this is one of those
fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).
It would be unthinkable, that the questioned Section 113 of Central
Bank No. 960 would be used as a device by accused Greg Bartelli for
wrongdoing, and in so doing, acquitting the guilty at the expense of
the innocent.
Call it what it may — but is there no conflict of legal policy here?
Dollar against Peso? Upholding the final and executory judgment of
the lower court against the Central Bank Circular protecting the
foreign depositor? Shielding or protecting the dollar deposit of a
transient alien depositor against injustice to a national and victim of a
crime? This situation calls for fairness against legal tyranny.
We definitely cannot have both ways and rest in the belief that we
have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No.
960 and PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426
are hereby held to be INAPPLICABLE to this case because of its
peculiar circumstances. Respondents are hereby REQUIRED to COMPLY
with the writ of execution issued in Civil Case No. 89-3214, "Karen
Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC
Makati and to RELEASE to petitioners the dollar deposit of respondent
Greg Bartelli y Northcott in such amount as would satisfy the
judgment.
SO ORDERED.
G.R. No. 72873 May 28, 1987
CARLOS ALONZO and CASIMIRA ALONZO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.
Perpetuo L.B. Alonzo for petitioners.
Luis R. Reyes for private respondent.
CRUZ, J.:
The question is sometimes asked, in serious inquiry or in curious
conjecture, whether we are a court of law or a court of justice. Do we
apply the law even if it is unjust or do we administer justice even
against the law? Thus queried, we do not equivocate. The answer is
that we do neither because we are a court both of law and of justice.
We apply the law with justice for that is our mission and purpose in
the scheme of our Republic. This case is an illustration.
Five brothers and sisters inherited in equal pro indiviso shares a parcel
of land registered in 'the name of their deceased parents under OCT
No. 10977 of the Registry of Deeds of Tarlac. 1
On March 15, 1963, one of them, Celestino Padua, transferred his
undivided share of the herein petitioners for the sum of P550.00 by
way of absolute sale. 2 One year later, on April 22, 1964, Eustaquia
Padua, his sister, sold her own share to the same vendees, in an
instrument denominated "Con Pacto de Retro Sale," for the sum of P
440.00. 3
By virtue of such agreements, the petitioners occupied, after the said
sales, an area corresponding to two-fifths of the said lot, representing
the portions sold to them. The vendees subsequently enclosed the
same with a fence. In 1975, with their consent, their son Eduardo
Alonzo and his wife built a semi-concrete house on a part of the
enclosed area.4
On February 25, 1976, Mariano Padua, one of the five coheirs, sought
to redeem the area sold to the spouses Alonzo, but his complaint was
dismissed when it appeared that he was an American citizen .5 On
May 27, 1977, however, Tecla Padua, another co-heir, filed her own
complaint invoking the same right of redemption claimed by her
brother. 6
The trial court * also dismiss this complaint, now on the ground that
the right had lapsed, not having been exercised within thirty days from
notice of the sales in 1963 and 1964. Although there was no written
notice, it was held that actual knowledge of the sales by the co-heirs
satisfied the requirement of the law. 7
In truth, such actual notice as acquired by the co-heirs cannot be
plausibly denied. The other co-heirs, including Tecla Padua, lived on
the same lot, which consisted of only 604 square meters, including the
portions sold to the petitioners . 8 Eustaquia herself, who had sold her
portion, was staying in the same house with her sister Tecla, who later
claimed redemption petition. 9 Moreover, the petitioners and the
private respondents were close friends and neighbors whose children
went to school together. 10

It is highly improbable that the other co-heirs were unaware of the
sales and that they thought, as they alleged, that the area occupied by
the petitioners had merely been mortgaged by Celestino and
Eustaquia. In the circumstances just narrated, it was impossible for
Tecla not to know that the area occupied by the petitioners had been
purchased by them from the other. co-heirs. Especially significant was
the erection thereon of the permanent semi-concrete structure by the
petitioners' son, which was done without objection on her part or of
any of the other co-heirs.
The only real question in this case, therefore, is the correct
interpretation and application of the pertinent law as invoked,
interestingly enough, by both the petitioners and the private
respondents. This is Article 1088 of the Civil Code, providing as
follows:
Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the
price of the sale, provided they do so within the period of one month
from the time they were notified in writing of the sale by the vendor.
In reversing the trial court, the respondent court ** declared that the
notice required by the said article was written notice and that actual
notice would not suffice as a substitute. Citing the same case of De
Conejero v. Court of Appeals 11 applied by the trial court, the
respondent court held that that decision, interpreting a like rule in
Article 1623, stressed the need for written notice although no
particular form was required.
Thus, according to Justice J.B.L. Reyes, who was the ponente of the
Court, furnishing the co-heirs with a copy of the deed of sale of the
property subject to redemption would satisfy the requirement for
written notice. "So long, therefore, as the latter (i.e., the
redemptioner) is informed in writing of the sale and the particulars
thereof," he declared, "the thirty days for redemption start running. "
In the earlier decision of Butte v. UY, 12 " the Court, speaking through
the same learned jurist, emphasized that the written notice should be
given by the vendor and not the vendees, conformably to a similar
requirement under Article 1623, reading as follows:
Art. 1623. The right of legal pre-emption or redemption shall not be
exercised except within thirty days from the notice in writing by the
prospective vendor, or by the vendors, as the case may be. The deed
of sale shall not be recorded in the Registry of Property, unless
accompanied by an affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of the adjoining
owners.
As "it is thus apparent that the Philippine legislature in Article 1623
deliberately selected a particular method of giving notice, and that
notice must be deemed exclusive," the Court held that notice given by
the vendees and not the vendor would not toll the running of the 30-
day period.
The petition before us appears to be an illustration of the Holmes
dictum that "hard cases make bad laws" as the petitioners obviously
cannot argue against the fact that there was really no written notice
given by the vendors to their co-heirs. Strictly applied and interpreted,
Article 1088 can lead to only one conclusion, to wit, that in view of
such deficiency, the 30 day period for redemption had not begun to
run, much less expired in 1977.
But as has also been aptly observed, we test a law by its results; and
likewise, we may add, by its purposes. It is a cardinal rule that, in
seeking the meaning of the law, the first concern of the judge should
be to discover in its provisions the in tent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as
to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good
motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we must
keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of
its peculiar circumstances. In such a situation, we are not bound,
because only of our nature and functions, to apply them just the
same, in slavish obedience to their language. What we do instead is
find a balance between the word and the will, that justice may be
done even as the law is obeyed.
As judges, we are not automatons. We do not and must not
unfeelingly apply the law as it is worded, yielding like robots to the
literal command without regard to its cause and consequence. "Courts
are apt to err by sticking too closely to the words of a law," so we are
warned, by Justice Holmes again, "where these words import a policy
that goes beyond them." 13 While we admittedly may not legislate,
we nevertheless have the power to interpret the law in such a way as
to reflect the will of the legislature. While we may not read into the
law a purpose that is not there, we nevertheless have the right to read
out of it the reason for its enactment. In doing so, we defer not to "the
letter that killeth" but to "the spirit that vivifieth," to give effect to the
law maker's will.
The spirit, rather than the letter of a statute determines its
construction, hence, a statute must be read according to its spirit or
intent. For what is within the spirit is within the letter but although it
is not within the letter thereof, and that which is within the letter but
not within the spirit is not within the statute. Stated differently, a thing
which is within the intent of the lawmaker is as much within the
statute as if within the letter; and a thing which is within the letter of
the statute is not within the statute unless within the intent of the
lawmakers. 14
In requiring written notice, Article 1088 seeks to ensure that the
redemptioner is properly notified of the sale and to indicate the date
of such notice as the starting time of the 30-day period of redemption.
Considering the shortness of the period, it is really necessary, as a
general rule, to pinpoint the precise date it is supposed to begin, to
obviate any problem of alleged delays, sometimes consisting of only a
day or two.
The instant case presents no such problem because the right of
redemption was invoked not days but years after the sales were made
in 1963 and 1964. The complaint was filed by Tecla Padua in 1977,
thirteen years after the first sale and fourteen years after the second
sale. The delay invoked by the petitioners extends to more than a
decade, assuming of course that there was a valid notice that tolled
the running of the period of redemption.
Was there a valid notice? Granting that the law requires the notice to
be written, would such notice be necessary in this case? Assuming
there was a valid notice although it was not in writing. would there be
any question that the 30-day period for redemption had expired long
before the complaint was filed in 1977?
In the face of the established facts, we cannot accept the private
respondents' pretense that they were unaware of the sales made by
their brother and sister in 1963 and 1964. By requiring written proof of
such notice, we would be closing our eyes to the obvious truth in favor
of their palpably false claim of ignorance, thus exalting the letter of
the law over its purpose. The purpose is clear enough: to make sure
that the redemptioners are duly notified. We are satisfied that in this
case the other brothers and sisters were actually informed, although
not in writing, of the sales made in 1963 and 1964, and that such
notice was sufficient.
Now, when did the 30-day period of redemption begin?
While we do not here declare that this period started from the dates
of such sales in 1963 and 1964, we do say that sometime between
those years and 1976, when the first complaint for redemption was
filed, the other co-heirs were actually informed of the sale and that
thereafter the 30-day period started running and ultimately expired.
This could have happened any time during the interval of thirteen
years, when none of the co-heirs made a move to redeem the
properties sold. By 1977, in other words, when Tecla Padua filed her
complaint, the right of redemption had already been extinguished
because the period for its exercise had already expired.
The following doctrine is also worth noting:
While the general rule is, that to charge a party with laches in the
assertion of an alleged right it is essential that he should have
knowledge of the facts upon which he bases his claim, yet if the
circumstances were such as should have induced inquiry, and the
means of ascertaining the truth were readily available upon inquiry,
but the party neglects to make it, he will be chargeable with laches,
the same as if he had known the facts. 15
It was the perfectly natural thing for the co-heirs to wonder why the
spouses Alonzo, who were not among them, should enclose a portion
of the inherited lot and build thereon a house of strong materials. This
definitely was not the act of a temporary possessor or a mere
mortgagee. This certainly looked like an act of ownership. Yet, given
this unseemly situation, none of the co-heirs saw fit to object or at
least inquire, to ascertain the facts, which were readily available. It
took all of thirteen years before one of them chose to claim the right
of redemption, but then it was already too late.
We realize that in arriving at our conclusion today, we are deviating
from the strict letter of the law, which the respondent court
understandably applied pursuant to existing jurisprudence. The said
court acted properly as it had no competence to reverse the doctrines
laid down by this Court in the above-cited cases. In fact, and this
should be clearly stressed, we ourselves are not abandoning the De
Conejero and Buttle doctrines. What we are doing simply is adopting
an exception to the general rule, in view of the peculiar circumstances
of this case.
The co-heirs in this case were undeniably informed of the sales
although no notice in writing was given them. And there is no doubt
either that the 30-day period began and ended during the 14 years
between the sales in question and the filing of the complaint for
redemption in 1977, without the co-heirs exercising their right of
redemption. These are the justifications for this exception.
More than twenty centuries ago, Justinian defined justice "as the
constant and perpetual wish to render every one his due." 16 That
wish continues to motivate this Court when it assesses the facts and
the law in every case brought to it for decision. Justice is always an
essential ingredient of its decisions. Thus when the facts warrants, we
interpret the law in a way that will render justice, presuming that it
was the intention of the lawmaker, to begin with, that the law be
dispensed with justice. So we have done in this case.
WHEREFORE, the petition is granted. The decision of the respondent
court is REVERSED and that of the trial court is reinstated, without any
pronouncement as to costs. It is so ordered.
G.R. No. 112099 February 21, 1995
ACHILLES C. BERCES, SR., petitioner,
vs.
HON. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA, JR., CHIEF
PRESIDENTIAL LEGAL COUNSEL ANTONIO CARPIO and MAYOR
NAOMI C. CORRAL OF TIWI, ALBAY, respondents.
QUIASON, J.:
This is a petition for certiorari and prohibition under Rule 65 of the
Revised Rules of Court with prayer for mandatory preliminary
injunction, assailing the Orders of the Office of the President as having
been issued with grave abuses of discretion. Said Orders directed the
stay of execution of the decision of the Sangguniang Panlalawigan
suspending the Mayor of Tiwi, Albay from office.
I
Petitioner filed two administrative cases against respondent Naomi C.
Corral, the incumbent Mayor of Tiwi, Albay with the Sangguniang
Panlalawigan of Albay, to wit:
(1) Administrative Case No. 02-92 for abuse of authority and/or
oppression for non-payment of accrued leave benefits due the
petitioner amounting to P36,779.02.
(2) Administrative Case No. 05-92 for dishonesty and abuse of
authority for installing a water pipeline which is being operated,
maintained and paid for by the municipality to service respondent's
private residence and medical clinic.
On July 1, 1993, the Sangguniang Panlalawigan disposed the two
Administrative cases in the following manner:
(1) Administrative Case No. 02-92
ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi, Albay, is
hereby ordered to pay Achilles Costo Berces, Sr. the sum of THIRTY-SIX
THOUSAND AND SEVEN HUNDRED SEVENTY-NINE PESOS and TWO
CENTAVOS (P36,779.02) per Voucher No. 352, plus legal interest due
thereon from the time it was approved in audit up to final payment, it
being legally due the Complainant representing the money value of his
leave credits accruing for services rendered in the municipality from
1988 to 1992 as a duly elected Municipal Councilor. IN ADDITION,
respondent Mayor NAOMI C. CORRAL is hereby ordered SUSPENDED
from office as Municipal Mayor of Tiwi, Albay, for a period of two (2)
months, effective upon receipt hereof for her blatant abuse of
authority coupled with oppression as a public example to deter others
similarly inclined from using public office as a tool for personal
vengeance, vindictiveness and oppression at the expense of the
Taxpayer (Rollo, p. 14).
(2) Administrative Case No. 05-92
WHEREFORE, premises considered, respondent Mayor NAOMI C.
CORRAL of Tiwi, Albay, is hereby sentenced to suffer the penalty of
SUSPENSION from office as Municipal Mayor thereof for a period of
THREE (3) MONTHS beginning after her service of the first penalty of
suspension ordered in Administrative Case No. 02-92. She is likewise
ordered to reimburse the Municipality of Tiwi One-half of the amount
the latter have paid for electric and water bills from July to December
1992, inclusive (Rollo, p. 16).
Consequently, respondent Mayor appealed to the Office of the
President questioning the decision and at the same time prayed for
the stay of execution thereof in accordance with Section 67(b) of the
Local Government Code, which provides:
Administrative Appeals. — Decision in administrative cases may, within
thirty (30) days from receipt thereof, be appealed to the following:
xxx xxx xxx
(b) The Office of the President, in the case of decisions of the
sangguniang panlalawigan and the sangguniang panglungsod of highly
urbanized cities and independent component cities.
Acting on the prayer to stay execution during the pendency of the
appeal, the Office of the President issued an Order on July 28, 1993,
the pertinent portions of which read as follows:
xxx xxx xxx
The stay of the execution is governed by Section 68 of R.A. No. 7160
and Section 6 of Administrative Order No. 18 dated 12 February 1987,
quoted below:
Sec. 68. Execution Pending Appeal. — An appeal shall not prevent a
decision from becoming final or executory. The respondent shall be
considered as having been placed under preventive suspension during
the pendency of an appeal in the events he wins such appeal. In the
event the appeal results in an exoneration, he shall be paid his salary
and such other emoluments during the pendency of the appeal (R.A.
No. 7160).
Sec. 6 Except as otherwise provided by special laws, the
execution of the decision/resolution/order appealed from is stayed
upon filing of the appeal within the period prescribed herein.
However, in all cases, at any time during the pendency of the appeal,
the Office of the President may direct or stay the execution of the
decision/resolution/order appealed from upon such terms and
conditions as it may deem just and reasonable (Adm. Order No. 18).
xxx xxx xxx
After due consideration, and in the light of the Petition for Review filed
before this Office, we find that a stay of execution pending appeal
would be just and reasonable to prevent undue prejudice to public
interest.
WHEREFORE, premises considered, this Office hereby orders the
suspension/stay of execution of:
a) the Decision of the Sangguniang Panlalawigan of Albay in
Administrative Case No. 02-92 dated 1 July 1993 suspending Mayor
Naomi C. Corral from office for a period of two (2) months, and
b) the Resolution of the Sangguniang Panlalawigan of Albay in
Administrative Case. No. 05-92 dated 5 July 1993 suspending Mayor
Naomi C. Corral from office for a period of three (3) months (Rollo, pp.
55-56).
Petitioner then filed a Motion for Reconsideration questioning the
aforesaid Order of the Office of the President.
On September 13, 1990, the Motion for Reconsideration was denied.
Hence, this petition.
II
Petitioner claims that the governing law in the instant case is R.A. No.
7160, which contains a mandatory provision that an appeal "shall not
prevent a decision from becoming final and executory." He argues that
administrative Order No. 18 dated February 12, 1987, (entitle
"Prescribing the Rules and Regulations Governing Appeals to Office
the President") authorizing the President to stay the execution of the
appealed decision at any time during the pendency of the appeal, was
repealed by R.A. No. 7160, which took effect on January 1, 1991 (Rollo,
pp. 5-6).
The petition is devoid of merit.
Petitioner invokes the repealing clause of Section 530 (f), R.A. No.
7160, which provides:
All general and special laws, acts, city charters, decrees, executive
orders, administrative regulations, part or parts thereof, which are
incosistent with any of the provisions of this Code, are hereby
repealed or modified accordingly.
The aforementioned clause is not an express repeal of Section 6 of
Administrative Order No. 18 because it failed to identify or designate
the laws or executive orders that are intended to be repealed (cf. I
Sutherland, Statutory Construction 467 [1943]).
If there is any repeal of Administrative Order No. 18 by R.A. No. 7160,
it is through implication though such kind of repeal is not favored (The
Philippine American Management Co., Inc. v. The Philippine American
Management Employees Association, 49 SCRA 194 [1973]). There is
even a presumption against implied repeal.
An implied repeal predicates the intended repeal upon the condition
that a substantial conflict must be found between the new and prior
laws. In the absence of an express repeal, a subsequent law cannot be
construed as repealing a prior law unless an irreconcible inconsistency
and repugnancy exists in the terms of the new and old laws (Iloilo
Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377
[1965]). The two laws must be absolutely incompatible (Compania
General de Tabacos v. Collector of Customs, 46 Phil. 8 [1924]). There
must be such a repugnancy between the laws that they cannot be
made to stand together (Crawford, Construction of Statutes 631
[1940]).
We find that the provisions of Section 68 of R.A. No. 7160 and Section
6 of Administrative Order No. 18 are not irreconcillably inconsistent
and repugnant and the two laws must in fact be read together.
The first sentence of Section 68 merely provides that an "appeal shall
not prevent a decision from becoming final or executory." As worded,
there is room to construe said provision as giving discretion to the
reviewing officials to stay the execution of the appealed decision.
There is nothing to infer therefrom that the reviewing officials are
deprived of the authority to order a stay of the appealed order. If the
intention of Congress was to repeal Section 6 of Administrative Order
No. 18, it could have used more direct language expressive of such
intention.
The execution of decisions pending appeal is procedural and in the
absence of a clear legislative intent to remove from the reviewing
officials the authority to order a stay of execution, such authority can
provided in the rules and regulations governing the appeals of elective
officials in administrative cases.
The term "shall" may be read either as mandatory or directory
depending upon a consideration of the entire provisions in which it is
found, its object and the consequences that would follow from
construing it one way or the other (cf. De Mesa v. Mencias, 18 SCRA
533 [1966]). In the case at bench, there is no basis to justify the
construction of the word as mandatory.
The Office of the President made a finding that the execution of the
decision of the Sagguniang Panlalawigan suspending respondent
Mayor from office might be prejudicial to the public interest. Thus, in
order not to disrupt the rendition of service by the mayor to the
public, a stay of the execution of the decision is in order.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
G.R. No. 103982 December 11, 1992
ANTONIO A. MECANO, petitioner,
vs.
COMMISSION ON AUDIT, respondent.
CAMPOS, JR., J.:
Antonio A. Mecano, through a petition for certiorari, seeks to nullify
the decision of the Commission on Audit (COA, for brevity) embodied
in its 7th Indorsement, dated January 16, 1992, denying his claim for
reimbursement under Section 699 of the Revised Administrative Code
(RAC), as amended, in the total amount of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI).
He was hospitalized for cholecystitis from March 26, 1990 to April 7,
1990, on account of which he incurred medical and hospitalization
expenses, the total amount of which he is claiming from the COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S.
Lim (Director Lim, for brevity), he requested reimbursement for his
expenses on the ground that he is entitled to the benefits under
Section 6991 of the RAC, the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in
performance of duty. — When a person in the service of the national
government of a province, city, municipality or municipal district is so
injured in the performance of duty as thereby to receive some actual
physical hurt or wound, the proper Head of Department may direct
that absence during any period of disability thereby occasioned shall
be on full pay, though not more than six months, and in such case he
may in his discretion also authorize the payment of the medical
attendance, necessary transportation, subsistence and hospital fees of
the injured person. Absence in the case contemplated shall be charged
first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly with the
performance of some act in the line of duty, the Department head
may in his discretion authorize the payment of the necessary hospital
fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement
dated June 22, 1990, to the Secretary of Justice, along with the
comment, bearing the same date, of Gerarda Galang, Chief, LED of the
NBI, "recommending favorable action thereof". Finding petitioner's
illness to be service-connected, the Committee on Physical
Examination of the Department of Justice favorably recommended the
payment of petitioner's claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th
Indorsement dated November 21, 1990, returned petitioner's claim to
Director Lim, having considered the statements of the Chairman of the
COA in its 5th Indorsement dated 19 September 1990, to the effect
that the RAC being relied upon was repealed by the Administrative
Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of
Opinion No. 73, S. 19912 dated April 26, 1991 of then Secretary of
Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that
"the issuance of the Administrative Code did not operate to repeal or
abregate in its entirety the Revised Administrative Code, including the
particular Section 699 of the latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted
anew Mecano's claim to then Undersecretary Bello for favorable
consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary
Drilon forwarded petitioner's claim to the COA Chairman,
recommending payment of the same. COA Chairman Eufemio C.
Domingo, in his 7th Indorsement of January 16, 1992, however, denied
petitioner's claim on the ground that Section 699 of the RAC had been
repealed by the Administrative Code of 1987, solely for the reason
that the same section was not restated nor re-enacted in the
Administrative Code of 1987. He commented, however, that the claim
may be filed with the Employees' Compensation Commission,
considering that the illness of Director Mecano occurred after the
effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of
Justice Eduardo Montenegro to Director Lim under a 9th Indorsement
dated February 7, 1992, with the advice that petitioner "elevate the
matter to the Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987
repealed or abrogated Section 699 of the RAC, this petition was
brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended,
and on the aforementioned Opinion No. 73, S. 1991 of Secretary
Drilon. He further maintains that in the event that a claim is filed with
the Employees' Compensation Commission, as suggested by
respondent, he would still not be barred from filing a claim under the
subject section. Thus, the resolution of whether or not there was a
repeal of the Revised Administrative Code of 1917 would decide the
fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of
the Administrative Code of 1987 (Exec. Order No. 292) operated to
revoke or supplant in its entirety the Revised Administrative Code of
1917. The COA claims that from the "whereas" clauses of the new
Administrative Code, it can be gleaned that it was the intent of the
legislature to repeal the old Code. Moreover, the COA questions the
applicability of the aforesaid opinion of the Secretary of Justice in
deciding the matter. Lastly, the COA contends that employment-
related sickness, injury or death is adequately covered by the
Employees' Compensation Program under P.D. 626, such that to allow
simultaneous recovery of benefits under both laws on account of the
same contingency would be unfair and unjust to the Government.
The question of whether a particular law has been repealed or not by
a subsequent law is a matter of legislative intent. The lawmakers may
expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and
portions thereof, that are intended to be repealed.3 A declaration in a
statute, usually in its repealing clause, that a particular and specific
law, identified by its number or title, is repealed is an express repeal;
all others are implied repeals.4
In the case of the two Administrative Codes in question, the
ascertainment of whether or not it was the intent of the legislature to
supplant the old Code with the new Code partly depends on the
scrutiny of the repealing clause of the new Code. This provision is
found in Section 27, Book VII (Final Provisions) of the Administrative
Code of 1987 which reads:
Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and
regulations, or portions thereof, inconsistent with this Code are hereby
repealed or modified accordingly.
The question that should be asked is: What is the nature of this
repealing clause? It is certainly not an express repealing clause
because it fails to identify or designate the act or acts that are
intended to be repealed.5 Rather, it is an example of a general
repealing provision, as stated in Opinion No. 73, S. 1991. It is a clause
which predicates the intended repeal under the condition that
substantial conflict must be found in existing and prior acts. The failure
to add a specific repealing clause indicates that the intent was not to
repeal any existing law, unless an irreconcilable inconcistency and
repugnancy exist in the terms of the new and old laws.6 This latter
situation falls under the category of an implied repeal.
Repeal by implication proceeds on the premise that where a statute of
later date clearly reveals an intention on the part of the legislature to
abrogate a prior act on the subject, that intention must be given
effect.7 Hence, before there can be a repeal, there must be a clear
showing on the part of the lawmaker that the intent in enacting the
new law was to abrogate the old one. The intention to repeal must be
clear and manifest;8 otherwise, at least, as a general rule, the later act
is to be construed as a continuation of, and not a substitute for, the
first act and will continue so far as the two acts are the same from the
time of the first enactment.9
There are two categories of repeal by implication. The first is where
provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict
constitutes an implied repeal of the earlier one. The second is if the
later act covers the whole subject of the earlier one and is clearly
intended as a substitute, it will operate to repeal the earlier law.10
Implied repeal by irreconcilable inconsistency takes place when the
two statutes cover the same subject matter; they are so clearly
inconsistent and incompatible with each other that they cannot be
reconciled or harmonized; and both cannot be given effect, that is,
that one law cannot be enforced without nullifying the other.11
Comparing the two Codes, it is apparent that the new Code does not
cover nor attempt to cover the entire subject matter of the old Code.
There are several matters treated in the old Code which are not found
in the new Code, such as the provisions on notaries public, the leave
law, the public bonding law, military reservations, claims for sickness
benefits under Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the
two Codes on the matter of the subject claim are in an irreconcilable
conflict. In fact, there can be no such conflict because the provision on
sickness benefits of the nature being claimed by petitioner has not
been restated in the Administrative Code of 1987. However, the COA
would have Us consider that the fact that Section 699 was not restated
in the Administrative Code of 1987 meant that the same section had
been repealed. It further maintained that to allow the particular
provisions not restated in the new Code to continue in force argues
against the Code itself. The COA anchored this argument on the
whereas clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a
new Administrative Code which incorporate in a unified document the
major structural, functional and procedural principles and rules of
governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code — the
Administrative Code of 1987. This contention is untenable.
The fact that a later enactment may relate to the same subject matter
as that of an earlier statute is not of itself sufficient to cause an
implied repeal of the prior act, since the new statute may merely be
cumulative or a continuation of the old one. 12 What is necessary is a
manifest indication of legislative purpose to repeal.13
We come now to the second category of repeal — the enactment of a
statute revising or codifying the former laws on the whole subject
matter. This is only possible if the revised statute or code was intended
to cover the whole subject to be a complete and perfect system in
itself. It is the rule that a subsequent statute is deemed to repeal a
prior law if the former revises the whole subject matter of the former
statute.14 When both intent and scope clearly evidence the idea of a
repeal, then all parts and provisions of the prior act that are omitted
from the revised act are deemed repealed.15 Furthermore, before
there can be an implied repeal under this category, it must be the
clear intent of the legislature that the later act be the substitute to the
prior act.16
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what
appears clear is the intent to cover only those aspects of government
that pertain to administration, organization and procedure,
understandably because of the many changes that transpired in the
government structure since the enactment of the RAC decades of
years ago. The COA challenges the weight that this opinion carries in
the determination of this controversy inasmuch as the body which had
been entrusted with the implementation of this particular provision
has already rendered its decision. The COA relied on the rule in
administrative law enunciated in the case of Sison vs. Pangramuyen17
that in the absence of palpable error or grave abuse of discretion, the
Court would be loathe to substitute its own judgment for that of the
administrative agency entrusted with the enforcement and
implementation of the law. This will not hold water. This principle is
subject to limitations. Administrative decisions may be reviewed by
the courts upon a showing that the decision is vitiated by fraud,
imposition or mistake.18 It has been held that Opinions of the
Secretary and Undersecretary of Justice are material in the
construction of statutes in pari materia.19
Lastly, it is a well-settled rule of statutory construction that repeals of
statutes by implication are not favored.20 The presumption is against
inconsistency and repugnancy for the legislature is presumed to know
the existing laws on the subject and not to have enacted inconsistent
or conflicting statutes.21
This Court, in a case, explains the principle in detail as follows:
"Repeals by implication are not favored, and will not be decreed
unless it is manifest that the legislature so intended. As laws are
presumed to be passed with deliberation with full knowledge of all
existing ones on the subject, it is but reasonable to conclude that in
passing a statute it was not intended to interfere with or abrogate any
former law relating to some matter, unless the repugnancy between
the two is not only irreconcilable, but also clear and convincing, and
flowing necessarily from the language used, unless the later act fully
embraces the subject matter of the earlier, or unless the reason for
the earlier act is beyond peradventure renewed. Hence, every effort
must be used to make all acts stand and if, by any reasonable
construction, they can be reconciled, the later act will not operate as a
repeal of the earlier.22
Regarding respondent's contention that recovery under this subject
section shall bar the recovery of benefits under the Employees'
Compensation Program, the same cannot be upheld. The second
sentence of Article 173, Chapter II, Title II (dealing on Employees'
Compensation and State Insurance Fund), Book IV of the Labor Code,
as amended by P.D. 1921, expressly provides that "the payment of
compensation under this Title shall not bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code . . .
whose benefits are administered by the system (meaning SSS or GSIS)
or by other agencies of the government."
WHEREFORE, premises considered, the Court resolves to GRANT the
petition; respondent is hereby ordered to give due course to
petitioner's claim for benefits. No costs.
SO ORDERED.
G.R. No. 141667 July 17, 2006
REPUBLIC OF THE PHILIPPINES, represented by NATIONAL
ELECOMMUNICATIONS COMMISSION (NTC), petitioner,
vs.
INTERNATIONAL COMMUNICATIONS CORPORATION (ICC),
respondent.
DECISION
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court,
petitioner Republic, through the National Telecommunications
Commission (NTC), seeks the annulment and setting aside of the
Amended Decision1 dated September 30, 1999 of the Court of
Appeals (CA), setting aside the orders dated June 4, 1996 and June 25,
1997 of the NTC insofar as said orders required respondent
International Communications Corporation (ICC) to pay the amount of
P1,190,750.50 by way of permit fee as a condition for the grant of a
provisional authority to operate an international telecommunications
leased circuit service, and the Resolution2 dated January 24, 2000,
denying NTC's motion for reconsideration.
There is no dispute as to the facts:
On April 4, 1995, respondent ICC, holder of a legislative franchise
under Republic Act (RA) No. 7633 to operate domestic
telecommunications, filed with the NTC an application for a Certificate
of Public Convenience and Necessity to install, operate, and maintain
an international telecommunications leased circuit service between
the Philippines and other countries, and to charge rates therefor, with
provisional authority for the purpose.
In an Order3 dated June 4, 1996, the NTC approved the application for
a provisional authority subject, among others, to the condition:
2. That applicant [ICC] shall pay a permit fee in the amount of
P1,190,750.00, in accordance with section 40(g) of the Public Service
Act,4 as amended;
Respondent ICC filed a motion for partial reconsideration of the Order
insofar as the same required the payment of a permit fee. In a
subsequent Order dated June 25, 1997, the NTC denied the motion.
Therefrom, ICC went to the CA on a petition for certiorari with prayer
for a temporary restraining order and/or writ of preliminary
injunction, questioning the NTC's imposition against it of a permit fee
of P1,190,750.50 as a condition for the grant of the provisional
authority applied for.
In its original decision5 dated January 29, 1999, the CA ruled in favor
of the NTC whose challenged orders were sustained, and accordingly
denied ICC's certiorari petition, thus:
WHEREFORE, the instant petition is hereby DENIED. In view thereof,
the assailed orders dated 4 June 1996 and 25 June 1997, requiring the
payment of permit fees in the amount of One Million One Hundred
Ninety Thousand Seven Hundred Fifty and 50/100 Pesos
(P1,190,750.50) as a condition for the grant of a Provisional Authority
to operate an International Circuit service, are hereby AFFIRMED.
ACCORDINGLY, the International Communications Corporation is
hereby ordered to pay the amount of One Million One Hundred Ninety
Thousand Seven Hundred Fifty and 50/100 Pesos (P1,190,750.50) to
the National Telecommunications Commission.
SO ORDERED.
In time, ICC moved for a reconsideration. This time, the CA, in its
Amended Decision dated September 30, 1999, reversed itself, to wit:
WHEREFORE, the instant Motion for Reconsideration is hereby
GRANTED. Accordingly, the Decision dated 29 January 1999 including
the imposition by the public respondent of permit fees with respect to
[ICC’s] international leased circuit service is hereby REVERSED.
Judgment is hereby rendered, setting aside the questioned orders
dated 04 June 1996 and 25 June 1997, insofar as they impose upon
petitioner ICC the payment of the amount of One Million One
Hundred Ninety Thousand Seven Hundred Fifty and Fifty Centavos
(P1,190,750.50) by way of permit fees as a condition for the grant of a
provisional authority to operate an International Leased Circuit
Service. No costs.
SO ORDERED. (Word in bracket added).
Petitioner NTC filed a motion for reconsideration, but its motion was
denied by the CA in its equally challenged Resolution dated January
24, 2000. Hence, NTC's present recourse claiming that the CA erred in
ruling that:
1. NTC has arrogated upon itself the power to tax an entity;
2. Section 40(g) of the Public Service Act has been amended by Section
5(g) of R.A. 7925;6
3. The imposition of permit fees is no longer authorized by R.A. 7925;
and
4. The imposed permit fee in the amount of P1,190,750.50 for
respondent's provisional authority is exorbitant.
Before addressing the issues raised, we shall first dwell on the
procedural matter raised by respondent ICC, namely, that the present
petition should be dismissed outright for having been filed out of time.
It is respondent's posture that petitioner's motion for reconsideration
filed with the CA vis-a-vis the latter's Amended Decision is a pro forma
motion and, therefore, did not toll the running of the reglementary
period to come to this Court via this petition for review.
Under Section 2 of Rule 45 of the Rules of Court, a recourse to this
Court by way of a petition for review must be filed within fifteen (15)
days from notice of the judgment or final order or resolution appealed
from, or of the denial of the petitioner's motion for new trial or
reconsideration filed in due time after notice of the judgment. While a
motion for reconsideration ordinarily tolls the period for appeal, one
that fails to point out the findings or conclusions which were
supposedly contrary to law or the evidence does not have such an
effect on the reglementary period as it is merely a pro forma motion.7
In arguing for the outright dismissal of this petition, respondent ICC
claims that the motion for reconsideration filed by petitioner NTC in
connection with the CA’s Amended Decision failed to point out
specifically the findings or conclusions of the CA which were
supposedly contrary to law. Respondent contends that the issues
raised by the petitioner in its motion for reconsideration were mere
reiterations of the same issues which had already been considered and
passed upon by the CA when it promulgated its Amended Decision. On
this premise, respondent maintains that petitioner’s aforementioned
motion for reconsideration is a mere pro forma motion that did not
toll the period for filing the present petition.
Under established jurisprudence, the mere fact that a motion for
reconsideration reiterates issues already passed upon by the court
does not, by itself, make it a pro forma motion.8 Among the ends to
which a motion for reconsideration is addressed is precisely to
convince the court that its ruling is erroneous and improper, contrary
to the law or evidence; and in so doing, the movant has to dwell of
necessity on issues already passed upon. If a motion for
reconsideration may not discuss those issues, the consequence would
be that after a decision is rendered, the losing party would be confined
to filing only motions for reopening and new trial.9
Where there is no apparent intent to employ dilatory tactics, courts
should be slow in declaring outright a motion for reconsideration as
pro forma. The doctrine relating to pro forma motions has a direct
bearing upon the movant's valuable right to appeal. Hence, if
petitioner's motion for reconsideration was indeed pro forma, it would
still be in the interest of justice to review the Amended Decision a quo
on the merits, rather than to abort the appeal due to a technicality,
especially where, as here, the industry involved (telecommunications)
is vested with public interest. All the more so given that the instant
petition raises some arguments that are well-worth resolving for
future reference.
This brings us to the substantive merits of the petition.
In its Amended Decision, the CA ruled that petitioner NTC had
arrogated upon itself the power to tax an entity, which it is not
authorized to do. Petitioner disagreed, contending the fee in question
is not in the nature of a tax, but is merely a regulatory measure.
Section 40(g) of the Public Service Act provides:
Sec. 40. The Commission is authorized and ordered to charge and
collect from any public service or applicant, as the case may be, the
following fees as reimbursement of its expenses in the authorization,
supervision and/or regulation of the public services:
xxx xxx xxx
g) For each permit, authorizing the increase in equipment, the
installation of new units or authorizing the increase of capacity, or the
extension of means or general extensions in the services, twenty
centavos for each one hundred pesos or fraction of the additional
capital necessary to carry out the permit. (Emphasis supplied)
Clearly, Section 40(g) of the Public Service Act is not a tax measure but
a simple regulatory provision for the collection of fees imposed
pursuant to the exercise of the State’s police power. A tax is imposed
under the taxing power of government principally for the purpose of
raising revenues. The law in question, however, merely authorizes and
requires the collection of fees for the reimbursement of the
Commission's expenses in the authorization, supervision and/or
regulation of public services. There can be no doubt then that
petitioner NTC is authorized to collect such fees. However, the amount
thereof must be reasonably related to the cost of such supervision
and/or regulation.10
Petitioner NTC also assails the CA's ruling that Section 40(g) of the
Public Service Act had been amended by Section 5(g) of R.A. No. 7925,
which reads:
Sec. 5. Responsibilities of the National Telecommunications
Commission. - The National Telecommunications Commission
(Commission) shall be the principal administrator of this Act and as
such shall take the necessary measures to implement the policies and
objectives set forth in this Act. Accordingly, in addition to its existing
functions, the Commission shall be responsible for the following:
xxx xxx xxx
g) In the exercise of its regulatory powers, continue to impose such
fees and charges as may be necessary to cover reasonable costs and
expenses for the regulation and supervision of the operations of
telecommunications entities. (Emphasis supplied)
The CA ratiocinated that while Section 40(g) of the Public Service Act
(CA 146, as amended), supra, allowed NTC to impose fees as
reimbursement of its expenses related to, among other things, the
"authorization" of public services, Section 5(g), above, of R.A. No.
7921 no longer speaks of "authorization" but only of "regulation" and
"supervision." To the CA, the omission by Section 5(g) of R.A. No. 7921
of the word "authorization" found in Section 40(g) of the Public
Service Act, as amended, meant that the fees which NTC may impose
are only for reimbursement of its expenses for regulation and
supervision but no longer for authorization purposes.
We find, however, that NTC is correct in saying that there is no
showing of legislative intent to repeal, even impliedly, Section 40(g),
supra, of the Public Service Act, as amended. An implied repeal is
predicated on a substantial conflict between the new and prior laws.
In the absence of an express repeal, a subsequent law cannot be
construed as repealing a prior one unless an irreconcilable
inconsistency and repugnancy exist in the terms of the new and old
laws.11 The two laws must be absolutely incompatible such that they
cannot be made to stand together.12
Courts of justice, when confronted with apparently conflicting statutes
or provisions, should endeavor to reconcile the same instead of
declaring outright the validity of one as against the other. Such alacrity
should be avoided. The wise policy is for the judge to harmonize such
statutes or provisions if this is possible, bearing in mind that they are
equally the handiwork of the same legislature, and so give effect to
both while at the same time also according due respect to a
coordinate department of the government. It is this policy the Court
will apply in arriving at the interpretation of the laws and the
conclusions that should follow therefrom.13
It is a rule of statutory construction that repeals by implication are not
favored. An implied repeal will not be allowed unless it is convincingly
and unambiguously demonstrated that the two laws are so clearly
repugnant and patently inconsistent with each other that they cannot
co-exist. This is based on the rationale that the will of the legislature
cannot be overturned by the judicial function of construction and
interpretation. Courts cannot take the place of Congress in repealing
statutes. Their function is to try to harmonize, as much as possible,
seeming conflicts in the laws and resolve doubts in favor of their
validity and co-existence.14
Here, there does not even appear to be a conflict between Section
40(g) of the Public Service Act, as amended, and Section 5(g) of R.A.
7925. In fact, the latter provision directs petitioner NTC to "continue to
impose such fees and charges as may be necessary to cover
reasonable costs and expenses for the regulation and supervision of
telecommunications entities." The absence alone of the word
"authorization" in Section 5(g) of R.A. No. 7921 cannot be construed
to mean that petitioner NTC had thus been deprived of the power to
collect such fees. As pointed out by the petitioner, the words
"authorization, supervision and/or regulation" used in Section 40(g) of
the Public Service Act are not distinct and completely separable
concepts which may be taken singly or piecemeal. Taken in their
entirety, they are the quintessence of the Commission's regulatory
functions, and must go hand-in-hand with one another. In petitioner's
own words, "[t]he Commission authorizes, supervises and regulates
telecommunications entities and these functions... cannot be
considered singly without destroying the whole concept of the
Commission's regulatory functions."15 Hence, petitioner NTC is
correct in asserting that the passage of R.A. 7925 did not bring with it
the abolition of permit fees.
However, while petitioner had made some valid points of argument,
its position must, of necessity, crumble on the fourth issue raised in its
petition. Petitioner itself admits that the fees imposed are precisely
regulatory and supervision fees, and not taxes. This necessarily
implies, however, that such fees must be commensurate to the costs
and expenses involved in discharging its supervisory and regulatory
functions. In the words of Section 40(g) of the Public Service Act itself,
the fees and charges which petitioner NTC is authorized to collect from
any public service or applicant are limited to the "reimbursement of its
expenses in the authorization, supervision and/or regulation of public
services." It is difficult to comprehend how the cost of licensing,
regulating, and surveillance could amount to P1,190,750.50. The CA
was correct in finding the amount imposed as permit fee exorbitant
and in complete disregard of the basic limitation that the fee should
be at least approximately commensurate to the expense. Petitioner
itself admits that it had imposed the maximum amount possible under
the Public Service Act, as amended. That is hardly taking into
consideration the actual costs of fulfilling its regulatory and
supervisory functions.
Independent of the above, there is one basic consideration for the
dismissal of this petition, about which petitioner NTC did not bother to
comment at all. We refer to the fact that, as respondent ICC aptly
observed, the principal ground given by the CA in striking down the
imposition of the P1,190,750.50 fee is that respondent ICC is entitled
to the benefits of the so-called "parity clause" embodied in Section 23
of R.A. No. 7925, to wit:
Section 23. Equality of Treatment in the Telecommunications Industry.
- Any advantage, favor, privilege, exemption, or immunity granted
under existing franchises, or may hereafter be granted, shall ipso facto
become part of previously granted telecommunications franchises and
shall be accorded immediately and unconditionally to the grantees of
such franchises x x x.
In this connection, it is significant to note that the subsequent
congressional franchise granted to the Domestic Satellite Corporation
under Presidential Decree No. 947, states:
Section 6. In consideration of the franchise and rights hereby granted,
the grantee shall pay to the Republic of the Philippines during the life
of this franchise a tax of one-half percent of gross earnings derived by
the grantee from its operation under this franchise and which
originate from the Philippines. Such tax shall be due and payable
annually within ten days after the audit and approval of the accounts
by the Commission on Audit as prescribed in Section 11 hereof and
shall be in lieu of all taxes, assessments, charges, fees, or levies of any
kind, nature, or description levied, established or collected by any
municipal, provincial, or national authority x x x (Emphasis supplied)
The CA was correct in ruling that the above-quoted provision is, by
law, considered as ipso facto part of ICC's franchise due to the "parity
clause" embodied in Section 23 of R.A. No. 7925. Accordingly,
respondent ICC cannot be made subject to the payment of the subject
fees because its payment of the franchise tax is "in lieu" of all other
taxes and fees.
WHEREFORE, the petition is hereby DENIED and the assailed Amended
Decision and Resolution of the CA are AFFIRMED.
SO ORDERED.

G.R. No. 147192 June 27, 2006
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
THE CITY ASSESSOR OF ILOILO CITY, THE REGISTER OF DEEDS OF
ILOILO CITY and ROSALINA FRANCISCO, represented by her attorney-
in-fact, SALVADOR PAJA I,* Respondents.
DECISION
CORONA, J.:
Assailed in this present petition for review under Rule 45 of the Rules
of Court are the decision1 and resolution2 of the Court of Appeals
(CA) dismissing a petition for annulment of judgment3 filed by
petitioner, the Government Service Insurance System (GSIS), in
Cadastral Case No. 84 and another unnumbered cadastral case
decided by the Regional Trial Court (RTC), Branches 36 and 31, of Iloilo
City, respectively.
In the two cadastral cases, private respondent Rosalina Francisco
petitioned for the issuance of new transfer certificates of title (TCTs) in
her name over two parcels of land, to wit:
TCT No. 41681
A parcel of land known as Lot No. 6, Block 2, of the Subdivision Plan
(LRC) Psd-184005 being a portion of Lot 2214-B, Jaro Cadastre, LRC
(GLRO) Record No. 8 situated in the District of Jaro, Iloilo City, Island of
Panay, registered in the name of GSIS c/o Baldomero Dagdag, of legal
age, Filipino citizen and resident of Jaro, Iloilo City, Philippines on June
28, 1991.
TCT No. 48580
A parcel of land known as Lot No. 22, Block 2, of the Subdivision
Record No. 8 situated in the District of Jaro, Iloilo City, Island of Panay,
registered in the name of GSIS c/o Rodolfo Ceres, of legal age, Filipino
Citizen and a resident of Iloilo City, Philippines, with an area of Two
Hundred Ninety Four (294) square meters, more or less.
Private respondent Francisco purchased the subject properties in the
auction sales held for the satisfaction of delinquent real property
taxes. After the lapse of the one-year redemption period and the
failure of the registered owner or any interested person to redeem the
properties, the Iloilo City Treasurer issued the corresponding final bill
of sale to private respondent. The sales were later on duly annotated
on the certificates of title on file with the Register of Deeds. However,
the final bill of sale could not be registered because the owner’s
duplicate certificate of title was unavailable at that time.
To effect registration in her name, private respondent instituted
separate petitions for the entry of title in her name over the two lots
with the RTCs of Iloilo City. Both petitions were unopposed.
Finding merit in her petitions, the RTCs, in separate orders issued on
separate dates, directed the issuance of new duplicate TCTs. The
dispositive portion of the April 29, 1993 order of RTC Branch 36 in
Cadastral Case No. 84 read:
WHEREFORE, premises considered, the Register of Deeds of the City of
Iloilo is hereby ordered to issue new owner’s duplicate copy of
Transfer Certificate of Title No. T-41681 in the name of GSIS c/o
Baldomero Dagdag, upon payment of the required legal fees.
Accordingly, the lost copy of the subject title is hereby declared as
NULL and VOID.4
On the other hand, RTC Branch 31 also issued an order, dated
November 8, 1994, in the other (unnumbered) cadastral case, the
dispositive portion of which read:
WHEREFORE, as prayed for, the Register of Deeds, City of Iloilo is
hereby directed to issue a new owner’s duplicate certificate of Title
No. T-48580 in the name of the G.S.I.S. C/O RODOLFO CERES, the
registered owner, basing the same on the Original Certificate of Title
found intact and existing in the Office of the Register of Deeds and the
latter to cancel Transfer Certificate of Title No. T-48580 together with
the encumbrances therein and to issue a new Transfer Certificate of
Title in the name of ROSALINA FRANCISCO of legal age, single, Filipino
Citizen and resident of Brgy. Tacas, Jaro, Iloilo City, Philippines. The
owner’s duplicate certificate of title No. T-48580 which was not
surrendered is hereby declared null and void.5
No appeal was made from both orders of the courts a quo, hence,
they became final and executory.
In a petition to annul the judgment of the trial court, petitioner, as the
alleged previous owner of the parcels of land sold at public auction,
assailed the orders of the RTCs of Iloilo City before the CA. It claimed
that the assessment of real property taxes on it (GSIS) was void since,
under its charter (RA 8291), it was exempt from all forms of taxes
(including real property taxes on the properties held by it) that were
due to the local governments where such properties were located.
Furthermore, it claimed that the proceedings in the assessment and
levy of said taxes, as well as the sale of the properties at public
auction, were held without notice to it, hence, its right to due process
was violated.
The appellate court gave no credence to the arguments of petitioner
and dismissed its petition. According to the CA, the exemption of GSIS
under its charter was not applicable pursuant to Section 234(a) of RA
7160, otherwise known as The Local Government Code of 1991 (LGC).
Under that law, the tax-exempt status of GSIS cannot be invoked
where the actual use or beneficial ownership of the properties under
its title has been conveyed to another person.6 The CA added that
there was also no basis for GSIS’s claim that it was denied due
process.7
Petitioner filed a motion for reconsideration but this was denied by
the CA, hence, it brought this case to us via a petition for review on
certiorari under Rule 45 of the Rules of Court.
In this petition, petitioner essentially faults the CA for ruling that its
properties were not exempt from all forms of taxes under its charter
(RA 8291) and that the proceedings on the assessment and levy of its
properties were legal.
In support of its position, petitioner points to Section 39 of RA 8291
which reads:
Section 39. Exemption from Tax, Legal Process and Lien. – It is hereby
declared that the actuarial solvency of the funds of the GSIS shall be
preserved and maintained at all times and that the contribution rates
are necessary to sustain the benefits under this Act shall be kept low
as possible in order not to burden the member of the GSIS and their
employers. Taxes imposed on the GSIS tend to impair the actuarial
solvency of its funds and increase the contribution rate necessary to
sustain the benefits of this Act. Accordingly, notwithstanding any laws
to the contrary, the GSIS, its assets, revenues, including all accruals
thereto, and benefits paid shall be exempt from all taxes, assessment
fees, charges or duties of all kinds. These exemptions shall continue
unless expressly and specifically revoked and any assessment against
the GSIS as of the approval of this Act are hereby considered paid.
Consequently, all laws, ordinances, regulations, issuances, opinions, or
jurisprudence contrary to or in derogation of this provision are hereby
deemed repealed, superseded and rendered ineffective and without
legal force and effect.
xxx xxx xxx
The funds and/or properties referred to herein as well as the benefits,
sums or monies corresponding to the benefits under this Act shall be
exempt from attachment, garnishment, execution, levy or other
processes issued by the courts, quasi-judicial agencies or
administrative bodies including the Commission on Audit (COA)
disallowances and from all financial obligations of the members,
including his pecuniary accountability arising from or caused or
occasioned by his exercise or performance of his official functions or
duties, or incurred relative to or in connection with his position or
otherwise, is in favor of GSIS.8 (italics supplied)
We find no reversible error in the decision and resolution of the CA.
Even if the charter of the GSIS generally exempts it from tax liabilities,
the prescription is not so encompassing as to make the tax exemption
applicable to the properties in dispute here.
In the early case of City of Baguio v. Busuego,9 we held that the tax-
exempt status of the GSIS could not prevent the accrual of the real
estate tax liability on properties transferred by it to a private buyer
through a contract to sell. In the present case, GSIS had already
conveyed the properties to private persons thus making them subject
to assessment and payment of real property taxes.10 The alienation of
the properties sold by GSIS was the proximate cause and necessary
consequence of the delinquent taxes due.
The doctrine laid down in City of Baguio is reflected in Section 234 (a)
of the LGC,11 which states:
Section 234. Exemptions from Real Property Tax. — The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been
granted, for consideration or otherwise, to a taxable person.
(emphasis supplied)
Petitioner, however, claims that RA 8291, which took effect in 1997,
abrogated Section 234 (a) of the LGC of 1991.
We disagree.
The abrogation or repeal of a law cannot be assumed; the intention to
revoke must be clear and manifest.12 RA 8291 made no express repeal
or abrogation of the provisions of RA 7160, particularly Section 234 (a)
thereof.
Repeal by implication in this case is not at all convincing either. To
bring about an implied repeal, the two laws must be absolutely
incompatible. They must be clearly repugnant in a way that the later
law (RA 8291) cannot exist without nullifying the prior law (RA
7160).13
Indeed, there is nothing in RA 8291 which abrogates, expressly or
impliedly, that particular provision of the LGC. The two statutes are
not inconsistent on that specific point, let alone so irreconcilable as to
compel us to uphold one and strike down the other.
The rule is that every statute must be interpreted and brought into
accord with other laws in a way that will form a uniform system of
jurisprudence.14 The legislature is presumed to have known existing
laws on the subject and not to have enacted conflicting laws.15 Thus,
the legislature cannot be presumed to have intended Section 234 (a)
to run counter to Section 39 of RA 8291.
This conclusion is buttressed by the Court’s 2003 decision in National
Power Corporation v. City of Cabanatuan16 where we declared that
the tax provisions of the LGC were the most significant provisions
therein insofar as they removed the blanket exclusion of
instrumentalities and agencies of the national government (like
petitioner) from the coverage of local taxation. In that case, petitioner
National Power Corporation (NPC) claimed that it was an
instrumentality of the government exempt under its charter from
paying franchise tax. The Court overruled NPC and upheld the right of
respondent city government to impose the franchise tax on its
privilege to transact business in its area.
Again, in the 2004 case of Rubia v. Government Service Insurance
System,17 the Court declared that any interpretation that gave Section
39 an expansive construction to exempt all GSIS assets and properties
from legal processes was unwarranted. These processes included the
levy and garnishment of its assets for taxes or claims enforced against
it. The Court there ruled that the exemption under Section 39 of the
GSIS Charter should be read consistently with its avowed purpose –
the maintenance of its actuarial solvency to finance the retirement,
disability and life insurance benefits of its members. The Court meant
that the tax-exempt properties and assets of GSIS referred to those
that remained at its disposal and use, either for investment or for
income-generating purposes. Properties whose actual and beneficial
use had been transferred to private taxable persons, for consideration
or otherwise, were excluded and were thus taxable.
In Mactan Cebu International Airport Authority v. Marcos,18 the Court
ruled that the exemption of a government-owned or controlled
corporation from taxes and other charges was not absolute and could
be withdrawn, as in fact certain provisions of the LGC, including
Section 234 (a), were deemed to have expressly withdrawn the tax-
exempt privilege of petitioner as a government-owned corporation.
Lastly, even if we were to construe that RA 8291 abrogated Section
234(a) of the LGC, still it cannot be made to apply retroactively
without impairing the vested rights of private respondent. The
appellate court thus correctly stated:
xxx it has been the courts’ consistent ruling that a repealing statute
must not interfere with vested rights or impair the obligation of
contracts; that if any other construction is possible, the act should not
be construed so as to affect rights which have vested under the old
law. Private respondent[s], we reiterate, have become the private
owner[s] of the properties in question in the regular course of
proceedings established by law, and after the decisions granting such
rights have become final and executory. The enactment of the new
GSIS Charter cannot be applied in a retroactive manner as to divest
the private respondent[s] of [their] ownership.19 (citations omitted)
WHEREFORE, the petition is hereby DENIED.
No costs.

SO ORDERED.
G.R. No. 112170 April 10, 1996
CESARIO URSUA, petitioner,
vs.
COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.
BELLOSILLO, J.:p
This is a petition for review of the decision of the Court of Appeals
which affirmed the conviction of petitioner by the Regional Trial Court
of Davao City for violation of Sec. 1 of C.A. No. 142, as amended by
R.A. No. 6085, otherwise known as "An Act to Regulate the Use of
Aliases". 1
Petitioner Cesario Ursua was a Community Environment and Natural
Resources Officer assigned in Kidapawan, Cotabato. On 9 May 1989
the Provincial Governor of Cotabato requested the Office of the
Ombudsman in Manila to conduct an investigation on a complaint for
bribery, dishonesty, abuse of authority and giving of unwarranted
benefits by petitioner and other officials of the Department of
Environment and Natural Resources. The complaint was initiated by
the Sangguniang Panlalawigan of Cotabato through a resolution
advising the Governor to report the involvement of petitioner and
others in the illegal cutting of mahogany trees and hauling of illegally-
cut logs in the area.2
On 1 August 1989 Atty. Francis Palmones, counsel for petitioner, wrote
the Office of the Ombudsman in Davao City requesting that he be
furnished copy of the complaint against petitioner. Atty. Palmones
then asked his client Ursua to take his letter-request to the Office of
the Ombudsman because his law firm's messenger, Oscar Perez, had
to attend to some personal matters. Before proceeding to the Office of
the Ombudsman petitioner talked to Oscar Perez and told him that he
was reluctant to personally ask for the document since he was one of
the respondents before the Ombudsman. However, Perez advised him
not to worry as he could just sign his (Perez) name if ever he would be
required to acknowledge receipt of the complaint. 3
When petitioner arrived at the Office of the Ombudsman in Davao City
he was instructed by the security officer to register in the visitors'
logbook. Instead of writing down his name petitioner wrote the name
"Oscar Perez" after which he was told to proceed to the Administrative
Division for the copy of the complaint he needed. He handed the letter
of Atty. Palmones to the Chief of the Administrative Division, Ms. Loida
Kahulugan, who then gave him a copy of the complaint, receipt of
which he acknowledged by writing the name "Oscar Perez."4
Before petitioner could leave the premises he was greeted by an
acquaintance, Josefa Amparo, who also worked in the same office.
They conversed for a while then he left. When Loida learned that the
person who introduced himself as "Oscar Perez" was actually
petitioner Cesario Ursua, a customer of Josefa Amparo in her gasoline
station, Loida reported the matter to the Deputy Ombudsman who
recommended that petitioner be accordingly charged.
On 18 December 1990, after the prosecution had completed the
presentation of its evidence, petitioner without leave of court filed a
demurrer to evidence alleging that the failure of the prosecution to
prove that his supposed alias was different from his registered name in
the local civil registry was fatal to its cause. Petitioner argued that no
document from the local civil registry was presented to show the
registered name of accused which according to him was a condition
sine qua non for the validity of his conviction.
The trial court rejected his contentions and found him guilty of
violating Sec. 1 of C.A. No. 142 as amended by R.A. No. 6085. He was
sentenced to suffer a prison term of one (1) year and one (1) day of
prision correccional minimum as minimum, to four (4) years of prision
correccional medium as maximum, with all the accessory penalties
provided for by law, and to pay a fine of P4,000.00 plus costs.
Petitioner appealed to the Court of Appeals.
On 31 May 1993 the Court of Appeals affirmed the conviction of
petitioner but modified the penalty by imposing an indeterminate
term of one (1) year as minimum to three (3) years as maximum and a
fine of P5,000.00.
Petitioner now comes to us for review of his conviction as he reasserts
his innocence. He contends that he has not violated C.A. No. 142 as
amended by R.A. No. 6085 as he never used any alias name; neither is
"Oscar Perez" his alias. An alias, according to him, is a term which
connotes the habitual use of another name by which a person is also
known. He claims that he has never been known as "Oscar Perez" and
that he only used such name on one occasion and it was with the
express consent of Oscar Perez himself. It is his position that an
essential requirement for a conviction under C.A. No. 142 as amended
by R.A. No. 6085 has not been complied with when the prosecution
failed to prove that his supposed alias was different from his registered
name in the Registry of Births. He further argues that the Court of
Appeals erred in not considering the defense theory that he was
charged under the wrong law.5
Time and again we have decreed that statutes are to be construed in
the light of the purposes to be achieved and the evils sought to be
remedied. Thus in construing a statute the reason for its enactment
should be kept in mind and the statute should be construed with
reference to the intended scope and purpose.6 The court may
consider the spirit and reason of the statute, where a literal meaning
would lead to absurdity, contradiction, injustice, or would defeat the
clear purpose of the lawmakers.7
For a clear understanding of the purpose of C.A. No. 142 as amended,
which was allegedly violated by petitioner, and the surrounding
circumstances under which the law was enacted, the pertinent
provisions thereof, its amendments and related statutes are herein
cited. C.A. No. 142, which was approved on 7 November 1936, and
before its amendment by R.A. No. 6085, is entitled An Act to Regulate
the Use of Aliases. It provides as follows:
Sec. 1. Except as a pseudonym for literary purposes, no person
shall use any name different from the one with which he was
christened or by which he has been known since his childhood, or such
substitute name as may have been authorized by a competent court.
The name shall comprise the patronymic name and one or two
surnames.
Sec. 2. Any person desiring to use an alias or aliases shall apply for
authority therefor in proceedings like those legally provided to obtain
judicial authority for a change of name. Separate proceedings shall be
had for each alias, and each new petition shall set forth the original
name and the alias or aliases for the use of which judicial authority
has been, obtained, specifying the proceedings and the date on which
such authority was granted. Judicial authorities for the use of aliases
shall be recorded in the proper civil register . . . .
The above law was subsequently amended by R.A. No. 6085, approved
on 4 August 1969. As amended, C.A. No. 142 now reads:
Sec. 1. Except as a pseudonym solely for literary, cinema,
television, radio or other entertainment purposes and in athletic
events where the use of pseudonym is a normally accepted practice,
no person shall use any name different from the one with which he
was registered at birth in the office of the local civil registry or with
which he was baptized for the first time, or in case of all alien, with
which he was registered in the bureau of immigration upon entry; or
such substitute name as may have been authorized by a competent
court: Provided, That persons whose births have not been registered
in any local civil registry and who have not been baptized, have one
year from the approval of this act within which to register their names
in the civil registry of their residence. The name shall comprise the
patronymic name and one or two surnames.
Sec. 2. Any person desiring to use an alias shall apply for authority
therefor in proceedings like those legally provided to obtain judicial
authority for a change of name and no person shall be allowed to
secure such judicial authority for more than one alias. The petition for
an alias shall set forth the person's baptismal and family name and the
name recorded in the civil registry, if different, his immigrant's name, if
an alien, and his pseudonym, if he has such names other than his
original or real name, specifying the reason or reasons for the desired
alias. The judicial authority for the use of alias, the Christian name and
the alien immigrant's name shall be recorded in the proper local civil
registry, and no person shall use any name or names other than his
original or real name unless the same is or are duly recorded in the
proper local civil registry.
The objective and purpose of C.A. No. 142 have their origin and basis
in Act No. 3883, An Act to Regulate the Use in Business Transactions of
Names other than True Names, Prescribing the Duties of the Director
of the Bureau of Commerce and Industry in its Enforcement, Providing
Penalties for Violations thereof, and for other purposes, which was
approved on 14 November 1931 and amended by Act No. 4147,
approved on 28 November 1934.8 The pertinent provisions of Act No.
3883 as amended follow —
Sec. 1. It shall be unlawful for any person to use or sign, on any
written or printed receipt including receipt for tax or business or any
written or printed contract not verified by a notary public or on any
written or printed evidence of any agreement or business
transactions, any name used in connection with his business other
than his true name, or keep conspicuously exhibited in plain view in or
at the place where his business is conducted, if he is engaged in a
business, any sign announcing a firm name or business name or style
without first registering such other name, or such firm name, or
business name or style in the Bureau of Commerce together with his
true name and that of any other person having a joint or common
interest with him in such contract, agreement, business transaction, or
business . . . .
For a bit of history, the enactment of C.A. No. 142 as amended was
made primarily to curb the common practice among the Chinese of
adopting scores of different names and aliases which created
tremendous confusion in the field of trade. Such a practice almost
bordered on the crime of using fictitious names which for obvious
reasons could not be successfully maintained against the Chinese who,
rightly or wrongly, claimed they possessed a thousand and one names.
C.A. No. 142 thus penalized the act of using an alias name, unless such
alias was duly authorized by proper judicial proceedings and recorded
in the civil register.9
In Yu Kheng Chiau v. Republic 10 the Court had occasion to explain the
meaning, concept and ill effects of the use of an alias within the
purview of C.A. No. 142 when we ruled —
There can hardly be any doubt that petitioner's use of alias "Kheng
Chiau Young" in addition to his real name "Yu Cheng Chiau" would add
to more confusion. That he is known in his business, as manager of the
Robert Reid, Inc., by the former name, is not sufficient reason to allow
him its use. After all, petitioner admitted that he is known to his
associates by both names. In fact, the Anselmo Trinidad, Inc., of which
he is a customer, knows him by his real name. Neither would the fact
that he had encountered certain difficulties in his transactions with
government offices which required him to explain why he bore two
names, justify the grant of his petition, for petitioner could easily avoid
said difficulties by simply using and sticking only to his real name "Yu
Kheng Chiau."
The fact that petitioner intends to reside permanently in the
Philippines, as shown by his having filed a petition for naturalization in
Branch V of the above-mentioned court, argues the more against the
grant of his petition, because if naturalized as a Filipino citizen, there
would then be no necessity for his further using said alias, as it would
be contrary to the usual Filipino way and practice of using only one
name in ordinary as well as business transactions. And, as the lower
court correctly observed, if he believes (after he is naturalized) that it
would be better for him to write his name following the Occidental
method, "he can easily file a petition for change of name, so that in
lieu of the name "Yu Kheng Chian," he can, abandoning the same, ask
for authority to adopt the name Kheng Chiau Young."
All things considered, we are of the opinion and so hold, that
petitioner has not shown satisfactory proper and reasonable grounds
under the aforequoted provisions of Commonwealth Act No. 142 and
the Rules of Court, to warrant the grant of his petition for the use of
an alias name.
Clearly therefore an alias is a name or names used by a person or
intended to be used by him publicly and habitually usually in business
transactions in addition to his real name by which he is registered at
birth or baptized the first time or substitute name authorized by a
competent authority. A man's name is simply the sound or sounds by
which he is commonly designated by his fellows and by which they
distinguish him but sometimes a man is known by several different
names and these are known as aliases. 11 Hence, the use of a fictitious
name or a different name belonging to another person in a single
instance without any sign or indication that the user intends to be
known by this name in addition to his real name from that day forth
does not fall within the prohibition contained in C.A. No. 142 as
amended. This is so in the case at bench.
It is not disputed that petitioner introduced himself in the Office of the
Ombudsman as "Oscar Perez," which was the name of the messenger
of his lawyer who should have brought the letter to that office in the
first place instead of petitioner. He did so while merely serving the
request of his lawyer to obtain a copy of the complaint in which
petitioner was a respondent. There is no question then that "Oscar
Perez" is not an alias name of petitioner. There is no evidence showing
that he had used or was intending to use that name as his second
name in addition to his real name. The use of the name "Oscar Perez"
was made by petitioner in an isolated transaction where he was not
even legally required to expose his real identity. For, even if he had
identified himself properly at the Office of the Ombudsman, petitioner
would still be able to get a copy of the complaint as a matter of right,
and the Office of the Ombudsman could not refuse him because the
complaint was part of public records hence open to inspection and
examination by anyone under the proper circumstances.

While the act of petitioner may be covered by other provisions of law,

such does not constitute an offense within the concept of C.A. No. 142
as amended under which he is prosecuted. The confusion and fraud in
business transactions which the anti-alias law and its related statutes
seek to prevent are not present here as the circumstances are peculiar
and distinct from those contemplated by the legislature in enacting
C.A. No. 142 as amended. There exists a valid presumption that
undesirable consequences were never intended by a legislative
measure and that a construction of which the statute is fairly
susceptible is favored, which will avoid all objectionable, mischievous,
indefensible, wrongful, evil and injurious consequences. 12 Moreover,
as C.A. No. 142 is a penal statute, it should be construed strictly
against the State and in favor of the accused. 13 The reason for this
principle is the tenderness of the law for the rights of individuals and
the object is to establish a certain rule by conformity to which
mankind would be safe, and the discretion of the court limited. 14
Indeed, our mind cannot rest easy on the proposition that petitioner
should be convicted on a law that does not clearly penalize the act
done by him.

WHEREFORE, the questioned decision of the Court of Appeals

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

SO ORDERED.