Endencia vs David
Facts: This is a joint appeal from the decision of the
Court of First Instance of Manila declaring section 13
of Republic Act No. 590 unconstitutional, and
ordering the appellant Saturnino David as Collector of
Internal Revenue to refund to Justice Pastor M.
Endencia the sum of P1,744.45, representing the
income tax collected on his salary as Associate Justice
of the Court of Appeals in 1951, and to Justice
Fernando Jugo the amount of P2,345.46,
representing the income tax collected on his salary
from January 1, 1950 to October 19, 1950, as
Presiding Justice of the Court of Appeals, and from
October 20, 1950 to December 31 1950, as Associate
Justice of the Supreme Court, without special
pronouncement as to costs.
They were jointly submitted for determination in the
lower court Judge Higinio B. Ma cadaeg presiding, in
a rather exhaustive and well considered decision
found and held that under the doctrine laid down by
this Court in the case of Perfecto vs. Meer, 85 Phil.,
552, the collection of income taxes from the salaries
of Justice Jugo and Justice Endencia was a diminution
of their compensation and therefore was in violation
of the Constitution of the Philippines, and so ordered
the refund of said taxes.
According to the brief of the Solicitor General on
behalf of appellant Collector of Internal Revenue, our
decision in the case of Perfecto vs. Meer, supra, was
not received favorably by Congress, because
immediately after its pro-mulgation, Congress
enacted Republic Act No. 590. To bring home his
point, the Solicitor General reproduces what he
considers the pertinent discussion in the Lower House
of House Bill No. 1127 which became Republic Act No.
590.
Issue: Whether or not Republic Act No. 590,
particularly section 13, can justify and legalize the
collection of income tax on the salary of judicial
officers?
Ruling: No. In the case of Perfecto vs Meer, the Court
held that taxing the salary of a judicial officer in the
Philippines is a diminution of such salary and so
violates the Constitution. It was based on Article VIII,
Sec 9 of the Constitution which states that, “''Sec. 9
The members of the Supreme Court and all judges of
inferior courts shall hold office during good behavior,
until they reach the age of seventy years, or become
incapacitated to discharge the duties of their office.
They shall receive such compensation as may he fixed
by law, which shall not be diminished during their
continuance in office. Until the Congress shall provide
otherwise, the Chief Justice of the Supreme Court
shall receive an annual compensation of sixteen
thousand pesos, and each Associate Justice, fifteen
thousand pesos."
Section 13 of Republic Act No. 590 provides: ''Sec. 13. No
salary wherever received by any public officer of the
Republic of the Philippines shall be considered as exempt
from the income tax, payment of which is hereby declared
not to be a diminution of his compensation fixed by the
Constitution or by law."
Under our system of constitutional government, the
Legislative department is assigned the power to make
and enact laws. The Executive department is charged
with the execution or carrying out of the provisions of
said laws. But the interpretation and application of
said laws belong exclusively to the Judicial
department. And this authority to interpret and apply
the laws extends to the Constitution. Before the
courts can determine whether a law is constitu-tional
or not, it will have to interpret and ascertain the
meaning not only of said law, but also of the pertinent
portion of the Constitution in order to decide whether
there is a conflict between the two, because if there
is, then the law will have to give way and has to be
declared invalid and unconstitutional.
By legislative fiat as enunciated in section 13, Republic
Act No. 590, Congress says that taxing the salary of a
judicial officer is not a decrease of compensation. This
is a clear example of interpretation or ascertainment
of the meaning of the phrase "which shall not be
diminished during their continuance in office," found
in section 9, Article VIII of the Constitution, referring
to the salaries of judicial officers. This act of
interpreting the Constitution or any part thereof by
the Legislature is an invasion of the well-defined and
established province and jurisdiction of the Judiciary.
If the Legislature may declare what a law means, or
what a specific portion of the Con-stitution means,
especially after the courts have in actual case
ascertain its meaning by interpretation and applied it
in a decision, this would surely cause confusion and
instability in judicial processes and court decisions.
Considering the practical side thereof, we believe that
the collection of income tax on a salary is an actual
and evident diminution thereof. Under the old system
where the in-come tax was paid at the end of the year
or sometime thereafter, the decrease may not be so
apparent and clear All that the official who had
previously received his full salary was called upon to
do, was to fulfill his obligation and to exercise his
privilege of paying his income tax on his salary. His
salary fixed by law was received by him in full, and
when he later pays his income tax, especially when
the amount of said tax comes from his other sources
of income, he may not fully realize the fact that his
salary had been decreased in the amount of said
income tax. But under the present system of
withholding the income tax at the source, where the
full amount of the income tax corre-sponding to his
salary is computed in advance and divided into equal
portions corresponding to the number of pay-days
during the year and actually deducted from his salary
corresponding to each payday, said official actually
does not receive his salary in full, because the income
tax is deducted therefrom every payday, that is to say,
twice a month.
Reading the discussion in the lower House in
connection with House Bill No. 1127, which became
Republic Act No. 590, it would seem that one of the
main reasons behind the enactment of the law was
the feeling among certain legislators that members of
the Supreme Court should not enjoy any exemption
and that as citizens, out of patriotism and love for
their country, they should pay income tax on their
salaries. It might be stated in this connection that the
exemption is not enjoyed by the members of the
Supreme Court alone but also by all judicial officers
including Jus-tices of the Court of Appeals and judges
of inferior courts. The exemption also extends to
other constitutional officers, like the President of the
Republic, the Auditor General, the members of the
Commission on Elections, and possibly members of
the Board of Tax Appeals, commissioners of the Public
Service Commission, and judges of the Court of
Industrial Relations. Compared to the number of all
these officials, that of the Supreme Court Justices is
relatively insignificant. There are more than 990 other
judi-cial officers enjoying the exemption, including 15
Justices of the Court of Appeals, about 107 Judges of
First Instance, 38 Municipal Judges and about 830
Justices of the Peace. The reason behind the
exemption in the Constitution, as interpreted by the
United States Federal Supreme Court and this Court,
is to preserve the independence of the Judiciary, not
only of this High Tribunal but of the other courts,
whose present membership number more than 990
judicial officials.
The exemption was not primarily intended to benefit
judicial officers, but was grounded on public policy.
Having in mind the limited number of judicial officers
in the Philippines enjoying this exemption, especially
when the great bulk thereof are justices of the peace,
many of them receiving as low as P200 a month, and
considering further the other exemptions allowed by
the income tax law, such as P3,000 for a married
person and P600 for each dependent, the amount of
national revenue to be derived from income tax on
the salaries of judicial officers, were if not for the
constitutional exemption, could not be large or
substantial. But even if it were otherwise, it should
not affect, much less outweigh the purpose and the
considera-tions that prompted the establishment of
the constitutional exemption. In the same case of
Evans vs. Gore, supra, the Federal Supreme Court
declared "that they (fathers of the Constitution)
regarded the independence of the judges as of far
greater importance than any revenue that could
come from taxing their salaries."
When a judicial officer assumes office, he does not
exactly ask for exemption from payment of income
tax on his salary, as a privilege. It is already attached
to his office, provided and secured by the
fundamental law, not primarily for his benefit, but
based on public interest, to secure and preserve his
independence of judicial thought and action. When
we come to the members of the Supreme Court, this
exemption to them is relatively of short duration.
Because of the limited membership in this High
Tribunal, eleven, and due to the high standards of
experience, practice and training required, one
generally enters its portals and comes to join its
membership quite late in life, on the aver-age, around
his sixtieth year, and being required to retire at
seventy, assuming that he does not die or become
incapa-citated earlier, naturally he is not in a position
to receive the benefit of exemption for long. It is
rather to the justices of the peace that the exemption
can give more benefit. They are relatively more
numerous, and because of the meager salary they
receive, they can less afford to pay the income tax on
it and its diminution by the amount of the income tax
if paid would be real, substantial and onerous.
Considering exemption in the abstract, there is
nothing unusual or abhorrent in it, as long as it is
based on public policy or public interest. While all
other citizens are sub-ject to arrest when charged
with the commission of a crime, members of the
Senate and House of Representatives ex-cept in cases
of treason, felony and breach of the peace are exempt
from arrest, during their attendance in the session of
the Legislature ; and while all other citizens are
generally liable for any speech, remark or statement,
oral or written, tending to cause the dishonor,
discredit or contempt of a natural or juridical person
or to blacken the memory of one who is dead,
Senators and Congressmen in making such
statements during their sessions are extended
immunity and exemption.
In conclusion we reiterate the doctrine laid down in
the case of Perfecto vs. Meer, supra, to the effect that
the col- lection of income tax on the salary of a judicial
officer is a diminution thereof and so violates the
Constitution. We further hold that the interpretation
and application of the Constitution and of statutes is
within the exclusive prov-ince and jurisdiction of the
Judicial department, and that in enacting a law, the
Legislature may not legally provide therein that it be
interpreted in such a way that it may not violate a
Constitutional prohibition, thereby tying the hands of
the courts in their task of later interpreting said
statute, specially when the interpretation sought and
provided in said statute runs counter to a previous
interpretation already given in a case by the highest
court of the land.
Ramos vs CIR
Facts: Petitioners are 147 workers and employees,
allegedly in the service of RCA, who lodged the
petition in their individual capacity, not as union
members. The issue involves the question of liability
by Rice and Corn Administration [RCA] from June 14,
1962 when the National Rice and Corn Corporation
[NARIC] ceased to exist and RCA was created—for an
obligation created by agreement confirmed in a
partial judgment of the Court of Industrial Relations
[CIR] rendered on February 16, 1953, directing NARIC,
to pay 25% additional compensation for overtime
work, night work, and work rendered on Sundays and
legal holidays by its laborers and employees.
They pray that respondent RCA be required to comply
with CIR’s February 16, 1953 partial judgment from
June, 1962 and to pay attorneys’ fees. Some of the
petitioners were former NARIC employees, others
allegedly were recently employed by RCA and never
employed by NARIC. The record is not altogether clear
as to whether petitioners are members of the Naric
Workers’ Union [NWU]. For, they claim they are not,
a fact negated, and no evidence was taken by CIR
thereon.
RCA pleaded disclaimer upon the averment, inter alia,
that because “RCA was created under Republic Act
3452 since June 14, 1962 as a service agency or
instrumentality of the government to implement a
government policy and program pursuant to R.A.
3452, the law applicable governing the extra hours of
work of employees of the Administration, is no longer
Commonwealth Act 444 known as the Eight-Hour
Labor Law but Commonwealth Act 246 known as the
Budget Act”; and that “the liabilities transferred from
the NARIC to the RCA are those liabilities incurred by
the NARIC but not those to be incurred by the RCA
such as the claims for overtime from creation of the
RCA on June 14, 1962 stated in the herein petition.”
RCA concedes that under the law of its creation,
Republic Act 3452, it should answer for all the
liabilities contracted by NARIC, but only those
incurred prior to the date of NARIC’s abolition.
Issue: Whether or not RCA is still liable for the 25%
additional compensation for overtime work, night
work, and work rendered on Sundays and legal
holidays by its laborers and employees?
Ruling: Yes. Petitioners’ claim against RCA must have
to be planted upon Section 13 of R.A. 3452 which
reads:
“SEC. 13. The National Rice and Corn Corporation is hereby
abolished and all its assets, liabilities, functions, powers
which are not inconsistent with the provisions of this Act,
and all personnel are transferred to the Administration.”
The accent here is on the legal provision that liabilities
which RCA is under obligation to respect are those of the
defunct NARIC “which are not inconsistent with the
provisions” of Republic Act 3452.
But petitioners forge the argument that amongst the
liabilities transferred to and to be met by RCA from
NARIC’s abolition in June, 1962 is the continuation by
RCA of the payment of 25% additional compensation
assumed by NARIC under the 1953 judgment. Thrust
upon us then is the problem of ascertaining whether
the liabilities under CIR’s said decision are
inconsistent with the provisions of R.A. 3452. Our
answer is in the affirmative.
At bottom, that decision was rendered in pursuance
of an agreement touching on one aspect of
employment—payment of extra compensation. It
was legally possible for NARIC to enter into such an
agreement which was, indeed, incorporated in the
judgment. NARIC was a corporation, as aforesaid.
But with the RCA, a different picture is presented. A
mere instrumentality of the national government
performing primarily governmental functions to
promote general welfare, the terms and conditions of
employment of its laborers and employees, such as
herein petitioners, are governed by law.8 They are
subject to civil service rules. They are governed by the
WAPCO Salary Plan. Explicit and unmistakable is
Section 5 of R.A. 3452 which, in part, reads:
“x x x He [General Manager] shall fix the number and,
subject to WAPCO salary plan allowed by the Civil Service,
salaries of, and appoint, subject to the Civil Service Law and
with the consent of the Board of Administrators, such
subordinate employees as may be necessary for the proper
discharge of the duties of the Administration. He shall
suspend or otherwise discipline, for cause and subject to
Civil Service Law, any subordinate employee of the
Administration with the consent of the Board of
Administrators and perform such other duties as may be
assigned by the Board.”
By Section 562 of the Revised Administrative Code, as
amended, the legal hours of labor of employees in
every branch of the government service shall be
“eight (8) hours a day, for five (5) days a week or a
total of forty (40) hours a week, exclusive of time for
lunch: x x x.”9 However, “[w]hen the interests of the
public service so require, the head of any
Department, Bureau, or Office may extend the daily
hours of labor, in what manner soever fixed, for any
or all of the employees under him, and may likewise
require any or all of them to do overtime work not
only on workdays but also on holidays.”
The foregoing notwithstanding, Congress had not left
the workers and employees—previously with the
NARIC and now with RCA—without ample protection.
Section 259 of the Revised Administrative Code states
that “[i]n the absence of special provision, persons
regularly and permanently appointed under the Civil
Service Law or whose salary, wages, or emoluments
are fixed by law or regulation shall not, for any service
rendered or labor done by them on holidays or for
other overtime work, receive or be paid any
additional compensation: x x x.” The special provision
contemplated in the status just mentioned is
paragraph 32, Section 7-1 of Commonwealth Act 246,
otherwise known as the Budget Act, which reads:
“(32) Additional compensation for overtime service.—
Officers and employees of the National Government,
except secretaries and undersecretaries of departments,
chiefs of bureaus and offices, and those occupying positions
of similar category, when working overtime on Saturdays,
Sundays, holidays, or during half-day sessions, and after five
o’clock post meridian on regular working days to finish work
that must be completed within a specified time, when
authorized by the President, may be paid from any
unexpended balance of the appropriation for salaries and
wages authorized in any annual General Appropriation Act,
compensation at rates to be fitted by the heads of
departments concerned, with the approval of the President,
which shall not exceed the rate of their regular
compensation. Such additional compensation shall not
exceed, for any one month, the equivalent of the regular
compensation, nor shall ii exceed, for any one year, fifty per
centum of such regular compensation.”
Paragraph 16 of RCA’s answer below avers: “That the
President of the Philippines, thru the Executive Secretary,
has authorized under certain limits the payment of extra
hours of work on ordinary days and on Saturdays, Sundays,
and legal holidays under the provisions of the said
Commonwealth Act No. 246 which the President has
authority to do under the provisions of said law;”.
The foregoing averment is not without prop. Through
the years since the enactment of R.A. 3452 on June
14, 1962, the President of the Philippines had
authorized payment of overtime compensation.
On November 29, 1962, the President allowed
additional pay for overtime service rendered by RCA
personnel in “the procurement, warehousing, milling
and distribution of rice and in the inspection and
inventory of property, to effectively implement the
massive palay procurement program of the President
and the stabilization function of the RCA”, for the
period from July 1, 1962 to December 31, 1962
“pursuant to Section 7-1 (32) of Commonwealth Act
No. 246, as amended, subject to availability of funds
and the usual audit”, provided “that at no time shall
such additional compensation exceed for any one
month the equivalent of the regular compensation,
nor shall it exceed for any one year fifty per centum
thereof.” This authority was extended on October 24,
1963 until December 31, 1963. In April, 1964, RCA was
granted authority to pay overtime compensation to
the replacement personnel of the Security
Department from January 1 up to June 30, 1964. On
June 10, 1964, overtime pay was given RCA personnel
for services rendered “in connection with the
unloading, checking, transporting, storage and
distribution, including the financing and accounting of
imported rice, from April 15, 1964 to December 29,
1964.”
On June 21, 1965, RCA employees who were required
to render “overtime services during the period from
March 16 to May 31, 1965” were granted meal
allowance only, “pursuant to GAO General Circular
No. 301, series of 1939, as amended:” and payment
to employees who have rendered overtime services
from June 1 to June 30, 1965 was approved as an
exceptional case. On July 2, 1965, overtime
compensation was authorized for RCA employees
who rendered services in connection with the
unloading and stockpiling of imported rice for the
months of July, August, and September, 1965. RCA
employees whose work involved the distribution of
rice from July 1 to December 31, 1965, were granted
meal allowance upon the the condition that
“overtime services of only needed personnel shall be
required.”
On April 5, 1966, the President permitted meal
allowance and transportation expenses to RCA
personnel for overtime services rendered and to be
rendered after office hours or beyond their tours of
duty effective January 5, 1966 until June 30, 1966.
The facts just recited prove the consistent
administrative interpretation by the Office of the
President as to what may, under the law, be granted
RCA workers and employees for overtime work and
work on Sundays and holidays. And, the President of
the Philippines, from time to time, authorized such
payments. Not a matter of right, such compensation
was given upon authority of Section 7-1 (32) of the
Budget Act. It would seem incongruous if said
employees and laborers, formerly of NARIC, were
allowed to recover under the partial judgment
rendered on February 16, 1953 in CIR Case 746-V
instituted by NARIC Workers’ Union against NARIC
here in dispute, and at the same time reap the
benefits under the aforesaid Budget Law. After all,
they are no longer NARIC workers and employees but
workers and employees of RCA which operates by law
“under the Office of the President of the Philippines.”
While executive construction is not necessarily
binding upon courts, it is entitled to great weight and
consideration. Reason for this is that such
construction comes from the particular branch of
government called upon to implement the particular
law involved.
Orencia v Enrile
Facts: On June 20, 1967, petitioner-appellant filed the
said petition for mandamus with preliminary
injunction before the Manila Court of First Instance
against respondents alleging substantially that he is
the deputy clerk of court of the Clerks of Court
Division of the Land Registration Commission, and he
has been performing functions of Assistant Chief of
said division and has been considered and recognized
as such, until Rep. Act 4040, enacted June 18, 1964
increasing the salaries of Assistant Chiefs of Divisions,
among others, was implemented where he was left
out while co-assistant chiefs of the nine (9) other
divisions of the Land Registration Commission were
so recognized and extended increased compensation,
in spite of his protest to respondents Secretary of
Justice, Land Registration Commissioner, and
Commissioner of Civil Service; and to add insult to
injury, respondent Guillermina M. Gener, was
appointed assistant chief of the Clerks of Court
Division, when there was no vacancy to said position
and given an increased compensation of P9,600.00
for the said position, while petitioner continued to
receive the old rate of P3,070.08 per annum, and
praying that he be extended similar recognition as
assistant chief of the Clerks of Court Division of the
Land Registration Commission, and paid the
corresponding salary under Rep. Act 4040 and that
the appointment of respondent Guillermina M. Gener
be declared null and void, with damages and
attorney’s fees. On July 17, 1967, respondents filed
their answer, and after usual admissions and denials,
interposed a defense that petitioner is unqualified for
the position of Assistant Chief, Clerks of Court
Division, and being a new position created under
Republic Act 4040, the same can only be filed by a
qualified person; that respondent Gener, being a
lawyer, is more qualified than petitioner who is only a
high school graduate with second grade civil service
eligibility, and praying that the petition be dis-
“On July 6, 1964, petitioner formally requested
respondent Commissioner of Land Registration
Coinmission for recommendation and payment of his
differential salary, which request was, however,
denied on July 10, 1964. On September 1, 1964,
petitioner appealed to the Secretary of Justice, but his
appeal was likewise denied . From the ruling of the
Secretary of Justice, he appealed to respondent
Commissioner of Civil Service on June 3, 1965 and,
again, he was rebuffed on February 21, 1966. On July
29, 1966, said respondent Gener was appointed
Assistant Chief of the Clerks of Court Division effective
July 1, 1966, by the respondent Secretary of Justice,
upon recommendation of respondent Land
Registration Commission, and duly attested to by the
Commissioner of Civil Service. Aggrieved, petitioner
has brought the present suit.”
Until the passage of Republic Act No. 4040, there was
no such position as Assistant Chief of the Clerks of
Court Division. It would be only through the utmost
straining of words that an assertion may be made as
to his right thereto, specially so as his designation was
specifically that of Deputy Clerk of Court.
RTC and CA Ruling: dismissed his suit for mandamus
to compel respondent officials, the then Secretary of
Justice, the then Commissioner of Land Registration
and the then Commissioner of Civil Service, to
recognize his alleged right as Assistant Chief, Clerks of
Court Division, Land Registration Commission
Issue: Whether or not Petitioner has the right to be
called the “Assistant Chief of the Clerks of Court
Division.
Ruling: No. It is not merely that petitioner does not
have a clear legal right. The more accurate way of
putting it is that he has no right at all to the position
of Assistant Chief to the Clerks of Court Division. The
ingenuity displayed by counsel, worthy of a better
cause, it might be added, cannot obscure the
undeniable fact that without Republic Act No. 4040,
there would be no such position that is now the
subject of dispute between him and respondent
Gener. His position left untouched, it is to be
assumed, is that of deputy clerk. As was made
mention of, he did so admit, for that was something
he could not very well deny. He would argue however
that he might as well “be considered as Assistant
Chief, Clerks of Court Division.”10 This is not the
language of affirmation but of surmise. It does credit
to petitioner’s respect for the truth, but it certainly
leaves his contention legally without support.
Nothing daunted, petitioner would argue that to view
the matter in a way opposed to his would in effect
“sanction removal of petitioner from such position,
without cause, in violation of the Constitution * * *11
Here, he seeks shelter within the provision of Section
4 of the 1985 Constitution.12 There is here a glaring
misapprehension. To so construe such provision by
way merely of assurance of term to a government
functionary and to lose sight of the paramount public
interest involved is to ignore and disregard the
fundamental postulate that a public office is a public
trust. That accounts for the rather qualified and
limited sense it possesses as property safeguarded by
the due process clause.13 The essential requirement
then for a place in the government service is the
possession of the requisite ability and competence.
Only thus may there be fulfillment of a trust.
Evidently, that was in the mind of respondent
dignitaries. A member of the bar, respondent Gener
met the prescribed standard. The position in question
is that of Assistant Chief, precisely of the Division for
the Clerks of Court.
On the other hand, it is not disputed that petitioner’s
scholastic background is much more limited, he being
merely a high school graduate,14 Under such
circumstances, his previous experience in his capacity
as Deputy Clerk of Court, attesting to his years of
service could not avail. As this Court had occasion to
observe in Aguilar vs. Nieva, Jr.:15 “Whatever
sympathy might be elicited for public officials who
had stayed long in the public service and who, for
some reason or another, did not receive the
promotion to which they felt they should be entitled,
cannot obscure the discretion that the law leaves in
the hands of the appointing official. * * * The basic
intent of the. law itself is to foster a more efficient
public service. It is ever timely to keep in mind the
public trust character of any governmental office. Its
creation is justifiable only if it serves to assure that the
functions of government, whether through the
traditional public offices or government-owned or
controlled corporations, be attended to with dispatch
and competence. Necessarily then, the appointing
official, especially so where his position is a
constitutional creation, as in this case, must be left
that necessary latitude of choice as to who can best
dicharge the responsibilities of the office where the
vacancy occurs. This is what happened here, and no
legal infirmity can validly be said to have vitiated such
an appointment. The impassioned plea of counsel for
petitioner, while not without its plausibility, if the
individual welfare of those in the ranks of government
personnel were considered, certainly cannot merit
our approval in the light of the greater and more
exigent public interest which has to be served.”
In relation to statutory Construction : Presumably
not unaware of the inherent weakness of his stand,
petitioner would discern an alleged legislative intent
in Republic Act No. 4040 to accord him the
recognition his heart is set on. What he sees is a
mirage. Assuming ambiguity in the applicable statute,
it must receive a construction in accordance with and
not in disregard of the cardinal postulate of a public
office being a public trust. Moreover, if there is any
other principle of legal hermeneutics that can be
invoked, it is that of contemporaneous construction.
Petitioner, after the unanimity shown by the
Commissioner of Land Registration, the Secretary of
Justice, and the Commissioner of Civil Service on the
precise point at issue, certainly is not in a position to
do so. All three find his pretension bereft of any merit.
They are for respondent Gener. It is not inappropriate
to note that such a principle was given expression by
Justice Malcolm in Molina v. Rafferty17 in these
words: “Courts should respect the contemporaneous
construction placed upon a statute by the executive
officers whose duty it is to enforce it and unless such
interpretation is clearly erroneous will ordinarily be
controlled thereby.”18 Later that same year in 1918,
in Madrigal v. Rafferty.19 there was a reiteration of
the same doctrine by the same jurist. So it has been
ever since?20 WHEREFORE, the lower court decision
of March 26, 1968, dismissing the petition for
mandamus, is affirmed.
People v Concepcion
Facts: By telegrams and a letter of confirmation to the
manager of the Aparri branch of the Philippine
National Bank, Venancio Concepcion, President of the
Philippine National Bank, between April 10, 1919, and
May 7, 1919, authorized an extension of credit in
favor of "Puno y Concepcion, S. en C." in the amount
of P300,000. This special authorization was essential
in view of the memorandum order of President
Concepcion dated May 17, 1918, limiting the
discretional power of the local manager at Aparri,
Cagayan, to grant loans and discount negotiable
documents to P5,000, which, in certain cases, could
be increased to P10,000. Pursuant to this
authorization, credit aggregating P300,000, was
granted the firm of "Puno y Concepcion, S. en C.," the
only security required consisting of six demand notes.
The notes, together with the interest, were taken up
and paid by July 17, 1919. "Puno y Concepcion, S. en
C." was a copartnership capitalized at P100,000.
Anacleto Concepcion contributed P5,000; Clara Vda.
de Concepcion, P5,000; Miguel S. Concepcion,
P20,000; Clemente Puno, P20,000; and Rosario San
Agustin, "casada con Gral. Venancio Concepcion,"
P50,000. Member Miguel S. Concepcion was the
administrator of the company.
**Section 35 of Act No. 2747, effective on February
20, 1918, just mentioned, to which reference must
hereafter repeatedly be made, reads as follows: "The
National Bank shall not, directly or indirectly, grant
loans to any of the members of the board of directors
of the bank nor to agents of the branch banks."
Section 49 of the same Act provides: "Any person who
shall violate any of the provisions of this Act shall be
punished by a fine not to exceed ten thousand pesos,
or by imprisonment not to exceed five years, or by
both such fine and imprisonment." These two
sections were in effect in 1919 when the alleged
unlawful acts took place, but were repealed by Act
No. 2938, approved on January 30, 1921.
Counsel for the defense assign ten errors as having
been committed by the trial court. These errors they
have argued adroitly and exhaustively in their printed
brief, and again in oral argument. Attorney-General
Villa-Real, in an exceptionally accurate and
comprehensive brief, answers the proposition of
appellant one by one.
Ruling of the Lower courts: On the facts recounted,
Venancio Concepcion, as President of the Philippine
National Bank and as member of the board of
directors of this bank, was charged in the Court of
First Instance of Cagayan with a violation of section 35
of Act No. 2747*. He was found guilty by the
Honorable Enrique V. Filamor, Judge of First Instance,
and was sentenced to imprisonment for one year and
six months, to pay a fine of P3,000, with subsidiary
imprisonment in case of insolvency, and the costs.
Issue/s: 1. Whether or not the granting of a credit of
P300,000 to the copartnership "Puno y Concepcion, S.
en C." by Venancio Concepcion, President of the
Philippine National Bank, a "loan" within the meaning
of section 35 of Act No. 2747. Yes
2: Whether or not the granting of a credit of P300,000
is an "indirect loan" within the meaning of section 35
of Act No. 2747.Yes
Contention 1 and Ruling 1: Counsel argue that the
documents of record do not prove that authority to
make a loan was given, but only show the concession
of a credit. In this statement of fact, counsel is correct,
for the exhibits in question speak of a "credito"
(credit) and not of a " prestamo" (loan). The "credit"
of an individual means his ability to borrow money by
virtue of the confidence or trust reposed by a lender
that he will pay what he may promise. A "loan" means
the delivery by one party and the receipt by the other
party of a given sum of money, upon an agreement,
express or implied, to repay the sum loaned, with or
without interest. The concession of a "credit"
necessarily involves the granting of "loans" up to the
limit of the amount fixed in the "credit,"
Contention 2 and Ruling 2: Counsel argue that a loan
to the partnership "Puno y Concepcion, S. en C." was
not an "indirect loan." In this connection, it should be
recalled that the wife of the defendant held one-half
of the capital of this partnership.
In the interpretation and construction of statutes, the
primary rule is to ascertain and give effect to the
intention of the Legislature. In this instance, the
purpose of the Legislature is plainly to erect a wall of
safety against temptation for a director of the bank.
The prohibition against indirect loans is a
recognition of the familiar maxim that no man may
serve two masters — that where personal interest
clashes with fidelity to duty the latter almost always
suffers. If, therefore, it is shown that the husband is
financially interested in the success or failure of his
wife's business venture, a loan to partnership of
which the wife of a director is a member, falls within
the prohibition.
Various provisions of the Civil serve to establish the
familiar relationship called a conjugal partnership. A
loan, therefore, to a partnership of which the wife of
a director of a bank is a member, is an indirect loan to
such director. That it was the intention of the
Legislature to prohibit exactly such an occurrence is
shown by the acknowledged fact that in this instance
the defendant was tempted to mingle his personal
and family affairs with his official duties, and to
permit the loan P300,000 to a partnership of no
established reputation and without asking for
collateral security.
In the case of Lester and Wife vs. Howard Bank , the
Supreme Court of Maryland said: What then was the
purpose of the law when it declared that no director
or officer should borrow of the bank, and "if any
director," etc., "shall be convicted," etc., "of directly
or indirectly violating this section he shall be punished
by fine and imprisonment?" We say to protect the
stockholders, depositors and creditors of the bank,
against the temptation to which the directors and
officers might be exposed, and the power which as
such they must necessarily possess in the control and
management of the bank, and the legislature
unwilling to rely upon the implied understanding that
in assuming this relation they would not acquire any
interest hostile or adverse to the most exact and
faithful discharge of duty, declared in express terms
that they should not borrow, etc., of the bank.
In the case of People vs. Knapp ([1912], 206 N. Y.,
373), relied upon in the Binalbagan Estate decision, it
was said: We are of opinion the statute forbade the
loan to his copartnership firm as well as to himself
directly. The loan was made indirectly to him through
his firm.
JUDGMENT : On a review of the evidence of record,
with reference to the decision of the trial court, and
the errors assigned by the appellant, and with
reference to previous decisions of this court on the
same subject, we are irresistibly led to the conclusion
that no reversible error was committed in the trial of
this case, and that the defendant has been proved
guilty beyond a reasonable doubt of the crime
charged in the information. The penalty imposed by
the trial judge falls within the limits of the punitive
provisions of the law. Judgment is affirmed, with the
costs of this instance against the appellant. So
ordered.
De Jesus vs City of Manila
Facts: It appears from the record that in 1901 Pastor
Lerma, who was at that time the owner of a piece of
land situated in the city of Manila, declared the same
for taxation, alleging its area to be 337,938.50 square
meters, when, in truth and in fact, it was 480,695.53
square meters. By reason of this inaccurate
declaration 142,767.03 square meters escaped the
payment of taxes from 1901 to 1910, in which year
the taxes which would have been paid upon said
142,767.03 square meters, if properly declared, were
assessed for the years from 1901 to 1910 against the
plaintiff, who was at that time the owner of said
lands. It further appears that, at the time the plaintiff
bought the land in question from Lerma, in 1907, it
was registered under the Torrens system and that the
plaintiff, in purchasing said land, received a certificate
of title thereto in accordance with the provisions of
Act No. 496.
The city, on the assessment of the taxes for the said
years against the plaintiff, proceeded by distraint
against the property f or the collection of the same,
whereupon the plaintiff, to avoid litigation, trouble
and expense, paid taxes, fees and interest in the sum
of P2,096.49, under protest, and thereafter began
this action to recover the same.
Summary of facts from a case digest (for better
summary):
FACTS: In 1907, Petitioner bought from an original
owner a piece of land in Manila which was under the
Torrens system. Apparently, the original owner
incorrectly declared the size of the land. So, from
1901 – 9017, the original owner was paying lesser
taxes than he should have and the same for Petitioner
from 1097 – 1910. Upon finding out that he was not
paying the correct amount of taxes, Petitioner paid
the taxes, fees, and interest of P2,096.49 for the
unpaid balance of the years 1901-1910. Soon after, he
protested and filed an action to recover the same
amount. Petitioner was awarded P1,649.82.
Petitioner contends that the supposed taxes from
before 1910 were not actually taxes because they had
not been assessed. Taxes may not be due and payable
until they are assessed.
Issue: Whether or not a purchaser for value and in
good faith of land registered under Act No. 496, which
has escaped taxation by reason of the failure of the
prior owner to declare it for taxation as required by
law, takes such land free and clear from the burden of
such taxes, they never having been, prior to the
purchase, actually levied or assessed against the land
by reason of said failure of the prior owner to declare
it for taxation?
Answer: Yes. Petitioner should only pay the taxes
when he was the owner of the property.
Ruling: The determination of that question depends
on the wording of section 39 of Act No. 496, as
amended by Act No. 2011. That section reads, so far
as material, as follows. "Every applicant receiving a
certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of
registered land who takes a certificate of title for
value in good faith shall hold the same free of all
incumbrances except those noted on said certificate,
and any of the following incumbrances which may be
subsisting, namely: * * * * * * "Second. Taxes within
two years after the same have become due and
payable."
The plaintiff’s action is based solely on the
proposition that, under section 39 above quoted, his
land "cannot be encumbered with the land tax except
those corresponding to the years" during which he
has held it. The complaint specifically alleges that the
back taxes in question were not assessed and levied
until 1910, years after the transfer of the area in
question to the plaintiff. Taxes were paid in 1911 or
one year after they were assessed and levied.
Assuming that an owner's certificate was issued to
plaintiff in 1907, section 39 of Act No. 496 is clearly
inapplicable for there were no taxes 'due and payable'
then on the area in question. This area was listed and
valued and the taxes were assessed and levied after
the issuance of his certificate, not before. Assessment
is the listing and valuation of property liable to
taxation. (Adam vs. Tonella, 70 Miss., 701; 22 L. R; A.,
349.) 'Without an assessment there is no debt from
the taxpayer, and there is no obligation on his part
which can be enforced in an action.' Thus, since dili ni
tax kay wala pa na assess, dili daw to sya apil sa
exemption na free from encumbrances ang
subsequent purchaser in good faith so as per him,
dapat ibalik sa iya iyang gibayad na tax. Note na
nagbayad sya ug tax nalang para wala nay samok and
this action is to recover the sum of money he has paid.
The appellant (kalaban) contends that the taxes or
the sum sought to be recovered represents the back
taxes which were assessed and levied in 1910 on the
area in question which had escaped taxation in the
previous years, and were charged against plaintiff in
pursuance of section 50 of Act No. 183. Act No. 183
provides for a per centum tax on the assessed value
of the real estate in the city of Manila. The tax being
based on the assessed value of the realty, the
proportion to be collected from any individual
taxpayer is not known, nor can it be ascertained
unless the valuation and assessment of the property
is first made. For this very reason said Act * * *
establishes as a prerequisite that 'the real estate in
the city of Manila shall be assessed and valued for
taxation by the city assessor and collector,' and
charges said officer with the duty of listing all taxable
property in the city. It is obvious, therefore, that there
can be no taxes due and payable unless the
assessment and valuation of the property to be taxed
is first made, for, otherwise, the amount of the tax
cannot be ascertained. He (appellant) further
contends that in compliance with the duty thus
imposed upon him by the provisions of the law above
quoted, the city assessor and collector, upon
discovery that said area of 142,767.03 square meters
of plaintiff's land had escaped taxation, proceeded to
list the same in his tax rolls and assessed and levied
the taxes in question.
We are of the opinion that the appellant has
misunderstood the purpose of Act No. 496. If a
statute needs interpretation or construction, the
influence most dominant in that process is the
purpose or intent of the Act. We have held (City of
Manila vs. Lack, 19 Phil. Rep., 324) that the general
purpose of the Land Registration Act (No, 496) was to
create an indefeasible title and one free from all
charges, liens and incumbrances except those
preserved against it by special mention in the decree
of registration or by provision of law. Section 39 of
that Act embodies that purpose in express law. It
declares, in effect, that every owner of registered
land shall hold the same free and clear from any and
all liens and incumbrances except those set forth in
the decree of registration and those mentioned and
excepted in that section. To repeat, the purpose was
to give to the person registering, and to his transferee
for value, an absolutely clean title, one not subject to
hidden defects, to undeveloped or inchoate claims, to
any sort of restriction, limitation or reduction except
those named in the certificate of registration or
described in section 39.
This being the purpose of the statute, the exceptions
named in section 39 will not be enlarged beyond the
actual signification of the words used or extended
beyond the limits which the words themselves
actually set. Reading that section in the light of this
purpose, we see, from the second paragraph thereof,
that the only taxes to which property held under a
Torrens title is subject in the hands of the person who
obtained the original registration, or of an innocent
purchaser for value, are those "within two years after
the same have become due and payable." From this
section, it is clear that, before land just registered or
transferred for value after registration can be
subjected to payment of past taxes, three things are
requisite: First, they must be taxes; second, they must
be due and payable and subsisting as liens; and, third,
they must be due and payable within two years of the
time when the land was originally registered or when
the transfer was made to the purchaser for value.
We pass over the question which might be raised as
to whether the assessment in question, made in the
year 1910, was really taxes in 1907, the year in which
the plaintiff purchased the land, and take up, first, the
second requisite, which is that the taxes be due and
payable and subsisting as charges on the land. Clear it
is that, under this section, taxes not due and payable
are not included among the subsisting liens and
incumbrances to which land in the condition
described is subject; and, if the assessment in
question, made for the first time in 1910, can be said
to have been taxes in 1907, it certainly was not, under
the tax laws, "taxes due and payable." Under the tax
laws taxes are not due and payable until they have
been levied or assessed as provided by law. In 1907,
therefore, the taxes now sought to be collected were
not due and payable, as they had not then been levied
or assessed on the property. As to this requisite then,
the taxes in question do not fall within its definition
or terms. Reverting to the third requisite, it is clear
that the taxes in question, not being due and payable
until 1910, the year in which they were assessed for
the first time, they were not taxes due and payable
within two years prior to the time when the transfer
to the plaintiff was made. Taxes due and payable for
the first time in 1910 could not have been due and
payable two years prior to 1907, the year in which the
plaintiff purchased the land, nor could they have been
subsisting as liens or incumbrances at that time. It is,
therefore, evident that the taxes in question do not
fulfill, with the possible exception of the first, any
one of the requisites necessary to bring them within
the second paragraph of section 39.
A further argument in favor of our position might be
based upon the fact that, if it was the intention of
the law to relieve registered land under certain
conditions from taxes which are subsisting liens and
incumbrances thereon, and this, of course, is the
fact, since, under section 39, all taxes, although duly
levied and assessed and, therefore, subsisting liens
and incumbrances prior to registration or the sale,
are prevented from having any force or effect on the
land so registered or sold, it is evident that so-called
taxes which have not been assessed or levied against
the property and are simply inchoate and
undeveloped, in other words, taxes in embryo, cannot
be held to be a lien or incumbrance upon the land so
registered or conveyed or to affect the title thereto.
If it was the intention of the law to wipe out actual
liens and incumbrances, is it logical to contend that
it was also the intention to preserve, with the force
of liens and incumbrances, inchoate taxes, or taxes
in embryo, which, as a matter of law, are not liens or
incumbrances in any sense of the word It is the
protection of the purchaser which is the dominant
note of the statute; and, if such taxes as those here
in question may be collected, then the value of that
title has been reduced, its efficacy impaired, and one
of the main purposes of the Land Registration Act
defeated; for taxes which have never been levied or
assessed are far more dangerous to a purchaser than
taxes actually assessed and of record, because they
are wholly unknown and unascertainable.
We see no foundation f or the contention of the
appellant that this construction of the statute
repeals section 50 of Act No. 183. It is true that the
provisions may at times, in a way, come in conflict
with each other. But that is due to the provisions
themselves and not to our construction of them.
Section 50 authorizes the city assessor and collector
to list, value and charge against the owner of lands
which have theretofore escaped taxation the taxes
due for the current year and for all other years for
which they had not been assessed. This provision is
general. Section 39 puts a limitation on it. It declares
that, although taxes may be assessed as provided in
section 50, they cannot be so assessed to the extent
of impairing the virtues of a Torrens title as it is
obtained by registration or by a purchaser f or value.
After section 50 has fully operated, section 39
determines whether the taxes assessed under that
section will be collectible out of lands held under
registered title. Section 50 deals with the levy and
assessment of taxes; section 39 with the conditions
under which certain lands shall be exempt from the
payment of taxes. By their very nature these sections
will at times be in open conflict. In such case the tax
must give way to the title—the general provision to
the exception. Nor do we see any strength in the
contention that our construction of section 39
discriminates against unregistered property.
When the intention of the Legislature in passing Act
No. 496 is kept clearly in mind, it is not at all strange
that the Legislature subordinated the right of the
Government to collect taxes in certain cases to the
creation of an indefeasible and unimpeachable title
and in furtherance of that intention declared that it
was better that the Government lose a tax
occasionally than that registered titles should be
uncertain always.
It seems to us clear that the confusion into which
the appellant has f allen would have been avoided if
it had made the distinction between lands in the
hands of the person who owned them at the time
the taxes became due, or during the period covered
by the false declaration, and those in the hands of a
purchaser for value to whom that person transfers
such lands.
Plaintiff is liable for all taxes and assessments which
were levied or assessed, or which might have been
levied or assessed, during his ownership of the lands.
It appears that he realized that he was so liable and
has paid the taxes for the years 1907 to 1910. He
claims only the right to recover for the taxes paid for
the years previous to the date of his purchase; and
those taxes not having been either due or payable
and not having even been assessed or levied prior to
the time when he purchased the land, his contention
is well founded.
Sy Kiong Vs Sarmiento
Facts: Petitioner is the owner of a duly licensed
grocery store located in the City of Manila and an
importer of flour who sells it either to bakeries or to
retail dealers for purposes of resale. Sometime in
September 1948, the Treasurer of the City of Manila
assessed against him the sum of P566.50 which, it is
claimed, represents the alleged deficiency municipal
license tax due from him on his gross sales of flour to
bakeries after deducting the sales made to retail
dealers for purposes of resale. Petitioner, instead of
honoring the demand, filed the present action for
declaratory relief. In his answer, respondent admitted
all the factual allegations of the complaint, but
contended that the sales in question are sales at retail
and in this sense are subject to the provisions of
Ordinance No. 2723, as amended.
The only issue involved in this appeal is whether the
sales of flour made by petitioner to bakeries to be
manufactured into bread are retail or wholesale. If
retail, they are subject to tax; if wholesale, they are
not. There two criteria by which this can be
determined. "One is by the quantity, whether small or
large; and the other is by the nature of the buyer,
whether he is a consumer or a merchant who resells
at a profit." The Court followed the second criterion
and held that it is the character of the purchaser and
not the quantity of the commodity sold that
determines if the sale is wholesale or retail. If the
purchaser buys the commodity for his own
consumption, the sale is considered retail,
irrespective of the quantity of the commodity sold. If
the purchaser buys the commodity for resale, the sale
is deemed wholesale regardless of the quantity of the
transaction.
Issue: Is the sale of flour to a bakery retail or
wholesale? It is retail.
Ruling: The Ordinance under which the municipal
license tax in question has been assessed does not
contain any definition of what is retail gross sale. Said
ordinance merely provides that the retail gross sales
of a grocery store shall be subject to a license fee to
be fixed by the City Treasurer in accordance with
certain schedule therein specified, but is silent as to
what are considered "retail gross sales". The National
Internal Revenue Code does not also furnish any lead
as regards the nature of a retail sale f or purposes of
taxation. It does not give any definition nor pattern as
to how a sale to a bakery or a manufacturer should be
considered. This is a loophole that our Congress has
not foreseen.
Buenaventura vs. Collector of Internal Revenue (50
Phil. 875) wherein a similar question was raised and
decided. In that case this Court ruled that the sale of
fish to a hotel by a vendor in a public market during
certain period of time and for a certain value is a sale
at retail and, therefore, is subject to the retail sales
tax law. And then the Court added: "even. the isolated
case of those made to the Hotel de Francia cannot be
considered as transactions for resale of fish, because
it has not been proved, nor is it probable, that said
hotel, as such, although it supplies food for payment
and among it fish, cannot be said or considered to be
a reseller of fish". The implication of this ruling is that
the sale of fish to a hotel is retail even if the same is
to be sold later in the form of food. We believe this
ruling to be in point and one of persuasive force in the
present case in the absence of any express provisions
of law on the matter. The parallelism between that
case and the one we are considering is apparent. In
one case, the fish is converted into food through
certain physical process, and, therefore, it suffers an
alteration in form before it is sold. In such case the
fish is resold in different form. A similar situation
obtains in the case of a bakery. The flour is converted
into bread through a physical or chemical process and
later is sold to the public in the form of bread.
We have taken notice of the fact that in many states
of the American Union, sales of tangible property to
manufacturers, producers or processors, or "sales of
goods which as ingredients or constituents go into
and form part of tangible personal property sold by
the buyer are not taxable" as retail transactions
because they are considered wholesale transactions
upon the theory that they have to be resold even in a
different form or condition. But we have noted that if
these transactions are so treated it is not by judicial
interpretation but by express statutory provisions. As
well stated by counsel for the appellee, these
transactions are considered wholesale either because
they are so declared by retail sales statutes of
different American States, by administrative rules and
regulations promulgated thereunder, or by judicial
decisions construing and applying them. If there is an
express provision of the law on the matter, there is
no room for judicial interpretation. Our duty is to
apply the law. But, as we have already pointed out,
such is not the situation obtaining in the Philippines.
Our law on the point is silent, and being silent we do
not feel justified to extend the force and effect of
American statutes to our jurisdiction. To do so would
be to incorporate into our statutes some legislative
matter by judicial ruling which is certainly beyond
our province to do.
Robles vs Zambales Chromite Mining Company, et al.
Facts: On November 28, 1956, the Zambales Chromite
Mining Company filed a complaint for unlawful
detainer against Jose Robles in the Justice of the
Peace Court of Sta. Cruz, Zambales, alleging among
other things that Robles and the Company entered
into a contract whereby the latter delivered the
possession of certain mining properties over which it
had control to Robles who was to extract, mine and
sell ores from said properties upon payment of
certain royalties; that Robles had violated the terms
of the contract; that the Company thereupon served
notice on Robles to vacate the premises; and that
Robles failed to comply with said demand.
Robles filed a motion to dismiss the complaint on the
ground that the Justice of the Peace did not have
jurisdiction, but the latter denied said motion. Robles
thereafter filed a petition for certiorari in the Court of
First Instance of Zambales, alleging that the Justice of
the Peace was without jurisdiction in taking
cognizance of the case for unlawful detainer involving
mineral land. The Court of First Instance ruled against
Robles, holding that the provisions of Section 1, Rule
72, of the Rules of Court, are sufficiently broad to
cover any kind of land, including mineral land. Robles
has appealed.
Issue: Whether or not the provisions of Section 1,
Rule 72, of the Rules of Court, are sufficiently broad
to cover any kind of land, including mineral land?
Ruling: No. Section 1, of Rule 72 provides that, "a
landlord, vendor, vendee, or other person against
whom the possession of any land or building is
unlawfully withheld after the expiration or
termination of the right to hold possession, by virtue
of any contract, express or implied, or the legal
representatives or assigns of any such landlord,
vendor, vendee, or other person, may, at any time
within one year after such unlawful deprivation or
withholding of possession, bring an action in the
proper inferior court against the person or persons
unlawfully withholding or depriving of possession, or
any person or persons claiming under them, for the
restitution of such possession, together with damages
and costs." Any land spoken of in this provision
obviously includes all kinds of land, whether
agricultural, residential or mineral. It is a well-known
maxim in statutory construction that where the law
does not distinguish, we should not distinguish.
People vs Subido
Facts: The CFI found Subido guilty of liber. Therefore,
he was sentenced of 3 months of arresto mayor with
the accessory penalties of the law, pay the fine of
P500.00, indemnify the offended party, Mayor
Arsenio Lacson, of P10,000.00, with subsidiary
imprisonment in case of insolvency and to pay the
costs. However, the Court of Appeals modified the
judgment by removing the penalty of arresto mayor,
reducing the indemnity amount from P10,000 to
P5,000 and mentioned nothing of the subsidiary
imprisonment in case of insolvency. As a result,
Subido filed with the trial court to recognize the
decision of the Court of Appeals and to cancel his
appeal bond.
Issue: Whether or not, the accused-appellant can be
required to serve the fine and indemnity prescribed
in the judgment of the Court of Appeals in form of
subsidiary imprisonment in case of insolvency?
Ruling: Yes. Under Article 355 of the Revised Penal
Code "a libel committed by means of writing, printing,
litography, engraving, radio, phonograph, paintings,
theatrical exhibition, cinematographic exhibition or
any similar means, shall be punished by prision
correccional in its minimum and medium period or a
fine ranging from 200 to 6000 pesos or both, in
addition to the civil action which may be brought by
the offended party". It is evident from the foregoing
provision that the court is given the discretion to
impose the penalty of imprisonment or fine or both
for the crime of libel. It will be noted that the lower
court chose to impose upon the accused: three
months of arresto mayor; a fine of P500.00;
indemnification of the offended party in the sum of
P10,000.00; subsidiary imprisonment in case of
insolvency; and the payment of the costs. On the
other hand, the Court of Appeals in the exercise of its
discretion decided to eliminate the penalty of three
(3) months arresto mayor and to reduce the
indemnity of P10,000.00 to P5,000.00.
A careful scrutiny of the decision of the trial court
reveals that the clause "with subsidiary imprisonment
in case of insolvency" is separated by a comma (,)
from the preceding clause" is hereby sentenced to
three months of arresto mayor with the accessory
penalties of the law, to pay a fine of five hundred
(P500.00) pesos, to indemnify the offended party,
Mayor Arsenio Lacson, in the sum of Ten Thousand
Pesos (P10,000.00) pesos." The use of a comma (,) in
the part of the sentence is to make "the subsidiary
imprisonment in case of insolvency" refer not only to
non-payment of the indemnity, but also to non-
payment of the fine.
If the lower court intended to make the phrase "with
subsidiary imprisonment in case of insolvency" refer
to non-payment of indemnity only and not to the non-
payment of the fine, it would have omitted the
comma (,), after the phrase "to indemnify the
offended party, Mayor Arsenio Lacson in the amount
of P10,000.00 pesos," so that the decision of the
lower court would read:
From the facts above stated the Court finds the accused
guilty of libel and he is hereby sentenced to three (3)
months of arresto mayor, to pay a fine of five hundred
(P500.00) pesos, to indemnify the offended party, Mayor
Arsenio Lacson, in the sum of ten thousand (P10,000.00)
pesos with subsidiary imprisonment in case of insolvency,
and to pay the costs.
As thus worded and punctuated there would be no
doubt that the lower court would want to make
accused-appellant serve the subsidiary imprisonment
in case of non-payment of the indemnity only.
Besides, we see no plausible reason why the lower
court would want accused-appellant to suffer
subsidiary imprisonment in case of insolvency to pay
the indemnity only and not to suffer subsidiary
imprisonment in case of non-payment of the fine.
Accordingly if according to the lower court's decision,
the accused-appellant should suffer subsidiary
imprisonment in case of insolvency to pay the fine
and the indemnity and the only modifications made
by the Court of Appeals are to eliminate the three (3)
months of arresto mayor and to reduce the indemnity
to the offended party, Mayor Arsenio Lacson, from
P10,000.00 to P5,000.00, then by force of logic and
reason, the fine of P5000.00, the reduced indemnity
of P5,000.00 and the subsidiary imprisonment in case
of insolvency should stand.
Fortunately, however, accused-appellant is favored
by the retroactive force of Article 39 of the Revised
Penal Code, as amended by Republic Act No. 5465
which exempts an accused person from subsidiary
imprisonment in case of insolvency to pay his civil
liability. It is a well known rule of legal hermeneutics
that penal statutes are to be strictly construed against
the government and liberally in favor of the
accused. In the interpretation of a penal statute, the
tendency is to give it careful scrutiny, and to construe
it with such strictness as to safeguard the rights of the
defendant.4 Considering that Article 39 of the Revised
Penal Code, as amended, is favorable to the accused-
appellant, the same should be made applicable to
him. It is so provided in Article 22 of the Revised Penal
Code that:
Penal laws shall have a retroactive effect in so far as they
favor the person guilty of a felony, who is not a habitual
criminal, as this term is defined in Rule 5 of Article 62 of this
Code, although at the time of the publication of such laws a
final sentence has been pronounced and the convict is
serving sentence.
Thus applying Article 39 of the Revised Penal Code, as
amended, to the accused-appellant, he cannot also
be required to serve his civil liability to the offended
party in form of subsidiary imprisonment in case of
insolvency because this is no longer required by the
aforesaid article.
Republic of the Philippines v St. Vincent de Paul
Colleges
Facts: Republic seeks the expropriation of certain
properties in the name of St. Vincent de Paul Colleges,
Inc. The Republic sought to expropriate 1,992 square
meters out of a total area of 6,068 square meters of
land for the construction of the Manila-Cavite Toll
Expressway Project (MCTEP). Said property belongs
to St. Vincent covered by TCT No. T-821169 and
located in Binakayan, Kawit, Cavite. In a 2nd case, the
Republic sought to expropriate 2,450 square meters
out of a total area of 9,039 square meters, also
belonging to St. Vincent and covered by TCT No. T-
821170. Said property adjoins the property subject of
Civil Case No. 0062-04. Subsequently, the Republic
filed in both cases an amended complaint alleging
that the subject land originated from a free patent
title and should be adjudicated to it without payment
of just compensation pursuant to Section 112 of
Commonwealth Act No. 141.
On August 9, 2005, the Republic filed a motion for the
issuance of an order of expropriation.4 It was granted
by the trial court per Order5 dated August 16, 2005,
ruling that the Republic has a lawful right to take the
1,992 square meters portion of the subject property,
with “no pronouncement as to just compensation”
since the subject property originated from a free
patent. A motion for the issuance of an order of
expropriation was likewise filed by the Republic in
Civil Case No. 0100-04 but before this could be
resolved, the Republic moved to consolidate the two
cases, which was granted by the trial court.
On November 16, 2006, the trial court denied St.
Vincent’s motion for reconsideration of its Order
dated August 16, 2005 granting expropriation.8 As
alleged in the petition, no appeal was taken by St.
Vincent from said orders.9 After almost 2 years, St.
Vincent filed a Manifestation with Motion for
Clarification of the Order dated August 16,
2005,contending that although it does not oppose the
ruling regarding the determination of public purpose
and the Republic’s right to expropriate the subject
land, it, however, claims that it is entitled to just
compensation.
Meanwhile, the Republic attempted to implement
the Order dated August 16, 2005 by entering the
subject portion of St. Vincent’s property. Aggrieved,
the latter demanded upon the Republic and its agents
to immediately vacate, and remove any and all
equipment or structures they introduced on its
property in a demand-letter11 dated October 3, 2008.
Due to St. Vincent’s refusal to honor the order of
expropriation, the Republic filed an urgent motion for
the issuance of a writ of possession, which was denied
by the lower court in its Order12 dated November 25,
2006 [2008]. The lower court, however, modified its
Order dated August 16, 2005 and required the
Republic to immediately pay St. Vincent in an amount
equivalent to one hundred percent (100%) of the
value of the property sought to be expropriated. The
Republic moved for reconsideration but it was denied
by the lower court per Order13 dated January 29,
2009 for lack of factual and legal basis. Seeking to
avail the extra ordinary remedy of certiorari under
Rule 65 of the Rules of Court, the Republic filed with
the CA a motion for additional time of fifteen (15)
days within which to file its petition. The CA granted
the motion in its Resolution14 dated April 30, 2009
and the Republic was given a non-extensible period of
fifteen (15) days or until May 4, 2009 within which to
file its petition for certiorari.
Ruling of the RTC: denied by the lower court in its
Order12 dated November 25, 2006 [2008]. The lower
court, however, modified its Order dated August 16,
2005 and required the Republic to immediately pay
St. Vincent in an amount equivalent to one hundred
percent (100%) of the value of the property sought to
be expropriated. The Republic moved for
reconsideration but it was denied by the lower court
per Order13 dated January 29, 2009 for lack of factual
and legal basis.
Ruling of CA: the CA, motu proprio, issued a
Resolution15 ordering the Republic to show cause
why its petition for certiorari should not be dismissed
for being filed out of time, pursuant to A.M. No. 07-7-
12- SC. The Republic filed its Compliance with
Explanation dated July 1, 2009 pleading for the
relaxation of the rules by reason of the
transcendental importance of the issues involved in
the case and in consideration of substantial justice. St.
Vincent filed its Comment/Opposition17 dated July
15, 2009 alleging among others that the said
explanation is merely pro forma due to the Republic’s
failure to justify its explanation.CA rendered the
assailed resolution dismissing the Republic’s petition
for certiorari on the ground that the petition was filed
out of time inasmuch as extensions of time are now
disallowed by A.M. No. 07-7-12-SC18 and as applied
in Laguna Metts Corporation v. Court of Appeals.
Issue: Whether or not the rules should be relaxed as
what the full text of Section 4 of Rule 65, as amended
by A.M. No. 07-7-12-SC provides. YES
Contention: The Republic relies on the CA resolution
granting its motion for extension of time and upon
the strength of the substantial merits of its petition.
The Republic also invokes Domdom v. Third and Fifth
Divisions of the Sandiganbayan,21 where the Court
ruled that absent a prohibition, motions for
extensions are allowed, subject to the Court’s sound
discretion.
Ruling: What seems to be a “conflict” is actually
more apparent than real. A reading of the foregoing
rulings leads to the simple conclusion that Laguna
Metts Corporation involves a strict application of the
general rule that petitions for certiorari must be filed
strictly within sixty (60) days from notice of
judgment or from the order denying a motion for
reconsideration. Domdom, on the other hand,
relaxed the rule and allowed an extension of the
sixty (60)-day period subject to the Court’s sound
discretion.
Labao v. Flores subsequently laid down some of the
exceptions to the strict application of the rule, viz.:
Under Section 4 of Rule 65 of the 1997 Rules of Civil
Procedure, certiorari should be instituted within a
period of 60 days from notice of the judgment, order,
or resolution sought to be assailed. The 60-day period
is inextendible to avoid any unreasonable delay that
would violate the constitutional rights of parties to a
speedy disposition of their case.
However, there are recognized exceptions to their
strict observance, such as: (1) most persuasive and
weighty reasons; (2) to relieve a litigant from an
injustice not commensurate with his failure to comply
with the prescribed procedure; (3) good faith of the
defaulting party by immediately paying within a
reasonable time from the time of the default; (4) the
existence of special or compelling circumstances; (5)
the merits of the case; (6) a cause not entirely
attributable to the fault or negligence of the party
favored by the suspension of the rules; (7) a lack of
any showing that the review sought is merely
frivolous and dilatory; (8) the other party will not be
unjustly prejudiced thereby; (9) fraud, accident,
mistake or excusable negligence without appellant’s
fault; (10) peculiar legal and equitable circumstances
attendant to each case; (11) in the name of
substantial justice and fair play; (12) importance of
the issues involved; and (13) exercise of sound
discretion by the judge guided by all the attendant
circumstances. Thus, there should be an effort on the
part of the party invoking liberality to advance a
reasonable or meritorious explanation for his/her
failure to comply with the rules.28 (Citations omitted
and emphasis ours)
Note that Labao explicitly recognized the general rule
that the sixty (60)-day period within which to file a
petition for certiorari under Rule 65 is non-extendible,
only that there are certain exceptional circumstances,
which may call for its non-observance. Even more
recently, in Mid-Islands Power Generation
Corporation v. Court of Appeals,29 the Court, taking
into consideration Laguna Metts Corporation and
Domdom, “relaxed the procedural technicalities
introduced under A.M. No. 07-7-12-SC in order to
serve substantial justice and safeguard strong public
interest” and affirmed the extension granted by the
CA to the respondent Power One Corporation due to
the exceptional nature of the case and the strong
public interest involved.
In Laguna Metts Corporation v. Court of Appeals, we
explained that the reason behind the amendments
under A.M. No. 07-7-12-SC was to prevent the use or
abuse of the remedy of petition for certiorari in order
to delay a case or even defeat the ends of justice. We
thus deleted the clause that allowed an extension of
the period to file a Rule 65 petition for compelling
reasons. Instead, we deemed the 60-day period to file
as reasonable and sufficient time for a party to mull
over the case and to prepare a petition that asserts
grave abuse of discretion by a lower court. The period
was specifically set and limited in order to avoid any
unreasonable delay in the dispensation of justice, a
delay that could violate the constitutional right of the
parties to a speedy disposition of their case. x x x.
Nevertheless, in the more recent case of Domdom v.
Sandiganbayan, we ruled that the deletion of the
clause in Section 4, Rule 65 by A.M. No. 07-7-12-SC
did not, ipso facto, make the filing of a motion for
extension to file a Rule 65 petition absolutely
prohibited. We held in Domdom that if absolute
proscription were intended, the deleted portion
could have just simply been reworded to specifically
prohibit an extension of time to file such petition.
Thus, because of the lack of an express prohibition,
we held that motions for extension may be allowed,
subject to this Court’s sound discretion, and only
under exceptional and meritorious cases.
Indeed, we have relaxed the procedural
technicalities introduced under A.M. No. 07-7-12-SC
in order to serve substantial justice and safeguard
strong public interest.
The present Petition involves one of those
exceptional cases in which relaxing the procedural
rules would serve substantial justice and safeguard
strong public interest. x x x Consequently, in order to
protect strong public interest, this Court deems it
appropriate and justifiable to relax the amendment of
Section 4, Rule 65 under A.M. No. 07-7-12-SC,
concerning the reglementary period for the filing of a
Rule 65 petition. Considering that the imminent
power crisis is an exceptional and meritorious
circumstance, the parties herein should be allowed to
litigate the issues on the merits. Furthermore, we find
no significant prejudice to the substantive rights of
the litigants as respondent was able to file the
Petition before the CA within the 15-day extension it
asked for. We therefore find no grave abuse of
discretion attributable to the CA when it granted
respondent Power One’s Motion for Extension to file
its Petition for Certiorari.30 (Citations omitted and
emphasis ours)
To reiterate, under Section 4, Rule 65 of the Rules of
Court and as applied in Laguna Metts Corporation, the
general rule is that a petition for certiorari must be
filed within sixty (60) days from notice of the
judgment, order, or resolution sought to be assailed.
Under exceptional circumstances, however, and
subject to the sound discretion of the Court, said
period may be extended pursuant to Domdom, Labao
and Mid-Islands Power cases. Accordingly, the CA
should have admitted the Republic’s petition: first,
due to its own lapse when it granted the extension
sought by the Republic per Resolution dated April
30, 2009; second, because of the public interest
involved, i.e., expropriation of private property for
public use (MCTEP); and finally, no undue prejudice
or delay will be caused to either party in admitting
the petition.
WHEREFORE, premises considered, the petition is
GRANTED. The Resolutions dated October 30, 2009
and July 15, 2010 of the Court of Appeals in CA-G.R.
SP No. 108499 are NULLIFIED. The Court of Appeals is
hereby ORDERED to REINSTATE and ADMIT the
petition for certiorari filed by the Republic of the
Philippines in CA-G.R. SP No. 108499 and to proceed
with the case with dispatch.
Ang Bagong Bayani v COMELEC
Facts: With the onset of the 2001 elections, the
Comelec received several Petitions for registration
filed by sectoral parties, organizations and political
parties. According to the Comelec, “[verifications
were made as to the status and capacity of these
parties and organizations and hearings were
scheduled day and night until the last party w[as]
heard. With the number of these petitions and the
observance of the legal and procedural requirements,
review of these petitions as well as deliberations
takes a longer process in order to arrive at a decision
and as a result the two (2) divisions promulgated a
separate Omnibus Resolution and individual
resolution on political parties. These numerous
petitions and processes observed in the disposition of
these petition [s] hinder the early release of the
Omnibus Resolutions of the Divisions which were
promulgated only on 10 February 2001.
Thereafter, before the February 12, 2001 deadline
prescribed under Comelec Resolution No. 3426 dated
December 22, 2000, the registered parties and
organizations filed their respective Manifestations,
stating their intention to participate in the party-list
elections. Other sectoral and political parties and
organizations whose registrations were denied also
filed Motions for Reconsideration, together with
Manifestations of their intent to participate in the
party list elections. Still other registered parties filed
their Manifestations beyond the deadline.
The Comelec gave due course or approved the
Manifestations (or accreditations) of 151 parties and
organizations, but denied those of several others in its
assailed March 26, 2001 Omnibus Resolution No.
3785, which we quote: “We carefully deliberated the
foregoing matters, having in mind that this system of
proportional representation scheme will encourage
multi-partisan [sic] and enhance the inability of small,
new or sectoral parties or organization to directly
participate in this electoral window.
“However, in the course of our review of the matters
at bar, we must recognize the fact that there is a need
to keep the number of sectoral parties, organizations
and coalitions, down to a manageable level, keeping
only those who substantially comply with the rules
and regulations and more importantly the sufficiency
of the Manifestations or evidence on the Motions for
Reconsiderations or Oppositions.”3
On April 10, 2001, Akbayan Citizens Action Party filed
before the Comelec a Petition praying that “the
names of some of herein respondents be deleted
from the ‘Certified List of Political Parties/Sectoral
Parties/Organizations/Coalitions Participating in the
Party List System for the May 14, 2001 Elections’ and
that said certified list be accordingly amended.” It also
asked, as an alternative, that the votes cast for the
said respondents not be counted or canvassed, and
that the latter’s nominees not be proclaimed.4 On
April 11, 2001, Bayan Muna and Bayan Muna-Youth
also filed a Petition for Cancellation of Registration
and Nomination against some of herein respondents.
The Comelec required the respondents in the two
disqualification cases to file Comments within three
days from notice. It also set the date for hearing on
April 26, 2001,6 but subsequently reset it to May 3,
2001. During the hearing, however, Commissioner
Ralph C. Lantion merely directed the parties to submit
their respective memoranda.
Meanwhile, dissatisfied with the pace of the Comelec,
Ang Bagong Bayani-OFW Labor Party filed a petition
assailing the Comelec Omnibus Resolution No. 3785.
The Court directed respondents to comment on the
Petition within a non-extendible period of five days
from notice. On April 17, 2001, Petitioner Bayan
Muna also filed before this Court a Petition also
challenging Comelec Omnibus Resolution No. 3785. In
its Resolution dated May 9, 2001,13 the Court
ordered the consolidation of the two Petitions before
it; it called the parties to an Oral Argument on May
17, 2001. It added that the Comelec may proceed with
the counting and canvassing of votes cast for the
party-list elections, but barred the proclamation of
any winner therein, until further orders of the Court.
Thereafter, Comments on the second Petition were
received by the Court and, on May 17, 2001, the Oral
Argument was conducted as scheduled. In an Order
given in open court, the parties were directed to
submit their respective Memoranda simultaneously
within a non-extendible period of five days.
Issue: 1. Whether or not political parties may
participate in the partylist elections. YES
2. Whether or not the party-list system is exclusive to
‘marginalized and underrepresented’ sectors and
organizations. NO, however not all sectors can be
represented under the party-list system.
Contention 1: Ang Bagong Bayani-OFW Labor Party
contends that “the inclusion of political parties in the
party-list system is the most objectionable portion of
the questioned Resolution.”27 For its part, Petitioner
Bayan Muna objects to the participation of “major
political parties.” On the other hand, the Office of the
Solicitor General, like the impleaded political parties,
submits that the Constitution and RA No. 7941 allow
political parties to participate in the party-list
elections. It argues that the party-list system is, in
fact, open to all “registered national, regional and
sectoral parties or organizations.”
Ruling 1: Under the Constitution and RA 7941, private
respondents cannot be disqualified from the party-list
elections, merely on the ground that they are political
parties. Section 5, Article VI of the Constitution,
provides that members of the House of
Representatives may “be elected through a party-list
system of registered national, regional, and sectoral
parties or organizations.” Furthermore, under
Sections 7 and 8, Article IX (C) of the Constitution,
political parties may be registered under the party-list
system. Sec. 7. No votes cast in favor of a political
party, organization, or coalition shall be valid, except
for those registered under the party-list system as
provided in this Constitution. Sec. 8. Political parties,
or organizations or coalitions registered under the
party-list system, shall not be represented in the
voter’s registration boards, boards of election
inspectors, boards of canvassers, or other similar
bodies. However, they shall be entitled to appoint poll
watchers in accordance with law.”
During the deliberations in the Constitutional
Commission, Comm. Christian S. Monsod pointed out
that the participants in the party-list system may “be
a regional party, a sectoral party, a national party,
UNIDO,31 Magsasaka, or a regional party in
Mindanao.
Indeed, Commissioner Monsod stated that the
purpose of the party-list provision was to open up the
system, in order to give a chance to parties that
consistently place third or fourth in congressional
district elections to win a seat in Congress.34 He
explained: The purpose of this is to open the system.
In the past elections, we found out that there were
certain groups or parties that, if we count their votes
nationwide, have about 1,000,000 or 1,500,000 votes.
But they were always third or fourth place in each of
the districts. So, they have no voice in the Assembly.
But this way, they would have five or six
representatives in the Assembly even if they would
not win individually in legislative districts. So, that is
essentially the mechanics, the purpose and objectives
of the partylist system.”
For its part, Section 2 of RA 7941 also provides for “a
party-list system of registered national, regional and
sectoral parties or organizations or coalitions thereof,
x x x.” Section 3 expressly states that a “party” is
“either a political party or a sectoral party or a
coalition of parties.” More to the point, the law
defines “political party” as “an organized group of
citizens advocating an ideology or platform, principles
and policies for the general conduct of government
and which, as the most immediate means of securing
their adoption, regularly nominates and supports
certain of its leaders and members as candidates for
public office.”
Furthermore, Section 11 of RA 7941 leaves no doubt
as to the participation of political parties in the party-
list system. We quote the pertinent provision below:
For purposes of the May 1998 elections, the first five
(5) major political parties on the basis of party
representation in the House of Representatives at the
start of the Tenth Congress of the Philippines shall not
be entitled to participate in the party-list system.
Indubitably, therefore, political parties—even the
major ones—may participate in the party-list
elections.
Contention 2: OSG Contends that since the list is not
exclusive, the rich can join the party-list elections
Ruling 2: That political parties may participate in the
party-list elections does not mean, however, that any
political party—or any organization or group for that
matter—may do so.
RA 7941 was enacted. It laid out the statutory policy
in this wise: “SEC. 2. Declaration of Policy.—The State shall
promote proportional representation in the election of
representatives to the House of Representatives through a
party-list system of registered national, regional and
sectoral parties or organizations or coalitions thereof,
which will enable Filipino citizens belonging to marginalized
and underrepresented sectors, organizations and parties,
and who lack well-defined political constituencies but who
could contribute to the formulation and enactment of
appropriate legislation that will benefit the nation as a
whole, to become members of the House of
Representatives. Towards this end, the State shall develop
and guarantee a full, free and open party system in order to
attain the broadest possible representation of party,
sectoral or group interests in the House of Representatives
by enhancing their chances to compete for and win seats in
the legislature, and shall provide the simplest scheme
possible.”
The intent of the Constitution is clear: to give genuine
power to the people, not only by giving more law to
those who have less in life, but more so by enabling
them to become veritable lawmakers themselves.
Consistent with this intent, the policy of the
implementing law, we repeat, is likewise clear: “to
enable Filipino citizens belonging to marginalized and
underrepresented sectors, organizations and parties,
x x x, to become members of the House of
Representatives.” Where the language of the law is
clear, it must be applied according to its express
terms.37
The marginalized and underrepresented sectors to be
represented under the party-list system are
enumerated in Section 5 of RA 7941, which
states:“SEC. 5. Registration.—Any organized group of
persons may register as a party, organization or
coalition for purposes of the party-list system by filing
with the COMELEC not later than ninety (90) days
before the election a petition verified ….Provided,
that the sector shall include labor, peasant, fisherfolk,
urban poor, indigenous cultural communities, elderly,
handicapped, women, youth, veterans, overseas
workers, and professionals.”While the enumeration
of marginalized and underrepresented sectors is not
exclusive, it demonstrates the clear intent of the law
that not all sectors can be represented under the
party-list system. It is a fundamental principle of
statutory construction that words employed in a
statute are interpreted in connection with, and their
meaning is ascertained by reference to, the words
and the phrases with which they are associated or
related. Thus, the meaning of a term in a statute may
be limited, qualified or specialized by those in
immediate association.
The declared policy of RA 7941 contravenes the
position of the Office of the Solicitor General (OSG).
We stress that the party-list system seeks to enable
certain Filipino citizens—specifically those belonging
to marginalized and underrepresented sectors,
organizations and parties—to be elected to the House
of Representatives. The assertion of the OSG that the
party-list system is not exclusive to the marginalized
and underrepresented disregards the clear statutory
policy. Its claim that even the super-rich and
overrepresented can participate desecrates the spirit
of the party-list system.
Indeed, the law grafted to address the peculiar
disadvantages of Payatas hovel dwellers cannot be
appropriated by the mansion owners of Forbes Park.
The interests of these two sectors are manifestly
disparate; hence, the OSG’s position to treat them
similarly defies reason and common sense. In
contrast, and with admirable candor, Atty. Lorna
Patajo-Kapunan42 admitted during the Oral
Argument that a group of bankers, industrialists and
sugar planters could not join the party-list system as
representatives of their respective sectors. While the
business moguls and the mega-rich are, numerically
speaking, a tiny minority, they are neither
marginalized nor underrepresented, for the stark
reality is that their economic clout engenders political
power more awesome than their numerical
limitation. Traditionally, political power does not
necessarily emanate from the size of one’s
constituency; indeed, it is likely to arise more directly
from the number and amount of one’s bank accounts.
It is ironic, therefore, that the marginalized and
underrepresented in our midst are the majority who
wallow in poverty, destitution and infirmity. It was for
them that the party-list system was enacted—to
give them not only genuine hope, but genuine
power; to give them the opportunity to be elected
and to represent the specific concerns of their
constituencies; and simply to give them a direct
voice in Congress and in the larger affairs of the
State. In its noblest sense, the party-list system truly
empowers the masses and ushers a new hope for
genuine change. Verily, it invites those marginalized
and underrepresented in the past—the farm hands,
the fisher folk, the urban poor, even those in the
underground movement—to come out and
participate, as indeed many of them came out and
participated during the last elections. The State
cannot now disappoint and frustrate them by
disabling and desecrating this social justice vehicle.
Verily, allowing the non-marginalized and
overrepresented to vie for the remaining seats under
the party-list system would not only dilute, but also
prejudice the chance of the marginalized and
underrepresented, contrary to the intention of the
law to enhance it. The party-list system is a tool for
the benefit of the underprivileged; the law could not
have given the same tool to others, to the prejudice
of the intended beneficiaries.
This Court, therefore, cannot allow the party-list
system to be sullied and prostituted by those who are
neither marginalized nor underrepresented. It cannot
let that flicker of hope be snuffed out. The clear state
policy must permeate every discussion of the
qualification of political parties and other
organizations under the party-list system.
Prasnik Vs Republic
Facts: Leopoldo Prasnik filed before the Court of First
Instance of Rizal a petition seeking to adopt Pablo
Vasquez, Ernesto Vasquez, Maria Lourdes Vasquez
and Elizabeth Prasnik who are the minor children of
Paz Vasquez. He claims that they are also his children
but without the benefit of marriage and he desires to
adopt them to promote their best interest and well-
being. Leopoldo Prasnik was formerly married to one
Catherine Prasnik but their marriage was dissolved by
virtue of a decree of divorce issued on December 12,
1947 by the Circuit Court of Miami, Dade Country,
Florida, U.S.A. Thereafter, he and Paz Vasquez lived
together as husband and wife without the benefit of
marriage and out of this relation four children were
born who are the minors he is now seeking to adopt.
He claims that it is his intention to marry Paz Vasquez
as soon as he is granted Philippine citizenship for
which he has already applied and in the meantime he
wants to adopt them in order that no one of his
relatives abroad could share in his inheritance. He
averred that he had no child with his former wife and
acknowledged said minors as his natural children.
Article 338 of the new Civil Code states that a natural
child may be adopted by his natural father or mother.
The Solicitor General interprets this provision in the
sense that in order that a natural child may be
adopted by his natural father or mother there should
not mediate between them an acknowledgment of
the status of natural child by the father or mother as
otherwise the adoption would be repugnant to Article
335 of the same Code which denies adoption to one
who has an acknowledged natural child, since
petitioner has expressly admitted in open court that
the minors subject of this proceeding are his natural
children, he is therefore disqualified to adopt under
the law.
Issue: WON the contention of solicitor general is
correct? No. He is incorrect.
Ruling: We do not agree to this interpretation.
Apparently, Article 338 above adverted to merely
refers to the adoption of a natural child and not to
one who has already been recognized, but there is
nothing therein which would prohibit the adoption of
an acknowledged natural child even if the law does
not expressly say so. The reason for the silence of the
law is obvious. That law evidently intends to allow
adoption whether the child be recognized or not. If
the intention were to allow adoption only to
unrecognized children, as contended, then the
provision of Article 338 would be of no useful purpose
because such children could have been validly
adopted even without it. And we say so because a
natural child not recognized has no right whatever 1
and being considered legally a total stranger to his
parents, he may be adopted under Article 337. The
same cannot be said with regard to an acknowledged
natural child because, his filiation having already been
established, his adoption cannot be made under the
general principles governing adoption. There is
therefore need of an express provision allowing the
adoption of an acknowledged natural child as an
exception to the rule and that is what is contemplated
in the article we are considering.
The Solicitor General, in his opposition to the petition,
invokes Article 335 of the new Civil Code which
provides that a person who has an acknowledged
natural child cannot adopt and considering that
petitioner has acknowledged the minors in question
as his children, he contends that he is disqualified
from adopting them under that article. We believe
that the Solicitor General has not made a correct
interpretation of that article for he is confusing the
children of the person adopting with the minors to
be adopted. A cursory reading of said article would
reveal that the prohibition merely refers to the
adoption of a minor by a person who has already an
acknowledged natural child and it does not refer to
the adoption of his own children even if he has
acknowledged them as his natural children. It may be
contended that the adoption of an acknowledged
natural child is unnecessary because there already
exists between the father and the child the relation of
paternity and filiation which is precisely the purpose
which adoption seeks to accomplish through legal
fiction. But it should be borne in mind that the rights
of an acknowledged natural child are much less than
those of a legitimate child and it is indeed to the great
advantage of the latter if he be given, even through
legal fiction, a legitimate status.
Spouses Pascual vs Spouses Ballesteros
Facts: The instant case involves a 1,539 square meter
parcel of land (subject property) situated in Barangay
Sta. Maria, Laoag City and covered by Transfer
Certificate of Title (TCT) No. T-303753 of the Laoag
City registry. The subject property is owned by the
following persons, with the extent of their respective
shares over the same: (1) the spouses Albino and
Margarita Corazon Mariano, 330 square meters; (2)
Angela Melchor (Angela), 466.5 square meters; and
(3) the spouses Melecio and Victoria Melchor
(Spouses Melchor), 796.5 square meters.
Upon the death of the Spouses Melchor, their share
in the subject property was inherited by their
daughter Lorenza Melchor Ballesteros (Lorenza).
Subsequently, Lorenza and her husband Antonio
Ballesteros (respondents) acquired the share of
Angela in the subject property by virtue of an Affidavit
of Extrajudicial Settlement with Absolute Sale4 dated
October 1, 1986.
On August 11, 2000, Margarita, then already
widowed, together with her children, sold their share
in the subject property to Spouses Pascual and
Francisco.5 Subsequently, Spouses Pascual and
Francisco caused the cancellation of TCT No. 30375
and, thus, TCT No. T-325226 was then issued in their
names together with Angela and Spouses Melchor.
Consequently, the respondents, claiming that they
did not receive any written notice of the said sale in
favor of Spouses Pascual and Francisco, filed with the
Regional Trial Court (RTC) of Laoag City a Complaint7
for legal redemption against the petitioners. The
respondents claimed that they are entitled to redeem
the portion of the subject property sold to Spouses
Pascual and Francisco being co-owners of the same.
For their part, the petitioners claimed that there was
no co-ownership over the subject property
considering that the shares of the registered owners
thereof had been particularized, specified and
subdivided and, hence, the respondents has no right
to redeem the portion of the subject property that
was sold to them.
Issue: Whether or not the written notice is the 30-day
period given to the respondents within which to
exercise their right of redemption has commence?
Ruling: No. The Court find no reversible error on the
part of the CA in ruling that the 30-day period given
to the respondents within which to exercise their
right of redemption has not commenced in view of
the absence of a written notice. Verily, despite the
respondents’ actual knowledge of the sale to the
respondents, a written notice is still mandatory and
indispensable for purposes of the commencement of
the 30-day period within which to exercise the right
of redemption.
Article 1623 of the Civil Code succinctly provides that:
“Article 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 vendor, 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
adjoining owners.”
The indispensability of the “written notice
requirement” for purposes of the exercise of the right
of redemption was explained by this Court in
Barcellano v. Bañas, thus:
“Nothing in the records and pleadings submitted by
the parties shows that there was a written notice sent
to the respondents. Without a written notice, the
period of thirty days within which the right of legal
preemption may be exercised, does not start.
The indispensability of a written notice had long been
discussed in the early case of Conejero v. Court of
Appeals, penned by Justice J.B.L. Reyes:
With regard to the written notice, we agree with petitioners
that such notice is indispensable, and that, in view of the
terms in which Article of the Philippine Civil Code is
couched, mere knowledge of the sale, acquired in some
other manner by the redemptioner, does not satisfy the
statute. The written notice was obviously exacted by the
Code to remove all uncertainty as to the sale, its terms and
its validity, and to quiet any doubts that the alienation is not
definitive. The statute not having provided for any
alternative, the method of notification prescribed remains
exclusive.
This is the same ruling in Verdad v. Court of Appeals:
The written notice of sale is mandatory. This Court has long
established the rule that notwithstanding actual knowledge
of a co-owner, the latter is still entitled to a written notice
from the selling co-owner in order to remove all
uncertainties about the sale, its terms and conditions, as
well as its efficacy and status.
Lately, in Gosiengfiao Guillen v. The Court of Appeals,
this Court again emphasized the mandatory character
of a written notice in legal redemption: From these
premises, we ruled that “[P]etitioner-heirs have not lost
their right to redeem, for in the absence of a written
notification of the sale by the vendors, the 30-day period
has not even begun to run.” These premises and conclusion
leave no doubt about the thrust of Mariano: The right of the
petitioner-heirs to exercise their right of legal redemption
exists, and the running of the period for its exercise has not
even been triggered because they have not been notified in
writing of the fact of sale. x x x x
Justice Edgardo Paras, referring to the origins of the
requirement, would explain in his commentaries on
the New Civil Code that despite actual knowledge, the
person having the right to redeem is STILL entitled to
the written notice. Both the letter and the spirit of the
New Civil Code argue against any attempt to widen
the scope of the “written notice” by including therein
any other kind of notice such as an oral one, or by
registration. If the intent of the law has been to
include verbal notice or any other means of
information as sufficient to give the effect of this
notice, there would have been no necessity or reason
to specify in the article that said notice be in writing,
for under the old law, a verbal notice or mere
information was already deemed sufficient.
Time and time again, it has been repeatedly declared
by this Court that where the law speaks in clear and
categorical language, there is no room for
interpretation. There is only room for application.
Where the language of a statute is clear and
unambiguous, the law is applied according to its
express terms, and interpretation should be resorted
to only where a literal interpretation would be either
impossible or absurd or would lead to an injustice.
x x x”
Here, it is undisputed that the respondents did not
receive a written notice of the sale in favor of the
petitioners. Accordingly, the 30-day period stated
under Article 1623 of the Civil Code within which to
exercise their right of redemption has not begun to
run. Consequently, the respondents may still redeem
from the petitioners the portion of the subject
property that was sold to the latter.
Land Bank vs CA
Facts: Petitioners Department of Agrarian Reform
(DAR) and Land Bank of the Philippines (LBP), filed
their respective motions for reconsideration
contending mainly that, contrary to the Court’s
conclusion, the opening of trust accounts in favor of
the rejecting landowners is sufficient compliance with
the mandate of Republic Act 6657. Moreover, it is
argued that there is no legal basis for allowing the
withdrawal of the money deposited in trust for the
rejecting landowners pending the determination of
the final valuation of their properties.
Petitioner DAR maintains that “the deposit
contemplated by Section 16(e) of Republic Act 6657,
absent any specific indication, may either be general
or special, regular or irregular, voluntary or
involuntary (necessary) or other forms known in law,
and any thereof should be, as it is the general rule,
deemed complying.”
Issue: Whether or not there is a legal basis for
allowing the withdrawal of the money deposited in
trust for the rejecting landowners pending the
determination of the final valuation of their
properties?
Ruling: Yes. Section 16(e) of Republic Act 6657 was
very specific in limiting the type of deposit to be made
as compensation for the rejecting landowners, that is,
in “cash” or in “LBP bonds,” to wit: “Sec. 16.
Procedure for Acquisition of Private Lands—
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. x
x x.”
The provision is very clear and unambiguous,
foreclosing any doubt as to allow an expanded
construction that would include the opening of “trust
accounts” within the coverage of the term “deposit.”
Accordingly, we must adhere to the well-settled rule
that when the law speaks in clear and categorical
language, there is no reason for interpretation or
construction, but only for application.3 Thus,
recourse to any rule which allows the opening of trust
accounts as a mode of deposit under Section 16(e) of
RA 6657 goes beyond the scope of the said provision
and is therefore impermissible. As we have previously
declared, the rule-making power must be confined to
details for regulating the mode or proceedings to
carry into effect the law as it has been enacted, and it
cannot be extended to amend or expand the
statutory requirements or to embrace matters not
covered by the statute.4 Administrative regulations
must always be in harmony with the provisions of the
law because any resulting discrepancy between the
two will always be resolved in favor of the basic law.
The validity of constituting trust accounts for the
benefit of the rejecting landowners and withholding
immediate payment to them is further premised on
the latter’s refusal to accept the offered
compensation thereby making it necessary that the
amount remains in the custody of the LBP for
safekeeping and in trust for eventual payment to the
landowners. Additionally, it is argued that the release
of the amount deposited in trust prior to the final
determination of the just compensation would be
premature and expose the government to
unnecessary risks and disadvantages, citing the
possibility that the government may subsequently
decide to abandon or withdraw from the coverage of
the CARP certain portions of the properties that it has
already acquired, through supervening administrative
determination that the subject land falls under the
exempt category, or by subsequent legislation
allowing additional exemptions from the coverage, or
even the total scrapping of the program itself. Force
majeure is also contemplated in view of the
devastation suffered by Central Luzon due to lahar.
Petitioner DAR maintains that under these conditions,
the government will be forced to institute numerous
actions for the recovery of the amounts that it has
already paid in advance to the rejecting landowners.
We are not persuaded. As an exercise of police power,
the expropriation of private property under the CARP
puts the landowner, and not the government, in a
situation where the odds are already stacked against
his favor. He has no recourse but to allow it. His only
consolation is that he can negotiate for the amount of
compensation to be paid for the expropriated
property. As expected, the landowner will exercise
this right to the hilt, but subject however to the
limitation that he can only be entitled to a “just
compensation.” Clearly therefore, by rejecting and
disputing the valuation of the DAR, the landowner is
merely exercising his right to seek just compensation.
If we are to affirm the withholding of the release of
the offered compensation despite depriving the
landowner of the possession and use of his property,
we are in effect penalizing the latter for simply
exercising a right afforded to him by law.
Obviously, this would render the right to seek a fair
and just compensation illusory as it would discourage
owners of private lands from contesting the offered
valuation of the DAR even if they find it unacceptable,
for fear of the hardships that could result from long
delays in the resolution of their cases. This is contrary
to the rules of fair play because the concept of just
compensation embraces not only the correct
determination of the amount to be paid to the
owners of the land, but also the payment of the land
within a reasonable time from its taking. Without
prompt payment, compensationcannot be
considered “just” for the property owner is made
tosuffer the consequence of being immediately
deprived of hisland while being made to wait for a
decade or more before actually receiving the amount
necessary to cope with his loss.8
It is significant to note that despite petitioners’
objections to the immediate release of the rejected
compensation, petitioner LBP, taking into account the
plight of the rejecting landowners, has nevertheless
allowed partial withdrawal through LBP Executive
Order No. 003,9 limited to fifty (50) per cent of the
net cash proceeds. This is a clear confirmation that
petitioners themselves realize the overriding need of
the landowners’ immediate access to the offered
compensation despite rejecting its valuation. But the
effort, though laudable, still falls short because the
release of the amount was unexplainably limited to
only fifty per cent instead of the total amount of the
rejected offer, notwithstanding that the rejecting
landowner’s property is taken in its entirety. The
apprehension against the total release of the rejected
compensation is discounted since the government’s
interest is amply protected under the
aforementioned payment scheme because among
the conditions already imposed is that the landowner
must execute a Deed of Conditional Transfer for the
subject property.10
Anent the aforecited risks and disadvantages to which
the government allegedly will be unnecessarily
exposed if immediate withdrawal of the rejected
compensation is allowed, suffice it to say that in the
absence of any substantial evidence to support the
same, the contemplated scenarios are at the moment
nothing but speculations. To allow the taking of the
landowners’ properties, and in the meantime leave
them empty-handed by withholding payment of
compensation while the government speculates on
whether or not it will pursue expropriation, or worse
for government to subsequently decide to abandon
the property and return it to the landowner when it
has already been rendered useless by force majeure,
is undoubtedly an oppressive exercise of eminent
domain that must never be sanctioned. Legislations in
pursuit of the agrarian reform program are not mere
overnight creations but were the result of long
exhaustive studies and even heated debates. In
implementation of the program, much is therefore
expected from the government. Unduly burdening
the property owners from the resulting flaws in the
implementation of the CARP which was supposed to
have been a carefully crafted legislation is plainly
unfair and unacceptable.
South Pacific Sugar Group v CA
Facts: In 1999, the government projected a shortage
of some 500,000 metric tons of sugar due to the
effects of El Niño and La Niña phenomena. To fill the
expected shortage and to ensure stable sugar prices,
then President Joseph Ejercito Estrada issued
Executive Order No. 87, Series of 1999 (EO 87),4
facilitating sugar importation by the private sector.
Section 2 of EO 87 created a Committee on Sugar
Conversion/Auction to determine procedures for
sugar importation as well as for collection and
remittance of conversion fee. Under Section 3 of EO
87, sugar conversion is by auction and is subject to
conversion fee to be remitted by respondent Sugar
Regulatory Administration (SRA) to the Bureau of
Treasury.
On 3 May 1999, the Committee on Sugar
Conversion/Auction issued the Bidding Rules
providing guidelines for sugar importation. Under the
Bidding Rules, the importer pays 25% of the
conversion fee within three working days from
receipt of notice of the bid award and the 75%
balance upon arrival of the imported sugar. The
Bidding Rules also provide that if the importer fails to
make the importation or if the imported sugar fails to
arrive on or before the set arrival date, 25% of the
conversion fee is forfeited in favor of the SRA. The
Committee on Sugar Conversion/Auction caused the
publication of the invitation to bid. Several sugar
importers submitted sealed bid tenders. Petitioners
Southeast Asia Sugar Mill Corporation (Sugar Mill)
and South Pacific Sugar Corporation (Pacific Sugar)
emerged as winning bidders for the 1st, 2nd, and 3rd
tranches.
For the 3rd tranche, Sugar Mill submitted the winning
bid of P286.80 per 50 kilogram for 10,000 metric tons
of sugar, while Pacific Sugar submitted the winning
bid of P285.99 per 50 kilogram for 20,000 metric tons
of sugar, for a combined total volume of 30,000
metric tons of sugar. Pursuant to the Bidding Rules,
Sugar Mill paid 25% of the conversion fee amounting
to P14,340,000.00, while Pacific Sugar paid 25% of the
conversion fee amounting to P28,599,000.00.
As it turned out, Sugar Mill and Pacific Sugar (sugar
corporations) delivered only 10% of their sugar
import allocation, or a total of only 3,000 metric tons
of sugar. They requested the SRA to cancel the
remaining 27,000 metric tons of sugar import
allocation blaming sharp decline in sugar prices. The
sugar corporations sought immediate reimbursement
of the corresponding 25% of the conversion fee
amounting to P38,637,000.00. The SRA informed the
sugar corporations that the conversion fee would be
forfeited pursuant to paragraph G.1 of the Bidding
Rules. The SRA also notified the sugar corporations
that the authority to reconsider their request for
reimbursement was vested with the Committee on
Sugar Conversion/ Auction. On 26 February 2002, the
sugar corporations filed a complaint for breach of
contract and damages in the RTC. In its notice of
appearance,7 the Office of the Solicitor General (OSG)
deputized Atty. Raul Labay of the SRA’s legal
department to assist the OSG in this case.
Ruling of the RTC: The RTC held that paragraph G.1 of
the Bidding Rules contemplated delay in the arrival of
imported sugar, not cancellation of sugar
importation. It concluded that the forfeiture provision
did not apply to the sugar corporations which merely
cancelled the sugar importation.
Ruling of the CA: (as to deputization)The Court of
Appeals held that the deputized SRA counsel had
authority to file a notice of appeal. The appellate
court thus directed the RTC to give due course to the
appeal that Atty. Labay timely filed.
Issue/s: 1. whether or not a deputized SRA counsel
may file a notice of appeal. YES
2. whether or not the sugar corporations are entitled
to reimbursement of P38,637,000.00 in conversion
fee. NO.
Contention 1 : The sugar corporations contend that
the deputized SRA counsel, Atty. Labay, was not
authorized to file a notice of appeal; that the OSG, as
the principal counsel, had the sole authority to file a
notice of appeal; that certiorari may not be
interposed as a substitute for the lost remedy of
appeal;
Ruling 1: Section 35, Chapter 12, Title III, Book IV of
the Administrative Code of 1987 authorizes the OSG
to represent the SRA, a government agency
established pursuant to Executive Order No. 18,
Series of 1986,18 in any litigation, proceeding,
investigation, or matter requiring the services of
lawyers. It provides: “SEC. 35. Powers and
Functions.—The Office of the Solicitor General shall
represent the Government of the Philippines, its
agencies and instrumentalities and its officials and
agents in any litigation, proceeding, investigation, or
matter requiring the services of lawyers. When
authorized by the President or head of the office
concerned, it shall also represent government owned
or controlled corporations. The Office of the Solicitor
General shall constitute the law office of the
Government and, as such, shall discharge duties
requiring the services of lawyers.” (Emphasis
supplied)
The OSG is empowered to deputize legal officers of
government departments, bureaus, agencies, and
offices in cases involving their respective offices.
Paragraph 8 of the same section reads: “(8)
Deputize legal officers of government departments,
bureaus, agencies, and offices to assist the Solicitor
General and appear or represent the Government in
cases involving their respective offices, brought
before the courts and exercise supervision and
control over such legal officers with respect to such
cases.” (Emphasis supplied) In National Power
Corporation v. Vine Development
Corporation,19 this Court ruled that the deputization
by the OSG of NAPOCOR counsels in cases involving
the NAPOCOR included the authority to file a notice
of appeal. The Court explained that the OSG could
have withdrawn the appeal if it believed that the
appeal would not advance the government’s cause.
The Court held that even if the deputized NAPOCOR
counsel had no authority to file a notice of appeal, the
defect was cured by the OSG’s subsequent
manifestation that the deputized NAPOCOR counsel
had authority to file a notice of appeal.
Contention 2:
Ruling 2: Section 2 of EO 87 granted the Committee
on Sugar Conversion/Auction power to promulgate
rules governing sugar importation by the private
sector. It provides:
“SEC. 2. Committee on Sugar Conversion/Auction.—
There is hereby created a Committee on Sugar
Conversion/Auction which shall be headed by the DA, with
the following as members: NEDA, DTI, DOF, SRA, and a
representative each from the sugar planters’ group and the
sugar millers’ group. The Committee is hereby authorized to
determine the parameters and procedures on the
importation of sugar by the private sector, and the
collection and remittance of the fee for the conversion of
sugar from “C” (reserve sugar) to “B” (domestic sugar).”
Pursuant to this authority, the Committee issued the
Bidding Rules subject of the controversy, paragraph
G.1 of which provides that if the importer fails to
make the importation, 25% of the conversion fee shall
be forfeited in favor of the SRA, thus:
G. Forfeiture of Conversion Fee- In case of failure of
the importer to make the importation or for the
imported sugar to arrive in the Philippines on or
before the Arrival Date, the 25% of Conversion Fee
Bid already paid shall be forfeited in favor of the SRA
and the imported sugar shall not be classified as “B”
(domestic sugar) unless, upon application with the
SRA and without objection of the Committee, the SRA
allows such conversion after payment by the importer
of 100% of the Conversion Fee applicable to the
shipment.”23 (Emphasis supplied)
In joining the bid for sugar importation, the sugar
corporations are deemed to have assented to the
Bidding Rules, including the forfeiture provision
under paragraph G.1. The Bidding Rules bind the
sugar corporations. The latter cannot rely on the
lame excuse that they are not aware of the forfeiture
provision.
At the trial, Teresita Tan testified that the Bidding
Rules were duly published in a newspaper of general
circulation.24 Vicente Cenzon, a sugar importer who
participated in the bidding for the 3rd tranche,
testified that he attended the pre-bid conference
where the Bidding Rules were discussed and copies of
the same were distributed to all the bidders. The
Bidding Rules passed through a consultative process
actively participated by various government agencies
and their counterpart in the private sector: the
Department of Agriculture, the National Economic
Development Authority, the Department of Trade
and Industry, the Department of Finance, the Sugar
Regulatory Administration, and a representative each
from the sugar planters’ group and the sugar millers’
group.
SEC. 2. Committee on Sugar Conversion/Auction.—
There is hereby created a Committee on Sugar
Conversion/Auction which shall be headed by the DA,
with the following as members: NEDA, DTI, DOF, SRA,
and representative each from the sugar planters’
group and the sugar millers’ group. The Committee is
hereby authorized to determine the parameters and
procedures on the importation of sugar by the private
sector, and the collection and remittance of the fee
for the conversion of sugar from “C” to “B”.
We find nothing in the forfeiture provision of the
Bidding Rules that is contrary to law, morals, good
customs, public order, or public policy. On the
contrary, the forfeiture provision fully supports
government efforts to aid the country’s ailing sugar
industry. Conversion fees, including those that are
forfeited under paragraph G.1 of the Bidding Rules,
are automatically remitted to the Bureau of Treasury
and go directly to the Agricultural Competitiveness
Enhancement Fund.
It is unrefuted that the sugar corporations failed in
their contractual undertaking to import the
remaining 27,000 metric tons of sugar specified in
their sugar import allocation. Applying paragraph G.1
of the Bidding Rules, such failure is subject to
forfeiture of the 25% of the conversion fee the sugar
corporations paid as part of their contractual
undertaking. The RTC gravely erred in ordering the
SRA to return the forfeited conversion fee to the
sugar corporations. Its strained interpretation that
paragraph G.1 of the Bidding Rules contemplates
cases of delay in the arrival of imported sugar but not
cases of cancellation of sugar importation defies logic
and the express provision of paragraph G.1. If delay in
the arrival of imported sugar is subject to forfeiture of
25% of the conversion fee, with more reason is
outright failure to import sugar, by cancelling the
sugar importation altogether, subject to forfeiture of
the 25% of the conversion fee.
Plainly and expressly, paragraph G.1 identifies two
situations which would bring about the forfeiture of
25% of the conversion fee: (1) when the importer fails
to make the importation or (2) when the imported
sugar fails to arrive in the Philippines on or before the
set arrival date. It is wrong for the RTC to interpret the
forfeiture provision in a way departing from its plain
and express language. Where the language of a rule
is clear, it is the duty of the court to enforce it
according to the plain meaning of the word. There is
no occasion to resort to other means of
interpretation.
WHEREFORE, we DENY the petition. Further, the 19
December 2006 Decision of the Regional Trial Court
(Branch 77) of Quezon City in Civil Case No. Q-02-
46236 is SET ASIDE.
Cecilleville Realty v CA
Facts: Petitioner Cecilleville Realty and Service
Corporation is the owner of a parcel of land in
Catmon, Sta. Maria, Bulacan, covered by T.C.T. No.
86.494 (M). Private respondent Herminigildo Pascual
occupies a portion thereof. Despite repeated
demands, private respondent refused to vacate and
insisted that he is entitled to occupy the land since he
is helping his mother Ana Pascual, petitioner’s tenant,
to cultivate the land in question. Thenceforth,
petitioner instituted an ejectment suit against private
respondent before the Municipal Trial Court of Sta.
Maria, Bulacan. Finding no tenancy relationship
between petitioner and private respondent, the
Municipal Trial Court on September 17, 1992, ordered
private respondent to vacate the land and to pay “the
sum of P10,000.00, as attorney’s fees” and “another
sum of P500.00 monthly from the filing of [the]
complaint.”
Ruling of the RTC: Private respondent appealed to the
Regional Trial Court which, on April 4, 1994, set aside
the Municipal Trial Court’s decision and remanded
the case to the DARAB for further adjudication. There
is no question that Ana Pascual may seek the
assistance of her immediate farm household in the
cultivation of the land. The law protects her in this
regard. If the tenant Ana Pascualwill be deprived of
such right by ejecting her son Herminigildo Pascual
from the land, it is tantamount to circumventing the
law as Ana Pascual will be deprived of the helping
hands of her son. What could not be done directly
cannot be done indirectly. The issue of tenancy
relationship between the plaintiff corporation and
Ana Pascual cannot be avoided in this ejectment case.
Ruling of the CA: affirmed the RTC
Issue: Whether or not there is a tenancy relationship
between petitioner and private respondent that
prohibits Herminigildo to occupy the subject
property. YES
Ruling : At the outset, the Court notes that petitioner
does not dispute respondent court’s finding that Ana
Pascual, private respondent’s mother, is its bona-fide
tenant. Neither does petitioner question “the right of
Ana Pascual, the tenant, to be assisted by a member
of her household, who in this case is respondent
Herminigildo Pascual.”7 What petitioner impugns as
erroneous is respondent court’s gratuitous
pronouncement which effectively granted private
respondent not only a home lot, but also the right to
maintain his own house in petitioner’s small parcel of
land8 despite the fact that Ana Pascual, the adjudged
bona-fide tenant, has previously been given a home
lot and has an existing house thereon. Private
respondent Herminigildo Pascual, for his part, insists
that he is entitled by law, “(Section 22, (3) of Rep. Act
No. 1199, as amended by Rep. Act No. 2263),”9 to a
home lot and the right to maintain another house
different from that of his mother. To bolster his
contention, private respondent adopts respondent
court’s ruling finding him as a member of Ana
Pascual’s immediate farm household. Private
respondent holds, quoting extensively from the
assailed decision, that “although not the tenant
himself, [he] is afforded the protection provided by
law as his mother is already old and infirm and is
allowed to avail of the labor of her immediate
household. x x x. [And] [h]is having a house of his own
on the property is merely incidental to the
tenancy.”10
As the Court sees it, the issue lies on the
interpretation of Section 22, paragraph 3, of Rep. Act
No. 1199, as amended by Rep. Act No. 2263. This
section provides in full as follows: “(3) The tenant
shall have the right to demand for a home lot suitable
for dwelling with an area of not more than 3 per cent
of the area of his landholding provided that it does
not exceed one thousand square meters and that it
shall be located at a convenient and suitable place
within the land of the landholder to be designated by
the latter where the tenant shall construct his
dwelling and may raise vegetables, poultry, pigs and
other animals and engage in minor industries, the
products of which shall accrue to the tenant
exclusively. The tenant’s dwelling shall not be
removed from the lot already assigned to him by the
landholder, except as provided in section twenty-six
unless there is a severance of the tenancy relationship
between them as provided under section nine, or
unless the tenant is ejected for cause, and only after
the expiration of forty-five days following such
severance of relationship or dismissal for cause.”
(Emphasis supplied)
The law is unambiguous and clear. Consequently, it
must be applied according to its plain and obvious
meaning, according to its express terms. Verba legis
non est recedendum, or from the words of a statute
there should be no departure.11 As clearly provided,
only a tenant is granted the right to have a home lot
and the right to construct or maintain a house
thereon. And here, private respondent does not
dispute that he is not petitioner’s tenant. In fact, he
admits that he is a mere member of Ana Pascual’s
immediate farm household. Under the law, therefore,
we find private respondent not entitled to a home lot.
Neither is he entitled to construct a house of his own
or to continue maintaining the same within the very
small landholding of petitioner. To rule otherwise is
to make a mockery of the purpose of the tenancy
relations between a bona-fide tenant and the
landholder as envisioned by the very law, i.e., Rep. Act
No. 1199, as amended, upon which private
respondent relies, to wit:
“Sec. 2. Purpose.—It is the purpose of this Act to establish
agricultural tenancy relations between landholders and
tenants upon the principle of social justice; to afford
adequate protection to the rights of both tenants and
landholders; to insure the equitable division of the produce
and income derived from the land; to provide tenant-
farmers with incentives to greater and more efficient
agricultural production; to bolster their economic position
and to encourage their participation in the development of
peaceful, vigorous and democratic rural communities.”
Thus, if the Court were to follow private respondent’s
argument and allow all the members of the tenant’s
immediate farm household to construct and maintain
their houses and to be entitled to not more than one
thousand (1,000) square meters each of home lot, as
what private respondent wanted this Court to dole-
out, then farms will be virtually converted into rows,
if not colonies, of houses. How then can there be
“equitable division of the produce and income
derived from the land” and “more efficient
agricultural production” if the land’s productivity and
use for growing crops is lessened or, more
appropriately, obliterated by its unceremonious
conversion into residential use? It is a fundamental
principle that once the policy or purpose of the law
has been ascertained, effect should be given to it by
the judiciary. This Court should not deviate
therefrom.
WHEREFORE, the petition is GRANTED. The part of the
decision appealed from which is inconsistent
herewith is REVERSED and SET ASIDE.
Victoria vs COMELEC
Facts: This is a petition for certiorari, under Rule 65 of
the Revised Rules of Court in relation to Section 2,
Article IX of the Constitution, to set aside (a) the
Resolution of the Commission on Elec-tions
(COMELEC) dated January 22, 1993, which certified
respondent James Calisin as the highest ranking
member of the Sangguniang Panlalawigan of the
Province of Albay and (b) its Resolution dated
February 22, 1993, which denied the motion for
reconsideration of petitioner. The issue in the case at
bench is the ranking of the members of the
Sangguniang Panlalawigan of the Province of Albay
for purposes of succession. In the May 11, 1992
Elections, candidates from the first, second and third
districts of the Province of Albay were elected and
proclaimed as members of the Sangguniang
Panlalawigan.
Due to the suspension of Governor Romeo Salalima of
the Province of Albay, Vice-Governor Danilo Azana
automatically assumed the powers and functions of
the governor, leaving vacant his post as vice-
governor. Under the law, Azana’s position as vice-
governor should be occupied by the highest ranking
Sanggunian member, a post being contested by
petitioner and private respondent. In answer to
private respondent’s petition for his declaration as
senior Sanggunian member for the Province of Albay,
the COMELEC issued a resolution dated January 22,
1993, certifying him as first in the order of ranking
with petitioner herein as second ranking member.
The COMELEC based its certification on the number
of votes obtained by the Sanggunian members in
relation to the number of registered voters in the
district. Thus, on February 15, 1993, Secretary Rafael
M. Alunan III of the Department of Interior and Local
Government designated private respondent as acting
Vice-Governor of the province. Petitioner filed a
motion for reconsideration.
Petitioner claims that the ranking of the Sanggunian
members should not only be based on the number
of votes obtained in relation to the total number of
registered voters, but also on the number of voters
in the district who actually voted therein. He further
argues that a district may have a large number of
registered voters but only a few actually voted, in
which case the winning candidate would register a
low percentage of the number of votes obtained.
Conversely, a district may have a smaller number of
registered voters but may have a big voters’ turn-out,
in which case the winning candidate would get a
higher percentage of the votes. Applying his formula,
petitioner would come out to be the highest ranking
Sanggunian member.
Issue: WON petitioner’s contention is correct? No. He
is incorrect.
Ruling: The Local Government Code provides: “For
purposes of succession as provided in this Chapter,
ranking in the sanggunian shall be determined on the
basis of the proportion of votes obtained by each
winning candidate to the total number of registered
voters in each district in the immediately preceding
local election.” The law is clear that the ranking in the
Sanggunian shall be determined on the basis of the
proportion of the votes obtained by each winning
candidate to the total number of registered voters of
each district. It does not mention anything about
factoring the number of voters who actually voted. In
such a case, the Court has no recourse but to merely
apply the law. The courts may not speculate as to the
probable intent of the legislature apart from the
words.
Under the principles of statutory construction, if a
statute is clear, plain and free from ambiguity, it must
be given its literal meaning and applied without
attempted interpretation. This plainmeaning rule or
verba legis derived from the maxim, index animi
sermo est (speech is the index of intention) rests on
the valid presumption that the words employed by
the legislature in a statute correctly express its intent
or will and preclude the court from construing it
differently. The legislature is presumed to know the
meaning of the words, to have used words advisedly,
and to have expressed its intent by the use of such
words as are found in the statute. Verba legis non est
recedendum, or from the words of a statute there
should be no departure. We are not unmindful of the
practicality of petitioner’s interpretation but it must
very well be addressed to the legislative branch and
not to this Court which has no power to change the
law.
Matabuena vs Cervantes
Facts: The plaintiff, now appellant Cornelia
Matabuena, a sister of the deceased Felix
Matabuena, maintains that a donation made while he
was living maritally without benefit of marriage to
defendant, now appellee Petronila Cervantes, was
void. Defendant would uphold its validity. The lower
court, after noting that it (donation) was made at a
time before defendant was married to the donor,
sustained the latter’s stand. Hence this appeal.
Cornelia contends that the deceased Felix Matabuena
died intestate on September 13, 1962; and that she is
claiming the property by reason of being the only
sister and nearest collateral relative of the deceased
by virtue of an affidavit of self adjudication executed
by her in 1962 and had the land declared in her name
and paid the estate and inheritance taxes thereon.
Issue: WON the ban on a donation between the
spouses during a marriage applies to a common-law
relationship? Yes. It applies.
Ruling: While Art. 133 of the Civil Code considers as
void a “donation between the spouses during the
marriage,” policy considerations of the most exigent
character as well as the dictates of morality require
that the same prohibition should apply to a common-
law relationship.
If the policy of the law is, in the language of the
opinion of the then Justice J.B.L. Reyes of that Court,
“to prohibit donations in favor of the other consort
and his descendants because of fear of undue and
improper pressure and influence upon the donor,
then there is every reason to apply the same
prohibitive policy to persons living together as
husband and wife without the benefit of nuptials. It
would not be just that such donations should subsist,
lest the condition of those who incurred guilt should
turn out to be better.’
It is hardly necessary to add that even in the absence
of the above pronouncement, any other conclusion
cannot stand the test of scrutiny. It would be to indict
the framers of the Civil Code for a failure to apply a
laudable rule to a situation which in its essentials
cannot be distinguished. Moreover, if it is at all to be
differentiated, the policy of the law which embodies
a deeply-rooted notion of what is just and what is
right would be nullified if such irregular relationship
instead of being visited with disabilities would be
attended with benefits. Certainly a legal norm should
not be susceptible to such a reproach. If there is ever
any occasion where the principle of statutory
construction that what is within the spirit of the law
is as much a part of it as what is written, this is it.
Otherwise the basic purpose discernible in such codal
provision would not be attained. Whatever omission
may be apparent in an interpretation purely literal of
the language used must be remedied by an adherence
to its avowed objective.
The lack of validity of the donation made by the
deceased to defendant Petronila Cervantes does not
necessarily result in plaintiff having exclusive right to
the disputed property. Prior to the death of Felix
Matabuena, the relationship between him and the
defendant was legitimated by their marriage on
March 28, 1962. She is therefore his widow. As
provided for in the Civil Code, she is entitled to one-
half of the inheritance and the plaintiff, as the
surviving sister, to the other half.
Comendador vs Villa
Facts: These four cases have been consolidated
because they involve practically the same parties and
related issues arising from the same incident.
The petitioners in G.R. Nos. 93177 and 96948 and the
private respondents in G.R. Nos. 95020 and 97454 are
officers of the Armed Forces of the Philippines facing
prosecution for their alleged participation in the
failed coup d’etat that took place on December 1 to
9, 1989.
The charges against them are violation of Articles of
War (AW) 67 (Mutiny), AW 96 (Conduct Unbecoming
an Officer and a Gentleman) and AW 94 (Various
Crimes) in relation to Article 248 of the Revised Penal
Code (Murder).
G.R. No. 93177 involves petition for certiorari,
prohibition, mandamus- questioning the conduct of
the pre-trial paneland the creation of General Court
Martial (GMC No. 14)
G.R. No. 96948 tackles about certiorari against the
ruling denying them the right to pre-emptory
challenge (or that the Members of general or special
courts-martial may be challenged bythe accused or
the trial judge advocate for cause stated to the court.
The court shall determine the relevancy and validity
thereof.)
G.R. No. 95020 involves certiorari against the
respondent judge on the ground that he has no
jurisdiction of GCM No. 14 and no authority to set
aside its ruling of denying bail to private respondents
G.R. No. 97454 involves certiorari- against the
decision of RTC in a petition for habeas corpus
directing the release of the private respondents.
Jurisdictional objection are also raised.
January 14, 1990, a Pre-Trial Investigation (PTI) Panel
had been constituted pursuant to Office Order No. 16
to investigate the petitioners. January 30, 1990, the
PTI Panel issued a uniform subpoena individually
addressed to the petitioners. The petitioners
acknowledged receipt of a copy of the charge sheet,
sworn statements of witnesses, and death and
medical certificates of victims of the rebellion. At the
first scheduled hearing, the petitioners challenged
the proceedings on various grounds, prompting the
PTI Panel to grant them 10 days to file their objections
in writing through a Motion for Summary Dismissal.
February 27,1990, the PTI Panel denied the motion
and gave the petitioners 5 days to submit their
respective counter-affidavits and the affidavits of
their witnesses. May 15, 1990, the petitioners
manifested that they were exercising their right to
raise peremptory challenges against the president
and members of GCM No.14 by invoking Article 18 of
Com. Act No. 408. GCM No. 14 ruled, however, that
peremptory challenges had been discontinued under
P.D. No.39.
Issue: Whether or not peremptory challenges had
been discontinued under P.D. No.39?
Ruling: No. P.D. No. 39 was issued to implement
General Order No. 8 and the other general orders
mentioned therein. With the termination of martial
law and the dissolution of the military tribunals
created thereunder, the reason for the existence of
P.D. No. 39 ceased automatically.
It is a basic canon of statutory construction that when
the reason of the law ceases, the law itself ceases.
Cessante ratione legis, cessat ipsa lex. This principle is
also expressed in the maxim ratio legis est anima: the
reason of law is its soul.
Applying these rules, we hold that the withdrawal of
the right to peremptory challenge in P.D. No. 39
became ineffective when the apparatus of martial law
was dismantled with the issuance of Proclamation No.
2045. As a result, the old rule embodied in Article 18
of Com. Act No. 408 was automatically revived and
now again allows the right to peremptory challenge.
We do not agree with the respondents in G.R. No.
96948 that the right to peremptory challenge remains
withdrawn under P.D. No. 39. To repeat for emphasis,
this decree was itself withdrawn when martial law
was lifted on January 17, 1981. Indeed, even if not so
withdrawn, it could still be considered no longer
operative, having been cast out under the new
dispensation as, in the words of the Freedom
Constitution, one of the “iniquitous vestiges of the
previous regime.”
The military tribunal was one of the most oppressive
instruments of martial law. It is curious that the
present government should invoke the rules of that
discredited body to justify its action against the
accused officers.
The Court realizes that the recognition of the right to
peremptory challenge may be exploited by a
respondent in a court-martial trial to delay the
proceedings and defer his deserved punishment. It is
hoped that the accused officers in the cases at bar will
not be so motivated. At any rate, the wisdom of Com.
Act No. 408, in the light of present circumstances, is a
matter addressed to the law-makers and not to this
Court. The judiciary can only interpret and apply the
laws without regard to its own misgivings on their
adverse effects. This is a problem only the political
departments can resolve.
CIR vs TMX Sales
Facts: Private respondent TMX Sales, Inc., a domestic
corporation, filed its quarterly income tax return for
the first quarter of 1981, declaring an income of
P571,174.31, and consequently, paying an income tax
thereon of P247,010.00 on May 15, 1981. During the
subsequent quarters, however, TMX Sales, Inc.
suffered losses so that when it filed on April 15, 1982
its Annual Income Tax Return for the year ended
December 31, 1981, it declared a gross income of
P904,122.00 and total deductions of P7,060,647.00,
or a net loss of P6,1 56,525.00 (CTA Decision, pp. 1-2;
Rollo, pp. 45-46).
Thereafter, on July 9,1982, TMX Sales, Inc. thru its
external auditor, SGV & Co. filed with the Appellate
Division of the Bureau of Internal Revenue a claim for
refund in the amount of P247,010.00 representing
overpaid income tax. (Rollo, p. 30) This claim was not
acted upon by the Commissioner of Internal Revenue.
On March 14, 1984, TMX Sales, Inc. filed a petition for
review before the Court of Tax Appeals against the
Commissioner of Internal Revenue, praying that the
petitioner, as private respondent therein, be ordered
to refund to TMX Sales, Inc. the amount of
P247,010.00, representing overpaid income tax for
the taxable year ended December 31, 1981.
In his answer, the Commissioner of Internal Revenue
averred that "granting, without admitting, the
amount in question is refundable, the petitioner (TMX
Sales, Inc.) is already barred from claiming the same
considering that more than two (2) years had already
elapsed between the payment (May 15, 1981) and
the filing of the claim in Court (March 14,1984).
(Sections 292 and 295 of the Tax Code of 1977, as
amended)."
On April 29, 1988, the Court of Tax Appeals rendered
a decision granting the petition of TMX Sales, Inc. and
ordering the Commissioner of Internal Revenue to
refund the amount claimed.
The Tax Court, in granting the petition, viewed the
quarterly income tax paid as a portion or installment
of the total annual income tax due.
Issue: Whether or not the two-year prescription
period is based on the day the Final Adjustment
Return was filed?
Ruling: No. Section 292 (now Section 230) of the
National Internal Revenue Code provides:
"Sec. 292. Recovery of tax erroneously or illegally
collected.—No suit or proceeding shall be maintained in any
court for the recovery of any national internal revenue tax
hereafter alleged to have been erroneously or illegally
assessed or collected, or of any penalty claimed to have
been collected without authority, or of any sum alleged to
have been excessive or in any manner wrongfully collected,
until a claim for refund or credit has been duly filed with the
Commissioner of Internal Revenue; but such suit or
proceeding may be maintained, whether or not such tax,
penalty, or sum has been paid under protest or duress.
In any case, no such suit or proceeding shall be begun after
the expiration of two years from the date of payment of the
tax or penalty regardless of any supervening cause that may
arise after payment: x x x."
Section 292 (now Section 230) of the National Internal
Revenue Code should be interpreted in relation to the
other provisions of the Tax Code in order to give effect
the legislative intent and to avoid an application of
the law which may lead to inconvenience and
absurdity. In the case of People vs. Rivera (59 Phil. 236
[1933]), this Court stated that statutes should receive
a sensible construction, such as will give effect to the
legislative intention and so as to avoid an unjust or an
absurd conclusion. INTERPRETATIO TALIS IN
AMBIGUIS SEMPER FRIENDA EST, UT EVITATUR
INCONVENIENS ET ABSURDUM. Where there is
ambiguity, such interpretation as will avoid
inconvenience and absurdity is to be adopted.
Furthermore, courts must give effect to the general
legislative intent that can be discovered from or is
unraveled by the four corners of the statute, and in
order to discover said intent, the whole statute, and
not only a particular provision thereof, should be
considered. (Manila Lodge No. 761, et al. vs. Court of
Appeals, et al. 73 SCRA 162 [1976]) Every section,
provision or clause of the statute must be expounded
by reference to each other in order to arrive at the
effect contemplated by the legislature. The intention
of the legislator must be ascertained from the whole
text of the law and every part of the act is to be taken
into view. (Chartered Bank vs. Imperial, 48 Phil. 931
[1921]; Lopez vs. El Hogar Filipino, 47 Phil. 249, cited
in Aboitiz Shipping Corporation vs. City of Cebu, 13
SCRA 449 [1965]).
Thus, in resolving the instant case, it is necessary that
we consider not only Section 292 (now Section 230)
of the National Internal Revenue Code but also the
other provisions of the Tax Code, particularly Sections
84, 85 (now both incorporated as Section 68), Section
86 (now Section 70) and Section 87 (now Section 69)
on Quarterly Corporate Income Tax Payment and
Section 321 (now Section 232) on keeping of books of
accounts. All these provisions of the Tax Code should
be harmonized with each other.
Section 292 (now Section 230) provides a two-year
prescriptive period to file a suit for a refund of a tax
erroneously or illegally paid, counted from the time
the tax was paid. But a literal application of this
provision in the case at bar which involves quarterly
income tax payments may lead to absurdity and
inconvenience.
Section 85 (now Section 68) provides for the method
of computing corporate quarterly income tax which is
on a cumulative basis, to wit:
"Sec. 85. Method of computing corporate quarterly income
tax.—Every corporation shall file in duplicate a quarterly
summary declaration of its gross income and deductions on
a cumulative basis for the preceding quarter or quarters
upon which the income tax, as provided in Title II of this
Code shall be levied, collected and paid. The tax so
computed shall be decreased by the amount of tax
previously paid or assessed during the preceding quarters
and shall be paid not later than sixty (60) days from the
close of each of the first three (3) quarters of the taxable
year, whether calendar or fiscal year."
while Section 87 (now Section 69) requires the filing
of an adjustment returns and final payment of income
tax, thus:
"Sec. 87. Filing of adjustment returns and final payment of
income tax.—On or before the fifteenth day of April or on
or before the fifteenth day of the fourth month following
the close of the fiscal year, every taxpayer covered by this
Chapter shall file an Adjustment Return covering the total
net taxable income of the preceding calendar or fiscal year
and if the sum of the quarterly tax payments made during
that year is not equal to the total tax due on the entire net
taxable income of that year, the corporation shall either (a)
pay the excess tax still due or (b) be refunded the excess
amount paid as the case may be. x x x"
In the case at bar, the amount of P247,010.00 claimed
by private respondent TMX Sales, Inc. based on its
Adjustment Return required in Section 87 (now
Section 69), is equivalent to the tax paid during the
first quarter. A literal application of Section 292 (now
Section 230) would thus pose no problem as the two-
year prescriptive period reckoned from the time the
quarterly income tax was paid can be easily
determined. However, if the quarter in which the
overpayment is made, cannot be ascertained, then a
literal application of Section 292 (Section 230) would
lead to absurdity and inconvenience.
Obviously, the most reasonable and logical
application of the law would be to compute the two-
year prescriptive period at the time of filing the Final
Adjustment Return or the Annual Income Tax Return,
when it can be finally ascertained if the taxpayer has
still to pay additional income tax or if he is entitled to
a refund of overpaid income tax. Furthermore,
Section 321 (now Section 232) of the National Internal
Revenue Code requires that the books of accounts of
companies or persons with gross quarterly sales or
earnings exceeding Twenty Five Thousand Pesos
(P25,000.00) be audited and examined yearly by an
independent Certified Public Accountant and their
income tax returns be accompanied by certified
balance sheets, profit and loss statements, schedules
listing income producing properties and the
corresponding incomes therefrom and other related
statements. It is generally recognized that before an
accountant can make a certification on the financial
statements or render an auditor's opinion, an audit of
the books of accounts has to be conducted in
accordance with generally accepted auditing
standards. Since the audit, as required by Section 321
(now Section 232) of the Tax Code is to be conducted
yearly, then it is the Final Adjustment Return, where
the figures of the gross receipts and deductions have
been audited and adjusted, that is truly reflective of
the results of the operations of a business enterprise.
Thus, it is only when the Adjustment Return covering
the whole year is filed that the taxpayer would know
whether a tax is still due or a refund can be claimed
based on the adjusted and audited figures.
Therefore, the filing of a quarterly income tax returns
required in Section 85 (now Section 68) and
implemented per BIR Form 1702-Q and payment of
quarterly income tax should only be considered mere
installments of the annual tax due. These quarterly
tax payments which are computed based on the
cumulative figures of gross receipts and deductions in
order to arrive at a net taxable income, should be
treated as advances or portions of the annual income
tax due, to be adjusted at the end of the calendar or
fiscal year. This is reinforced by Section 87 (now
Section 69) which provides for the filing of adjustment
returns and final payment of income tax.
Consequently, the two-year prescriptive period
provided in Section 292 (now Section 230 of the Tax
Code should be computed from the time of filing the
Adjustment Return or Annual Income Tax Return and
final payment of income tax.
People v Purisima
Facts: These twenty-six (26) Petitions for Review filed
by the People of the Philippines represented,
respectively, by the Office of the City Fiscal of Manila,
the Office of the Provincial Fiscal of Samar, and joined
by the Solicitor General, are consolidated in this one
Decision as they involve one basic question of law.
These Petitions or appeals involve three Courts of
First Instance, namely: the Court of First Instance of
Manila, Branch VII, presided by Hon. Amante P.
Purisima (17 Petitions), the Court of First Instance of
Manila, Branch XVIII, presided by Hon. Maximo A.
Maceren (8 Petitions) and, the Court of First Instance
of Samar, with Hon. Wenceslao M. Polo, presiding, (1
Petition).
Before those courts, Informations were filed charging
the respective accused with “illegal possession of
deadly weapon” in violation of Presidential Decree
No. 9. On a motion to quash filed by the accused, the
three Judges mentioned above issued in the
respective cases filed before them—the details of
which will be recounted below—an Order quashing or
dismissing the Informations, on a common ground,
viz, that the Information did not allege facts which
constitute the offense penalized by Presidential
Decree No. 9 because it failed to state one essential
element of the crime. Thus, are the Informations filed
by the People sufficient in form and substance to
constitute the offense of “illegal possession of deadly
weapon” penalized under Presidential Decree (PD for
short) No. 9? This is the central issue which we shall
resolve and dispose of, all other corollary matters not
being indispensable for the moment.
A— The Information filed by the People-
1. In L-42050-66, one typical Information filed with
the Court presided by Judge Purisima follows:
“THE PEOPLE OF THE PHILIPPINES, plaintiff, versus
PORFIRIO CANDELOSAS Y DURAN, accused.
PORFIRIO CANDELOSAS Y DURAN of a violation of
paragraph 3, Presidential Decree No. 9 of
Proclamation 1081, committed as follows: “That on or
about the 14th day of December, 1974, in the City of
Manila, Philippines, the said accused did then and
there wilfully, unlawfully, feloniously and knowingly
have in his possession and under his custody and
control one (1) carving knife with a blade of 6-1/2
inches and a wooden handle of 5-1/4 inches, or an
overall length of 11-3/4 inches, which the said
accused carried outside of his residence, the said
weapon not being used as a tool or implement
necessary to earn his livelihood nor being used in
connection therewith.
2. THE PEOPLE OF THE PHILIPPINES, plaintiff, versus
REYNALDO LAQUI Y AQUINO, accused.
The undersigned accuses REYNALDO LAQUI Y
AQUINO of a VIOLATION OF PARAGRAPH 3,
PRESIDENTIAL DECREE NO. 9 in relation to Letter of
Instruction No. 266 of the Chief Executive dated April
1, 1975, committed as follows: That on or about the
28th day of January, 1977, in the City of Manila,
Philippines, the said accused did then and there
wilfully, unlawfully and knowingly carry outside of his
residence a bladed and pointed weapon, to wit: an ice
pick with an overall length of about 8 1/2 inches, the
same not being used as a necessary tool or implement
to earn his livelihood nor being used in connection
therewith.
3. PEOPLE OF THE PHILIPPINES, complainant, versus
PANCHITO REFUNCION, accused: “The undersigned
First Assistant Provincial Fiscal of Samar, accuses
PANCHITO REFUNCJON of the crime of ILLEGAL
POSSESSION OF DEADLY WEAPON or VIOLATION OF
PD NO. 9 issued by the President of the Philippines on
Oct. 2, 1972, pursuant to Proclamation No. 1081
dated Sept. 21 and 23, 1972, committed as follows:
“That on or about the 6th day of October, 1976, in the
evening at Barangay Barruz, Municipality of
Matuginao, Province of Samar Philippines, and within
the jurisdiction of this Honorabe Court, the
abovenamed accused, knowingly, wilfully, unlawfully
and feloniously carried with him outside of his
residence a deadly weapon called socyatan, an
instrument which from its very nature is no such as
could be used as a necessary tool or instrument to
earn a livelihood, which act committed by the
accused is a Violation of Presidential Decree No. 9.
1. Judge Purisima reasoned out, inter alia, in this
manner: the Court is of the opinion that in order that
possession of bladed weapon or the like outside
residence may be prosecuted and tried under P.D. No.
9, the information must specifically allege that the
possession of bladed weapon charged was for the
purpose of abetting, or in furtherance of the
conditions of rampant criminality, organized
lawlessness, public disorder, etc. as are contemplated
and recited in Proclamation No. 1081, as justification
therefor. Devoid of this specific allegation, not
necessarily in the same words, the information is not
complete, as it does not allege sufficient facts to
constitute the offense contemplated in P.D. No. 9.
The information in these cases under consideration
suffer from this defect.
2. Judge Maceren in turn gave his grounds for
dismissing the charges as follows: It is therefore
reasonable to conclude from the foregoing premises
that the carrying of bladed, pointed or blunt weapons
outside of one’s residence which is made unlawful
and punishable by said par. 3 of P.D. No. 9 is one that
abets subversion, insurrection or rebellion, lawless
violence, criminality, chaos and public disorder or is
intended to bring about these conditions. This
conclusion is further strengthened by the fact that all
previously existing laws that also made the carrying of
similar weapons punishable have not been repealed,
whether expressly or impliedly. It is noteworthy that
Presidential Decree No. 9 does not contain any
repealing clause or provision. The mere carrying
outside of one’s residence of these deadly weapons if
not concealed in one’s person and if not carried in any
of the aforesaid specified places, would appear to be
not unlawful and punishable by law.
3. Judge Polo of the Court of First Instance of Samar
expounded his order dismissing the Information filed
before him, thus: We believe that to constitute an
offense under the aforecited Presidential Decree, the
same should be or there should be an allegation that
a felony was committed in connection or in
furtherance of subversion, rebellion, insurrection,
lawless violence and public disorder. Precisely
Proclamation No. 1081 declaring a state of martial law
throughout the country was issued because of
wanton destruction to lives and properties
widespread lawlessness and anarchy. And in order to
restore the tranquility and stability of the country and
to secure the people from violence and loss of lives in
the quickest possible manner and time, carrying
firearms, explosives and deadly weapons without a
permit unless the same would fall under the
exception is prohibited. This conclusion becomes
more compelling when we consider the penalty
imposable, which is from five years to ten years. A
strict enforcement of the provision of the said law
would mean the imposition of the Draconian penalty
upon the accused.
In most if not all of the cases, the orders of dismissal
were given before arraignment of the accused. In the
criminal case before the Court of (First Instance of
Samar the accused was arraigned but at the same
time moved to quash the Information. In all the cases
where the accused were under arrest, the three
Judges ordered their immediate release unless held
on other charges.
“PRESIDENTIAL DECREE NO. 9: “DECLARING VIOLATIONS OF
GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22,
1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE
UNLAWFUL AND PROVIDING PENALTIES THEREFORE.
… “WHEREAS, subversion, rebellion,
insurrection, lawless violence, criminality, chaos
and public disorder mentioned in the aforesaid
Proclamation No. 1081 are committed and
abetted by the use of firearms, explosives and
other deadly weapons;
“NOW, THEREFORE, I, FERDINAND E. MARCOS,
Commander-in-Chief of all the Armed Forces of the
Philippines, in order to attain the desired result of the
aforesaid Proclamation No. 1081 and General Orders Nos. 6
and 7, do hereby order and decree that:
“1. Any violation of the aforesaid General Orders Nos. 6 and
7 is unlawful and the violator shall, upon conviction suffer:
(a) The mandatory penalty of death by a firing squad or
electrocution as a Military Court/Tribunal/Commission may
direct, if the firearm involved in the violation is unlicensed
and is attended by assault upon, or resistance to persons in
authority or their agents in the performance of their official
functions resulting in death to said persons in authority or
their agent; or if such unlicensed firearm is used in the
commission of crimes against persons, property or chastity
causing the death of the victim, or used in violation of any
other General Orders and/or Letters of Instructions
promulgated under said Proclamation No. 1081:
(b) The penalty of imprisonment ranging from twenty years
to life imprisonment as a Military
Court/Tribunal/Commission may direct, when the violation
is not attended by any of the circumstances enumerated
under the preceding paragraph;
(c) The penalty provided for in the preceding paragraphs
shall be imposed upon the owner, president, manager,
members of the board of directors or other responsible
officers of any public or private firms, companies,
corporations or entities who shall willfully or knowingly
allow any of the firearms owned by such firm, company,
corporation or entity concerned to be used in violation of
said General Orders Nos. 6 and 7.
“2. It is unlawful to possess deadly weapons, including hand
grenades, rifle grenades and other explosives, including, but
not limited to, ‘pill box bombs,’ ‘molotov cocktail bombs,’
‘fire bombs,’ or other incendiary device consisting of any
chemical, chemical compound, or detonating agents
containing combustible units or other ingredients in such
proportion, quantity, packing, or bottling that ignites by
fire, by friction, by concussion, by percussion, or by
detonation of all or part of the compound or mixture which
may cause such a sudden generation of highly heated gases
that the resultant gaseous pressures are capable of
producing destructive effects on continguous objects or of
causing injury or death of a person; and any person
convicted thereof shall be punished by imprisonment
ranging from ten to fifteen years as a Military
Court/Tribunal/Commission may direct.
“3. It is unlawful to carry outside of residence any bladed,
pointed or blunt weapon such as ‘fan knife,’ ‘spear,’
‘dagger,’ ‘bolo,’ ‘balisong,’ ‘barong,’ ‘kris,’ or club, except
where such articles are being used as necessary tools or
implements to earn a livelihood and while being used in
connection therewith; and any person found guilty thereof
shall suffer the penalty of imprisonment ranging from five
to ten years as a Military Court/Tribunal/Commission may
direct.
“4. When the violation penalized in the preceding
paragraphs 2 and 3 is committed during the commission of
or for the purpose of committing, any other crime, the
penalty shall be imposed upon the offender in its maximum
extent, in addition to the penalty provided for the particular
offenses committed or intended to be committee
Issue: Whether or not PD 9 repealed the previous
statute and ordinance. NO
1. It is a constitutional right of any person who stands
charged in a criminal prosecution to be informed of
the nature and cause of the accusation against him.3
Pursuant to the above, Section 5, Rule 110 of the
Rules of Court, expressly requires that for a complaint
or information to be sufficient it must, inter alia, state
the designation of the offense by the statute, and the
acts or omissions complained of as constituting the
offense. This is essential to avoid surprise on the
accused and to afford him the opportunity to prepare
his defense accordingly.4
To comply with these fundamental requirements of
the Constitution and the Rules on Criminal Procedure,
it is imperative for the specific statute violated to be
designated or mentioned in the charge. In fact,
another compelling reason exists why a specification
of the statute violated is essential in these cases. As
stated in the order of respondent Judge Maceren the
carrying of so-called “deadly weapons” is the subject
of another penal statute and a Manila city ordinance.
Thus, Section 26 of Act No. 1780 provides:
“Section 26. It should be unlawful for any person to carry
concealed about his person any bowie knife, dirk, dagger,
kris, or other deadly weapon: x x x. Any person violating the
provisions of this section shall, upon conviction in a court of
competent jurisdiction, be punished by a fine not exceeding
five hundred pesos, or by imprisonment for a period not
exceeding six months, or both such fine and imprisonment,
in the discretion of the court.”
Ordinance No. 3820 of the City of Manila as amended
by Ordinance No. 3928 which took effect on
December 4, 1957, in turn penalizes with a fine of not
more than P200.00 or imprisonment for not more
than one months, or both, at the discretion of the
court, anyone who shall carry concealed in his person
in any manner that would disguise its deadly
character any kind of firearm, bowie knife, or other
deadly weapon . . . in any public place. Consequently,
it is necessary that the particular law violated be
specified as there exists a substantial difference
between the statute and city ordinance on the one
hand and P.D. 9 (3) on the other regarding the
circumstances of the commission of the crime and the
penalty imposed for the offense.
We do not agree with petitioner that the above-
mentioned statute and the city ordinance are
deemed repealed by P.D. 9 (3).5 P. D. 9(3) does not
contain any repealing clause or provision, and repeal
by implication is not favored.6 This principle holds
true with greater force with regards to penal
statutes which as a rule are to be construed strictly
against the state and liberally in favor of the
accused.7 In fact, Article 7 of the New Civil Code
provides that laws are repealed only by subsequent
ones and their violation or non-observance shall not
be excused by disuse, or custom or practice to the
contrary.
Thus we are faced with the situation where a
particular act may be made to fall, at the discretion
of a police officer or a prosecuting fiscal, under the
statute, or the city ordinance, or the presidential
decree. That being the case, the right becomes more
compelling for an accused to be confronted with the
facts constituting the essential elements of the
offense charged against him, if he is not to become
an easy pawn of oppression and harassment, or of
negligent or misguided official action—a fear
understandably shared by respondent Judges who
by the nature of their judicial functions are daily
exposed to such dangers.
2. The position taken by petitioner that P.D. 9(3)
covers one and all situations where a person carries
outside his residence any of the weapons mentioned
or described in the decree irrespective of motivation,
intent, or purpose, converts these cases into one of
“statutory construction.” That there is ambiguity in
the presidential decree is manifest from the
conflicting views which arise from its implementation.
When ambiguity exists, it becomes a judicial task to
construe and interpret the true meaning and scope of
the measure, guided by the basic principle that penal
statutes are to be construed and applied liberally in
favor of the accused and strictly against the state.
3. In the construction or interpretation of a
legislative measure—a presidential decree in these
cases—the primary rule is to search for and
determine the intent and spirit of the law. Legislative
intent is the controlling factor, for in the words of this
Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio
Teehankee, whatever is within the spirit of a statute
is within the statute, and this has to be so if strict
adherence to the letter would result in absurdity,
injustice and contradictions.8
There are certain aids available to Us to ascertain the
intent or reason for P.D. 9(3).
First, the presence of events which led to or
precipitated the enactment of P.D. 9. These events
are clearly spelled out in the “Whereas” clauses of the
presidential decree, thus: (1) the state of martial law
in the country pursuant to Proclamation 1081 dated
September 21, 1972; (2) the desired result of
Proclamation 1081 as well as General Orders Nos. 6
and 7 which are particularly mentioned in P.D. 9; and
(3) the alleged fact that subversion, rebellion,
insurrection, lawless violence, criminality, chaos, and
public disorder mentioned in Proclamation 1081 are
committed and abetted by the use of firearms and
explosives and other deadly weapons.
The Solicitor General however contends that a
preamble of a statute usually introduced by the word
“whereas”, is not an essential part of an act and
cannot enlarge or confer powers, or cure inherent
defects in the statute (p. 120, rollo of L-42050-66);
that the explanatory note or enacting clause of the
decree, if it indeed limits the violation of the decree,
cannot prevail over the text itself inasmuch as such
explanatory note merely states or explains the reason
which prompted the issuance of the decree. (pp. 114-
115, rollo of 46997)
We disagree with these contentions. Because of the
problem of determining what acts fall within the
purview of P.D. 9, it becomes necessary to inquire
into the intent and spirit of the decree and this can be
found among others in the preamble or “whereas”
clauses which enumerate the facts or events which
justify the promulgation of the decree and the stiff
sanctions stated therein.
“A ‘preamble’ is the key of the statute, to open the
minds of the makers as to the mischiefs which are to
be remedied, and objects which are to be
accomplished, by the provisions of the statute.”
(West Norman Timber v. State, 224 P. 2d 635, 639,
cited in Words and Phrases, “Preamble”; emphasis
supplied) “While the preamble of a statute is not
strictly a part thereof, it may, when the statute is in
itself ambiguous and difficult of interpretation, be
resorted to, but not to create a doubt or uncertainty
which otherwise does not exist,” (James v. Du Bois, 16
N.J.L. (1 Har.) 285, 294, cited in Words and Phrases,
“Preamble”)
Second, the result or effects of the presidential
decree must be within its reason or intent. In the
paragraph immediately following the last “Whereas”
clause, the presidential decree states.
From the above it is clear that the acts penalized in
P.D. 9 are those related to the desired result of
Proclamation 1081 and General Orders Nos. 6 and 7.
General Orders Nos. 6 and 7 refer to firearms and
therefore have no relevance to P.D. 9(3) which refers
to blunt or bladed weapons. With respect to
Proclamation 1081 some of the underlying reasons
for its issuance are quoted hereunder:
“WHEREAS, these lawless elements having taken up
arms against our duly constituted government and
against our people, and having committed and are
still committing acts of armed insurrection and
rebellion consisting of armed raids, forays, sorties,
ambushes, wanton acts of murders, spoilage,
plunder, looting, arsons, destruction of public and
private buildings, and attacks against innocent and
defenseless civilian lives and property, all of which
activities have seriously endangered and continue to
endanger public order and safety and the security of
the nation, x x x.”
“WHEREAS, it is evident that there is throughout the land a
state of anarchy and lawlessness, chaos and disorder,
turmoil and destruction of a magnitude equivalent to an
actual war between the forces of our duly constituted
government and the New People’s Army and their satellite
organizations because of the unmitigated forays, raids,
ambuscades, assaults, violence, murders, assassinations,
acts of terror, deceits, coercions, threats, intimidations,
treachery, machinations, arsons, plunders and
depredations committed and being committed by the
aforesaid lawless elements who have pledged to the whole
nation that they will not stop their dastardly effort and
scheme until and unless they have fully attained their
primary and ultimate purpose of forcibly seizing political
and state power in this country by overthrowing our
present duly constituted government, x x x.” (See Book I,
Vital Documents on the Declaration of Martial Law in the
Philippines by the Supreme Court of the Philippines, pp. 13-
39)
It follows that it is only that act ot carrying a blunt or
bladed weapon with a motivation connected with or
related to the afore-quoted desired result of
Proclamation 1081 that is within the intent of P.D.
9(3), and nothing else.
“Statutes are to be construed in the light of purposes
to be achieved and the evils sought to be remedied”
“When construing a statute, the reason for its
enactment should be kept in mind, and the statute
should be construed with reference to its intended
scope and purpose.” (Statutory Construction by E.T.
Crawford, pp. 604-605, cited in Commissioner of
Internal Revenue v. Filipinas Compañia de Seguros,
107 Phil. 1055, 1060; emphasis supplied)
4. In the construction of P.D. 9(3) it becomes
relevant to inquire into the consequences of the
measure if a strict adherence to the letter of the
paragraph is followed.
It is a salutary principle in statutory construction that
there exists a valid presumption that undesirable
consequences were never intended by a legislative
measure, and that a construction of which the statute
is fairly susceptible is favored, which will avoid all
objectionable, mischievous, indefensible, wrongful,
evil, and injurious consequences.9a
And as respondent Judge Maceren points out, the
people’s interpretation of P.D. 9(3) results in
absurdity at times. To his example We may add a
situation where a law-abiding citizen, a lawyer by
profession, after gardening in his house remembers
to return the bolo used by him to his neighbor who
lives about 30 meters or so away and while crossing
the street meets a policeman. The latter upon seeing
the bolo being carried by that citizen places him under
arrest and books him for a violation of P.D. 9(3). Could
the presidential decree have been conceived to
produce such absurd, unreasonable, and insensible
results?
Pertinent provisions of the Rules of Court follow:
“Rule 117, Section 7. Effect of sustaining the motion
to quash.—If the motion to quash is sustained the
court may order that another information be filed. If
such order is made the defendant, if in custody, shall
remain so unless he shall be admitted to bail. If such
order is not made or if having been made another
information is not filed with on time to be specified in
the order, or within such further time as the court
may allow for good cause shown, the defendant, if in
custody, shall be discharged therefrom, unless he is in
custody on some other charge.”
Two courses of action were open to Petitioner upon
the quashing of the Informations in these cases, viz:
First, if the evidence on hand so warranted, the
People could have filed an amended Information to
include the second element of the offense as defined
in the disputed orders of respondent Judges. We have
ruled that if the facts alleged in the Information do
not constitute a punishable offense, the case should
not be dismissed but the prosecution should be given
an opportunity to amend the Information.16
Second, if the facts so justified, the People could have
filed a complaint either under Section 26 of Act No.
1780, quoted earlier, or Manila City Ordinance No.
3820, as amended by Ordinance No. 3928, especially
since in most if not all of the cases, the dismissal was
made prior to arraignment of the accused and on a
motion to quash.
Section 8. Rule 117 states that: “An order sustaining
the motion to quash is not a bar to another
prosecution for the same offense unless the motion
was based on the grounds specified in section 2,
subsections (f) and (h) of this rule.”
Under the foregoing, the filing of another complaint
or Information is barred only when the criminal action
or liability had been extinguished (Section 2[f]) or
when the motion to quash was granted for reasons of
double jeopardy. (ibid., [h])
WHEREFORE, We DENY these 26 Petitions for Review
and We AFFIRM the Orders of respondent Judges
dismissing or quashing the Information concerned,
subject however to Our observations made in the
preceding pages 23 to 25 of this Decision regarding
the right of the State or Petitioner herein to file either
an amended Information under Presidential Decree
No. 9, paragraph 3, or a new one under other existing
statute or city ordinance as the facts may warrant.
Quimpo v Mendoza
Facts: Petitioner Angel Quimpo is the owner of a
building located in Cagayan de Oro City assessed at
P20,000.00 for 1969 under Tax Declaration No. 2102.
The realty tax of said building is P400.00 yearly,
payable in four equal installments, the first
installment to be paid on or before March 31. The
second installment, on or before June 30; the third
installment, on or before September 30; and the last
installment, on or before December 31. (Sec. 4, RA
5447).
“Petitioner paid on time the first three installments
amounting to P300.00, but with respect to the last
installment of P100.00 which was to be paid on or
before December 31, it was only on August 27, 1970
that he tendered the amount of P124.00, which
covered, according to his computation, the tax or last
installment of P100.00 and the penalty of P24.00 to
herein respondent City Treasurer of Cagayan de Oro,
who refused the payment insisting that petitioner
ought to pay the last installment of P100.00 plus the
penalty of P96.00 or a total of P196.00 (Stipulations,
pars. 3 & 4) based on and computed according to
Section 42 of the City Charter of Cagayan de Oro (RA
521) and the Provincial Circular No. 18–64 dated July
17, 1964 of the Secretary of Finance (Exhibit 2 and
Stipulations, par. 7).
“On September 2, 1970 petitioner deposited by way
of consignation the above-mentioned amount of
P124.00 with the Clerk of Court (Stipulations, par. 5)
and instituted the instant action of mandamus, with
damages, against herein respondent City Treasurer in
his official as well as personal capacity, praying for
judgment:
1. ORDERING the respondent to accept the payment
of taxes for the last installment and the penalty
therefor in the amount of ONE HUNDRED TWENTY
FOUR (P124.00);
2. ORDERING the respondent to issue the official
receipt for the final payment of the taxes for 1969,
and a tax clearance certificate;
3. DECLARING the act of the respondent in imposing
the penalty on the full amount of the tax even if the
late payment was only on the last installment as
illegal, unjust, immoral and oppressive;
The court below sustained the City Treasurer, relying
on the main opinion of this Tribunal in the case of
Padilla vs. City of Pasay and City Treasurer. The
decision under review states:The law imposes only
one annual real estate tax (plus the additional tax
under RA 5447). This tax is due and payable only once,
on or before March 31 of every year. Before the
effectivity of RA 5447 the taxpayer was given the
option to pay the tax in two installments, the first on
or before May 31, and the second on or before
October 30th. The payment in two installments was a
privilege extended to the taxpayer for his
accommodation and convenience. With the
imposition of the additional tax of one per centum on
the assessed value of real property in addition to the
real property tax regularly levied thereon the amount
of the tax shouldered by the taxpayer has practically
been doubled, and it is for this reason, to the mind of
the Court, that the new law now allows him to pay his
real tax in four equal installments instead of only two.
There is only one tax, payable in four equal
installments on specified dates; not four different
taxes, each with a different due date. x x x.
“Accordingly, the Court concludes that the ruling of
the Supreme Court in the above-mentioned Padilla
case applies squarely to the case at bar. Hence, the
tax liability of petitioner is P100.00, corresponding to
the unpaid last installment, plus P96.00 computed at
2% of the original tax of P400.00 for every full month
of delinquency but not to exceed 24% from April,
1969 to July 1970."The lower court further held that
it was without authority to entertain the suit for
failure of petitioner to comply with the provisions of
the Charter of Cagayan de Oro (Republic Act No. 521)
on payment of tax under protest.3
On January 1, 1969, Republic Act No. 5447 took effect,
imposing an additional tax on real property and
providing, inter alia, that “the pertinent provisions of
the corresponding charters of chartered cities to the
contrary notwithstanding, the basic and the
additional property tax shall be due and payable in
four equal installments; the first installment shall be
due and payable on or before March 31; the second
installment, on or before June 30; the third
installment, on or before September 30; and the last
installment on or before December 31."4
Petitioner contends that R.A. 5447 explicitly amended
the respective city charters, including R.A. 521, by
providing that the real property tax now becomes due
in four equal installments and becomes payable in
four equal installments; that the term “original tax
due” in R.A. 521 is only proper if the tax has one due
date and is payable in two or more installments; and,
that R.A. 5447, having been enacted after the Padilla
case relied upon by respondent court, was obviously
intended to cure the harsh but mandatory law as
interpreted in said decision.
Issue: Whether or not the property tax now becomes
due in 4 installments and becomes due in the same
manner. Yes
Ruling: We agree with petitioner that, contrary to the
conclusion of the lower court, the aforementioned
Padilla case does not apply squarely to the case at bar.
In Padilla, the applicable law was Republic Act No.
183, otherwise known as the Charter of the City of
Pasay. Therein petitioner Teodoro Padilla paid the
first installment of his 1963 real property tax on time
but paid his second installment only on December 23,
1963, instead of October 30 of the same year, as
required by R.A. 183. This Court held that his
delinquency penalty should be based on the amount
of the original tax due, and computed from June first5
when said tax became due and payable. We quote
below the pertinent portions of the decision as f
ollows:
“In appellant’s brief, it is submitted that the taxpayer
having been given an option to pay his realty tax in
two installments and the appellant having paid within
the permissible period, the first installment, he could
not be considered delinquent insofar as the first half
of the realty tax is due, His delinquency should date
only from November 1, 1963 by virtue of his failure to
pay on October 30 of the same year. For appellant, it
is inconclusive ‘how he can be declared delinquent
from June 1, 1963 since the second installment of his
real estate tax was not yet due on that date but will
have become due and payable only on the thirtieth of
October 1963'. The decision then, according to
appellant, ‘negates the taxpayer’s option to pay his
realty tax in two (2) installments as expressly granted’
by law and amounted to ‘unwarranted judicial
legislation.’
“Appellant’s theory is not inherently implausible.
Nonetheless, it must yield to the specific language of
the law which is controlling. The last sentence of the
first paragraph of the controlling legal provision reads
thus: ‘All taxes on real estate for any year shall be due
and payable annually on the first day of June and from
this date such taxes together with all penalties
accruing thereto shall constitute a lien on the
property subject to such taxation.’ Two paragraphs
later, the taxpayer is given the option to pay ‘in two
installments to be fixed annually by the Municipal
Board simultaneously with the rate per centum ad
valorem taxation: Provided, That the time limit for the
first and second installments shall be set at not later
than the thirtyfirst day of May and the thirtieth day of
October of each year, respectively.’ Then comes the
provision as to the penalty to be imposed in case of
delinquency and how to fix the same: ‘At the
expiration of the time for the payment of the real
estate tax without penalty, the taxpayer shall be
subject, from the first day of delinquency, to the
payment of a penalty at the rate of two per centum
for each full month of delinquency that has expired,
on the amount of the original tax due, until the tax
shall have been paid in full or until the property shall
have been forfeited to the city as provided in this ACT:
Provided, That in no case shall the total penalty
exceed twenty-four per centum of the original tax
due.’
“Construed together, the above provisions yield no
other conclusion but that the taxes are due and
payable ‘on the first day of June’ from which date
‘such taxes together with all penalties accruing
thereto shall constitute a lien on the property subject
to such taxation.’ It is true the taxpayer is given the
option to pay in two installments with the respective
dates for the payment thereof ‘at not later than the
thirty-first day of May and the thirtieth day of October
of each year, respectively.’ Then comes the crucial
and decisive provision. ‘At the expiration of the time
for the payment of the real estate tax without
penalty, the taxpayer shall be subject, from the first
day of delinquency, to the payment of a penalty at the
rate of two per centum for each full month of
delinquency that has expired, on the amount of the
original tax due, until the tax shall have been paid in
full or until the property shall have been forfeited to
the city x x
“The law is specific and mandatory. It calls for
application as thus worded. There is no room f or
interpretation. The penalty is to be based ‘on the
amount of the original tax due.’ The fact that the first
installment was made on time does not benefit the
taxpayer at all, if thereafter the second installment
were not paid on time. In effect then, the option thus
granted, to pay in two installments, must be strictly
complied with, otherwise the operation of the plain
statutory command that the tax due and payable on
June 1st becomes unavoidable and delinquency is to
be computed from such a date.”
The aforecited provisions of R.A. 183 (Charter of
Pasay City) applied and interpreted in the Padilla case
are indeed almost identical to the corresponding
provisions in R.A. 521 (Charter of Cagayan de Oro
City), the law applicable to the case at bar. However,
the Padilla decision was promulgated on June 29,
1968, or prior to the passage of R.A. 5447 which, as
already stated, took effect on January 1, 1969. As the
tax penalty in question was imposed on the real
estate tax for 1969 the subsequent enactment of R.A.
5447 must be taken into consideration with R.A. 521
and the pronouncements of this Court in the Padilla
case.
R.A. 521 specifically and expressly provides for one
due date for the whole annual real estate tax. R.A.
5447, on the other hand, does not provide for such a
specific singular date for the payment of the entire
tax, but directly and unmistakably mandates that the
tax shall be due and payable in four equal installments
spread over the period of one year. Each installment
is due and payable on or before a specified statutory
limit. The last installment is due and payable on or
before December 31 of each year, hence it is only
thereafter, or commencing January 1 of the following
year, that delinquency starts as to this final
installment. This being so, it only logically follows that
the penalty for delinquency should be computed from
January 1.
The next question now poses itself: What is the basis
for the computation of the tax penalty in case of
delinquency? The sixth paragraph of Section 42, R.A.
521 (supra), provides that the taxpayer is subject to
“a penalty at the rate of two per centum for each full
month of delinquency that has expired, on the
amount of the original tax due x x x.” There is no
corresponding or amendatory provision in R.A. 5447.
This later law does not cover the aspect of penalty in
case of delinquency in the payment of the real estate
tax. In the absence of such penalty provision,
respondent City Treasurer insists that the penalty of
2% be based on the original tax due whereas
petitioner maintains that it should be the amount of
the installment due and not paid.
We rule for the petitioner, following the general rule
in the interpretation of tax statutes that such
statutes are construed most strongly against the
government and in favor of the taxpayer. Moreover,
simple logic, fairness and reason cannot countenance
an exaction or a penalty for an act faithfully done in
compliance with the law. Since petitioner is allowed
by law to pay his real estate tax in four equal
installments due and payable on four specified dates
and having paid the first three (3) installments
faithfully and religiously, it is manifest injustice, sheer
arbitrariness and abuse of power to penalize him for
doing so when he fails to pay the fourth and last
installment.
That it is the legislator’s intention to subject the
taxpayer to the payment of the penalty of two (2) per
centum on the amount of the delinquent tax f or each
month of delinquency or fraction thereof, is clearly
evident in the promulgation of P.D. No. 464 enacting
the Real Property Tax Code, Sec. 66 thereof which
provides: Sec. 66. Penalty for delinquency.—Failure
to pay the real property tax before the expiration of
the period for the payment without penalty of the
quarterly installments thereof shall subject the
taxpayer to the payment of a penalty of two per
centum on the amount of the delinquent tax for each
month of delinquency or fraction thereof, until the
delinquent tax shall be fully paid: Provided, That in no
case shall the total penalty exceed twenty-four per
centum of the delinquent tax. The rate of penalty for
tax delinquency fixed herein shall be uniformly
applied in all provinces and cities.” (italics supplied)
P.D. 464 was promulgated effective June 1, 1974.
Section 66 of the P.D. evidently supplies the omission
of a penalty provision in Republic Act 5447. However,
since R.A. 5447 amended R.A. 521, the City Charter of
Cagayan de Oro City in making the basic and
additional property tax to be due and payable in four
(4) equal installments, We hold that the penalty
provision of R.A. 521, Sec. 42 is deemed modified by
implication.
Accordingly, petitioner’s total liability as of August 27,
1970 when he tendered payment to respondent City
Treasurer may be computed as follows: P100.00 (the
fourth and last installment) plus P16.00 penalty (8
months of delinquency from January to August, 1970
at two per centum on the amount of the delinquent
tax of P 100.00) which totals P1 16.00.
Contention 2 and ruling 2: As to the second
assignment of error, We do not agree with the
respondent court that failure of the petitioner to
comply with Section 42 and Section 58 (b) of R.A. 521
requiring payment of taxes under protest, rendered
the court without authority to entertain the suit.
Section 58(b) provides that "(n)o court shall entertain
any suit assailing the validity of a tax assessed under
this Chapter until the taxpayer shall have paid, under
protest, the taxes assessed against him x x x. (italics
supplied.) The phrase “tax assessed” clearly refers to
the annual real estate tax imposable on the taxable
real property. May the phrase “tax assessed” be
interpreted to include not only the tax itself but also
all penalties accruing thereto? The legislative intent is
not clear on this point, reading Section 42 to Section
58 of the Act. However, in the case of Collector of
Internal Revenue vs. Bautista, G.R. No. L-12250 and L-
12259, May 27, 1959, this Court, speaking thru Justice
Roberto Concepcion, who later became Chief Justice,
held that a surcharge is not a “tax” in itself, and We
quote: “It will be noted that the surcharge of five per
centum (5%) and the interest of one per centum (1%)
a month, referred to in Section 51 (e) are imposed
upon the “tax unpaid.” Similarly, under said section
72, the “surcharge of fifty per centum (50%) of the
amount of” the “deficiency tax,” imposable “in case
of x x x a false or fraudulent return,” shall be “added”
to the “tax or to the deficiency tax”. In other words,
the aforementioned surcharge of 50% is not a “tax” in
itself, and hence, not subject to the 5% surcharge and
to the interest of 1% a month on the “unpaid tax”,
prescribed in section 51(e). Although, pursuant to
section 72, said 50% surcharge “shall be collected at
the same time and in the same manner and as part of
that tax”, the likeness to the tax therein mentioned
refers exclusively to the “time” and “manner"—
meaning the method—of collection, not to the
amount to be collected which is not procedural, but
substantive in character.”
Since a surcharge is in the nature of a penalty, the
ruling cited above is aptly applicable in the instant
case. Furthermore, the particular circumstances
herein cast doubt as to the applicability of Section
58(b), R.A. 521, which must be resolved in favor of the
petitioner. We must take into consideration his
apparent good faith in relying on the amendatory
provisions of R.A. 5447, and the admitted fact that he
tendered payment of the last installment of his 1969
realty tax to respondent City Treasurer, together with
the tax penalty in accordance with his computation,
though erroneous, before filing this case in court. We
likewise take into account the fact that even said
respondent Treasurer erred in interpreting the law. It
may be added that it could have been more expedient
for the latter to have accepted the amount tendered
by petitioner in August, 1970, for after all, the tax
itself was not in question.
WHEREFORE, judgment is hereby rendered ordering
petitioner to pay to the City Treasurer of Cagayan de Oro
City the amount of P1 16.00 representing full payment of
the last installment of P100.00 on the realty tax for the year
1969 and the tax penalty of P16.00 for eight months of his
delinquency from January, 1970 to August, 1970; and
ordering said City Treasurer to accept the aforesaid
payment, issue the official receipt therefor and a tax
clearance certificate covering the aforementioned real
estate tax and penalty. No costs.
Ebarle vs Sucaldito
Facts: Ebarle, the petitioner, was then provincial
governor of Zamboanga and a candidate for re-
election in 1971 local elections. The Anti-Graft League
of the Philippines filed complaints with the city fiscal
against the petitioner for violations of RA 3019 (Anti-
Graft Law) and Articles 171, 182,183, 213, and 318 of
the Revised Penal Code. The petitioner filed petitions
for prohibition and certiorari in CFI but they were
dismissed. He petitioned to the Supreme Court and
alleged that the City Fiscal and Anti-Graft League
failed to comply with the provisions of EO 264, which
outlined the procedure how complainants charging
the government officials and employees with the
commission of irregularities should be guided.
EO 264 outlines the procedure which complainants
charging government officials and employees with
commission of irregularities should be guided,
applies to criminal actions or complaints.
· EO 265 – “complaints against public officials and
employees shall be promptly acted upon and
disposed of by the officials or authorities concerned
in accordance with pertinent laws and regulations so
that the erring officials and employees can be soonest
removed or otherwise disciplines and the innocent,
exonerated or vindicated in like manner, and to the
end also that other remedies, including court action,
may be pursued forthwith by the interested parties,
after administrative remedies shall have been
exhausted”
Issue: WON the compliance of EO 264 apply to
respondents? No. Thus, Anti Graft does not need to
comply with it. Petitioner is wrong.
Ruling: No, EO No. 264 has exclusive application to
administrative, not criminal complaints. Executive
Order No. 264 makes reference to "erring officials
and employees x x x removed or otherwise
vindicated" and does not employ such technical
terms as "accused, " "convicted" and "acquitted, "
hence it was not intended to apply to criminal
prosecutions. It is moreover significant that the
Executive Order in question makes specific reference
to "erring officials or employees x x x removed or
otherwise vindicated." If it were intended to apply to
criminal prosecutions, it would have employed such
technical terms as "accused," "convicted," or
"acquitted." While this is not necessarily a controlling
parameter for all cases, it is here material in
construing the intent of the measure.
lt is plain from the very wordings of the Order that it
has exclusive application to administrative, not
criminal complaints. The Order itself shows why. The
very title speaks of "COMMISSION' OF
IRREGULARITIES." There is no mention, not even by
implication, of criminal "offenses," that is to say,
"crimes." While "crimes" amount to "irregularities,"
the Executive Order could have very well referred to
the more specific term had it intended to make itself
applicable thereto.
Feliciano vs Aquino
Facts: Respondent Benigno S. Aquino, Jr. was
proclaimed as elected mayor of Concepcion Tarlac.
Four days after the proclamation, petitioner
instituted quo warranto proceedings challenging
Petitioner’s eligibility on the ground that respondent
was not yet 23 years old at the time of his election.
Respondent Nicolas Feliciano claimed that age
requirement only refers to the age of the time of
assumption of office. He appealed the existence of a
semi-colon, converted into a comma in the
1951Revised Administrative Code does not require
him to possess the remaining qualifications atthe
time of election but rather at the time of assumption
of office provided that he had fulfilled the 1st 2
requirements. Lower Court ruled in favor of the
petitioner. Hence this petition.
The controversy revolves around sec. 2174 of the
Revised Administrative Code of 1917 (Act 2711),
reading as follows:
"Sec. 2174. Qualifications of Elective Municipal
Officer. - An elective municipal officer must, at the
time of the election, be a qualified voter in his
municipality and must have been resident therein for
at least one year; he must be loyal to the United
States 1and not less than twenty-three years of age.
He must also be able to read and write intelligently
either Spanish, English or the local dialect."
Appellant avers that the phraseology of the section
and the existence of a semi-colon (;) after the first two
requirements (improperly converted into a comma (,)
in the 1951 edition of the Revised Administrative
Code) proves that while the candidate must be a
qualified voter and a resident at the time of the
election, he need not possess the remaining
qualifications until he assumes the office; that
appellant was chosen by an overwhelming majority of
his constituents and that the evident will of the
electorate was thwarted by the judgment appealed
from.
Issue: WON the election of respondent is unlawful?
Yes. It is unlawful.
Ruling: The primary rule of statutory construction
that punctuation marks cannot be disregardedunless
there is reason to do to the contrary. Punctuation
marks are aids of law degree ininterpreting the
language of a statute and can never control against
the intelligible meaningof written words. No reason is
shown why, after plainly and unequivocally requiring
thatcandidates for all other elective offices should
possess the age qualification "at the time of the
election", the law should suddenly change the
requirement in the case of municipal officers. No
argument is needed to show that where
the candidate is mentioned as eligible or ineligible in
the said section taking part in the election is meant,
not capacity to assume office. Decision of the lower
court is affirmed and the election of respondent is
declared unlawful and illegal.
Indeed, Aquino became 23 years old only 19 days
after the elections, and 16 days after the canvassers
had proclaimed him Mayor elect. The spirit of the law,
as well as the natural and obvious sense of section
2174 of the Revised Administrative Code, is that the
candidate for a municipal elective office must be not
less than 23 years of age at the time the election is
held. The section only makes mention of this time: it
refers to no other. This interpretation is in harmony
with the legal requirements for other elective offices,
from President of the Republic to provincial officers.
No reason is shown why, after plainly and
inequivocably requiring that candidates for all other
elective offices should possess the age qualification
"at the time of the election", the law should
suddenly change the requirement in the case of
municipal officers. If that was the intention of the
Legislature, it would have said so expressly instead
of leaving the matter open to confusion and doubt.
That the term "eligibility" as used in the' Election Law
has reference to the election time, and not to the
commencement of the term of office is further
confirmed by section 31 of said law, about certificates
of candidacy. No argument is needed to show that
where the candidate is mentioned as "eligible" or
"ineligible" in said section, taking part in the election
is meant, and not capacity to assume office.