Doctrine of Statutory Construction

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

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

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

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

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

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

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

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes,
whether sealed as first-class matter or not, shall be imported into the Philippines through the mails, or to be
deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any officer or
employee of the Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or
purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in
whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or
property of any kind by means of false or fraudulent pretenses, representations, or promises.
 "SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in
conducting any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme,
device, or enterprise for obtaining money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promises, the Director of Posts may instruct any postmaster or
other officer or employee of the Bureau to return to the person, depositing the same in the mails, with the
word "fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of whatever
class mailed by or addressed to such person or company or the representative or agent of such person or
company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director
of Posts may, upon evidence satisfactory to him that any person or company is engaged in conducting any
lottery, gift enterprise or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or
enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent
pretenses, representations, or promise, forbid the issue or payment by any postmaster of any postal money
order or telegraphic transfer to said person or company or to the agent of any such person or company,
whether such agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and
may provide by regulation for the return to the remitters of the sums named in money orders or telegraphic
transfers drawn in favor of such person or company or its agent.

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

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

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

The respondent appealed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win
a prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be
tenable if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation.
But it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphîl.nèt

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

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

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

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

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

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

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

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

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a
device to evade the law and no consideration is derived, directly or indirectly, from the party receiving the
chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286,
41 N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under
the prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar
schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration.
Finding none in the contest here in question, we rule that the appellee may not be denied the use of the mails for
purposes thereof. Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory
relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the appellee does not
transgress the provisions of the Postal Law.

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

Nature of the Rules of Statutory Construction

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-63318 November 25, 1983

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,

vs.
NATIONAL TELECOMMUNICATIONS COMMISSION AND PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, respondents.

Tomas C. Llamas for petitioner.

The Solicitor General for respondent NTC.

Graciano C. Regala and Eliseo B. Alampay for respondent PLDT.

RELOVA, J.

Petition for certiorari seeking to set aside and annul the decision, dated November 22, 1982, of public
respondent National Telecommunications Commission (NTC, for short), approving the application of the
Philippine Long Distance Telephone Company (PLDT, for short) of its revised schedule for its Subscriber
Investment Plan (SIP) for the entire service area, including the ex-RETELCO area; as well as the order of
January 14, 1983 which denied the motion for reconsideration of petitioner Philippine Consumers Foundation,
Inc. (PCFI, for short).

Records show that on March 20, 1980, private respondent PLDT filed an application with the NTC for the
approval of a revised schedule for its Subscriber Investment Plan (SIP), docketed as Case No. 82-27.

On April 14, 1982, the NTC issued an ex-parte order provisionally approving the revised schedule which,
however, was set aside by this Court on August 31, 1982 in the case of "Samuel Bautista vs. NTC, et al.," 116
SCRA 411. The Court therein ruled that "there was necessity of a hearing by the Commission before it should
have acted on the application of the PLDT so that the public could air its opposition, particularly the herein
petitioner and the Solicitor General, representing the government. They should be given the opportunity to
substantiate their objection that the rates under the subscriber investment plan are excessive and
unreasonable and, as a consequence, the low income and middle class group cannot afford to have telephone
connections; and, that there is no need to increase the rate because the applicant is financially sound."

On November 22, 1982, the NTC rendered the questioned decision permanently approving PLDT's new and
increased SIP rates, the dispositive portion of which reads: têñ.£îhqwâ£

IN VIEW OF ALL THE FOREGOING, this Commission finds that applicant's reduced proposals
for its revised Subscriber Investment Plan Schedule, upon further reductions herein ordered
with respect to subscriber investments for new installations of single residential telephones in
the Metro Manila and Provincial Service Areas, are all within the 50%-of-cost limit provided in
P.D. 217; that they are just and reasonable and in consonance with the public policies declared
in said decree; and that it is in the public interest that applicant's revised SIP Schedule be, as it
is hereby APPROVED, as follows:

REVISED SIP SCHEDULE

Service Category Revised SIP Rates

Metro Manila Provincial têñ.£îhqwâ£

1. New Installations –

1. PBX/PABX Trunk P 5,000 P3,000

2. Business Phone:

Single line 3,500 2,000

Party line 2,000 1,600

3. Residential Phone:

Single line 1,800 1,300

Party line 900 800

4. Leased Line 2,500 2,500

5. Tie trunk or tie line 2,500 2,500

6. Outside local 2,500 2,500

II. Transfers –

1. PBX/PABX 1,500 1,200

2. Business Phone:

Single line 800 600

Party line 600 500

3. Residential Phone:

Single line 600 500

Party line 500 300

4. Leased Line 800 800

Revised SIP Rates

Metro Manila Provincial

5. Tie trunk or tie line P800 P800

6. Outside Local 800 800

(pp. 34-35, Rollo)

Petitioner filed a motion for reconsideration of the above judgment on December 14, 1982, and after a month,
or on January 14, 1983, NTC denied said motion for reconsideration.

It is the submission of petitioner that the SIP schedule presented by the PLDT is pre-mature and, therefore,
illegal and baseless, because the NTC has not yet promulgated the required rules and regulations
implementing Section 2 of Presidential Decree No. 217 which provides: têñ.£îhqwâ£

Section 2. The Department of Public Works, Transportation and Communications through

its Board of Communications and/or appropriate agency shall see to it that the herein declared
policies for the telephone industry are immediately implemented and for this purpose pertinent
rules and regulations may be promulgated ... (Emphasis supplied).

Petitioner avers that the "substitute procedural vehicle utilized by NTC in allowing the establishment of SIP by
PLDT was by treating the appropriate Petition of PLDT as if the same were a rate case over which the Rules of
Practice was applicable. NTC proceeded to invoke the summary powers provided for in the Rules of Practice
to fully bear on the hapless consumer, notably the repressive 'Provisional Reliefs;' (pp. 5-6, Rollo) that at the
hearings thereof, "NTC limited the numerous oppositors in the instant Application, among them PCFI, by
applying the two oppositor-rule. This means that only two of the oppositors will be heard in representation of all
the oppositors, again pursuant to the procedure laid down in the Rules of Practice." (p. 130, rollo) Further, the
NTC invoked its extraordinary powers pursuant to Section 3 of Rule 15 of the Rules of Practice, "whereby even
without an iota or proof to substantiate its application, NTC allowed the desired increase purportedly on a
provisional basis. " (p. 129, rollo)

The question is whether or not respondent acted with grave abuse of discretion when it approved the Revised
Subscriber Investment Plan (SIP) of respondent PLDT in the absence of specific rules and regulations
implementing Presidential Decree No. 217. Petitioner claims that these implementing rules and regulations are
mandatory pre-requisite for the approval of said SIP rates.

Respondent NTC admits the absence of rules and regulations referred to in PD 217. However, it contends that
nowhere in said decree is there any legal provision making the promulgation of rules a mandatory pre-requisite
to the establishment of SIP and the determination of its schedules; that since respondent NTC is enjoined to
implement the declared policies of the decree, for its immediate implementation, it may rely on existing Rules
of Practice; that under the same Rules of Practice all existing subscriber investment plans were presented,
considered and approved by the NTC; that the promulgation of the rules is inherently an internal and
administrative matter and therefore, is not a proper subject of litigation, much less a duty of the NTC to
accomplish; and, that public respondent may or may not promulgate the rules in the immediate implementation
of said decree as the word used there is "may."

We are not persuaded.

Presidential Decree No. 217 was promulgated on June 16, 1973 and paragraph 4 of Section 1 thereof
provides: têñ.£îhqwâ£

4. In line with the objective of spreading ownership among a wide base of the people, the
concept of telephone subscriber self-financing is hereby adopted whereby a telephone
subscriber finances part of the capital investments in telephone installations through the
purchase of stocks, whether common or preferred stock, of the telephone company. (Emphasis
supplied)

There is merit in the contention of petitioner that it is the duty of respondent NTC to promulgate rules and
regulations because: têñ.£îhqwâ£

1. P.D. 217 deals with matters so alien, innovative and untested such that existing substantive
and procedural laws would not be applicable. Thus, the Subscriber Investment Plan (SIP) was
so set up precisely to ensure the financial viability of public telecommunications companies
 which in turn assures the enjoyment of the population at minimum cost the benefits of a
telephone facility.

The SIP has never been contemplated prior to P.D. 217.

The existing law on the other hand, the Public Service Act, diametrically runs counter to the
spirit and intention, if not the purpose of P.D. 217. It may even be gainsaid that as long as the
optimum number of individuals may enjoy telephone service, there is no limitation on the
profitability of such companies. Hence, while P.D. 217 encourages the profitability of public
telecommunication companies, the Public Service Act limits the same.

2. In the absence of such rules and regulations, there is outright confusion among the rights of
PLDT, the consumers and the government itself. As may clearly be seen, how can the Decision
be said to have assured that most of the population will enjoy telephone facilities? Did the
Decision likewise assure the financial viability of PLDT? Was the government's duty to provide
telephone service to its constituents subserved by the Decision? These questions can never be
answered unless such rules and regulations are set up.

3. Finally, it should be emphasized that NTC is estopped from claiming that there is no need to
promulgate such rules and regulations. In the case of PCFI vs. NTC, G.R. No. 61892, now
pending resolution before this Honorable Tribunal, NTC totally refused to act on a petition filed
by PLDT precisely for the promulgation of such rules and regulations.

Why then did NTC refuse to act on such petition if and when there is no need for the
promulgation of such rules and regulations? After all NTC could have simply ruled that the
petition in G.R. No. 61892 is unnecessary because such rules and regulations are also
unnecessary. (pp. 135-136, Rollo)

At any rate, there is no justification for the rate increase of the revised schedule of PLDT's Subscriber
Investment Plan. It is to say the least, untimely, considering the present economic condition obtaining in the
country. The approved rate defeats the purpose of the decree which is to spread ownership among the wide
base of investors. The State, in Presidential Decree No. 217 promulgated on June 16, 1973, adopted the basic
policies of the telephone industry, which, among others, are: (1) the attainment of efficient telephone service
for as wide an area as possible at the lowest reasonable costs to the subscriber; (2) the capital requirements of
telephone utilities obtained from ownership funds shall be raised from a broad base of investors, involving as
large a number of individual investors as may be possible; and (3) in any subscriber self-financing plan, the
amount of subscriber self-financing will, in no case, exceed fifty per centum (50%) of the cost of the installed
telephone line, as may be determined from time to time by the regulatory bodies of the State.

The load on the back of our people is heavy enough. Let us not increase its weight further. Noteworthy is the
concurrence of Justice Vicente Abad Santos in the case of Bautista vs. NTC (supra) that "the PLDT which is
reported to have made over 100 million pesos in profits in just six months but with its service so poor that even
the First Lady has taken notice should think of improved service before increased profits."

Indeed, let t us not aggravate the situation of the populace by raising the revised SIP schedule plan of the
PLDT. A rate increase would be an additional burden on the telephone subscribers. The plan to expand the
company program and/or improve its service is laudable, but the expenses should not be shouldered by the
telephone subscribers. Considering the multi-million profits of the company, the cost of expansion and/or
improvement should come from part of its huge profits.

Anent the question that petitioner should have appealed the decision of respondent NTC, instead of filing the
instant petition, suffice it to say that certiorari is available despite existence of the remedy of appeal where
public welfare and the advancement of public policy so dictate, or the orders complained of were issued in
excess of or without jurisdiction (Jose vs. Zulueta, 2 SCRA 574).
ACCORDINGLY, the DECISION of the public respondent National Telecommunications Commission, dated
November 22, 1982, and the ORDER dated January 14, 1983. are hereby ANNULLED and SET ASIDE.

SO ORDERED.1äwphï1.ñët

Fernando, C.J., Teehankee, Makasiar, Guerrero, Abad Santos, Melencio- Herrera, Escolin and Gutierrez, Jr.,
JJ., concur.

Aquino, Concepcion Jr., and De Castro, JJ., took no part.

Plana, J., I reserve my vote.

Power to construe and its limitations

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR S.
FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S. FLORESCA,
MELBA S. FLORESCA, JUDITH S. FLORESCA and CARMEN S. FLORESCA;

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

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

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

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

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

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

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

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

xxx xxx xxx

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

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

xxx xxx xxx

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

xxx xxx xxx

(pp. 42-44, rec.)

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

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

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

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

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

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

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

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

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

Petitioners thus filed the present petition.

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

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS' COMPLAINT

FOR LACK OF JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN
CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER
THE WORKMEN'S COMPENSATION ACT.

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

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

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

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

SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have exclusive
jurisdiction to hear and decide claims for compensation under the Workmen's Compensation Act,
subject to appeal to the Supreme Court, ...

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

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

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

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

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

There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or worker, or the
heirs in case of his death, may initiate a complaint to recover damages (not compensation under the Workmen's
Compensation Act) with the regular court on the basis of negligence of an employer pursuant to the Civil Code
provisions. Atty. Angara believes otherwise. He submits that the remedy of an injured employee for work-connected
injury or accident is exclusive in accordance with Section 5 of the Workmen's Compensation Act, while Atty.
Bacungan's position is that the action is selective. He opines that the heirs of the employee in case of his death
have a right of choice to avail themselves of the benefits provided under the Workmen's Compensation Act or to sue
in the regular court under the Civil Code for higher damages from the employer by virtue of negligence of the latter.
Atty. Bocobo's stand is the same as that of Atty. Bacungan and adds that once the heirs elect the remedy provided
for under the Act, they are no longer entitled to avail themselves of the remedy provided for under the Civil Code by
filing an action for higher damages in the regular court, and vice versa.
On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss on the
ground that they have amicably settled their claim with respondent Philex. In the resolution of September 7, 1978,
WE dismissed the petition only insofar as the aforesaid petitioners are connected, it appearing that there are other
petitioners in this case.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In Pacaña WE said:

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

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

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party tortfeasor, said
rule should likewise apply to the employer-tortfeasor.
Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been dismissed in the
resolution of September 7, 1978 in view of the amicable settlement reached by Philex and the said heirs.

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

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

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

To emphasize, the 1935 Constitution declares that:

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

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

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

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the 1973
Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:

Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
(emphasis supplied).
The aforestated constitutional principles as implemented by the aforementioned articles of the New Civil Code
cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor Code. Section 5 of the
Workmen's Compensation Act (before it was amended by R.A. No. 772 on June 20, 1952), predecessor of Article
173 of the New Labor Code, has been superseded by the aforestated provisions of the New Civil Code, a
subsequent law, which took effect on August 30, 1950, which obey the constitutional mandates of social justice
enhancing as they do the rights of the workers as against their employers. Article 173 of the New Labor Code
seems to diminish the rights of the workers and therefore collides with the social justice guarantee of the
Constitution and the liberal provisions of the New Civil Code.

The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are statements
of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the case of West Virginia
State Board of Education vs. Barnette, with characteristic eloquence, enunciated:

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

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

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

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

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

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

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

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

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

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other rights
and remedies accruing to the employee, his personal representatives, dependents or nearest of kin
against the employer under the Civil Code and other laws, because of said injury.
 Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate
with such laborers that the remedies prescribed by this Act shall apply to injuries received outside
the Island through accidents happening in and during the performance of the duties of the
employment. Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such law be more
favorable to them (As amended by section 5 of Republic Act No. 772).

Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of the New Civil
Code, because said Article 173 provides:

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

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

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

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

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

Article 8 of the New Civil Code provides:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

xxx xxx xxx

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

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

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

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

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

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

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

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

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

The power of judicial review and the principle of separation of powers as well as the rule on political questions have
been evolved and grafted into the American Constitution by judicial decisions (Marbury vs. Madison, supra Coleman
vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).

It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate concurring
opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question as beyond the ambit of
judicial review. There is nothing in both the American and Philippine Constitutions expressly providing that the
power of the courts is limited by the principle of separation of powers and the doctrine on political questions. There
are numerous cases in Philippine jurisprudence applying the doctrines of separation of powers and political
questions and invoking American precedents.

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

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

SO ORDERED.

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

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

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

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX Mining Corporation under
the general provisions of the Civil Code. The Civil Code itself, however, provides for its non-applicability to the
complaint. It is specifically provided in Article 2196 of the Code, found in Title XVIII-Damages that:
 COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR
ILLNESS IS REGULATED BY SPECIAL LAWS.

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

Petitioner also avers that compensation is not damages. This argument is but a play on words. The
term compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for
damages suffered, being awarded for a personal injury caused or aggravated by or in the course of
employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the complaint
involved in the instant case. That "special law", in reference to the complaint, can be no other than the Workmen's
Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the majority rules,
both options cannot be exercised simultaneously, and the exercise of one will preclude the exercise of the other.
The petitioners had already exercised their option to come under the Workmen's Compensation Act, and they have
already received compensation payable to them under that Act. Stated differently, the remedy under the Workmen's
Compensation Act had already become a "finished transaction".

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

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

B.

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

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

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

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

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and
employees of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.)

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

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)
2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine Legislature
worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an
employee

by reason of a personal injury entitling him to compensation

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

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

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

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

3. The original second paragraph of Section 5 provided:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

GUTIERREZ, JR., J., dissenting:

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

Workmen's compensation evolved to remedy the evils associated with the situation in the early years of the
industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit that his
employer was either negligent or in bad faith, that his injury was caused by the employer and not a fellow worker,
and that he was not guilty of contributory negligence. The employer could employ not only his wealth in defeating
the claim for damages but a host of common law defenses available to him as well. The worker was supposed to
know what he entered into when he accepted employment. As stated in the leading case of Priestley u. Fowler (3 M.
& W. 1, 150 Reprint 1030) decided in 1837 "the mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may reasonably be expected to do of
himself." By entering into a contract of employment, the worker was deemed to accept the risks of employment that
he should discover and guard against himself.
The problems associated with the application of the fellow servant rule, the assumption of risk doctrine, the principle
of contributory negligence, and the many other defenses so easily raised in protracted damage suits illustrated the
need for a system whereby workers had only to prove the fact of covered employment and the fact of injury arising
from employment in order to be compensated.

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

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

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

The nature of the compensation principle is explained as follows:

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

acts and the cases interpreting them.

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

xxx xxx xxx

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

xxx xxx xxx

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

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

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

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

The importance of the compromise character of compensation cannot be overemphasized. The

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

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the premiums paid
by employers to the present system, the actuarial stability of the trust fund and many other interrelated parts have all
been carefully studied before the integrated scheme was enacted in to law. We have a system whose parts must
mesh harmonious with one another if it is to succeed. The basic theory has to be followed.

If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the system
without touching the related others, the entire structure is endangered. For instance, I am personally against
stretching the law and allowing payment of compensation for contingencies never envisioned to be compensable
when the law was formulated. Certainly, only harmful results to the principle of workmen's compensation can arise if
workmen, whom the law allows to receive employment compensation, can still elect to file damage suits for
industrial accidents. It was precisely for this reason that Section 5 of the Workmen's Compensation Act, which
reads:

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

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State Insurance
Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the
 employee his dependents or anyone otherwise entitled to receive damages on behalf of the
employee or his dependents.

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

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

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

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR

ILLNESS IS REGULATED BY SPECIAL LAWS.

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

Petitioner also avers that compensation is not damages. This argument is but a play on words. The
term compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for
damages suffered, being awarded for a personal injury caused or aggravated by or in the course of
employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the complaint
involved in the instant case. That "special law", in reference to the complaint, can be no other than the Workmen's
Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the majority rules,
both options cannot be exercised simultaneously, and the exercise of one will preclude the exercise of the other.
The petitioners had already exercised their option to come under the Workmen's Compensation Act, and they have
already received compensation payable to them under that Act. Stated differently, the remedy under the Workmen's
Compensation Act had already become a "finished transaction".

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

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

B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the exclusory
provision of the Workmen's Compensation Act." I may further add:
1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took effect on June
10, 1928. It was patterned from Minnesota and Hawaii statutes.

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

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

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and
employees of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.)

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

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

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine Legislature
worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an
employee

by reason of a personal injury entitling him to compensation

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

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

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

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

3. The original second paragraph of Section 5 provided:

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

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

4. It might be mentioned that, within the Act itself, provision is made for remedies other than within the Act itself.
Thus, Section 6, in part, provides:
 SEC. 6. Liability of third parties.-In case an employee suffers an injury for which compensation is
due under this Act by any other person besides his employer, it shall be optional with such injured
employee either to claim compensation from his employer, under this Act, or sue such other person
for damages, in accordance with law; ... (Emphasis supplied)

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

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

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

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

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

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

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

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

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

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

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

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

GUTIERREZ, JR., J., dissenting:

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

Workmen's compensation evolved to remedy the evils associated with the situation in the early years of the
industrial revolution when injured workingmen had to rely on damage suits to get recompense.

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

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

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

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

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

The nature of the compensation principle is explained as follows:

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

acts and the cases interpreting them.

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

xxx xxx xxx

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

xxx xxx xxx

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

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

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

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

The importance of the compromise character of compensation cannot be overemphasized. The

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

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

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

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State Insurance
Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the
employee his dependents or anyone otherwise entitled to receive damages on behalf of the
employee or his dependents.

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

Footnotes

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

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-6355-56 August 31, 1953

PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees,

vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.

Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:

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 re-fund 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.

Because of the similarity of the two cases, involving as they do the same question of law, they were jointly submitted
for determination in the lower court. Judge Higinio B. Macadaeg 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.

We see no profit and necessity in again discussing and considering the proposition and the arguments pro and cons
involved in the case of Perfecto vs. Meer, supra, which are raised, brought up and presented here. In that case, we
have held despite the ruling enunciated by the United States Federal Supreme Court in the case of O 'Malley vs.
Woodrought 307 U. S., 277, that taxing the salary of a judicial officer in the Philippines is a diminution of such salary
and so violates the Constitution. We shall now confine our-selves to a discussion and determination of the remaining
question of 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.

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
promulgation, Congress enacted Republic Act No. 590. To bring home his point, the Solicitor General reproduced
what he considers the pertinent discussion in the Lower House of House Bill No. 1127 which became Republic Act
No. 590.

For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:.

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 be 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.

As already stated construing and applying the above constitutional provision, we held in the Perfecto case that
judicial officers are exempt from the payment of income tax on their salaries, because the collection thereof by the
Government was a decrease or diminution of their salaries during their continuance in office, a thing which is
expressly prohibited by the Constitution. Thereafter, according to the Solicitor General, because Congress did not
favorably receive the decision in the Perfecto case, Congress promulgated Republic Act No. 590, if not to counteract
the ruling in that decision, at least now to authorize and legalize the collection of income tax on the salaries of
judicial officers. We quote section 13 of Republic Act No. 590:

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 dimunition of his
compensation fixed by the Constitution or by law.

So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly section 9,
Article VIII, has held that judicial officers are exempt from payment of income tax on their salaries, because the
collection thereof was a diminution of such salaries, specifically prohibited by the Constitution. Now comes the
Legislature and in section 13, Republic Act No. 590, says that "no salary wherever received by any public officer of
the Republic (naturally including a judicial officer) shall be considered as exempt from the income tax," and
proceeds to declare that payment of said income tax is not a diminution of his compensation. Can the Legislature
validly do this? May the Legislature lawfully declare the collection of income tax on the salary of a public official,
specially a judicial officer, not a decrease of his salary, after the Supreme Court has found and decided otherwise?
To determine this question, we shall have to go back to the fundamental principles regarding separation of powers.

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 of 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
constitutional 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.

Defining and interpreting the law is a judicial function and the legislative branch may not limit or restrict the
power granted to the courts by the Constitution. (Bandy vs. Mickelson et al., 44N. W., 2nd 341, 342.)

When it is clear that a statute transgresses the authority vested in the legislature by the Constitution, it is the
duty of the courts to declare the act unconstitutional because they cannot shrink from it without violating their
oaths of office. This duty of the courts to maintain the Constitution as the fundamental law of the state is
imperative and unceasing; and, as Chief Justice Marshall said, whenever a statute is in violation of the
fundamental law, the courts must so adjudge and thereby give effect to the Constitution. Any other course
would lead to the destruction of the Constitution. Since the question as to the constitutionality of a statute is
a judicial matter, the courts will not decline the exercise of jurisdiction upon the suggestion that action might
be taken by political agencies in disregard of the judgment of the judicial tribunals. (11 Am. Jur., 714-715.)

Under the American system of constitutional government, among the most important functions in trusted to
the judiciary are the interpreting of Constitutions and, as a closely connected power, the determination of
whether laws and acts of the legislature are or are not contrary to the provisions of the Federal and State
Constitutions. (11 Am. Jur., 905.).

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.

The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or act declaratory of
what the law was before its passage, so as to give it any binding weight with the courts. A legislative
definition of a word as used in a statute is not conclusive of its meaning as used elsewhere; otherwise, the
legislature would be usurping a judicial function in defining a term. (11 Am. Jur., 914, emphasis supplied)

The legislature cannot, upon passing a law which violates a constitutional provision, validate it so as to
prevent an attack thereon in the courts, by a declaration that it shall be so construed as not to violate the
constitutional inhibition. (11 Am. Jur., 919, emphasis supplied)

We have already said that the Legislature under our form of government is assigned the task and the power to make
and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic law, the
Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare what a law
means, or what a specific portion of the Constitution 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. Under such a system, a final court determination of a case based on a judicial
interpretation of the law of the Constitution may be undermined or even annulled by a subsequent and different
interpretation of the law or of the Constitution by the Legislative department. That would be neither wise nor
desirable, besides being clearly violative of the fundamental, principles of our constitutional system of government,
particularly those governing the separation of powers.

So much for the constitutional aspect of the case. 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 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 corresponding 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. Let us take the case of Justice Endencia. As
Associate Justice of the Court of Appeals, his salary is fixed at p12,000 a year, that is to say, he should receive
P1,000 a month or P500 every payday, — fifteenth and end of month. In the present case, the amount collected by
the Collector of Internal Revenue on said salary is P1,744.45 for one year. Divided by twelve (months) we shall have
P145.37 a month. And further dividing it by two paydays will bring it down to P72.685, which is the income tax
deducted form the collected on his salary each half month. So, if Justice Endencia's salary as a judicial officer were
not exempt from payment of the income tax, instead of receiving P500 every payday, he would be actually receiving
P427.31 only, and instead of receiving P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear
that every payday, his salary is actually decreased by P72.685 and every year is decreased by P1,744.45?

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 Justices 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. Compares to the number of all these officials, that of the Supreme
Court Justices is relatively insignificant. There are more than 990 other judicial 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. As said by
Justice Van Devanter of the United States Supreme Court in the case of Evans vs. Gore (253 U. S., 245):

The primary purpose of the prohibition against diminution was not to benefit the judges, but, like the clause
in respect of tenure, to attract good and competent men to the bench and to promote that independence of
action and judgment which is essential to the maintenance of the guaranties, limitations and pervading
principles of the Constitution and to the administration of justice without respect to person and with equal
concern for the poor and the rich. Such being its purpose, it is to be construed, not as a private grant, but as
a limitation imposed in the public interest; in other words, not restrictively, but in accord with its spirit and the
principle on which it proceeds.

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 considerations 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 far as greater importance than any revenue that could
come from taxing their salaries.

When a judicial officer assumed 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 excemption 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 incapacitated 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 subject to arrest when charged with the commission of a crime,
members of the Senate and House of Representatives except 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.

And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural and juridical, are
exempt from taxes on their lands, buildings and improvements thereon when used exclusively for educational
purposes, even if they derive income therefrom. (Art. VI, Sec. 22 [3].) Holders of government bonds are exempted
from the payment of taxes on the income or interest they receive therefrom (sec. 29 (b) [4], National Internal
Revenue Code as amended by Republic Act No. 566). Payments or income received by any person residing in the
Philippines under the laws of the United States administered by the United States Veterans Administration are
exempt from taxation. (Republic Act No. 360). Funds received by officers and enlisted men of the Philippine Army
who served in the Armed Forces of the United States, allowances earned by virtue of such services corresponding
to the taxable years 1942 to 1945, inclusive, are exempted from income tax. (Republic Act No. 210). The payment of
wages and allowances of officers and enlisted men of the Army Forces of the Philippines sent to Korea are also
exempted from taxation. (Republic Act No. 35). In other words, for reasons of public policy and public interest, a
citizen may justifiably by constitutional provision or statute be exempted from his ordinary obligation of paying taxes
on his income. Under the same public policy and perhaps for the same it not higher considerations, the framers of
the Constitution deemed it wise and necessary to exempt judicial officers from paying taxes on their salaries so as
not to decrease their compensation, thereby insuring the independence of the Judiciary.

In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the effect that the
collection 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 province
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.

In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with no pronouncement
as to costs.

Pablo, Bengzon, Padilla, Tuason, Reyes, and Labrador, JJ., concur.

Separate Opinions

BAUTISTA ANGELO, J., concurring:

Without expressing any opinion on the doctrine laid down by this Court in the case of Perfecto vs. Meer, G. R. No. L-
2314, in view of the part I had in that case as former Solicitor General, I wish however to state that I concur in the
opinion of the majority to the effect that section 13, Republic Act No. 590, in so far as it provides that taxing of the
salary of a judicial officer shall be considered "not to be a diminution of his compensation fixed by the Constitution or
by law", constitutes an invasion of the province and jurisdiction of the judiciary. In this sense, I am of the opinion that
said section is null and void, it being a transgression of the fundamental principle underlying the separation of
powers.

PARAS, C.J., concurring and dissenting:

I dissent for the same reasons stated in the dissenting opinion of Mr. Justice Ozaeta in Perfecto vs. Meer, 85 Phil.,
552, in which I concurred. But I disagree with the majority in ruling that no legislation may provide that it be held
valid although against a provision of the Constitution.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-2348 February 27, 1950

GREGORIO PERFECTO, plaintiff-appellee,

vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-appellant.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Francisco Carreon for oppositor and appellant.
Gregorio Perfecto in his own behalf.

BENGZON, J.:

In April, 1947 the Collector of Internal Revenue required Mr. Justice Gregorio Perfecto to pay income tax upon his
salary as member of this Court during the year 1946. After paying the amount (P802), he instituted this action in the
Manila Court of First Instance contending that the assessment was illegal, his salary not being taxable for the
reason that imposition of taxes thereon would reduce it in violation of the Constitution.

The Manila judge upheld his contention, and required the refund of the amount collected. The defendant appealed.

The death of Mr. Justice Perfecto has freed us from the embarrassment of passing upon the claim of a colleague.
Still, as the outcome indirectly affects all the members of the Court, consideration of the matter is not without its
vexing feature. Yet adjudication may not be declined, because (a) we are not legally disqualified; (b) jurisdiction may
not be renounced, ad it is the defendant who appeals to this Court, and there is no other tribunal to which the
controversy may be referred; (c) supreme courts in the United States have decided similar disputes relating to
themselves; (d) the question touches all the members of the judiciary from top to bottom; and (e) the issue involves
the right of other constitutional officers whose compensation is equally protected by the Constitution, for instance,
the President, the Auditor-General and the members of the Commission on Elections. Anyway the subject has been
thoroughly discussed in many American lawsuits and opinions, and we shall hardly do nothing more than to borrow
therefrom and to compare their conclusions to local conditions. There shall be little occasion to formulate new
propositions, for the situation is not unprecedented.

Our Constitution provides in its Article VIII, section 9, that the members of the Supreme Court and all judges of
inferior courts "shall receive such compensation as may be fixed by law, which shall not be diminished during their
continuance in office." It also provides that "until Congress shall provide otherwise, the Chief Justice of the Supreme
Court shall receive an annual compensation of sixteen thousand pesos". When in 1945 Mr. Justice Perfecto
assumed office, Congress had not "provided otherwise", by fixing a different salary for associate justices. He
received salary at the rate provided by the Constitution, i.e., fifteen thousand pesos a year.

Now, does the imposition of an income tax upon this salary in 1946 amount to a diminution thereof?.

A note found at page 534 of volume 11 of the American Law Reports answers the question in the affirmative. It
says:

Where the Constitution of a state provides that the salaries of its judicial officers shall not be dismissed
during their continuance in office, it had been held that the state legislature cannot impose a tax upon the
compensation paid to the judges of its court. New Orleans v. Lea (1859) 14 La. Ann. 194; Opinion of
Attorney-General if N. C. (1856) 48 N. C. (3 Jones, L.) Appx. 1; Re Taxation of Salaries of Judges (1902)
131 N. C. 692, 42 S. E. 970; Com. ex. rel. Hepburn v. Mann (1843) 5 Watts & S,. (Pa.) 403 [but see to the
 contrary the earlier and much criticized case of Northumberland county v. Chapman (1829) 2 Rawle (Pa.)
73]*

A different rule prevails in Wisconsin, according to the same annotation. Another state holding the contrary view is
Missouri.

The Constitution of the United States, likes ours, forbids the diminution of the compensation of Judges of the
Supreme Court and of inferior courts. The Federal Governments has an income tax law. Does it embrace the
salaries of federal judges? In answering this question, we should consider four periods:

First period. No attempts was made to tax the compensation of Federal judges up to 1862 1.

Second period. 1862-1918. In July, 1862, a statute was passed subjecting the salaries of "civil officers of the United
States" to an income tax of three per cent. Revenue officers, construed it as including the compensation of all
judges; but Chief Justice Taney, speaking for the judiciary, wrote to the Secretary of the Treasury a letter of protest
saying, among other things:

The act in question, as you interpret it, diminishes the compensation of every judge 3 per cent, and if it can
be diminished to that extent by the name of a tax, it may, in the same way, be reduced from time to time, at
the pleasure of the legislature.

The judiciary is one of the three great departments of the government, created and established by the
Constitution. Its duties and powers are specifically set forth, and are of a character that requires it to be
perfectly independent of the two other departments, and in order to place it beyond the reach and above
even the suspicion of any such influence, the power to reduce their compensation is expressly withheld from
Congress, and excepted from their powers of legislation.

Language could not be more plain than that used in the Constitution. It is, moreover, one of its most
important and essential provisions. For the articles which limits the powers of the legislative and executive
branches of the government, and those which provide safeguards for the protection of the citizen in his
person and property, would be of little value without a judiciary to uphold and maintain them, which was free
from every influence, direct and indirect, that might by possibility in times of political excitement warp their
judgments.

Upon these grounds I regard an act of Congress retaining in the Treasury a portion of the Compensation of
the judges, as unconstitutional and void2.

The protest was unheeded, although it apparently bore the approval of the whole Supreme Court, that ordered it
printed among its records. But in 1869 Attorney-General Hoar upon the request of the Secretary of the Treasury
rendered an opinion agreeing with the Chief Justice. The collection of the tax was consequently discontinued and
the amounts theretofore received were all refunded. For half a century thereafter judges' salaries were not taxed as
income.3

Third period. 1919-1938. The Federal Income Tax Act of February 24, 1919 expressly provided that taxable income
shall include "the compensation of the judges of the Supreme Court and inferior courts of the United States". Under
such Act, Walter Evans, United States judge since 1899, paid income tax on his salary; and maintaining that the
impost reduced his compensation, he sued to recover the money he had delivered under protest. He was upheld in
1920 by the Supreme Court in an epoch-making decision.*, explaining the purpose, history and meaning of the
Constitutional provision forbidding impairment of judicial salaries and the effect of an income tax upon the salary of a
judge.

With what purpose does the Constitution provide that the compensation of the judges "shall not be
diminished during their continuance in office"? Is it primarily to benefit the judges, or rather to promote the
public weal by giving them that independence which makes for an impartial and courageous discharge of the
judicial function? Does the provision merely forbid direct diminution, such as expressly reducing the
compensation from a greater to a less sum per year, and thereby leave the way open for indirect, yet
effective, diminution, such as withholding or calling back a part as tax on the whole? Or does it mean that
the judge shall have a sure and continuing right to the compensation, whereon he confidently may rely for
his support during his continuance in office, so that he need have no apprehension lest his situation in this
regard may be changed to his disadvantage?

The Constitution was framed on the fundamental theory that a larger measure of liberty and justice would be
assured by vesting the three powers — the legislative, the executive, and the judicial — in separate
departments, each relatively independent of the others and it was recognized that without this independence
— if it was not made both real and enduring — the separation would fail of its purpose. all agreed that
restraints and checks must be imposed to secure the requisite measure of independence; for otherwise the
legislative department, inherently the strongest, might encroach on or even come to dominate the others,
and the judicial, naturally the weakest, might be dwarf or swayed by the other two, especially by the
legislative.

The particular need for making the judiciary independent was elaborately pointed our by Alexander Hamilton
in the Federalist, No. 78, from which we excerpt the following:

xxx xxx xxx

At a later period John Marshall, whose rich experience as lawyer, legislator, and chief justice enable him to
speak as no one else could, tersely said (debates Va. Gonv. 1829-1831, pp. 616, 619): . . . Our courts are
the balance wheel of our whole constitutional system; and our is the only constitutional system so balanced
and controlled. Other constitutional systems lacks complete poise and certainly of operation because they
lack the support and interpretation of authoritative, undisputable courts of law. It is clear beyond all need of
exposition that for the definite maintenance of constitutional understandings it is indispensable, alike for the
preservation of the liberty of the individual and for the preservation of the integrity of the powers of the
government, that there should be some nonpolitical forum in which those understandings can be impartially
debated and determined. That forum our courts supply. There the individual may assert his rights; there the
government must accept definition of its authority. There the individual may challenge the legality of
governmental action and have it adjudged by the test of fundamental principles, and that test the
government must abide; there the government can check the too aggressive self-assertion of the individual
and establish its power upon lines which all can comprehend and heed. The constitutional powers of the
courts constitute the ultimate safeguard alike of individual privilege and of governmental prerogative. It is in
this sense that our judiciary is the balance wheel of our entire system; it is meant to maintain that nice
adjustment between individual rights and governmental powers which constitutes political liberty.
Constitutional government in the United States, pp. 17, 142.

Conscious in the nature and scope of the power being vested in the national courts, recognizing that they
would be charge with responsibilities more delicate and important than any ever before confide to judicial
tribunals, and appreciating that they were to be, in the words of George Washington, "the keystone of our
political fabric", the convention with unusual accord incorporated in the Constitution the provision that the
judges "shall hold their offices during good behavior, and shall at stated times receive for their services a
compensation which shall not be diminished during their continuance in office." Can there be any doubt that
the two things thus coupled in place — the clause in respect of tenure during good behaviour and that in
respect of an undiminishable compensation-were equally coupled in purpose? And is it not plain that their
purposes was to invest the judges with an independence in keeping with the delicacy and importance of
their task, and with the imperative need for its impartial and fearless performance? Mr. Hamilton said in
explanation and support of the provision (Federalist No. 79): "Next to permanency in office, nothing can
contribute more to the independence of the judges than a fixed provision for their support. . . . In the general
course of human nature, a power over a man's subsistence amounts to a power over his will.

xxx xxx xxx

These considerations make it very plain, as we think, that the primary purpose of the prohibition against
diminution was not to benefit the judges, but, like the clause in respect of tenure, to attract good and
competent men to the bench, and to promote that independence of action and judgment which is essential
to the maintenance of the guaranties, limitations, and pervading principles of the constitution, and to the
admiration of justice without respect to persons, and with equal concern for the poor and the rich.
 xxx xxx xxx

But it is urged that what plaintiff was made to pay back was an income tax, and that a like tax was exacted
of others engaged in private employment.

If the tax in respect of his compensation be prohibited, it can find no justification in the taxation of other
income as to which there is no prohibition, for, of course, doing what the Constitution permits gives no
license to do what it prohibits.

The prohibition is general, contains no excepting words, and appears to be directed against all diminution,
whether for one purpose or another; and the reason for its adoption, as publicly assigned at the time and
commonly accepted ever since, make with impelling force for the conclusion that the fathers of the
Constitution intended to prohibit diminution by taxation as well as otherwise, that they regarded the
independence of the judges as of far greater importance than any revenue that could come from taxing their
salaries. (American law Reports, annotated, Vol. 11, pp. 522-25; Evans vs. Gore, supra.)

In September 1, 1919, Samuel J. Graham assumed office as judge of the Unites States court of claims. His salary
was taxed by virtue of the same time income tax of February 24, 1919. At the time he qualified, a statute fixed his
salary at P7,500. He filed action for reimbursement, submitting the same theory on which Evans v. Gore had been
decided. The Supreme Court of the United States in 1925 reaffirmed that decision. It overruled the distinction
offered by Solicitor-General Beck that Judge Graham took office after the income tax had been levied on judicial
salaries, (Evans qualified before), and that Congress had power "to impose taxes which should apply to the salaries
of Federal judges appointed after the enactment of the taxing statute." (The law had made no distinction as to
judges appointed before or after its passage)

Fourth period. 1939 — Foiled in their previous attempts, the Revenue men persisted, and succeeded in inserting in
the United States Revenue Act of June, 1932 the modified proviso that "gross income" on which taxes were payable
included the compensation "of judges of courts of the United States taking office after June 6, 1932". Joseph W.
Woodrough qualified as United States circuit judge on May 1, 1933. His salary as judge was taxed, and before the
Supreme Court of the United States the issue of decrease of remuneration again came up. That court, however,
ruled against him, declaring (in 1939) that Congress had the power to adopt the law. It said:

The question immediately before us is whether Congress exceeded its constitutional power in providing that
United States judges appointed after the Revenue Act of 1932 shall not enjoy immunity from the incidence of
taxation to which everyone else within the defined classes of income is subjected. Thereby, of course,
Congress has committed itself to the position that a non-discriminatory tax laid generally on net income is
not, when applied to the income of federal judge, a diminution of his salary within the prohibition of Article 3,
Sec. 1 of the Constitution. To suggest that it makes inroads upon the independence of judges who took
office after the Congress has thus charged them with the common duties of citizenship, by making them
bear their aliquot share of the cost of maintaining the Government, is to trivialize the great historic
experience on which the framers based the safeguards of Article 3, Sec. 1. To subject them to a general tax
is merely to recognize that judges also are citizens, and that their particular function in government does not
generate an immunity from sharing with their fellow citizens the material burden of the government whose
Constitution and laws they are charged with administering. (O'Malley vs. Woodrough, 59 S. Ct. 838, A. L. R.
1379.)

Now, the case for the defendant-appellant Collector of Internal Revenue is premised mainly on this decision (Note
A). He claims it holds "that federal judges are subject to the payment of income taxes without violating the
constitutional prohibition against the reduction of their salaries during their continuance in office", and that it "is a
complete repudiation of the ratio decidenci of Evans vs. Gore". To grasp the full import of the O'Malley precedent,
we should bear in mind that:

1. It does not entirely overturn Miles vs. Graham. "To the extent that what the Court now says is inconsistent with
what said in Miles vs. Graham, the latter can not survive", Justice Frankfurter announced.

2. It does not expressly touch nor amend the doctrine in Evans vs, Gore, although it indicates that the Congressional
Act in dispute avoided in part the consequences of that case.
Carefully analyzing the three cases (Evans, Miles and O'Malley) and piecing them together, the logical conclusion
may be reached that although Congress may validly declare by law that salaries of judges appointed thereafter shall
be taxed as income (O'Malley vs. Woodrough) it may not tax the salaries of those judges already in office at the time
of such declaration because such taxation would diminish their salaries (Evans vs. Gore; Miles vs. Graham). In this
manner the rationalizing principle that will harmonize the allegedly discordant decision may be condensed.

By the way, Justice Frankfurter, writing the O'Malley decision, says the Evans precedent met with disfavor from
legal scholarship opinion. Examining the issues of Harvard Law review at the time of Evans vs. Gore (Frankfurter is
a Harvard graduate and professor), we found that such school publication criticized it. Believing this to be the
"inarticulate consideration that may have influenced the grounds on which the case went off"4, we looked into the
criticism, and discovered that it was predicated on the position that the 16th Amendment empowered Congress "to
collect taxes on incomes from whatever source derived" admitting of no exception. Said the Harvard Law Journal:

In the recent case of Evans vs. Gore the Supreme Court of the United States decided that by taxing the
salary of a federal judge as a part of his income, Congress was in effect reducing his salary and thus
violating Art. III, sec. 1, of the Constitution. Admitting for the present purpose that such a tax really is a
reduction of salary, even so it would seem that the words of the amendment giving power to tax 'incomes,
from whatever source derived', are sufficiently strong to overrule pro tanto the provisions of Art. III, sec. 1.
But, two years ago, the court had already suggested that the amendment in no way extended the subjects
open to federal taxation. The decision in Evans vs. Gore affirms that view, and virtually strikes from the
amendment the words "from whatever source derived". (Harvard law Review, vol. 34, p. 70)

The Unites States Court's shift of position5 might be attributed to the above detraction which, without appearing on
the surface, led to Frankfurter's sweeping expression about judges being also citizens liable to income tax. But it
must be remembered that undisclosed factor — the 16th Amendment — has no counterpart in the Philippine legal
system. Our Constitution does not repeat it. Wherefore, as the underlying influence and the unuttered reason has no
validity in this jurisdiction, the broad generality loses much of its force.

Anyhow the O'Malley case declares no more than that Congress may validly enact a law taxing the salaries of
judges appointed after its passage. Here in the Philippines no such law has been approved.

Besides, it is markworthy that, as Judge Woodrough had qualified after the express legislative declaration taxing
salaries, he could not very well complain. The United States Supreme Court probably had in mind what in other
cases was maintained, namely, that the tax levied on the salary in effect decreased the emoluments of the office
and therefore the judge qualified with such reduced emoluments.6

The O'Malley ruling does not cover the situation in which judges already in office are made to pay tax by executive
interpretation, without express legislative declaration. That state of affairs is controlled by the administrative and
judicial standards herein-before described in the "second period" of the Federal Government, namely, the views of
Chief Justice Taney and of Attorney-General Hoar and the constant practice from 1869 to 1938, i.e., when the
Income Tax Law merely taxes "income" in general, it does not include salaries of judges protected from diminution.

In this connection the respondent would make capital of the circumstance that the Act of 1932, upheld in the
O'Malley case, has subsequently been amended by making it applicable even to judges who took office before1932.
This shows, the appellant argues, that Congress interprets the O'Malley ruling to permit legislative taxation of the
salary of judges whether appointed before the tax or after. The answer to this is that the Federal Supreme Court
expressly withheld opinion on that amendment in the O'Malley case. Which is significant. Anyway, and again, there
is here no congressional directive taxing judges' salaries.

Wherefore, unless and until our Legislature approves an amendment to the Income Tax Law expressly taxing "that
salaries of judges thereafter appointed", the O'Malley case is not relevant. As in the United States during the second
period, we must hold that salaries of judges are not included in the word "income" taxed by the Income Tax Law.
Two paramount circumstances may additionally be indicated, to wit: First, when the Income Tax Law was first
applied to the Philippines 1913, taxable "income" did not include salaries of judicial officers when these are
protected from diminution. That was the prevailing official belief in the United States, which must be deemed to have
been transplanted here;7 and second, when the Philippine Constitutional Convention approved (in 1935) the
prohibition against diminution off the judges' compensation, the Federal principle was known that income tax on
judicial salaries really impairs them. Evans vs. Gore and Miles vs. Graham were then outstanding doctrines; and the
inference is not illogical that in restraining the impairment of judicial compensation the Fathers of the Constitution
intended to preclude taxation of the same.8

It seems that prior to the O'Malley decision the Philippine Government did not collect income tax on salaries of
judges. This may be gleaned from General Circular No. 449 of the Department of Finance dated March 4, 1940,
which says in part:

xxx xxx xxx

The question of whether or not the salaries of judges should be taken into account in computing additional
residence taxes is closely linked with the liability of judges to income tax on their salaries, in fact, whatever
resolution is adopted with respect to either of said taxes be followed with respect to the other. The opinion of
the Supreme Court of the United States in the case of O'Malley v. Woodrough, 59 S. Ct. 838, to which the
attention of this department has been drawn, appears to have enunciated a new doctrine regarding the
liability of judges to income tax upon their salaries. In view of the fact that the question is of great
significance, the matter was taken up in the Council of State, and the Honorable, the Secretary of Justice
was requested to give an opinion on whether or not, having in mind the said decision of the Supreme Court
of the United States in the case of O'Malley v. Woodrough, there is justification in reversing our present
ruling to the effect that judges are not liable to tax on their salaries. After going over the opinion of the court
in the said case, the Honorable, the Secretary of Justice, stated that although the ruling of the Supreme
Court of the United States is not binding in the Philippines, the doctrine therein enunciated has resolved the
issue of the taxability of judges' salaries into a question of policy. Forthwith, His Excellency the President
decided that the best policy to adopt would be to collect income and additional residence taxes from the
President of the Philippines, the members of the Judiciary, and the Auditor General, and the undersigned
was authorized to act accordingly.

In view of the foregoing, income and additional residence taxes should be levied on the salaries received by
the President of the Philippines, members of the Judiciary, and the Auditor General during the calendar year
1939 and thereafter. . . . . (Emphasis ours.)

Of course, the Secretary of Justice correctly opined that the O'Malley decision "resolved the issue of taxability of
judges' salaries into a question of policy." But that policy must be enunciated by Congressional enactment, as was
done in the O'Malley case, not by Executive Fiat or interpretation.

This is not proclaiming a general tax immunity for men on the bench. These pay taxes. Upon buying gasoline, or
other commodities, they pay the corresponding duties. Owning real property, they pay taxes thereon. And on
incomes other than their judicial salary, assessments are levied. It is only when the tax is charged directly on their
salary and the effect of the tax is to diminish their official stipend — that the taxation must be resisted as an
infringement of the fundamental charter.

Judges would indeed be hapless guardians of the Constitution if they did not perceive and block encroachments
upon their prerogatives in whatever form. The undiminishable character of judicial salaries is not a mere privilege of
judges — personal and therefore waivable — but a basic limitation upon legislative or executive action imposed in
the public interest. (Evans vs. Gore)

Indeed the exemption of the judicial salary from reduction by taxation is not really a gratuity or privilege. Let the
highest court of Maryland speak:

The exemption of the judicial compensation from reduction is not in any true sense a gratuity, privilege or
exemption. It is essentially and primarily compensation based upon valuable consideration. The covenant on
the part of the government is a guaranty whose fulfillment is as much as part of the consideration agreed as
is the money salary. The undertaking has its own particular value to the citizens in securing the
independence of the judiciary in crises; and in the establishment of the compensation upon a permanent
foundation whereby judicial preferment may be prudently accepted by those who are qualified by talent,
knowledge, integrity and capacity, but are not possessed of such a private fortune as to make an assured
salary an object of personal concern. On the other hand, the members of the judiciary relinquish their
position at the bar, with all its professional emoluments, sever their connection with their clients, and
dedicate themselves exclusively to the discharge of the onerous duties of their high office. So, it is irrefutable
 that they guaranty against a reduction of salary by the imposition of a tax is not an exemption from taxation
in the sense of freedom from a burden or service to which others are liable. The exemption for a public
purpose or a valid consideration is merely a nominal exemption, since the valid and full consideration or the
public purpose promoted is received in the place of the tax. Theory and Practice of Taxation (1900), D. A.
Wells, p. 541. (Gordy vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series, p. 80)

It is hard to see, appellants asserts, how the imposition of the income tax may imperil the independence of the
judicial department. The danger may be demonstrated. Suppose there is power to tax the salary of judges, and the
judiciary incurs the displeasure of the Legislature and the Executive. In retaliation the income tax law is amended so
as to levy a 30 per cent on all salaries of government officials on the level of judges. This naturally reduces the
salary of the judges by 30 per cent, but they may not grumble because the tax is general on all receiving the same
amount of earning, and affects the Executive and the Legislative branches in equal measure. However, means are
provided thereafter in other laws, for the increase of salaries of the Executive and the Legislative branches, or their
perquisites such as allowances, per diems, quarters, etc. that actually compensate for the 30 per cent reduction on
their salaries. Result: Judges compensation is thereby diminished during their incumbency thanks to the income tax
law. Consequence: Judges must "toe the line" or else. Second consequence: Some few judges might falter; the
great majority will not. But knowing the frailty of human nature, and this chink in the judicial armor, will the parties
losing their cases against the Executive or the Congress believe that the judicature has not yielded to their
pressure?

Respondent asserts in argumentation that by executive order the President has subjected his salary to the income
tax law. In our opinion this shows obviously that, without such voluntary act of the President, his salary would not be
taxable, because of constitutional protection against diminution. To argue from this executive gesture that the
judiciary could, and should act in like manner is to assume that, in the matter of compensation and power and need
of security, the judiciary is on a par with the Executive. Such assumption certainly ignores the prevailing state of
affairs.

The judgment will be affirmed. So ordered.

Moran, C.J., Pablo, Padilla, Tuason, Montemayor, Reyes and Torres, JJ., concur.

Separate Opinions

OZAETA., J., dissenting:

It is indeed embarrassing that this case was initiated by a member of this Court upon which devolves the duty to
decide it finally. The question of whether the salaries of the judges, the members of the Commission on Elections,
the Auditor General, and the President of the Philippines are immune from taxation, might have been raised by any
interested party other than a justice of the Supreme Court with less embarrassment to the latter.

The question is simple and not difficult of solution. We shall state our opinion as concisely as possible.

The first income tax law of the Philippines was Act No. 2833, which was approved on March 7, 1919, to take effect
on January 1, 1920. Section 1 (a) of said Act provided:

There shall be levied, assessed, collected, and paid annually upon the entire net income received in the
preceding calendar year from all sources by every individual, a citizen or resident of the Philippine Islands, a
tax of two per centum upon such income. . . . (Emphasis ours.)

Section 2 (a) of said Act provided:

Subject only to such exemptions and deductions as are hereinafter allowed, the taxable net income of a
person shall include gains, profits, and income derived from salaries, wages or compensation for personal
service of whatever kind and is whatever form paid, or from professions, vocations, businesses, trade,
 commerce, sales, or dealings in property, whether real or personal, growing out of the ownership or use of
or interest in real or personal property, also from interest, rent, dividends, securities, or the transaction of
any business carried on for gain or profit, or gains, profits, and income derived from any source whatever.

That income tax law has been amended several times, specially as to the rates of the tax, but the above-quoted
provisions (except as to the rate) have been preserved intact in the subsequent Acts. The present income tax law is
Title II of the National Internal Revenue Code, Commonwealth Act No. 466, sections 21, 28 and 29 of which
incorporate the texts of the above-quoted provisions of the original Act in exactly the same language. There can be
no dispute whatsoever that judges (who are individuals) and their salaries (which are income) are as clearly
comprehended within the above-quoted provisions of the law as if they were specifically mentioned therein; and in
fact all judges had been and were paying income tax on their salaries when the Constitution of the Philippines was
discussed and approved by the Constitutional Convention and when it was submitted to the people for confirmation
in the plebiscite of May 14, 1935.

Now, the Constitution provides that the members of the Supreme Court and all judges of inferior courts "shall
receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office."
(Section 9, Article VIII, emphasis ours.)a

The simple question is: In approving the provisions against the diminution of the compensation of judges and other
specified officers during their continuance in office, did the framers of the Constitution intend to nullify the then
existing income tax law insofar as it imposed a tax on the salaries of said officers ? If they did not, then the income
tax law, which has been incorporated in the present National Internal Revenue Code, remains in force in its entirety
and said officers cannot claim exemption therefrom on their salaries.

Section 2 of Article XVI of the Constitution provides that all laws of the Philippine Islands shall remain operative,
unless inconsistent with this Constitution, until amended, altered, modified. or repealed by the Congress of the
Philippines.

In resolving the question at bar, we must take into consideration the following well-settled rules:

"A constitution shall be held to be prepared and adopted in reference to existing statutory laws, upon the
provisions of which in detail it must depend to be set in practical operation" (People vs. Potter, 47 N. Y. 375;
People vs. Draper, 15 N. Y. 537; Cass vs. Dillon, 2 Ohio St. 607; People vs. N. Y., 25 Wend. (N. Y. 22).
(Barry vs. Traux, 3 A. & E. Ann. Cas 191, 193.).

Courts are bound to presume that the people adopting a constitution are familiar with the previous and
existing laws upon the subjects to which its provisions relate, and upon which they express their judgment
and opinion in its adoption (Baltimore vs. State, 15 Md. 376, 480; 74 Am. Dec. 572; State vs. Mace, 5 Md.
337; Bandel vs. Isaac, 13 Md. 202; Manly vs. State, 7 Md. 135; Hamilton vs. St. Louis County Ct., 15 Mo. 5;
People vs. Gies, 25 Mich. 83; Servis vs. Beatty, 32 Miss. 52; Pope vs. Phifer, 3 Heisk. (Tenn.) 686; People
vs. Harding, 53 Mich. 48, 51 Am. Rep. 95; Creve Coeur Lake Ice Co. vs. Tamm, 138 Mo. 385, 39 S. W. Rep.
791). (Idem.)

A constitutional provision must be presumed to have been framed and adopted in the light and
understanding of prior and existing laws and with reference to them. Constitutions, like statutes, are properly
to be expounded in the light of conditions existing at the time of their adoption, the general spirit of the times,
and the prevailing sentiments among the people. Reference may be made to the historical facts relating to
the original or political institutions of the community or to prior well-known practices and usages. (11 Am.
Ju., Constitutional Law, 676-678.)

The salaries provided in the Constitution for the Chief Justice and each associate Justice, respectively, of the
Supreme Court were the same salaries ]which they were receiving at the time the Constitution was framed and
adopted and on which they were paying income tax under the existing income tax law. It seems clear to us that for
them to receive the same salaries, subject to the same tax, after the adoption of the Constitution as before does not
involve any diminution at all. The fact that the plaintiff was not a member of the Court when the Constitution took
effect, makes no difference. The salaries of justices and judges were subject to income tax when he was appointed
in the early part of 1945. In fact he must have declared and paid income tax on his salary for 19454 — he claimed
exemption only beginning 1946. It seems likewise clear that when the framers of the Constitution fixed those
salaries, they must have taken into consideration that the recipients were paying income tax thereon. There was no
necessity to provide expressly that said salaries shall be subject to income tax because they knew that already so
provided. On the other hand, if exemption from any tax on said salaries had been intended, it would have been
specifically to so provide, instead of merely saying that the compensation as fixed "shall not be diminished during
their continuance in office."

In the light of the antecedents, the prohibition against diminution cannot be interpreted to include or refer to general
taxation but to a law by which said salaries may be fixed. The sentence in question reads: "They shall receive such
compensation as may be fixed by law, which shall not be diminished during their continuance in office." The next
sentence reads: "Until the Congress shall provide otherwise, the Chief Justice of the Supreme Court shall receive
an annual compensation of P16,000, and each associate Justice, P15,000." It is plain that the Constitution
authorizes the Congress to pass a law fixing another rate of compensation, but that such rate must be higher than
that which the justices receive at he time of its enactment or, if lower, it must not affect those justice already in
office. In other words, Congress may approve a law increasing the salaries of the justices at any time, but it cannot
approve a law decreasing their salaries unless such law is made effective only as to justices appointed after its
approval.

It would be a strained and unreasonable construction of the prohibition against diminution to read into it an
exemption from taxation. There is no justification for the belief or assumption that the framers of the Constitution
intended to exempt the salaries of said officers from taxes. They knew that it was and is the unavoidable duty of
every citizen to bear his aliquot share of the cost of maintaining the Government; that taxes are the very blood that
sustains the life of the Government. To make all citizens share the burden of taxation equitably, the Constitution
expressly provides that "the rule of taxation shall be uniform." (Section 22 [1], Article VI.) We think it would be a
contravention of this provision to read into the prohibition against diminution of the salaries of the judges and other
specified officers an exemption from taxes on their salaries. How could the rule of income taxation be uniform if it
should not be applied to a group of citizens in the same situation as other income earners ? It is to us inconceivable
that the framers ever intended to relieve certain officers of the Government from sharing with their fellows citizens
the material burden of the Government — to exempt their salaries from taxes. Moreover, the Constitution itself
specifies what properties are exempt from taxes, namely: "Cemeteries, churches, and parsonages or convents
appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious, charitable, or
educational purposes." (Sec. 22 [3], Article VI.) The omission of the salaries in question from this enumeration is in
itself an eloquent manifestation of intention to continue the imposition of taxes thereon as provided in the existing
law. Inclusio est exclusio alterius.

We have thus far read and construed the pertinent portions of our own Constitution and income tax law in the light of
the antecedent circumstances and of the operative factors which prevailed at the time our Constitution was framed,
independently of the construction now prevailing in the United States of similar provisions of the federal Constitution
in relation to the present federal income tax law, under which the justices of the Supreme Court, and the federal
judges are now, and since the case of O'Malley vs. Woodrough was decided on May 22, 1939, have been, paying
income tax on their salaries. Were this a majority opinion, we could end here with the consequent reversal of the
judgment appealed from. But ours is a voice in the wilderness, and we may permit ourselves to utter it with more
vehemence and emphasis so that future players on this stage perchance may hear and heed it. Who knows? The
Gospel itself was a voice in the wilderness at the time it was uttered.

We have to comment on Anglo-American precedents since the majority decision from which we dissent is based on
some of them. Indeed, the majority say they "hardly do nothing more than to borrow therefrom and to compare their
conclusions to local conditions." which we shall presently show did not obtain in the United States at the time the
federal and state Constitutions were adopted. We shall further show that in any event what they now borrow is not
usable because it has long been withdrawn from circulation.

When the American Constitution was framed and adopted, there was no income tax law in the United States. To this
circumstance may be attributed the claim made by some federal judges headed by Chief Justice Taney, when under
the Act of Congress of July 1, 1862, their salaries were subjected to an income tax, that such tax was a diminution
of their salaries and therefore prohibited by the Constitution. Chief Justice Taney's claim and his protest against the
tax were not heeded, but no federal judge deemed it proper to sue the Collector of Internal Revenue to recover the
taxes they continued to pay under protest for several years. In 1869, the Secretary of the Treasury referred the
question to Atty. General Hoar, and that officer rendered an opinion in substantial accord with Chief Justice Taney's
protest, and also advised that the tax on the President's compensation was likewise invalid. No judicial
pronouncement, however, was made of such invalidity until June 1, 1920, when the case of Evans vs. Gore (253
U.S. 245, 64 L. ed. 887) was decided upon the constitutionality of section 213 of the Act of February 24, 1919, which
required the computation of incomes for the purpose of taxation to embrace all gains, profits, income and the like,
"including in the case of the President of the United States, the judges of the Supreme and inferior courts of the
United States, [and others] . . . the compensation received as such." The Supreme Court of the United States,
speaking through Mr. Justice Van Devanter, sustained the suit with the dissent of Justice Holmes and Brandeis. The
doctrine of Evans vs. Gore holding in effect that an income tax on a judge's salary is a diminution thereof prohibited
by the Constitution, was reaffirmed in 1925 in Miles vs. Graham, 69 L. ed 1067.

In 1939, however, the case of O'Malley vs. Woodrough (59 S. Ct. 838, 122 A. L. R. 1379) was brought up to the test
the validity of section 22 of the Revenue Act of June 6, 1932, which included in the "gross income," on the basis of
which taxes were to be paid, the compensation of "judges of courts of the United States taking office after June 6,
1932." And in that case the Supreme Court of the United States, with only one dissent (that of Justice Butler),
abandoned the doctrine of Evans vs. Gore and Miles vs. Graham by holding:

To subject them [the judges] to a general tax is merely to recognize that judges are also citizens, and that
their particular function in government does not generate an immunity from sharing with their fellow citizens
the material burden of the government whose Constitution and laws they are charged with administering.

The decision also says:

To suggest that it [the law in question] makes inroads upon the independence of judges who took office after
Congress had thus charged them with the common duties of citizenship, by making them bear their aliquot
share of the cost of maintaining the Government, is to trivialize the great historic experience on which the
framers based the safeguard of Article 3, section 1.

Commenting on the above-quoted portions of the latest decision of the Supreme Court of the United States on the
subject, Prof. William Bennett, Munro, in his book, The Governm

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 191890 December 04, 2012

EVALYN I. FETALINO and AMADO M. CALDERON, Petitioners,

MANUEL A. BARCELONA, JR., Petitioner-Intervenor,
vs.
COMMISSION ON ELECTIONS, Respondent.

DECISION

BRION, J.:

Before us is a Petition for Certiorari, Mandamus and Prohibition with Application for Writ of Preliminary Injunction
and/or Temporary Restraining Order, 1 seeking to nullify and enjoin the implementation of Commission on Elections
(Co melee) Resolution No. 8808 issued on March 30, 2010.2 Republic Act (R.A.) No. 1568, as amended,3 extends a
five-year lump sum gratuity to the chairman or any member of the Comelec upon retirement, after completion of the
term of office; incapacity; death; and resignation after reaching 60 years of age but before expiration of the term of
office. The Comelec en banc determined that former Comelec Commissioners Evalyn I. Fetalino4 and Amado M.
Calderon5 (petitioners) - whose ad interim appointments were not acted upon by the Commission on Appointments
(CA) and, who were subsequently, not reappointed — are not entitled to the five-year lump sum gratuity because
they did not complete in full the seven year term of office.

The Antecedent Facts

On February 10, 1998, President Fidel V. Ramos extended an interim appointment to the petitioners as Comelec
Commissioners, each for a term of seven (7) years, pursuant to Section 2, Article IX-D of the 1987
Constitution.6Eleven days later (or on February 21, 1998), Pres. Ramos renewed the petitioners’ ad
interim appointments for the same position. Congress, however, adjourned in May 1998 before the CA could act on
their appointments. The constitutional ban on presidential appointments later took effect and the petitioners were no
longer re-appointed as Comelec Commissioners.7 Thus, the petitioners merely served as Comelec
Commissioners for more than four months, or from February 16, 1998 to June 30, 1998.8

Subsequently, on March 15, 2005, the petitioners applied for their retirement benefits and monthly pension with the
Comelec, pursuant to R.A. No. 1568.9 The Comelec initially approved the petitioners’ claims pursuant to its
Resolution No. 06-136910 dated December 11, 2006 whose dispositive portion reads:

The Commission RESOLVED, as it hereby RESOLVES, to approve the recommendation of Director Alioden D.
Dalaig, Law Department, to grant the request of former Comelec Commissioners Evalyn Fetalino and Amado
Calderon for the payment of their retirement benefits, subject to release of funds for the purpose by the Department
of Budget and Management.11

On February 6, 2007, the Comelec issued Resolution No. 07-0202 granting the petitioners a pro-rated gratuity and
pension.12 Subsequently, on October 5, 2007, the petitioners asked for a re-computation of their retirement pay on
the principal ground that R.A. No. 1568,13 does not cover a pro-rated computation of retirement pay. In response, the
Comelec issued a resolution referring the matter to its Finance Services Department for comment and
recommendation.14 On July 14, 2009, the Comelec issued another resolution referring the same matter to its Law
Department for study and recommendation.15

In the presently assailed Resolution No. 880816 dated March 30, 2010, the Comelec, on the basis of the Law
Department’s study, completely disapproved the petitioners’ claim for a lump sum benefit under R.A. No. 1568. The
Comelec reasoned out that:

Of these four (4) modes by which the Chairman or a Commissioner shall be entitled to lump sum benefit, only the
first instance (completion of term) is pertinent to the issue we have formulated above. It is clear that the non-
confirmation and non-renewal of appointment is not a case of resignation or incapacity or death. The question
rather is: Can it be considered as retirement from service for having completed one’s term of office?

xxxx

The full term of the Chairman and the Commissioners is seven (7) years. When there has been a partial service,
what remains is called the "unexpired term." The partial service is usually called tenure. There is no doubt in the
distinction between a term and tenure. Tenure is necessarily variable while term is always fixed. When the law, in
this case, RA 1568 refers to completion of term of office, it can only mean finishing up to the end of the seven year
term. By completion of term, the law could not have meant partial service or a variable tenure that does not reach
the end. It could not have meant, the "expiration of term" of the Commissioner whose appointment lapses by reason
of non-confirmation of appointment by the Commission on Appointments and non-renewal thereof by the President.
It is rightly called expiration of term but note: it is not completion of term. RA 1568 requires ‘having completed his
term of office’ for the Commissioner to be entitled to the benefits.

Therefore, one whose ad interim appointment expires cannot be said to have completed his term of office so as to
fall under the provisions of Section 1 of RA 1568 that would entitle him to a lump sum benefit of five (5) years
salary.17 (emphasis, italics and underscores ours)

On this basis, the Comelec ruled on the matter, as follows:

Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to APPROVE and ADOPT the
study of the Law Department on the payment of retirement benefits to members of the Commission.

Consequently, the following former Chairman and Commissioners of this Commission whose appointments expired
by reason of nonapproval by Commission on Appointments and non-renewal by the President are not entitled to a
lump sum benefit under Republic Act 1528 (sic):
Name Position Date of Service

1. Alfredo Benipayo, Jr. Chairman Feb. 16, 2001 to June 5, 2002

2. Evalyn Fetalino Commissioner Feb. 16, 1998 to June 30, 1998

3. Amado Calderon Commissioner Feb. 16, 1998 to June 30, 1998

4. Virgilio Garciliano Commissioner Feb. 12, 2004 to June 10, 2005

5. Manuel Barcelona, Jr. Commissioner Feb. 12, 2004 to June 10, 2005

6. Moslemen Macarambon Commissioner Nov[.] 05, 2007 to Oct. 10, 2008

7. Leonardo Leonida Commissioner July 03, 2008 to June 26, 2009

This resolution shall also apply to all requests of former COMELEC Chairmen and Commissioners similarly situated.
All previous resolutions which are inconsistent herewith are hereby AMENDED or REVOKED accordingly.

Let the Finance Services and Personnel Departments implement this resolution.18 (emphasis ours)

The Petitions

The petitioners sought the nullification of Comelec Resolution No. 8808 via a petition for certiorari under Rule 65 of
the Rules of Court. Petitioner intervenor Manuel A. Barcelona, Jr. later joined the petitioners in questioning the
assailed resolution. Like the petitioners, Barcelona did not complete the full seven-year term as Comelec
Commissioner since he served only from February 12, 2004 to July 10, 2005. The petitioners and Barcelona
commonly argue that:

(1) the non-renewal of their ad interim appointments by the CA until Congress already adjourned qualifies
as retirement under the law and entitles them to the full five-year lump sum gratuity;

(2) Resolution No. 06-1369 that initially granted the five-year lump sum gratuity is already final and
executory and cannot be modified by the Comelec; and

(3) they now have a vested right over the full retirement benefits provided by RA No. 1568 in view of the
finality of Resolution No. 06- 1369.19

In the main, both the petitioners and Barcelona pray for a liberal interpretation of Section 1 of R.A. No. 1568. They
submit that the involuntary termination of their ad interim appointments as Comelec Commissioners should be
deemed by this Court as a retirement from the service. Barcelona, in support of his plea for liberal construction,
specifically cites the case of Ortiz v. COMELEC.20 The Court ruled in this cited case that equity and justice demand
that the involuntary curtailment of Mario D. Ortiz’s term be deemed a completion of his term of office so that he
should be considered retired from the service.

In addition, the petitioners also bewail the lack of notice and hearing in the issuance of Comelec Resolution No.
8808. Barcelona also assails the discontinuance of his monthly pension on the basis of the assailed Comelec
issuance.21

The Case for the Respondents

On July 22, 2010, the Comelec filed its Comment22 through the Office of the Solicitor General. The Comelec prays for
the dismissal of the petition on the grounds outlined below:

First, it submits that the petitioners’ reliance on Section 13, Rule 18 of the Comelec Rules of Procedure to
show that Resolution No. 06-1369 has attained finality is misplaced as this resolution is not the final decision
contemplated by the Rules. It also argues that estoppel does not lie against the Comelec since the
 erroneous application and enforcement of the law by public officers do not estop the Government from
making a subsequent correction of its errors.23

Second, the Comelec reiterates that the petitioners are not entitled to the lump sum gratuity, considering that
they cannot be considered as officials who retired after completing their term of office. It emphasizes that
R.A. No. 1568 refers to the completion of the term of office, not to partial service or to a variable tenure that
does not reach its end, as in the case of the petitioners. The Comelec also draws the Court’s attention to the
case of Matibag v. Benipayo24 where the Court categorically ruled that an ad interim appointment that lapsed
by inaction of the Commission on Appointments does not constitute a term of office.25

Third, it argues that the petitioners do not have any vested right on their retirement benefits considering that
the retirements benefits afforded by R.A. No. 1568 are purely gratuitous in nature; they are not similar to
pension plans where employee participation is mandatory so that they acquire vested rights in the pension
as part of their compensation. Without such vested rights, the Comelec concludes that the petitioners were
not deprived of their property without due process of law.26

The Court’s Ruling

We DISMISS the petition and DENY Barcelona’s petition for intervention.

Preliminary Considerations

R.A. No. 1568 provides two types of retirement benefits for a Comelec Chairperson or Member: a gratuity or five-
year lump sum, and an annuity or a lifetime monthly pension.27 Our review of the petitions, in particular, Barcelona’s
petition for intervention, indicates that he merely questions the discontinuance of his monthly pension on the basis of
Comelec Resolution No. 8808.28 As the assailed resolution, by its plain terms (cited above), only pertains to the lump
sum benefit afforded by R.A. No. 1568, it appears that Barcelona’s petition for intervention is misdirected. We note,
too, that Barcelona has not substantiated his bare claim that the Comelec discontinued the payment of his monthly
pension on the basis of the assailed Resolution.

To put the case in its proper perspective, the task now before us is to determine whether the petitioners are entitled
to the full five-year lump sum gratuity provided for by R.A. No. 1568. We conclude under our discussion below that
they are not so entitled as they did not comply with the conditions required by law.

The petitioners are not entitled to the lump sum gratuity under Section 1 of R.A. No. 1568, as amended

That the petitioners failed to meet conditions of the applicable retirement law — Section 1 of R.A. No. 156829 — is
beyond dispute. The law provides:

Sec. 1. When the Auditor General or the Chairman or any Member of the Commission on Elections retires from the
service for having completed his term of office or by reason of his incapacity to discharge the duties of his office, or
dies while in the service, or resigns at any time after reaching the age of sixty years but before the expiration of his
term of office, he or his heirs shall be paid in lump sum his salary for one year, not exceeding five years, for every
year of service based upon the last annual salary that he was receiving at the time of retirement, incapacity, death
or resignation, as the case may be: Provided, That in case of resignation, he has rendered not less than twenty
years of service in the government; And, provided, further, That he shall receive an annuity payable monthly during
the residue of his natural life equivalent to the amount of monthly salary he was receiving on the date of retirement,
incapacity or resignation. [italics supplied]

To be entitled to the five-year lump sum gratuity under Section 1 of R.A. No. 1568, any of the following events must
transpire:

(1) Retirement from the service for having completed the term of office;

(2) Incapacity to discharge the duties of their office;

(3) Death while in the service; and

 (4) Resignation after reaching the age of sixty (60) years but before the expiration of the term of office. In
addition, the officer should have rendered not less than twenty years of service in the government at the
time of retirement.

Death during the service obviously does not need to be considered in the present case, thus
leaving retirement, incapacity and resignation as the event that must transpire in order to be entitled to the lump sum
gratuity.

We note that the termination of the petitioners’ ad interim appointments could hardly be considered as incapacity
since it was not the result of any disability that rendered them incapable of performing the duties of a Commissioner.
Thus, incapacity is likewise effectively removed from active consideration.

"Resignation is defined as the act of giving up or the act of an officer by which he declines his office and renounces
the further right to it. To constitute a complete and operative act of resignation, the officer or employee must show a
clear intention to relinquish or surrender his position accompanied by the act of relinquishment."30 In this sense,
resignation likewise does not appear applicable as a ground because the petitioners did not voluntarily relinquish
their position as Commissioners; their termination was merely a consequence of the adjournment of Congress
without action by the CA on their ad interim appointments.

This eliminative process only leaves the question of whether the termination of the petitioners’ ad
interim appointments amounted to retirement from the service after completion of the term of office. We emphasize
at this point that the right to retirement benefits accrues only when two conditions are met: first, when the conditions
imposed by the applicable law – in this case, R.A. No. 1568 — are fulfilled; and second, when an actual retirement
takes place.31 This Court has repeatedly emphasized that retirement entails compliance with certain age and service
requirements specified by law and jurisprudence, and takes effect by operation of law.32

Section 1 of R.A. No. 1568 allows the grant of retirement benefits to the Chairman or any Member of the Comelec
who has retired from the service after having completed his term of office. The petitioners obviously did not retire
under R.A. No. 1568, as amended, since they never completed the full seven-year term of office prescribed by
Section 2, Article IX-D of the 1987 Constitution; they served as Comelec Commissioners for barely four
months, i.e., from February 16, 1998 to June 30, 1998. In the recent case of Re: Application for Retirement of Judge
Moslemen T. Macarambon under Republic Act No. 910, as amended by Republic Act No. 9946,33 where the Court
did not allow Judge Macarambon to retire under R.A. No. 910 because he did not comply with the age and service
requirements of the law, the Court emphasized:

Strict compliance with the age and service requirements under the law is the rule and the grant of exception
remains to be on a case to case basis. We have ruled that the Court allows seeming exceptions to these fixed
rules for certain judges and justices only and whenever there are ample reasons to grant such exception. (emphasis
ours; citations omitted)

More importantly, we agree with the Solicitor General that the petitioners’ service, if any, could only amount
to tenure in office and not to the term of office contemplated by Section 1 of R.A. No. 1568. Tenure and term of
office have well-defined meanings in law and jurisprudence. As early as 1946, the Court, in Topacio Nueno v.
Angeles,34provided clear distinctions between these concepts in this wise:

The term means the time during which the officer may claim to hold the office as of right, and fixes the
interval after which the several incumbents shall succeed one another. The tenure represents the term
during which the incumbent actually holds the office. The term of office is not affected by the hold-over. The
tenure may be shorter than the term for reasons within or beyond the power of the incumbent. There is no principle,
law or doctrine by which the term of an office may be extended by reason of war. [emphasis ours]

This is the ruling that has been followed since then and is the settled jurisprudence on these concepts.35

While we characterized an ad interim appointment in Matibag v. Benipayo36 "as a permanent appointment that takes
effect immediately and can no longer be withdrawn by the President once the appointee has qualified into office,"
we have also positively ruled in that case that "an ad interim appointment that has lapsed by inaction of the
Commission on Appointments does not constitute a term of office."37 We consequently ruled:
However, an ad interim appointment that has lapsed by inaction of the Commission on Appointments does not
constitute a term of office. The period from the time the ad interim appointment is made to the time it lapses is
neither a fixed term nor an unexpired term. To hold otherwise would mean that the President by his unilateral
action could start and complete the running of a term of office in the COMELEC without the consent of the
Commission on Appointments. This interpretation renders inutile the confirming power of the Commission on
Appointments.38 (emphasis ours; italics supplied)

Based on these considerations, we conclude that the petitioners can never be considered to have retired from the
service not only because they did not complete the full term, but, more importantly, because they did not serve a
"term of office" as required by Section 1 of R.A. No. 1568, as amended.

Ortiz v. COMELEC cannot be applied to the present case

We are not unmindful of the Court’s ruling in Ortiz v. COMELEC39 which Barcelona cites as basis for his claim of
retirement benefits despite the fact that — like the petitioners — he did not complete the full term of his office.

In that case, the petitioner was appointed as Comelec Commissioner, for a term expiring on May 17, 1992, by then
President Ferdinand E. Marcos, and took his oath of office on July 30, 1985. When President Corazon Aquino
assumed the Presidency and following the lead of the Justices of the Supreme Court, Ortiz — together with the
other Comelec Commissioners — tendered his courtesy resignation on March 5, 1986. On July 21, 1986, President
Aquino accepted their resignations effective immediately. Thereafter, Ortiz applied for retirement benefits under R.A.
No. 1568, which application the Comelec denied. The Court, however, reversed the Comelec and held that "[t]he
curtailment of [Ortiz’s] term not being attributable to any voluntary act on the part of the petitioner, equity and justice
demand that he should be deemed to have completed his term xxx. [That he] should be placed in the same category
as that of an official holding a primarily confidential position whose tenure ends upon his superior’s loss of
confidence in him." Thus, as "he is deemed to have completed his term of office, [Ortiz] should be considered retired
from the service."40

A close reading of Ortiz reveals that it does not have the same fact situation as the present case and is thus not
decisive of the present controversy. We note that the impact of the principle of stare decisis that Barcelona cited as
basis is limited; specific judicial decisions are binding only on the parties to the case and on future parties
with similar or identical factual situations.41 Significantly, the factual situation in Ortiz is totally different so that its
ruling cannot simply be bodily lifted and applied arbitrarily to the present case.

First, in Ortiz, Ortiz’s appointment was a regular appointment made by then President Marcos, while the petitioners
were appointed by President Ramos ad interim or during the recess of Congress.

Second, Ortiz’s appointment was made under the 1973 Constitution which did not require the concurrence of the
CA. Notably, the 1973 Constitution abolished the CA and did not provide for an executive limit on the appointing
authority of the President. In the present case, the petitioners’ ad interim appointment was made under the 1987
Constitution which mandated that an appointment shall be effective only until disapproval by the CA or until the next
adjournment of Congress.

Third, in Ortiz, the Court addressed the issue of whether a constitutional official, whose "courtesy resignation" had
been accepted by the President of the Philippines during the effectivity of the Freedom Constitution, may be entitled
to retirement benefits under R.A. No. 1568. In the present case, the issue is whether the termination of the
petitioners’ ad interim appointments entitles them to the full five-year lump sum gratuity provided for by R.A. No.
1568.

No occasion for liberal construction since Section 1 of R.A. No. 1568, as amended, is clear and
unambiguous

The petitioners’ appeal to liberal construction of Section 1 of R.A. No. 1568 is misplaced since the law is clear and
unambiguous. We emphasize that the primary modality of addressing the present case is to look into the provisions
of the retirement law itself. Guided by the rules of statutory construction in this consideration, we find that the
language of the retirement law is clear and unequivocal; no room for construction or interpretation exists, only the
application of the letter of the law.
The application of the clear letter of the retirement law in this case is supported by jurisprudence. As early as 1981,
in the case of In Re: Claim of CAR Judge Noel,42 the Court strictly adhered to the provisions of R.A. No. 910 and did
not allow the judge’s claim of monthly pension and annuity under the aforementioned law, considering that his
length of government service fell short of the minimum requirements.

Similarly, in Re: Judge Alex Z. Reyes,43 the Court dismissed CTA Judge Reyes’ invocation of the doctrine of liberal
construction of retirement laws to justify his request that the last step increment of his salary grade be used in the
computation of his retirement pay and terminal leave benefits, and held:

In Borromeo, the court had occasion to say: "It is axiomatic that retirement laws are liberally construed and
administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be
resolved in favor of the retiree to achieve its humanitarian purposes." Such interpretation in favor of the retiree is
unfortunately not called for nor warranted, where the clear intent of the applicable law and rules are
demonstrably against the petitioner's claim. (Paredes v. City of Manila, G.R. No. 88879, March 21, 1991).
Section 4 is explicit and categorical in its prohibition and, unfortunately for Judge Reyes, applies squarely to the
instant case.44 (emphasis ours; italics supplied)

Finally, in Gov’t Service Insurance System v. Civil Service Commission,45 the Court was asked to resolve whether
government service rendered on a per diem basis is creditable for computing the length of service for retirement
purposes. In disregarding the petitioners’ plea for liberal construction, the Court held:

The law is very clear in its intent to exclude per diem in the definition of "compensation." Originally, per diem was not
among those excluded in the definition of compensation (See Section 1(c) of C.A. No. 186), not until the passage of
the amending laws which redefined it to exclude per diem.

The law not only defines the word "compensation," but it also distinguishes it from other forms of remunerations.
Such distinction is significant not only for purposes of computing the contribution of the employers and employees to
the GSIS but also for computing the employees' service record and benefits.

xxxx

Private respondents both claim that retirement laws must be liberally interpreted in favor of the retirees. However,
the doctrine of liberal construction cannot be applied in the instant petitions, where the law invoked is clear,
unequivocal and leaves no room for interpretation or construction. Moreover, to accommodate private
respondents' plea will contravene the purpose for which the law was enacted, and will defeat the ends which it
sought to attain (cf. Re: Judge Alex Z. Reyes, 216 SCRA 720 [1992]).46 [italics supplied; emphasis ours]

No compelling reasons exist to warrant the liberal application of Section 1 of R.A. No. 1568, as amended, to
the present case

We find no compelling legal or factual reasons for the application of the Court’s liberality in the interpretation of
retirement laws to the present case. The discretionary power of the Court to exercise the liberal application of
retirement laws is not limitless; its exercise of liberality is on a case-to-case basis and only after a consideration of
the factual circumstances that justify the grant of an exception. The recent case of Re: Application for Retirement of
Judge Moslemen T. Macarambon under Republic Act No. 910, as amended by Republic Act No. 994647 fully
explained how a liberal approach in the application of retirement laws should be construed, viz:

The rule is that retirement laws are construed liberally in favor of the retiring employee. However, when in the
interest of liberal construction the Court allows seeming exceptions to fixed rules for certain retired Judges
or Justices, there are ample reasons behind each grant of an exception. The crediting of accumulated leaves
to make up for lack of required age or length of service is not done indiscriminately. It is always on a case to case
basis.

In some instances, the lacking element—such as the time to reach an age limit or comply with length of service is de
minimis. It could be that the amount of accumulated leave credits is tremendous in comparison to the lacking period
of time.
More important, there must be present an essential factor before an application under
the Plana or Britanico rulings may be granted. The Court allows a making up or compensating for lack of required
age or service only if satisfied that the career of the retiree was marked by competence, integrity, and dedication to
the public service; it was only a bowing to policy considerations and an acceptance of the realities of political will
which brought him or her to premature retirement. (emphases and italics ours; citation omitted)

In the present case, as previously mentioned, Ortiz cannot be used as authority to justify a liberal application of
Section 1 of R.A. No. 1568, as amended not only because it is not on all fours with the present case; more
importantly, the Court in Ortiz had ample reasons, based on the unique factual circumstances of the case, to grant
an exception to the service requirements of the law. In Ortiz, the Court took note of the involuntariness of Ortiz’s
"courtesy resignation," as well as the peculiar circumstances obtaining at that time President Aquino issued
Proclamation No. 1 calling for the courtesy resignation of all appointive officials, viz:

From the foregoing it is evident that petitioner's "resignation" lacks the element of clear intention to surrender his
position. We cannot presume such intention from his statement in his letter of March 5, 1986 that he was placing his
position at the disposal of the President. He did not categorically state therein that he was unconditionally giving up
his position. It should be remembered that said letter was actually a response to Proclamation No. 1 which President
Aquino issued on February 25, 1986 when she called on all appointive public officials to tender their "courtesy
resignation" as a "first step to restore confidence in public administration."48

In stark contrast, no such peculiar circumstances obtain in the present case.

Finally, in the absence of any basis for liberal interpretation, the Court would be engaged in judicial legislation if
we grant the petitioners’ plea. We cannot overemphasize that the policy of liberal construction cannot and should
not be to the point of engaging in judicial legislation — an act that the Constitution absolutely forbids this Court to
do. In the oft-cited case of Tanada v. Yulo,49 Justice George A. Malcolm cautioned against judicial legislation and
warned against liberal construction being used as a license to legislate and not to simply interpret,50 thus:

Counsel in effect urges us to adopt a liberal construction of the statute. That in this instance, as in the past, we aim
to do. But counsel in his memorandum concedes "that the language of the proviso in question is somewhat
defective and does not clearly convey the legislative intent", and at the hearing in response to questions was finally
forced to admit that what the Government desired was for the court to insert words and phrases in the law in order
to supply an intention for the legislature. That we cannot do. By liberal construction of statutes, courts from the
language used, the subject matter, and the purposes of those framing them are able to find out their true meaning.
There is a sharp distinction, however, between construction of this nature and the act of a court in engrafting upon a
law something that has been omitted which someone believes ought to have been embraced. The former is liberal
construction and is a legitimate exercise of judicial power. The latter is judicial legislation forbidden by the tripartite
division of powers among the three departments of government, the executive, the legislative, and the judicial.51

In the present case, Section 1 of R.A. No. 1568, by its plain terms, is clear that retirement entails the completion of
the term of office. To construe the term "retirement" in Section 1 of R.A. No. 1568 to include termination of an ad
interim appointment is to read into the clear words of the law exemptions that its literal wording does not support; to
depart from the meaning expressed by the words of R.A. No. 1568 is to alter the law and to legislate, and not to
interpret. We would thereby violate the timehonored rule on the constitutional separation of powers. The words of
Justice E. Finley Johnson in the early case of Nicolas v. Alberto52 still ring true today, viz.:

The courts have no legislative powers. In the interpretation and construction of statutes their sole function is to
determine, and, within the constitutional limits of the legislative power, to give effect to the intention of the
legislature. The courts cannot read into a statute something which is not within the manifest intention of the
legislature as gathered from the statute itself. To depart from the meaning expressed by the words of a statute, is to
alter the statute, to legislate and not to interpret. The responsibility for the justice or wisdom of legislation rests with
the legislature, and it is the province of the courts to construe, not to make the laws.

To reiterate, in light of the express and clear terms of the law, the basic rule of statutory construction should
therefore apply: "legislative intent is to be determined from the language employed, and where there is no ambiguity
in the words, there is no room for construction."53

The Comelec did not violate the rule on finality of judgments

Petitioners argue that Resolution No. 06-1369, which initially granted them a five-year lump sum gratuity, attained
finality thirty (30) days after its promulgation, pursuant to Section 13, Rule 18 of the Comelec Rules of Procedure,
and, thus, can no longer be modified by the Comelec.

We cannot agree with this position. Section 13, Rule 18 of the Comelec Rules of Procedure reads:

Sec. 13. Finality of Decisions or Resolutions. –

a. In ordinary actions, special proceedings, provisional remedies and special reliefs a decision or resolution of
the Commission en banc shall become final and executory after thirty (30) days from its promulgation.

A simple reading of this provision shows that it only applies to ordinary actions, special proceedings, provisional
remedies and special reliefs. Under Section 5, Rule 1 of the Comelec Rules of Procedures, ordinary actions refer
to election protests, quo warranto, and appeals from decisions of courts in election protest cases; special
proceedings refer to annulment of permanent list of voters, registration of political parties and accreditation of
citizens’ arms of the Commission; provisional remedies refer to injunction and/or restraining order; and special
reliefs refer to certiorari, prohibition, mandamus and contempt. Thus, it is clear that the proceedings that
precipitated the issuance of Resolution No. 06-1369 do not fall within the coverage of the actions and proceedings
under Section 13, Rule 18 of the Comelec Rules of Procedure. Thus, the Comelec did not violate its own rule on
finality of judgments.
1âw phi 1

No denial of due process

We also find no merit in the petitioners’ contention that that they were denied due process of law when the Comelec
issued Resolution No. 8808 without affording them the benefit of a notice and hearing. We have held in the past that
"[t]he essence of due process is simply the opportunity to be heard, or as applied to administrative proceedings, an
opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of.
[Thus, a] formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied
where the parties are given fair and reasonable opportunity to explain their side of the controversy at hand. What is
frowned upon is absolute lack of notice and hearing." 54 In Bautista v. Commission on Elections,55 we emphasized:

In Zaldivar vs. Sandiganbayan (166 SCRA 316 [1988]), we held that the right to be heard does not only refer to the
right to present verbal arguments in court. A party may also be heard through his pleadings. Where opportunity to
be heard is accorded either through oral arguments or pleadings, there is no denial of procedural due process. As
reiterated in National Semiconductor (HK) Distribution, Ltd. vs. NLRC (G.R. No. 123520, June 26, 1998), the
essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an
opportunity to explain one's side. Hence, in Navarro III vs. Damaso (246 SCRA 260 1995), we held that a formal or
trial-type hearing is not at all times and not in all instances essential.56 (italics supplied)

Thus, "a party cannot successfully invoke deprivation of due process if he was accorded the opportunity of a
hearing, through either oral arguments or pleadings. There is no denial of due process when a party is given an
opportunity through his pleadings."57 In the present case, the petitioners cannot claim deprivation of due process
because they actively participated in the Comelec proceedings that sought for payment of their retirement benefits
under R.A. No. 1568. The records clearly show that the issuance of the assailed Comelec resolution was
precipitated by the petitioners’ application for retirement benefits with the Comelec. Significantly, the petitioners
were given ample opportunity to present and explain their respective positions when they sought a re-computation
of the initial pro-rated retirement benefits that were granted to them by the Comelec. Under these facts, no violation
of the right to due process of law took place.

No vested rights over retirement benefits

As a last point, we agree with the Solicitor General that the retirement benefits granted to the petitioners under
Section 1 of R.A. No. 1568 are purely gratuitous in nature; thus, they have no vested right over these
benefits. 58Retirement benefits as provided under R.A. No. 1568 must be distinguished from a pension which is a
form of deferred compensation for services performed; in a pension, employee participation is mandatory, thus,
employees acquire contractual or vested rights over the pension as part of their compensation. 59 In the absence of
any vested right to the R.A. No. 1568 retirement benefits, the petitioners' due process argument must perforce fail.
WHEREFORE, premises considered, we hereby DISMISS the petition for certiorari filed by petitioners Evalyn I.
Fetalino and Amado M. Calderon for lack of merit. We likewise DENY Manuel A. Barcelona, Jr.'s petition for
intervention for lack of merit. No costs.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

(On Leave)
MARIA LOURDES P. A. SERENO*
Chief Justice

ANTONIO T. CARPIO**
Acting Chief Justice

(no part due to relationship to party)

TERESITA J. LEONARDO-DE CASTRO
PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice

I join the dissent of J. Reyes

DIOSDADO M. PERALTA
LUCAS P. BERSAMIN
Associate Justice
Associate Justice

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

(with my dissenting position)

JOSE CATRAL MENDOZA
BIENVENIDO L. REYES
Associate Justice
Associate Justice

ESTELA M. PERLAS-BERNABE MARVIC M.V. F. LEONEN

Associate Justice Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the Court.

ANTONIO T. CARPIO
Acting Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. Nos. 119987-88 October 12, 1995

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. LORENZO B. VENERACION, Presiding Judge of the Regional Trial Court, National Capital Judicial
Region, Branch 47, Manila, HENRY LAGARTO y PETILLA and ERNESTO CORDERO, respondents.

KAPUNAN, J.:

The sole issue in the case at bench involves a question of law. After finding that an accused individual in a criminal
case has, on the occasion of Rape, committed Homicide, is the judge allowed any discretion in imposing either the
penalty of Reclusion Perpetua or Death?

The facts antecedent to the case before this Court, as narrated by petitioner,1 involve the perpetration of acts so
bizarre and devoid of humanity as to horrify and numb the senses of all civilized men:

On August 2, 1994, the cadaver of a young girl, later identified as Angel Alquiza wrapped in a sack
and yellow table cloth tied with a nylon cord with both feet and left hand protruding from it was seen
floating along Del Pan St. near the corner of Lavesares St., Binondo, Manila.

When untied and removed from its cover, the lifeless body of the victim was seen clad only in a light
colored duster without her panties, with gaping wounds on the left side of the face, the left chin, left
ear, lacerations on her genitalia, and with her head bashed in.

On the basis of sworn statements of witnesses, booking sheets, arrest reports and the necropsy report of the victim,
Abundio Lagunday, a.k.a. Jr. Jeofrey of no fixed address, and Henry Lagarto y Petilla, of 288 Area H. Parola
Compound, Tondo, Manila were later charged with the crime of Rape with Homicide in an Information dated August
8, 1994 filed with the Regional Trial Court of Manila, National Capital Judicial Region. Said Information, docketed as
Criminal Case No. 94-138071, reads:

That on or about August 2, 1994, in the City of Manila, Philippines, the said accused, conspiring and
confederating together with one alias "LANDO" and other persons whose true names, identifies and
present whereabouts are still unknown and helping one another, with treachery, taking advantage of
their superior strength and nocturnity, and ignominy, and with the use of force and violence, that is,
by taking ANGEL ALQUIZA y LAGMAN into a warehouse, covering her mouth, slashing her vagina,
hitting her head with a thick piece of wood and stabbing her neck did then and there wilfully,
unlawfully and feloniously have carnal knowledge of the person of said ANGEL ALQUIZA y
LAGMAN, a minor, seven (7) years of age, against the latter's will and consent and on said occasion
the said ABUNDIO LAGUNDAY, a.k.a. "LANDO" and others, caused her fatal injuries which were
the direct cause of her death immediately thereafter.

CONTRARY TO LAW.

Subsequently thereafter, Ernesto Cordero y Maristela, a.k.a. "Booster," of 1198 Sunflower St.,
Tondo, Manila, Rolando Manlangit y Mamerta, a.k.a. "Lando," of 1274 Kagitingan St., Tondo, Manila,
Richard Baltazar y Alino, a.k.a. "Curimao," also of 1274 Kagitingan St., Tondo, Manila, and Catalino
Yaon y Aberin, a.k.a. "Joel," of 1282 Lualhati St., Tondo, Manila were accused of the same crime of
 Rape with Homicide in an Information dated August 11, 1994, docketed as Criminal Case No. 94-
138138, allegedly committed as follows:

That on or about the 2nd day of August, 1994, in the City of Manila, Philippines, the
said accused conspiring and confederating with ABUNDIO LAGUNDAY Alias "JR,"
JEOFREY and HENRY LAGARTO y PETILLA who have already been charged in the
Regional Trial Court of Manila of the same offense under Criminal Case No. 94-
138071, and helping one another, with treachery, taking advantage of their superior
strength and nocturnity and ignominy, and with the use of force and violence, that is,
by taking ANGEL ALQUIZA y LAGMAN into a pedicab, and once helpless, forcibly
bringing her to a nearby warehouse, covering her mouth, slashing her vagina, hitting
her head with a thick piece of wood and stabbing her neck, did then and there
wilfully, unlawfully and feloniously have carnal knowledge of the person of said
ANGEL ALQUIZA y LAGMAN, a minor, seven (7) years of age, against the latter's
will and consent and on said occasion the said accused together with their
confederates ABUNDIO LAGARTO y PETILLA caused her fatal injuries which were
the direct cause of her death immediately thereafter.

CONTRARY TO LAW.

The two criminal cases were consolidated to Branch 47 of the Regional Trial Court of Manila,
presided over by respondent Judge.

Duly arraigned, all the accused, except Abundio Lagunday who was already dead, (allegedly shot by
police escorts after attempting to fire a gun he was able to grab from SPO1 D. Vidad on August 12,
1994), pleaded "Not Guilty." Abundio Lagunday was dropped from the Information.

After trial and presentation of the evidence of the prosecution and the defense, the trial court rendered a decision2on
January 31, 1995 finding the defendants Henry Lagarto y Petilla and Ernesto Cordero y Maristela guilty beyond
reasonable doubt of the crime of Rape with Homicide and sentenced both accused with the "penalty of reclusion
perpetua with all the accessories provided for by law."3 Disagreeing with the sentence imposed, the City Prosecutor
of Manila on February 8, 1995, filed a Motion for Reconsideration, praying that the Decision be "modified in that the
penalty of death be imposed" against respondents Lagarto and Cordero, in place of the original penalty (reclusion
perpetua). Refusing to act on the merits of the said Motion for Reconsideration, respondent Judge, on February 10,
1995, issued an Order denying the same for lack of jurisdiction. The pertinent portion reads:

The Court believes that in the above-entitled cases, the accused Lagarto and Cordero have
complied with the legal requirements for the perfection of an appeal. Consequently, for lack of
jurisdiction, this Court cannot take cognizance of the Motion for Reconsideration of the Public
Prosecutor of Manila.

WHEREFORE, the order earlier issued by this Court regarding the Notices of Appeal filed by both
herein accused is hereby reiterated.

The Clerk of this Court is hereby directed to transmit the complete records of these cases, together
with the notices of appeal, to the Honorable Supreme Court, in accordance with Sec. 8, Rule 122 of
the Revised Rules of Criminal Procedure.

SO ORDERED.

Hence, the instant petition.

The trial court's finding of guilt is not at issue in the case at bench. The basis of the trial court's determination of guilt
and its conclusions will only be subject to our scrutiny at an appropriate time on appeal. We have thus clinically
limited our narration of events to those cold facts antecedent to the instant case relevant to the determination of the
legal question at hand, i.e., whether or not the respondent judge acted with grave abuse of discretion and in excess
of jurisdiction when he failed and/or refused to impose the mandatory penalty of death under Republic Act No. 7659,
after finding the accused guilty of the crime of Rape with Homicide.

We find for petitioner.

Obedience to the rule of law forms the bedrock of our system of justice. If judges, under the guise of religious or
political beliefs were allowed to roam unrestricted beyond boundaries within which they are required by law to
exercise the duties of their office, then law becomes meaningless. A government of laws, not of men excludes the
exercise of broad discretionary powers by those acting under its authority. Under this system, judges are guided by
the Rule of Law, and ought "to protect and enforce it without fear or favor,"4 resist encroachments by governments,
political parties,5 or even the interference of their own personal beliefs.

In the case at bench, respondent judge, after weighing the evidence of the prosecution and the defendant at trial
found the accused guilty beyond reasonable doubt of the crime of Rape with Homicide. Since the law in force at the
time of the commission of the crime for which respondent judge found the accused guilty was Republic Act No.
7659, he was bound by its provisions.

Section 11 of R.A. No. 7659 provides:

Sec. 11. Article 335 of the same Code is hereby amended to read as follows:

Art. 335. When and how rape is committed. — Rape is committed by having carnal knowledge of a
woman under any of the following circumstances:

1. By using force or intimidation.

2. When the woman is deprived of reason or otherwise unconscious; and

3. When the woman is under twelve years of age or is demented.

The crime of rape shall be punished by reclusion perpetua.

Whenever the crime of rape is committed with the use of a deadly weapon or by two or more
persons, the penalty shall be reclusion perpetua to death.

When by reason or on the occasion of the rape, the victim has become insane, the penalty shall be
death.

When the rape is attempted or frustrated and a homicide is committed by reason or on the occasion
thereof, the penalty shall be reclusion perpetua to death.

When by reason or on the occasion of the rape, a homicide is committed, the penalty shall be death.
. . .6

Clearly, under the law, the penalty imposable for the crime of Rape with Homicide is not Reclusion Perpetua but
Death. While Republic Act 7659 punishes cases of ordinary rape with the penalty of Reclusion Perpetua, it allows
judges the discretion — depending on the existence of circumstances modifying the offense committed — to impose
the penalty of either Reclusion Perpetua only in the three instances mentioned therein. Rape with homicide is not
one of these three instances. The law plainly and unequivocably provides that "[w]hen by reason or on the occasion
of rape, a homicide is committed, the penalty shall be death." The provision leaves no room for the exercise of
discretion on the part of the trial judge to impose a penalty under the circumstances described, other than a
sentence of death.

We are aware of the trial judge's misgivings in imposing the death sentence because of his religious convictions.
While this Court sympathizes with his predicament, it is its bounden duty to emphasize that a court of law is no place
for a protracted debate on the morality or propriety of the sentence, where the law itself provides for the sentence of
death as a penalty in specific and well-defined instances. The discomfort faced by those forced by law to impose the
death penalty is an ancient one, but it is a matter upon which judges have no choice. Courts are not concerned with
the wisdom, efficacy or morality of laws. In People vs. Limaco 7 we held that:

[W]hen . . . private opinions not only form part of their decision but constitute a decisive factor in
arriving at a conclusion and determination of a case or the penalty imposed, resulting in an illegality
and reversible error, then we are constrained to state our opinion, not only to correct the error but for
the guidance of the courts. We have no quarrel with the trial judge or with anyone else, layman or
jurist as to the wisdom or folly of the death penalty. Today there are quite a number of people who
honestly believe that the supreme penalty is either morally wrong or unwise or ineffective.
However, as long as that penalty remains in the statute books, and as long as our criminal law
provides for its imposition in certain cases, it is the duty of judicial officers to respect and apply the
law regardless of their private opinions. It is a well settled rule that the courts are not concerned with
the wisdom, efficacy or morality of laws. That question falls exclusively within the province of the
Legislature which enacts them and the Chief Executive who approves or vetoes them. The only
function of the judiciary is to interpret the laws and, if not in disharmony with the Constitution, to
apply them. And for the guidance of the members of the judiciary we feel it incumbent upon us to
state that while they as citizens or as judges may regard a certain law as harsh, unwise or morally
wrong, and may recommend to the authority or department concerned, its amendment, modification,
or repeal, still, as long as said law is in force, they must apply it and give it effect as decreed by the
law-making body.8

Finally, the Rules of Court mandates that after an adjudication of guilt, the judge should impose "the proper penalty
and civil liability provided for by the law on the accused."9 This is not a case of a magistrate ignorant of the law. This
is a case in which a judge, fully aware of the appropriate provisions of the law, refuses to impose a penalty to which
he disagrees. In so doing, respondent judge acted without or in excess of his jurisdiction or with grave abuse of
discretion amounting to a lack of jurisdiction in imposing the penalty of Reclusion Perpetua where the law clearly
imposes the penalty of Death.

WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED. The case is hereby REMANDED to
the Regional Trial Court for the imposition of the penalty of death upon private respondents in consonance with
respondent judge's finding that the private respondents in the instant case had committed the crime of Rape with
Homicide under Article 335 of the Revised Penal Code, as amended by Section 11 of Republic Act No. 7659,
subject to automatic review by this Court of the decision imposing the death penalty.

SO ORDERED.

Feliciano, Padilla, Romero, Bellosillo, Melo, Puno, Mendoza, Francisco and Hermosisima, Jr., JJ., concur.

Separate Opinions

NARVASA, C.J., concurring:

I concur with the conclusions and dispositions set forth in the opinion of Mr. Justice Kapunan. I draw up this
separate opinion merely to address a question which may be raised in relation to the appeal taken by the accused
from the judgment of conviction rendered by respondent Judge. It will be recalled that respondent Judge declined to
act on the merits of motion for reconsideration filed by the prosecution — praying that his decision sentencing both
accused to suffer reclusion perpetua be "modified in that the penalty of death be imposed" — for the reason that
since the accused had already "complied with the legal requirements for the perfection of an appeal," the Trial Court
had lost jurisdiction over the cases. It was precisely that refusal that prompted the institution in this Court of the
special civil action of certiorari at bar.

It is indeed axiomatic that once an appeal is perfected from a judgment, jurisdiction is lost by the court rendering the
judgment; and jurisdiction over the case passes to the appellate tribunal. This proposition considered, and following
respondent Judge's reasoning, this Court's directive for the remand of the case "to the Regional Trial Court for the
imposition of the penalty of death upon private respondents," might appear to be open to question, since it would
require the Trial Court to act in cases over which it had lost jurisdiction. Such a conclusion is not warranted.

The judgment in question is void, and has been annulled and set aside by this Court, because rendered "without or
in excess of . . . jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction," in so far as it
imposes, in light of the facts found to have been proven beyond reasonable doubt, a penalty other than that
peremptorily prescribed by law. The judgment being void, the appeal attempted to be taken therefrom is
inefficacious. The Trial Court may not be deemed to have thereby lost jurisdiction of the cases. It cannot thus be
said that it is being required by this Court to act in cases over which it has already lost jurisdiction. There exists no
legal obstacle to the remand of the cases to it and its modification of the judgment so that it may comply with the
mandatory prescription of the law.

REGALADO, J., concurring:

I concur without reservation in the ponencia in this case and its directive that the court a quo impose the correct
penalty of death as provided by law and consequent to its findings of guilt on the part of private respondents.
Indeed, this separate opinion which explicates my conformity with the procedure adopted and the mandate thereof
would not have been necessary were it not for the contrary observations that the petition herein should either have
been dismissed or consolidated with the criminal case elevated on appeal by private respondents.

Such digression from the judgment unconditionally accepted by the other members of the Court does not impress
me as being concordant with the Rules of Court and decisional law. What is before us in the case at bar is an
original civil action invoking the extraordinary writ of certiorari for the imposition of the correct penalty specified by
law, which legal duty respondent judge refused to comply with in grave abuse of his judicial discretion.1 On the other
hand, the criminal case with which it is sought to be consolidated is an appellate recourse wherein the relief sought
is primarily the reversal of the finding of guilt and the absolution of private respondents.

Evidently, the determinative issues involved and the limited relief sought in the present special civil action are
entirely different from the issues for resolution and the modificatory judgment desired in the appealed criminal case.
The basic rule in consolidation of cases in civil procedure2 requires, among others, the same subject matter and the
existence of a common question of law or fact. This is essentially the same as the rule on consolidation in criminal
procedure3 which contemplates charges for offenses founded on the same facts, or forming part of a series of
offenses of similar character.

Also, these reglementary requisites for consolidation require two or more ordinary civil or criminal actions, and not
a special civil action in combination with the former. The impropriety of the latter situation is specially underscored
where the resolution of the controversy in the special civil action is a pre-judicial matter in the appealed criminal
case. These considerations apply to both the trial courts in the exercise of original jurisdiction and to the appellate
courts in the implementation of revisory power.

The purpose of the present original action for certiorari is to have the erroneous judgment of respondent judge —
erroneous because he imposed the wrong penalty — corrected on that score in the first instance. After such
correction shall have been effected, then the appeal from his judgment shall proceed for the desired review by this
Court to determine the guilt or innocence of appellants. The corrective action must proceed first and the resultant
amended judgment containing the proper penalty shall be the basis for the review as to whether appellants are truly
guilty and have to be meted that ultimate penalty. To have the certiorari action proceed simultaneously and in
unification with the appellate proceeding strikes me as an aberrant procedure. While it does not exactly square with
the figurative posture of putting the cart before the horse, it does result in the same absurdity of both the horse and
the cart moving abreast at the same time along the same judicial path.

It would even be worse if, as suggested, this certiorari action should be dismissed and the appellate review be
conducted with the judgment containing an unauthorized penalty as the basis therefor, with this Court closing its
eyes to such a flagrant mistake. This time the cart precedes the horse. True, an appeal throws the judgment a
quoopen for review and the Court may raise the penalty to the appropriate punitive level. But, as the People
pertinently observes, what is there to prevent appellants from withdrawing their appeal upon sensing from the
arguments that, instead of the acquittal or reduced penalty aspired for, the ultimate denouement would be the death
sentence?
Jurisprudence tells us that before the case is submitted for decision, an appellant may withdraw his appeal in the
appellate court.4 Generally, the withdrawal of an appeal before the filing of the appellee's brief in this Court is
permitted.5 Assuming that the Court denies the withdrawal of the appeal in order that the mistake in the penalty
imposed may be corrected in the judgment of the case on the merits,6 why should the appellate course of the
proceedings still have to be subject to such contingencies — with the inevitable waste of time and effort in the
formulation of alternative theories in two sets of pleadings by both parties — when with the decisive sweep of the
adjudgment here the doubts are dissipated and the real areas of contention are laid bare?

Nor is that all. Appellants have come to this Court through the medium of an appeal by writ of error from a judgment
of the trial court imposing the wrong penalty of reclusion perpetua. If the mistake in the penalty is now rectified with
the death sentence being substituted therefor, as undeniably it should be, then the case will consequently be before
this Court on automatic review. That provision calling for automatic review when capital punishment is
inflicted7serves equally the interests of both the defense and the prosecution through protective features established
by case law.

Thus, even if the accused had unnecessarily appealed from the judgment imposing the penalty of death and he
thereafter withdraws his appeal, the automatic review of the case shall nonetheless proceed, albeit without the
benefit of briefs or arguments from the accused.8 The automatic review of the case shall proceed even if the death
convict shall escape,9 as an exception to the provisions of Section 8, Rule 124, and such automatic review cannot
be waived. 10 The aforementioned beneficial effects are not provided for and may not be availed of by the accused in
an ordinary appeal to this Court.

The automatic review of the death sentence ensures the right of the condemned person to procedural due process
on appeal, and safeguards the interests of the State by exacting the corresponding penal sanction decreed by law.
The disposition adopted by the Court in this case subserves the ends of these fundamental policies, hence my
unqualified assent thereto.

VITUG, J., dissenting:

The ponencia itself indicates that the case against the convicted accused is already on appeal before this Court.
Thus, the instant petition, in my view, has become academic since an appeal brings the case wide open for review
and consideration. A ruling on the petition would be precipitate and might be so perceived as peremptory on the
imposition of the death penalty.

With all due respect, it is my personal view that if the Court is not disposed to dismiss the petition, it should at the
very least be consolidated with the appealed case.

Accordingly, I am constrained, at this time, to vote for the dismissal of the petition.

Davide, Jr., J. concurs.

Separate Opinions

NARVASA, C.J., concurring:

I concur with the conclusions and dispositions set forth in the opinion of Mr. Justice Kapunan. I draw up this
separate opinion merely to address a question which may be raised in relation to the appeal taken by the accused
from the judgment of conviction rendered by respondent Judge. It will be recalled that respondent Judge declined to
act on the merits of motion for reconsideration filed by the prosecution — praying that his decision sentencing both
accused to suffer reclusion perpetua be "modified in that the penalty of death be imposed" — for the reason that
since the accused had already "complied with the legal requirements for the perfection of an appeal," the Trial Court
had lost jurisdiction over the cases. It was precisely that refusal that prompted the institution in this Court of the
special civil action of certiorari at bar.
It is indeed axiomatic that once an appeal is perfected from a judgment, jurisdiction is lost by the court rendering the
judgment; and jurisdiction over the case passes to the appellate tribunal. This proposition considered, and following
respondent Judge's reasoning, this Court's directive for the remand of the case "to the Regional Trial Court for the
imposition of the penalty of death upon private respondents," might appear to be open to question, since it would
require the Trial Court to act in cases over which it had lost jurisdiction. Such a conclusion is not warranted.

The judgment in question is void, and has been annulled and set aside by this Court, because rendered "without or
in excess of . . . jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction," in so far as it
imposes, in light of the facts found to have been proven beyond reasonable doubt, a penalty other than that
peremptorily prescribed by law. The judgment being void, the appeal attempted to be taken therefrom is
inefficacious. The Trial Court may not be deemed to have thereby lost jurisdiction of the cases. It cannot thus be
said that it is being required by this Court to act in cases over which it has already lost jurisdiction. There exists no
legal obstacle to the remand of the cases to it and its modification of the judgment so that it may comply with the
mandatory prescription of the law.

REGALADO, J., concurring:

I concur without reservation in the ponencia in this case and its directive that the court a quo impose the correct
penalty of death as provided by law and consequent to its findings of guilt on the part of private respondents.
Indeed, this separate opinion which explicates my conformity with the procedure adopted and the mandate thereof
would not have been necessary were it not for the contrary observations that the petition herein should either have
been dismissed or consolidated with the criminal case elevated on appeal by private respondents.

Such digression from the judgment unconditionally accepted by the other members of the Court does not impress
me as being concordant with the Rules of Court and decisional law. What is before us in the case at bar is an
original civil action invoking the extraordinary writ of certiorari for the imposition of the correct penalty specified by
law, which legal duty respondent judge refused to comply with in grave abuse of his judicial discretion.1 On the other
hand, the criminal case with which it is sought to be consolidated is an appellate recourse wherein the relief sought
is primarily the reversal of the finding of guilt and the absolution of private respondents.

Evidently, the determinative issues involved and the limited relief sought in the present special civil action are
entirely different from the issues for resolution and the modificatory judgment desired in the appealed criminal case.
The basic rule in consolidation of cases in civil procedure2 requires, among others, the same subject matter and the
existence of a common question of law or fact. This is essentially the same as the rule on consolidation in criminal
procedure3 which contemplates charges for offenses founded on the same facts, or forming part of a series of
offenses of similar character.

Also, these reglementary requisites for consolidation require two or more ordinary civil or criminal actions, and not
a special civil action in combination with the former. The impropriety of the latter situation is specially underscored
where the resolution of the controversy in the special civil action is a pre-judicial matter in the appealed criminal
case. These considerations apply to both the trial courts in the exercise of original jurisdiction and to the appellate
courts in the implementation of revisory power.

The purpose of the present original action for certiorari is to have the erroneous judgment of respondent judge —
erroneous because he imposed the wrong penalty — corrected on that score in the first instance. After such
correction shall have been effected, then the appeal from his judgment shall proceed for the desired review by this
Court to determine the guilt or innocence of appellants. The corrective action must proceed first and the resultant
amended judgment containing the proper penalty shall be the basis for the review as to whether appellants are truly
guilty and have to be meted that ultimate penalty. To have the certiorari action proceed simultaneously and in
unification with the appellate proceeding strikes me as an aberrant procedure. While it does not exactly square with
the figurative posture of putting the cart before the horse, it does result in the same absurdity of both the horse and
the cart moving abreast at the same time along the same judicial path.

It would even be worse if, as suggested, this certiorari action should be dismissed and the appellate review be
conducted with the judgment containing an unauthorized penalty as the basis therefor, with this Court closing its
eyes to such a flagrant mistake. This time the cart precedes the horse. True, an appeal throws the judgment a
quoopen for review and the Court may raise the penalty to the appropriate punitive level. But, as the People
pertinently observes, what is there to prevent appellants from withdrawing their appeal upon sensing from the
arguments that, instead of the acquittal or reduced penalty aspired for, the ultimate denouement would be the death
sentence?

Jurisprudence tells us that before the case is submitted for decision, an appellant may withdraw his appeal in the
appellate court.4 Generally, the withdrawal of an appeal before the filing of the appellee's brief in this Court is
permitted.5 Assuming that the Court denies the withdrawal of the appeal in order that the mistake in the penalty
imposed may be corrected in the judgment of the case on the merits,6 why should the appellate course of the
proceedings still have to be subject to such contingencies — with the inevitable waste of time and effort in the
formulation of alternative theories in two sets of pleadings by both parties — when with the decisive sweep of the
adjudgment here the doubts are dissipated and the real areas of contention are laid bare?

Nor is that all. Appellants have come to this Court through the medium of an appeal by writ of error from a judgment
of the trial court imposing the wrong penalty of reclusion perpetua. If the mistake in the penalty is now rectified with
the death sentence being substituted therefor, as undeniably it should be, then the case will consequently be before
this Court on automatic review. That provision calling for automatic review when capital punishment is
inflicted7serves equally the interests of both the defense and the prosecution through protective features established
by case law.

Thus, even if the accused had unnecessarily appealed from the judgment imposing the penalty of death and he
thereafter withdraws his appeal, the automatic review of the case shall nonetheless proceed, albeit without the
benefit of briefs or arguments from the accused.8 The automatic review of the case shall proceed even if the death
convict shall escape,9 as an exception to the provisions of Section 8, Rule 124, and such automatic review cannot
be waived. 10 The aforementioned beneficial effects are not provided for and may not be availed of by the accused in
an ordinary appeal to this Court.

The automatic review of the death sentence ensures the right of the condemned person to procedural due process
on appeal, and safeguards the interests of the State by exacting the corresponding penal sanction decreed by law.
The disposition adopted by the Court in this case subserves the ends of these fundamental policies, hence my
unqualified assent thereto.

VITUG, J., dissenting:

The ponencia itself indicates that the case against the convicted accused is already on appeal before this Court.
Thus, the instant petition, in my view, has become academic since an appeal brings the case wide open for review
and consideration. A ruling on the petition would be precipitate and might be so perceived as peremptory on the
imposition of the death penalty.

With all due respect, it is my personal view that if the Court is not disposed to dismiss the petition, it should at the
very least be consolidated with the appealed case.

Accordingly, I am constrained, at this time, to vote for the dismissal of the petition.

Davide, Jr., J. concurs.

Penal Laws

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-12262 February 10, 1917

THE UNITED STATES, plaintiff-appellee,

vs.
ANTONIO ABAD SANTOS, defendant-appellant.

Quirino Abad Santos for appellant.

Attorney-General Avanceña for appellee.

MORELAND, J.:

The appellant here is accused of violating the Internal Revenue Law. He was convicted and sentenced to pay a fine
of P10. He appealed.

Section 185 of Act No. 2339 (now section 2727 of the Administrative Code) reads as follows:

A person who violates any provision of the Internal Revenue Law or any lawful regulation of the Bureau of
Internal Revenue made in conformity with the same, for which delinquency no specific penalty is provided by
law, shall be punished by a fine of not more than three hundred pesos or by imprisonment for not more than
six months, or both.

Pursuant to the authorization in the Internal Revenue Law, the Collector of Internal Revenue issued Circular No.
467, the third section of which reads as follows:

3. Printers, publishers, contractors, common carriers, etc. — Each printer, publisher, contractor,
warehouseman, proprietor of a dockyard, keeper of a hotel or restaurant, keeper of a livery stable or garage,
transportation contractor and common carrier by land or water, and so forth, subject to the tax imposed by
sections 42, 43, and 44 of Act No. 2339, shall keep a day book in which he shall enter in detail, in English or
Spanish, each amount of money received in the conduct of his business. Before being used for said
purpose, the pages of the book must be numbered serially in a permanent and legible manner, and the book
itself presented to an internal revenue agent or office for approval. In this book the cash receipts of the
owner thereof shall be entered under the corresponding date within the twenty-four hours next following the
date the money was received. If no money is received on any day, then that fact shall be noted in the book
within the said twenty-four hours under the corresponding date.

The appellant is the owner of a printing establishment called "The Excelsior" and as such was required by law to
keep a book in which he should make the entire required by the above quoted regulation. It is charged in the
information that he violated the provisions of said regulation in that he failed to make any entry for the 5th day of
January, 1915, indicating whether any business was done on that day or not.

We are of the opinion that the accused must be acquitted. It appears undisputed that he regularly employed a
bookkeeper who was in complete charge of the book in which the entries referred to should have been made and
that the failure to make the entry required by law was due to the omission of the bookkeeper of which appellant
knew nothing.

We do not believe that a person should be held criminally liable for the acts of another done without his knowledge
or consent, unless the law clearly so provides. In the case before us the accused employed a bookkeeper, with the
expectation that he would perform all the duties pertaining to his position including the entries required to be made
by the Collector of Internal Revenue. It is undisputed that the accused took no part in the keeping of the book in
question in this case and that he personally never made an entry in it. He left everything to his bookkeeper. Under
such circumstances we do not believe that the mere proof of the fact that the bookkeeper omitted to make the
entries required by the Internal Revenue Circular for the 5th day of January, 1915, is an act upon which the
conviction of the accused can be based. No knowledge on his part was shown with regard to the bookkeeper's
omission and the Government does not contend that he had any knowledge. Nor is it contended that the
bookkeeper omitted the entry under the direction of the accused or with his connivance. No connection between the
accused and the omission of the bookkeeper is shown or claimed. On the contrary the board contention is that the
accused is responsible for the acts and omissions of his bookkeeper, and that, if any act or omissions of his
bookkeeper, violates the criminal law, the principal is responsible criminally.

With this we cannot agree. Neither the statute nor the circular of the Collector of Internal Revenue, nor both
together, expressly require such a result nor can we say from the circular or the law that the intention to do so was
so clear as to leave no room for doubt. Courts will not hold one person criminally responsible for the acts of another,
committed without his knowledge or consent, unless there is a statute requiring it so plain in its terms that there is no
doubt of the intention of the Legislature. Criminal statutes are to be strictly construed. No person should be brought
within their terms who is not clearly within them, nor should any act be pronounced criminal which is not clearly
made so by the statute. (U. S. vs. Madrigal, 27 Phil. Rep., 347.)

The judgment of conviction is reversed and the accused acquitted. Costs de officio. So ordered.

Arellano, C. J., Torres and Araullo, JJ., concur.

Carson and Trent, JJ., dissent.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

[G.R. Nos. L-12011-14. September 30, 1958.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, v. ALFONSO GATCHALIAN, Defendant-Appellee.

Solicitor General Ambrosio Padilla and Solicitor Troadio T. Quiazon, Jr. for Appellant.

Ishmael Rodriguez for Appellee.

SYLLABUS

1. MINIMUM WAGE LAW; WILLFUL VIOLATION OF ANY PROVISION; CRIMINAL AND CIVIL LIABILITY OF VIOLATOR. —
While Section 3 of the Minimum Wage Law under which appellee was charged does not state that it shall be unlawful
for an employer to pay his employees wages below the minimum wage but merely requires that the employer shall pay
wages not below the minimum wage, however, Section 15 of the same Act imposes both a criminal penalty for a willful
violation of any of the provisions of the law and a civil liability for any underpayment of wages due en employee. Thus,
the intention of the law is clear: to slap not only a criminal liability upon an erring employer for any willful violation of
the acts sought to be enjoined but to attach concurrently a civil liability for any underpayment he may commit as a
result thereof. The law speaks of a willful violation of "any of the provisions of this Act", which is all-embracing, and the
same must include what is enjoined in Section 3 thereof which embodies the very fundamental purpose for which the
law has been adopted.

2. ID.; ID.; ID.; GOVERNMENT OFFICIALS NOR INCLUDED IN THE PENALTY CLAUSE. — Officials of the government
entrusted with the enforcement of the law do not come under the penal clause embodied in Section 15 (a) of the
Minimum Wage Law. The failure of these officials to comply with their duties would subject them merely to
administrative sanction (Sec. 18[c], Rep. Act No. 602).
3. CRIMINAL PROCEDURE; INFORMATION; SPECIFIC PROVISION WHICH PENALIZES ACT NEED NOT BE MENTIONED. — It
is true that the informations under which appellee was charged only mention Section 3 of the law as the one violated
and this section does not contain a penal clause, but this does not make the information defective. There is no law
which requires that in order that an accused may be convicted the specific provision which penalizes the act charged be
mentioned in the information. The Rules of Court do not require such designation.

4. STATUTORY CONSTRUCTION; PENAL LAW; STRICT CONSTRUCTION, WHEN MAY BE INVOKED. — The rule that penal
statutes should be strictly construed against the State may be invoked only where the law is ambiguous and there is
doubt as to their interpretation. Where the law is clear and unambiguous, there is no room for the application of the
rule.

DECISION

BAUTISTA ANGELO, J.:

Alfonso Gatchalian was charged before the Court of First Instance of Zamboanga with a violation of Section 3 of Republic
Act No. 602 in four separate informations (Criminal Cases Nos. 2206, 2207, 2208 and 2209) committed as
follows:jgc:chanrobles.com.ph

"That on or about August 4, 1951, up to and including December 31, 1953 and within the jurisdiction of this Court, viz, in
the City of Zamboanga, Philippines, the above named accused, owner or manager of the New Life Drug Store, a business
establishment in the City of Zamboanga and having under his employ one Expedito Fernandez as salesman in the said
establishment, did then and there willfully, and feloniously, pay and cause to be paid to said Expedito Fernandez, a
monthly salary of P60 to P90 for the period above-mentioned which is less than that provided for by law, thereby
leaving a difference of an unpaid salary to the latter in the total amount of P1,016.64 for the period above-
mentioned."cralaw virtua1aw library

When arraigned on June 19, 1956, he pleaded not guilty to the charge. On August 29, 1956, his counsel, in his behalf,
filed a written motion to dismiss based on two grounds which in substance merely consist in that the violation charged
does not constitute a criminal offense but carries only a civil liability, and even if it does, the section of the law alleged to
have been violated does not carry any penalty penalizing it. On September 25, 1956, the City Attorney of Zamboanga
filed his answer to the motion to dismiss contending that the law which was violated by the accused carries with it both
civil and criminal liability, the latter being covered by Section 15 which provides for the penalty for all willful violations of
any of the provisions of the Minimum Wage Law. On December 3, 1956, the Court, after hearing the arguments of both
parties, as well as some members of the local bar, issued an order dismissing the informations with costs de oficio and
cancelling the bail bond filed by the accused. The court in the same order directed the Regional Representative of the
Department of Labor to immediately institute a civil action against the erring employer for the collection of the alleged
underpayment of wages due the employees. A motion for reconsideration having been denied, the Government took
the present appeal.

The pertinent portion of Section 3 of Republic Act 602 under which appellee was prosecuted, reads as
follows:chanrob1es virtual 1aw library

SEC. 3. Minimum wage. — (a) Every employer shall pay to each of his employees who is employed by an enterprise other
than in agriculture wages at the rate of not less than —

(1) Four pesos a day on the effective date of this Act and thereafter for employees of an establishment located in Manila
or its environs;

(2) Three pesos a day on the effective date of this Act and for one year after the effective date, and thereafter P4 a day,
for employees of establishment located outside of Manila or its environs: Provided, That this Act shall not apply to any
retail or service enterprise that regularly employs not more then five employees."cralaw virtua1aw library

Section 15 of the same law, which treats of "penalties and recovery of wages due", likewise
provides:jgc:chanrobles.com.ph

"SEC. 15. Penalties and recovery of wage due under this Act. —

(a) Any person who wilfully violates any of the provisions of this Act shall upon conviction thereof be subject to a fine of
not more than two thousand pesos, or, upon second conviction, to imprisonment of not more then one year, or to both
fine and imprisonment, in the discretion of the court.

(b) If any violation of this Act is committed by a corporation, trust, partnership or association, the manager or in his
default, the person acting as such when the violation took place, shall be responsible. In the case of a government
corporation, the managing head shall be made responsible, except when shown that the violation was due to an act or
commission of some other person, over whom he has no control, in which case the latter shall be held responsible.

(c) The Secretary is authorized to supervise the payment of the unpaid minimum wages or the wages found owing to any
employee under this Act.

(d) The Secretary may bring an action in any competent court to recover the wages owing to an employee under this
Act, with legal interest. Any sum thus recovered by the Secretary on behalf of an employee pursuant to this subsection
shall be held in a special deposit account and shall be paid, on order of the Secretary, directly to the employee or
employees affected. Any such sums not paid to an employee because he cannot be located within a period of three
years shall be covered into the Treasury as miscellaneous receipts.

(e) Any employer who underpays an employee in violation of this Act shall be liable to the employee effected in the
amount of the unpaid wages with legal interest. Action to recover such liability may be maintained in any competent
court by anyone or more employees on behalf of himself or themselves. The court in such action shall, in addition to any
judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee which shall not exceed ten per cent of
the amount awarded to the plaintiffs, unless the amount awarded is less than one hundred pesos, in which event the fee
may be ten pesos, but not in excess of that amount. Payment of the amount found due to the plaintiffs shall be made
directly to the plaintiffs, in the presence of a representative of the Secretary or the Court. In the event payment is
witnessed by the court or its representative, the Secretary shall be notified within ten days of payment that the payment
has been made.

(f) No employer, attorney, or any other person, other than the employee to whom underpayment are found due, shall
receive any part of the underpayment due the employee; and no attorney shall receive any fee in excess of the
maximum specified herein.

(g) In determining when an action is commenced under this section for the purpose of the statute of limitation, it shall
be considered to be commenced in the case of any individual claimant on the date when the complaint is filed if he is
specifically named as a party plaintiff in the complaint, or if his name did not so appear, on the subsequent date on
which his name is added as a party plaintiff in such action."cralaw virtua1aw library

It is clear from the above-quoted provisions that while Section 3 explicitly requires every owner of an establishment
located outside of Manila or its environs to pay each of its employees P3.00 a day on the effective date of the Act, and
one year thereafter P4.00 a day, Section 15 imposes both a criminal penalty for a willful violation of any of the above
provisions and a civil liability for any underpayment of wages due an employee. The intention of the law is clear: to slap
not only a criminal liability upon an erring employer for any willful violation of the acts sought to be enjoined but to
attach concurrently a civil liability for any underpayment he may commit as a result thereof. The law speaks of a willful
violation of "any of the provisions of this Act", which is all-embracing, and the same must include what is enjoined in
Section 3 thereof which embodies the very fundamental purpose for which the law has been adopted. A study of the
origin of our Minimum Wage Law (Republic Act 602) may be of help in arriving at an enlightened and proper
interpretation of the provisions under consideration. Our research shows that. this Act was patterned after the U. S. Fair
Labor Standards Act of 1938, as amended, and so a comparative study of the pertinent provisions of both would be
enlightening.

The pertinent provisions of the U. S. Fair Labor Standards Act of 1938, as amended, follow:jgc:chanrobles.com.ph

"MINIMUM WAGES

SEC. 6. (a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods
for commerce wages at the following rates —

"(1) not less than 75 cents an hour;"

x x x

"PROHIBITED ACTS"

SEC. 15. (a) After the expiration of one hundred and twenty, days from the date of enactment of this Act, it shall be
unlawful for any person —

"(1) to transport, offer for transportation, ship, deliver, or sell in commerce, or to ship, deliver; or sell with knowledge
that shipment or delivery or sale thereof in commerce is intended, any goods in the production of which any employee
was employed in violation of section 6 or section 7, or in violation of any regulation or order of the Administrator issued
under section 14; . . .

"(2) to violate any of the provisions of section 6 or section 7, or any of the provisions of any regulation or order of the
Administrator issued under section 14;

"(3) to discharge or in any other manner discriminate against any employee because such employee has filed any
complaint or instituted or cause to be instituted any proceeding under or related to this Act, or has testified or is about
to testify in any such proceeding, or has served or is about to serve on an industry committee;

"(4) to violate any of the provisions of section 11 (c) or any regulation or order made or continued in effect under the
provisions of section 11 (d), or to make any statement, report, or record filed or kept pursuant. to the provisions of such
section or of any regulation or order thereunder, knowing such statement, report, or record to be false in a material
respect.

x x x

"PENALTIES

SEC. 16. (a) Any person who willfully violates any of the provisions of section 15 shall upon conviction thereof be subject
to a line of not more than P10,000, or to imprisonment for not more than six months, or both. No person shall be
imprisoned under this subsection except for an offense committed after the conviction of such person for a prior offense
under this subsection.

"(b) Any employer who violates the provisions of section 6 or 7 of this Act shall be liable to the employee or employees
affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be,
and in additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of
competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees
similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to
become such a party and such consent is filed in the court in which such action is brought. The court in such action shall,
in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the
defendant costs of the action."cralaw virtua1aw library

The pertinent provisions of Republic Act 602 read:chanrob1es virtual 1aw library

SEC. 3. Minimum wage. — (a) Every employer shall pay to each of his employees who is employed by an enterprise other
than in agriculture wages at the rate of not less than —

"(2) Three pesos a day on the effective date of this Act and for one year after the effective date, and thereafter P4 a day,
for employees of establishments located outside of Manila or its environs: Provided, That this Act shall not apply to any
retail or service enterprise that regularly employs not more than five employees."cralaw virtua1aw library

"SEC. 15. Penalties and recovery of wage due under this Act. — (a) Any person who willfully violates any of the
provisions of this Act shall upon conviction thereof be subject to a fine of not more than two thousand pesos, or, upon
second conviction, to imprisonment of not more than one year, or to both fine and imprisonment, in the discretion of
the court.

x x x

"(e) Any employer who underpays an employee in violation of this Act shall be liable to the employee effected in the
amount of the unpaid wages with legal interest. Action to recover such liability may be maintained in any competent
court by anyone or more employees on behalf of himself or themselves. The court in such action shall, in addition to any
judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee which shall not exceed ten per cent of
the amount awarded to the plaintiffs, unless the amount awarded is less than one hundred pesos, in which event the fee
may be ten pesos, but not in excess of that amount. Payment of the amount found due to the plaintiffs shall be made
directly to the plaintiffs, in the presence of a representative of the Secretary or of the Court. In the event payment is
witnessed by the court or its representative, the Secretary shall be notified within ten days of payment that the payment
has been made."cralaw virtua1aw library

An examination of the above-quoted provisions of the two Acts will show that while in substance they are similar, they
however contain some differences in their phraseology and in the apportionment of their provisions. Thus, while Section
15 (a), paragraph 2, of the Fair Labor Standards Act makes it unlawful for an employer not to pay the minimum wage
prescribed therein, our Minimum Wage Law does not contain a similar provision. Again, the Fair Labor Standards Act
enumerates in one single section all those acts which are declared unlawful and are not spread out in different sections
as done in our law. Thus, the acts that are declared unlawful by the former law as enumerated in Section 15(a) are: (1)
to transport or deliver any goods in the production of which any employee was employed in violation of Section 6 or
Section 7, or in violation of any regulation or order of the Administrator; (2) failure to pay the minimum wage; (3) to
discharge or in any other manner discriminate against an employee who has filed a complaint against the employer in
relation to the Act; and (4) failure to keep the record or report required by law or to make a false record or report. On
the other hand, our law declares unlawful the following acts, to wit: (1) to pay wages in the form of promissory notes,
vouchers, coupons, tokens or any other form alleged to represent legal tender [Section 10 (a) (1)]; (2) to make any
deduction or withhold any amount from the wages of an employee, or induce any employee to give part of his wages by
force or intimidation [Section 10(g)]; (3) to commit any act of discrimination against an employee because of certain
complaint he has filed or caused to be filed against the employer (Section 13); and (4) to make any false statement,
report or record to subvert the purpose of the Act (Section 14), which acts are contained in separate sections mentioned
therein. The failure to pay the prescribed minimum wage is not declared unlawful in our law.

It should also be noted that while Section 16 of the Fair Labor Standards Act which provides for the penalties to be
imposed for any willful violation of the provisions of the Act; specifically states that those penalties refer to acts declared
unlawful under Section 15 of the same Act, our law does not contain such specification. It merely provides in Section 15
(a) that "Any person who willfully violates any of the provisions of this Act shall upon conviction" be subject to the
penalty therein prescribed. This distinction is very revealing. It clearly indicates that while the Fair Labor Standards Act
intends to subject to criminal action only acts that are declared unlawful, our law by legislative fiat intends to punish not
only those expressly declared unlawful but even those not so declared but are clearly enjoined to be observed to carry
out the fundamental purpose of the law. One such provision is undoubtedly that which refers to the payment of the
minimum wage embodied in Section 3. This is the only rational interpretation that can be drawn from the attitude of our
Congress in framing our law in a manner different from that appearing in the mother law.

Indeed, the main objective of the law is to provide for a rock-bottom wage to be observed and followed by all employers
of an agricultural and industrial establishment. This objective would be defeated were we to adopt a restrictive
interpretation of the above penal clause, for an employer who knows that he cannot be amenable to a criminal action
would be prone to subvert the law because if he is detected it would be easy for him to pay the underpayment and the
corresponding interest as would be the case were he to assume merely a civil liability. This would be a mockery and a
decision of the law not contemplated by our lawmaker which would certainly render it nugatory and abortive. We are
not prepared to adopt an interpretation which would give such adverse result to a legislation conceived in the lofty
purpose of protecting labor and giving it a living wage. If the law is to survive, it must be real, militant and effective.

"The establishment of the maximum wage benefits directly the low-paid employees, who now receive inadequate wages
on which to support themselves and their families. It benefits all wage earners indirectly by setting a floor below which
their remuneration cannot fail. It raises the standards of competition among employers, since it would protect the fair-
minded employer who voluntarily pays a wage that supports the wage earner from the competition of the employer,
who operates at lower cost by reasons of paying his workers a wage below subsistence. If, in fact, the employer cannot
pay a subsistence wage. then he should not continue his operation unless he improves his methods and equipment so as
to make the payment of the minimum wage feasible for him; otherwise the employer is wasting the toil of the worker
and the material resources used in the employment. Second methods of operation, progressive and fair-minded
management, and an adequate minimum wage go hand in hand." (Explanatory Note to H.B. No. 1476)

Counsel for appellee however entertains a different interpretation. He contends that if Section 15(a) should be
interpreted in a manner that would embrace a wilful violation of any of the provisions of the law we would have a
situation where even the officials entrusted with its enforcement may be held criminally liable which is not
contemplated in the law. Thus, he contends, the Secretary of Labor may be criminally prosecuted for willfully not using
all available devices for investigation [Section 4(c)], for not presenting to the Wage Board all the evidence in his
possession relating to the wages in the industries for which the Wage Board is appointed and other information relevant
to the establishment of the minimum wage [Section 5(p)], and for not doing all other acts which the law requires him to
do under Section 6. This, he emphasizes, is absurd and should not be entertained.

To begin with, the Minimum Wage Law is a social legislation which has been adopted for the benefit of labor and as such
it contains provisions that are enjoined to be observed by the employer. These provisions are substantive in nature and
had been adopted for common observance by the persons affected. They cannot be eluded nor subverted lest the erring
employer runs into the sanction of the law. On the other hand, the provisions adverted to by counsel are merely
administrative in character which had been adopted to set the machinery by which the law is to be enforced. They are
provisions established for observance by the officials entrusted with its enforcement. Failure to comply with them would
therefore subject them merely to administrative sanction. They do not come under the penal clause embodied in
Section 15(a). This is clearly inferred from Section 18(c), of Republic Act No. 602, which provides: "Any official of the
Government to whom responsibility in administration and enforcement has been delegated under this Act shall be
removable on the sustaining of charges of malfeasance or non-feasance in office." This specific provision should be
interpreted as qualifying the penal clause provided for in Section 15(a).

It is true that Section 3 under which appellee was charged does not state that it shall be unlawfull for an employer to
pay his employees wages below the minimum wage but merely requires that the employer shall pay wages not below
the minimum wage. But failure of such declaration does not make the non-observance of the provisions less unlawful
than otherwise, for such provision embodies precisely the raison d’etre of the law itself. Indeed, Section 3 is the very
provision on which all the other provisions of the law are built. Thus, the prohibition against discriminating against any
employee because he has filed a complaint or caused to be instituted one against the employer is just a means to insure
the effective enforcement of that provision (Section 13); and so the prohibition against the making of a false statement,
report or record required to be filed or kept by the law (Section 13); the prohibition against the payment of wages in the
form of promissory notes, vouchers, coupons, tokens, or any other form to represent legal tender (Section 10, par. a,
sub-paragraph 1); and the prohibition against making deductions or withholding any amount from the wages of an
employee (Section 10, par. g). These are acts which were declared unlawful because they may be resorted to by
unscrupulous employers with the evident purpose of subverting or defeating the payment of the minimum wage. If
these supplementary provisions are mere safeguards established by the lawmaker to close every avenue to trickery or
subversion on the part of the employer, they cannot be more important and imperative as the central provision fixing
the minimum wage without which the law will have no reason to exist. We cannot therefore entertain the claim that
because said provision was not declared unlawful it cannot be subject to the penal sanction embodied in Section 15.

It is likewise true that the informations under which the accused was charged only mention Section 3 of the law as the
one violated and this section does not contain a penal clause, but this does not make the informations defective. There
is no law which requires that in order that an accused may be convicted the specific provision which penalizes that act
charged be mentioned in the information. The Rules of Court do not require such designation. In fact, the rule provides
that an information, to be sufficient, should state only the name of the defendant, the designation of the offense by the
statute, the acts or omissions complained of as constituting the offense, the name of the offended party, the
approximate time of the commission of the offense, and the place wherein the offense was committed (Rule 106,
Section 5). The rule does not require that it should mention the particular penal provision penalizing the offense.

The final claim of appellee is that inasmuch as the provisions of the law under which he was prosecuted are ambiguous
and there is doubt as to their interpretation, that doubt should be resolved in his favor because a penal statute should
be strictly construed against the State. This contention must also fail if we are to be consistent with our interpretation of
the provisions of Section 15 (a) of the law. We have stated that section is clear and unambiguous and covers the
provisions embodied in Section 3 of the law, and if such is the case then there is no room for the application of the
principle invoked by appellee.

We are therefore persuaded to conclude that the court a quo erred in dismissing the informations filed against the
appellee and, consequently, its order of December 3, 1956, subject of this appeal should be set aside.

Wherefore, the order appealed from is hereby set aside. It is ordered that these cases be remanded to the court a quo
for further proceedings, with costs against appellee.

Paras, C.J. Padilla and Endencia, JJ., concur.

Separate Opinions

CONCEPCION, J., concurring:chanrob1es virtual 1aw library

I concur in the foregoing opinion, as well as in the concurring opinion of Mr. Justice Reyes (J. B. L.) . REYES, J. B. L.,
concurring:chanrob1es virtual 1aw library

I concur in the opinion of Mr. Justice Felix Bautista Angelo, particularly in view of the provisions of Sec. 10, paragraph g
of the Minimum Wage Act which reads as follows:chanrob1es virtual 1aw library

SEC. 10 (g). It shall be unlawful for any person, including but not restricted to, any employer . . . to make any deductions
or withhold any amount from the wages of an employee . . . by force, intimidation, threat, or procuring dismissal or in
any manner whatsoever."cralaw virtua1aw library

If the act declares unlawful to withhold in any manner whatsoever any amount from the wages of an employee it must
necessarily be unlawful not to pay him the wage called for by the Minimum Wage Act. What is the difference between
not paying the minimum wage and withholding part of the wage so the balance is below the minimum wage? To
underpay is to withhold part of the wage.

The act complained of, therefore, is an offense penalized under the Act. Our duty being to interpret the Act in
consonance with its primary purpose to benefit the laborer, we should consider that the only sanction for not paying the
minimum wage were to be the payment of interest on the unpaid salary, the situation of the wage earner would have
been in no way advanced and the Minimum Wage Act would be practically nullified, for a laborer is in no position to
engage in protracted litigation with his employer. As pointed in the opinion of Justice Bautista Angelo the criminal
liability is the only effective sanction under the circumstances. The rejection of the Tañada amendment merely proves
that the Legislature was against heavier penalties at the start, not that it desired to shield anyone from prosecution.

It is not for us to speculate upon the secondary effects of the Act on industry. To foresee them is the task of the
Legislature. If it desired to immunize employers against criminal prosecution, as an exception to the general penalty, it
could have clearly so stated. On the other hand if it wished to be ambiguous in order to content both Capital and Labor, I
think the Court would be advancing the cause of good government by driving home the necessity that laws be carefully
framed and clearly worded.

The function of statutory interpretation, in my opinion, is to cure involuntary mistakes and supply inadvertences; not to
ferret out of ambiguities a policy that legislators may be afraid or unwilling to express. If it is unconstitutional for the
Judiciary to invade the sphere of the Legislature, it is just as unlawful for the legislators to shirk their own duty and
divert to the Judges the odium of unpopular measures. Que cada palo aguante su vela — each mast should bear its own
sail.

BENGZON, J., dissenting:chanrob1es virtual 1aw library

Concurring in the dissent of Mr. Justice Montemayor, I wish to emphasize that as applied to this case, Sec. 15,
subsections (a) and (e) should be read together substantially as follows:chanrob1es virtual 1aw library

Any person who violates any provision of this Act shall be punished with fines, etc. . . . except that where the violation
consists in paying the employee less than the minimum wage, she employer shall be punished by requiring him to satisfy
the difference, plus attorney’s fees.

I believe subsection (e) punishes the particular "violation" of paying less than the minimum wage. It is a special
provision, which under well-known rules of construction, should prevail over the general provision in subsection (a). In
other words, although the Act does not expressly say so, subsection (e) is an exception 1 to subsection (a).

I think it is a mistake to suppose that this interpretation fails to punish the employer who disregards the Act; because
the liability imposed by subsection (e) is unquestionably a sanction, penal in nature, which except for the the law, would
not be demandable. If Juan de la Cruz, by contract, employs Pedro at P3.00 per day in Manila where the law fixes a
minimum daily wage of P4.00, Pedro could not recover P4.00 instead of P3.00 (except for this law) because Pedro
agreed to the 3-peso wage. Nevertheless, this subsection (e) says, despite such agreement with Pedro, Juan must pay
him at the rate of P4.00 a day, plus attorney’s fees. He is required to pay what he did not contract to pay, or could not
afford to pay. Is not this a punishment imposed on Juan? Remember that fine, which is also a punishment consists in the
disbursement of money.

But such payment is insufficient penalty, I hear others argue. This case will easily disprove such argument. Under
subsection (e) this appellee would have to pay necessarily P1,016.00, plus attorney’s fees; whereas under subsection (a)
he might be fined P200.00 only. 2

However, the majority will counter, we hold that the employer, is liable under subsection (e) in addition to his liability
under subsection (a).

Therein lies the trouble; the words "in addition" or words of similar import, were not inserted in subsection (e), as they
could have been inserted.
Additional liability, is their prevailing idea. And yet, why should the law impose on the employer (who pays in
accordance with a contract freely entered into), additional burdens not imposed on the other employers will fully
violating other fundamental provisions of the Act.

It may be argued that subsection (e) is not really a sanction independent of subsection (a), or additional thereto,
because it merely repeats the well-known principle that "every person criminally liable is also civily liable." My answer is
twofold: first, attorney’s fees are not usually included in such principle a robber is not required to pay attorney’s fees;
second, the employee is not really the injured party because he accepted the employment under a contract: "Scienti et
volenti nulla fit injuria." There is no violation of any right of the employee for which reparation is due. In the example
given, Pedro had no right to require Juan to employ him at P4.00. There is only a breach of the statute, for which the
Government can choose, and did choose the proper sanction, namely, payment of the salary differential under
subsection (e). The Congress did not choose more than that; contrary to what it did in analogous situations. Take the
Usury Law, for instance; it provides "without prejudice to the proper civil action for the recovery of usurious interest
paid, violations of this Act shall be subject to criminal prosecution and the guilty person, etc." (Sec. (10).

In the absence of a clear, unmistakable statute, we should not approve two punishments for one and the same
misconduct.

MONTEMAYOR, J., dissenting:chanrob1es virtual 1aw library

To my knowledge, this is the first time that the Minimum Wage Law is being interpreted by this Tribunal, as regards the
compass and scope of the penalty provided in Section 15 of said law, so that on this subject matter, this will be the first
case and a leading one. The trial court in its order dismissing the information said that it had carefully considered its
ruling or order because "it believes that any resolution, one way or another, would be precedent-setting, because until
now, the Supreme Court has not directly ruled upon the point."cralaw virtua1aw library

Under the interpretation given by the majority, any employer who underpays his employees in violation of the Minimum
Wage Law (Section 3) would be subject to criminal prosecution. I am afraid that if that is the law, the prosecuting
attorneys and fiscals would have on their hands not only the prosecution of thousands of private employers who may be
paving their employees and laborers amounts less than the minimum wage, however small the deficiency, but also
hundreds and thousands of provincial and municipal officials, particularly the latter, who are paying their employees,
not excluding peace officers like municipal policemen and patrolmen, salaries which are way below the minimum wage
of P4.00 a day. It is a well known fact that in this respect, the Government is the first and worst offender. Even first class
municipalities cannot afford and naturally do not pay their employees and peace officers the minimum wage; with more
reason cannot second class and third class municipalities do so.

The majority opinion will have such far-reaching and to me, unforeseen consequences, at once baneful, undesirable, and
hurtful to industry, and disastrous to local government officials who, strictly speaking, are not to blame, that I am
constrained to voice my dissent and explain the reasons therefor.

For a better understanding of the adoption of the minimum wage in this jurisdiction, it is well to remember that it was
not of the initiative, idea or volition of this country. It was recommended by the Bell Mission which made an economic
survey here and in its report, recommended its establishment. Not only this, but it would appear that the enactment of
this Minimum Wage Law was made a condition precedent to economic aid to be given to us by the United States of
America. 1

In connection with the discussion and enactment of this piece of legislation, not only our economists but also our
legislators expressed their fears, doubts and misgivings, fully realizing that the country was not perhaps prepared
economically for its adoption and operation. But because of our commitment with America, 2 and possibly realizing also
the necessity of establishing a fair minimum standard of wages for laborers and employees, the Legislature enacted this
law in the nature of an experiment, carefully watching and observing in its operation, execution and observance, its
good points and its shortcomings as well, with the idea of later making the necessary changes and amendment. The
Legislature was, as it were, venturing out on an uncharted sea; so it had to be conservative and move with measured
steps. Since the law was merely being tried out as an experiment, its provisions could not have been made and intended
to be strict and severe, in the sense that because of their severity and strictness, compliance there with would be
difficult, if not impossible, and would result in their nonobservance, and the consequent punishment by fine and prison
sentence of those defined as employers who are unable to comply with said provisions. The net result would be the
unjust punishment of innocent government officials and the discouragement and destruction of infant and small
industries.

From the explanatory note of Senate Bill No. 202, we may have an idea of the attitude of the Legislature on this
particular point:jgc:chanrobles.com.ph

"One thing to be remembered is that the country has not yet attained that degree of industrialization where wages can
be set at fully satisfactory levels from the viewpoints of human values. Compromises must still. be made until this full
industrial status is attained. Another thing is that hasty and unjudicious action in passing minimum wags laws may be
deterrent to private capital which, on the contrary needs to be encouraged to invest in local industries if the
industrialization of our country must someday be a fact." (Emphasis supplied).

As the majority opinion correctly observes, our Minimum Wage Law is patterned after that of the United States Fair
Labor Standards Act (F. L. S. A.) of 1938, as amended. As I have already stated, the establishment of this minimum wage
in this country being a sort of experiment, it being the first time that it was being tried out, and not knowing whether or
not it would be a success, it is to be presumed that the Legislature acted cautiously and warily, and even while adopting
as a pattern the United States F.L.S.A., it did not wish or intend to make our law more stern and strict in its enforcement
and application, particularly as regards its penalties. But the majority opinion would make our law more rigorous and
severe, more comprehensive and more devastating in the application of its penal provisions. For instance, while the
F.L.S.A. in Section 16(a) penalizes only specific violations of its provisions expressly enumerated, our law as interpreted
by the majority opinion, would punish any violation whatsoever, whether enumerated specifically or not. Moreover,
while Section 15(a) of the F. L. S. A. makes it unlawful for an employer not to pay the minimum wage prescribed by it,
our Minimum Wage Law does not contain a similar provision. What our law declares unlawful are certain positive and
affirmative acts, such as, paying wages in the form of promissory notes, vouchers, etc.; making deductions or
withholding any amount from the wages of an employee, or inducing any employee to give part of his wages by force or
intimidation; committing any act of discrimination against an employee because of a certain complaint he had filed
against the employer, or making any false statement in any report or record to subvert the purposes of the Act. These
acts must have been regarded by the Legislature as serious and so expressly declared them unlawful. However, the mere
failure to pay the prescribed minimum wage is not, in our law, declared unlawful. I believe that what the Legislature
intended to penalize with fine and prison sentence were only those acts which it enumerated and declared unlawful, not
the mere failure to follow and comply with the obligations imposed upon an employer, such as, the nonpayment of the
minimum wage.

It will be noticed that our law expressly provides that any employer underpaying an employee in violation of the Act
shall be liable to said employee in the amount of the underpayment, with legal interest, plus a reasonable amount for
attorney’s fees. This amount may be recovered not only by the employee himself, but by the Secretary of Labor on his
behalf. In my opinion, this civil responsibility to be enforced with the aid of the Department of Labor, was regarded as
sufficient punishment and deterrent on the employer. Being a civil action, the employee only needs preponderance of
evidence to win his suit. The Legislature may have been of the belief that application of the penal sanction in the form of
fine and prison sentence would be too radical a measure, would scare and discourage new and infant industries, besides
inducing violators to resort to underhanded but effective measures to hide and conceal infringement of the law, to say
nothing of the added difficulty in securing conviction, which requires not only preponderance of evidence, but proof of
guilt beyond reasonable doubt.

To show that the Legislature did not intend to be too severe and stern in the application of this new law which was
merely being tried out, while House Bill No. 1732 was being discussed in the Senate, Senator Tañada believing that the
bill was too lenient for those who violated its provisions by providing for a fine of only not more than P1,000.00 or
imprisonment of not more than six months, he proposed that the fine be increased to not more than P10,000.00 — half
the amount of the fine provided in Section 16 (a) of the U.S. Fair Labor Standards Act; but the committee sponsoring the
bill, through Senator Torres, objected to the proposed amendment as being too excessive and severe, specially at the
beginning of the operation of the law, upon which Senator Tañada withdrew his amendment, with the understanding
that in a year or so after the promulgation of the law, it will be amended:jgc:chanrobles.com.ph

"SENATE

"December 22, 1950

‘ENMIENDA TAÑADA’

"SENATOR TAÑADA. Mr. President for another amendment, on page 18, Section 15 provides for penalties. Mr.
President, I believe that the bill is too lenient for those who violate the provisions of this measure. It only provides for a
fine of not more than one thousand pesos or imprisonment of not more than six months, or both. In order to really
protect labor we must make the penalty stiffer than what is provided in this bill. So I propose the following amendment:
In line 22, delete the word ‘one’ between the words ‘than’ and ‘thousand’, and insert in its place the word ‘ten’ — not
more than ten thousand pesos’.

"EL PRESIDENTE. Que dice el comite?

"EL SENADOR TORRES. Señor Presidente, el Comite siente no poder aceptar la enmienda, en viata de que considera
demasiada excesiva la pena, sobre todo, en los comienzos de la vigencia de la ley.

"SENATOR TAÑADA. I then, Mr. President, withdraw my amendment with the understanding that in a year or so after
this Law has been in force, we shall amend it."cralaw virtua1aw library

"EL PRESIDENTE. Se da por retirada." (Senate Journal, Jan. 5, 1951, pp. 5-6). (Emphasis supplied).

Going back to the violation of this Minimum Wage Law by the Government itself, it is a matter of public knowledge that
employees like clerks in the office of the Municipal Treasurer, and municipal policemen receive as low as P40.00 or
P50.00 a month, way below the minimum wage prescribed by the law. Under the interpretation given by the majority,
since the word "employer" in the law includes the Government 3 and government corporations, then the municipal
mayor, the municipal councilors and the municipal treasurer who knowingly and wilfully pay to their employees and
policemen salaries way below the minimum wage, would all be subject to criminal prosecution. Multiply this number of
municipal officials by the number of such towns and municipalities in the Philippines which do not and cannot pay the
minimum wage to their employees and municipal policemen, which towns and municipalities can be counted by the
hundreds, and we shall have an idea of the number of government violators of the law which we have and must
prosecute criminally under the majority opinion. Could such mass and wholesale prosecution have been contemplated
and intended by the Legislature? And let it not be said that with respect to said Government officials, the only
punishment is by administrative action and removal, as provided in Section 18, paragraphs (c) and (d), which read as
follows:jgc:chanrobles.com.ph

"(c) Any official of the Government to whom responsibility in administration and enforcement has been delegated under
this Act shall be removable on the sustaining of charges of malfeasance or nonfeasance in office.

"(d) Any person engaged in the administration and enforcement of this Act who is found to have accepted any bribe
from or on behalf of any party in interest under this Act shall be summarily dismissed, and criminal action shall be
instituted against such person." (Italics supplied).

because those provisions clearly refer only to those government officials entrusted with the administration and
enforcement of the law, such as, the Secretary of Labor, the members of the Wage Administration Service, and others.

But the majority opinion says that not to apply the penal sanction to an employer underpaying his laborers or
employees —

". . . would be a mockery and a derision of the law not contemplated by our lawmaker which would certainly render it
nugatory and abortive. We are not prepared to adopt an interpretation which would give such adverse result to a
legislation conceived in the lofty purpose of protecting labor and giving it a living wage. If the law is to survive, it must be
real, militant and effective." (Emphasis supplied).

In other words, the majority of this Tribunal on its own initiative would make the Minimum Wage Law militant and
effective by a blanket and indiscriminate application of Section 15 (a) to all violators of its provisions, whether or not
such violation is expressly or specifically declared unlawful by the law itself. Stated otherwise, this Tribunal steps in, nay,
rushes in to put teeth in a legislation which it considers toothless and would make effective and militant what it regards
would otherwise be ineffectual and inadequate. This Tribunal would, like one unlicensed to practice medicine, prescribe
a cure for a supposed legislational malady. I am afraid that is not and has never been the province, much less, the
prerogative of the Judiciary. Otherwise, the courts would be indulging in judicial legislation.

If the Minimum Wage Law is found to be inadequate and ineffective, let the Legislature make the necessary changes and
amendments. In fact, that was the legislative plan from the beginning — observe the operation and working of the law
and then make changes, if deemed necessary. But evidently, the Legislature is satisfied with the operation and mode of
application of the law, because although approved on April 6, 1951, and made effective 120 days thereafter, in other
words, after a seven-year operation, it (Legislature) has not seen fit to introduce any major changes,4 specially in the
application of the penalty.

Anyway, after all is said and done, the least that could be said about the applicability of Section 15(a) of the Minimum
Wage law to violations of Section 3 is doubtful. Even brushing aside and not considering the grave doubts entertained by
the undersigned as to the applicability of said Section 15 (a) to violations of Section 3, we have in evidence the opinion
of the Court of First Instance of Zamboanga and according to it, the opinion of the major sector of the Zamboanga bar,
sustaining the view that Section 15 (a) is not applicable to violations of Sections 3 of the Minimum Wage Law. We have
the well settled principle in the interpretation of penal laws that in case of doubt, the interpretation favorable to the
accused should be adopted. Authorities in support of this principle are not wanting.

"Laws creating, defining, or punishing crimes, and those imposing penalties and forfeitures, are to be construed strictly
against the state or the party seeking to enforce them, and liberally in favor of the party sought to be charged. They are
not to be enlarged by implications, nor extended to persons or cases not plainly within the meaning of the language
employed." (Black on Interpretation of Laws, p. 451).

Said this Court in U. S. v. Abad Santos, 35 Phil. 243:jgc:chanrobles.com.ph

"Criminal statutes are to be construed strictly; no person should be brought within them, nor should any act be
pronounced criminal which is not made clearly so."cralaw virtua1aw library

In view of the foregoing, I hold that the penal sanction of the Minimum Wage Law applies only to certain violations of its
provisions, that is to say, those acts which are expressly declared by the law itself as unlawful; and that mere
nonpayment of the minimum wage is not included in the said penal sanction, the Legislature evidently believing that the
civil responsibility of the employer for the amount of the underpayment with legal interest and attorney’s fees to be
enforced with the aid of the Department of Labor, is enough punishment and deterrent on employers.

REYES, A., J., dissenting:chanrob1es virtual 1aw library

As the majority opinion itself says, "failure to pay the prescribed minimum wage is not declared unlawful in our law"
(Rep. Act No. 602). On the other hand, it is doubtful if the penal sanction prescribed in section 15(a) of that Act —
presumably for the acts and practices therein declared unlawful — could be rightfully applied to the act of underpaying
an employee, since paragraph (e) of that same section already provides a specific remedy therefor. Considering that
penal statutes are strictly construed against the state and in case of doubt courts must adopt the construction favorable
to the accused, I vote for the affirmance of the order below and also say that courts should not presume to legislate by
putting into the law more teeth than the Legislature has already put into it.

Endnotes:

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 152666 April 23, 2008

MARCIANO TAN, petitioner,

vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, respondent.

DECISION

CARPIO MORALES, J.:

From the March 19, 2002 Decision1 of the Court of Appeals affirming that of the Makati Regional Trial Court (RTC)
convicting Marciano Tan, herein petitioner, of nine (9) counts of violation of Batas Pambansa Blg. 22 (B.P. Blg. 22)
or the Bouncing Checks Law, petitioner filed the present petition for review on certiorari.

The following undisputed facts spawned the filing of the nine (9) informations for violation of BP Blg. 22 against
petitioner.

Master Tours and Travel (MTT), of which petitioner was executive vice-president, applied on July 16, 1990 for a
360-day Usance Letter of Credit (LC) with respondent Philippine Commercial International Bank (PCIB) for the
importation of four tourist buses with a total value of US$430,0002 from Daewoo Corporation of Seoul, Korea (the
supplier), which was agreed upon by the parties to amount to "closed [sic] to P10 Million Pesos"3 computed on the
basis of the then prevailing rate of exchange of the dollar to the peso.

As a condition to the grant of the LC, PCIB and MTT entered into a Memorandum of Agreement4 under which the
initial drawings of the supplier in the amount of US$5,700 against the LC would be paid by PCI Leasing and Finance
Inc. (PCILF) out of the proceeds of MTT’s amortized loan with it, and any subsequent drawings against the LC by
the supplier in excess of the said amount would be paid out of the proceeds of Treasury Bills which PCIB would
purchase out of the proceeds of post-dated checks to be issued by MTT.

MTT thus issued five checks postdated August, September, October, November, and December 1990 each
for P716,666.66 and another check in January 1991 for P716,666.70 or in the total amount of P4,300,000.

PCIB thereupon issued the Usance LC in favor of the supplier, which was to mature in October 1991.

The tourist buses arrived in October 1990 and were delivered to MTT, covered by Trust Receipts with PCIB as
entruster and MTT as entrustee.

Of the six checks that MTT issued to PCIB, the first five representing a total amount of P3,583,333 were cleared but
not the last one dated January 1991. PCIB soon demanded settlement of this dishonored check from MTT. At the
same time, PCIB required MTT to pay the exchange differential on the peso-dollar rate which was P23.7884 to
US$1 in July 1990 when the LC was issued to P28.56 to US$1 in January 1991 when the last postdated check
matured but was dishonored. The exchange differential was computed by PCIB to amount to P2,061,331.20. MTT
agreed to pay the exchange differential, albeit it later claimed that its agreement to pay the differential was a
"mistake"5 since no such condition was incorporated in their contract. The exchange differential, of P2,061,331.20
when added to the P716,666.70 face value of the dishonored check, totalled P2,777,999.86.
MTT thus issued 14 postdated checks of P198,428.42, payable every 15 days, the first to start on February 28,
1991.

Of the 14 checks, only the first five were honored, the proceeds of which totaled P992,142.10. The other nine, those
dated May 15, 1991 et seq. in the total amount of P1,785,855.78, were dishonored – the subject of the nine
informations at bar.

MTT, having suffered financial reverses, availed of provision No. 7 of the Trust Receipt reading.

7. In the event the Entrustee defaults in his/its obligations or breaches or fails to comply with the terms and
conditions of this Trust Receipt, or upon default in, breach of or noncompliance with the obligation evidenced
by Annex A hereof or the agreement under which the Entruster issued the letter of credit under the terms of
which the Trust Property was purchased ("events of default"), the Entruster may cancel this trust, and
thereupon take possession of the Trust Property and/or such proceeds as may then have been realized
therefrom, and have the goods sold and the proceeds of such sale applied, in accordance with the
provisions of Section 7 of the Trust Receipts Law. In all cases where the Entruster is compelled to resort to
the cancellation of this Trust Receipt or to take any other legal action to protect its interest, the Entrustee
shall pay attorney’s fees fixed at 15% of the total obligation of the Entrustee, which in no case shall be less
than P500.00 exclusive of the costs and fees allowed by law and the other expenses of collection incurred
by the Entruster. Any deficiency resulting from the sale of the Trust Property shall be paid by the Entrustee
within 24 hours from such sale; failing which the Entruster may take such legal action, without further notice
to the Entrustee, as it may deem necessary to collect such deficiency from the Entrustee.6 (Underscoring
supplied)

MTT thus surrendered the buses to PCIB which accepted them in mid 1991 and March 1992. By MTT’s claim the
buses were, at the time of surrender, estimated to be "about 6.6 million."

Subsequently or in July 1992, PCIB sent petitioner a letter of July 9, 1992 reading:

xxxx

From the records now in our possession, it appears that despite promises made by you to make good your
obligations, no performance thus far has been made. As of June 30, 1992, inclusive of interests and penalty
charges, your obligations totaled P10,327,591.21.

Since adequate time and opportunity had already been given you by our client, you are now requested to
remit to it the aforesaid sum of P10,327,591.21 within five (5) days from your receipt hereof, otherwise, we
shall bring you to court.

x x x x7 (Underscoring supplied)

Replying, petitioner’s counsel, by letter of July 22, 1992, wrote PCIB as follows:

Your letters of July 9, 1992 were endorsed to us for appropriate reply by our clients, Master Tours and
Travel Corporation and Marciano Tan.

Your letter to Mr. Tan makes mention of two (2) trust receipts signed by him covering the importation of the
four (4) units DAEWOO buses you want our client to account for. However, Philippine Commercial
International Bank ("PCIB") never furnished our client copies thereof. And up to this date, none is in the
possession of our client. Could you please provide our client with copies of the documents?

Delving into the crux of your demand, kindly be advised that our clients voluntarily surrendered physical
possession and custody of the four (4) DAEWOO buses to PCIB as early as August [sic] 1991. The units
were accepted by PCIB and, therefore, there no longer exist[s] any liability or obligation on the part of our
clients towards that of yours. As clearly stated in your subject letter written to Mr. Marciano Tan, under the
terms of the trust receipts, our client has the alternative obligation to either surrender the buses upon
 demand or pay the total value thereof. As the buses have been surrendered and delivered to your
client, our client’s obligation has been extinguished.

We suggest then that your clarify the fact of delivery of the four (4) units with your client.

We do hope to have amply answered and enlightened you on the status of the matter regarding our client’s
supposed liability on the four (4) buses.8 (Emphasis and underscoring supplied)

There is no showing if PCIB reacted to the above-quoted letter of petitioner’s counsel. PCIB subsequently filed in
October 1992 a criminal complaint against petitioner before the Makati City Prosecutor’s Office which resulted in the
filing on April 1, 1993 of the nine informations against him for violation of B.P. Blg. 22 before the RTC of Makati. The
first information, Criminal Case No. 93-2365, reads:

That on or about the 29th day of January 1991, in the Municipality of Makati, Metro Manila, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused as the duly authorized signatory of
Master Tours and Travel Corporation, did then and there willfully, unlawfully and feloniously make or draw
and issue to Philippine Commercial Int[ernational] Bank to apply on account or for value the check/described
below:

Check No.: 677744

Drawn Against: Philippine Banking Corp.
In the amount: P198,428.42
Dated/Postdated: May 15, 1991
Payable to: Philippine Commercial International Bank

said accused well knowing that at the time of issue thereof Master Tours & Travel Corp. had no sufficient
funds in or credit with the drawee bank for the payment in full of the face amount of the check upon its
presentment, which check was presented for payment within ninety (90) days from the date thereof was
subsequently dishonored by the drawee bank for the reason "Drawn Against Insufficient Funds" and, despite
receipt of notice of said dishonor, the accused and/or Master Tours & Travel Corporation failed to pay said
payee the face amount of said check or to make arrangement for full payment thereof within five (5) banking
days after receiving notice.9 (Underscoring partly in the original and partly supplied)

The other eight informations, Criminal Case Nos. 93-2366 to 93-2373, are similarly worded and for the same
amount, differing only as to the check numbers, the dates of issue and, with respect to Criminal Cases No. 93-2368
to 93-2373, the cause of dishonor ("account closed").10

Branch 142 of the Makati RTC, by Decision11 of October 25, 1995, convicted petitioner of all the nine charges. The
trial court absolved petitioner of civil liability, however, because "the money obligations arising from the checks are
of Master Tours & Travel Corporation and not of the accused Marciano Tan who did not, by signing in behalf of the
corporation, assume personal liability therefor."12 Thus, the trial court disposed:

WHEREFORE, the Court finds the accused MARCIANO T. TAN to be GUILTY beyond reasonable
doubt of these nine (9) criminal charges for violation of BP 22, and hereby sentences him to suffer
imprisonment for THIRTY (30) days for EACH of the NINE [9] CRIMNAL OFFENSES CHARGED.

For lack of evidence, the claim of civil liability arising from the nine [9] dishonored checks, are
DISMISSED, without prejudice to their being taken up in a proper civil action for recovery of the amounts till
due, if any, from Master Tours [&] Travel Corporation.

Costs against the accused.13 (Emphasis in the original; underscoring supplied)

On petitioner’s appeal, the Court of Appeals affirmed the trial court’s decision by Decision of March 19, 2002.
Hence, the present Petition for Review,14 faulting the appellate court

A
 . . . IN CONVICTING THE ACCUSED DESPITE THE FACT THAT HIS CRIMINAL LIABILITY WAS
EXTINGUISHED BY HIS HAVING OVERPAID PCIB.

. . . IN NOT FINDING THAT MASTER HAD FULLY PAID PCIB [AND] . . . IN NOT FINDING THAT
MASTER, AS A MATTER OF FACT, HAD IN EFFECT, OVERPAID PCIB WHEN THE LATTER PULLED
OUT THE BUSES SUBJECT OF THE TRUST RECEIPTS ISSUED IN CONNECTION WITH THE
TRANSACTION.

. . . IN NOT FINDING THAT THE CONTRACT DOCUMENTS DO NOT CONTAIN ANY STIPULATION AS
TO ADJUSTMENT OF THE OBLIGATION IN CASE OF FOREIGN EXCHANGE FLUCTUATION. THERE
IS NOTHING IN THE MEMORANDUM OF AGREEMENT BETWEEN THE PARTIES NOR IN THE LETTER
OF CREDIT APPLICATION OR IN ANY DOCUMENT COVERING THE TRANSACTION WHEREIN
MASTER TOURS OBLIGED ITSELF TO PAY AN INCREASE IN DOLLAR EXCHANGE RATE
FLUCTUATION. CONVERSELY, NEITHER IS PCIB OBLIGED TO REFUND MASTER TOURS OF ANY
DECREASE IN THE PESO DOLLAR EXCHANGE RATE.

. . . IN NOT FINDING THAT EVEN ASSUMING MASTER WAS OBLIGED TO PAY FOREIGN EXCHANGE
RATE DIFFERENTIAL, IT WAS PREMATURE TO DEMAND IT [ON] JANUARY 7, 1991.

xxxx

. . . IN NOT FINDING THAT THE SUPERVENING BANKRUPTCY SUFFERED BY MASTER BROUGHT

ABOUT BY THE ECONOMIC DISLOCATION OF THE COUNTRY BROUGHT ABOUT BY THE MOUNT
PINATUBO ERUPTION, THE GULF WAR AND THE BAGUIO EARTHQUAKE DISCULPATES THE
ACCUSED FROM CRIMINAL LIABILITY.15 (Emphasis and underscoring supplied)

The petition is impressed with merit.

Unless the following elements are shown to have been proven by the prosecution, an accused will not be convicted
for violation of B.P. Blg. 22:

1. The accused makes, draws or issues any check to apply to account or for value;

2. The accused knows at the time of the issuance that he or she does not have sufficient funds in, or credit
with, the drawee bank for the payment of the check in full upon its presentment; and

3. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or it would
have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank
to stop payment.16 (Underscoring supplied)

While issuing of a bouncing check is malum prohibitum, the prosecution is not excused from its responsibility of
proving beyond reasonable doubt all the elements of the offense.17

Respecting the second element of the crime, the prosecution must prove that the accused knew, at the time of
issuance, that he does not have sufficient funds or credit for the full payment of the check upon its presentment.18
The element of "knowledge" involves a state of mind that obviously would be difficult to establish, hence, the statute
creates a prima facie presumption of knowledge on the insufficiency of funds or credit coincidental with the
attendance of the two other elements.19

Evidence of knowledge of insufficient funds.– The making, drawing and issuance of a check payment of
which is refused by the drawee because of insufficient funds in or credit with such bank, when presented
within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such
insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due
thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days
after receiving notice that such check has not been paid by the drawee.20 (Emphasis and underscoring
supplied)

In order to create such presumption, it must be shown that the drawer or maker received a notice of dishonor and,
within five banking days thereafter, failed to satisfy the amount of the check or arrange for its payment.21 The above-
quoted provision creates a presumption juris tantum that the second element prima facie exists when the first and
third elements of the offense are present.22

The presumption is not conclusive,23 however, as it may be rebutted by full payment.24 If the maker or drawer pays,
or makes arrangement with the drawee bank for the payment of the amount due within the five-day period from
notice of the dishonor, he or she may no longer be indicted for such violation.25 It is a complete defense26 that would
lie regardless of the strength of the evidence presented by the prosecution.27 In essence, the law affords the drawer
or maker the opportunity to avert prosecution by performing some acts that would operate to preempt the criminal
action,28 which opportunity serves to mitigate the harshness of the law in its application.29

It is a general rule that only a full payment at the time of its presentment or during the five-day grace
periodcould exonerate one from criminal liability under B.P. Blg. 22 and that subsequent payments can only affect
the civil, but not the criminal, liability.30

In Macalalag v. People,31 the Court held that payment by the accused of the amount of the check prior to its
presentment serves the same purpose. It rebuked the malpractice of presenting checks for payment even after the
amount thereof had been paid.

In Griffith v. Court of Appeals,32 the Court held that where the creditor had collected more than a sufficient amount to
cover the value of the checks representing rental arrearages, holding the debtor’s president to answer for a criminal
offense under B.P. Blg. 22 two years after the said collection is no longer tenable nor justified by law or equitable
considerations. In that case, the Court ruled that albeit made beyond the grace period but two years prior to the
institution of the criminal case, the payment collected from the proceeds of the foreclosure and auction sale of the
petitioner’s impounded properties, with more than a million pesos to spare, justified the acquittal of the petitioner.
The Court ratiocinated:

The Bouncing Checks Law "was devised to safeguard the interest of the banking system and the legitimate
public checking account user." It was not designed to favor or encourage those who seek to enrich
themselves through manipulation and circumvention of the purpose of the law. x x x

x x x We cannot, under these circumstances, see how petitioner’s conviction and sentence could be upheld
without running afoul of basic principles of fairness and justice. For [private respondent] has, in our
view, already exacted its proverbial pound of flesh through foreclosure and auction sale as its chosen
remedy.33(Emphasis supplied)

In the present case, PCIB already exacted its proverbial pound of flesh by receiving and keeping in possession the
four buses-trust properties surrendered by petitioner in about mid 1991 and March 1992 pursuant to Section 7 of the
Trust Receipts Law,34 the estimated value of which was "about P6.6 million."35 It thus appears that the total amount
of the dishonored checks – P1,785,855.75 –, the undisputed claim of petitioner of a mistaken agreement to pay
the exchange differential (which the same checks represented) aside, was more than fully satisfied prior to the
transmittal and receipt of the July 9, 1992 letter of demand. In keeping with jurisprudence, the Court then
considers such payment of the dishonored checks to have obliterated the criminal liability of petitioner.36
It is a consistent rule that penal statutes are construed strictly against the State and liberally in favor of the accused.
And since penal laws should not be applied mechanically, the Court must determine whether the application of the
penal law is consistent with the purpose and reason of the law.37 In the present case, it finds in the negative.

WHEREFORE, the petition is GRANTED. The assailed March 19, 2002 Decision of the Court of Appeals in CA-G.R.
C.R. No. 18999 is REVERSED and SET ASIDE. Petitioner Marciano Tan is ACQUITTED in Criminal Case Nos. 93-
2365 to 93-2373.

SO ORDERED.

Quisumbing,Chairperson, Tinga, Velasco, Jr., Brion, JJ., concur.

Footnotes

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 150758 February 18, 2004

VERONICO TENEBRO, petitioner

vs.
THE HONORABLE COURT OF APPEALS, respondent.

DECISION

YNARES-SANTIAGO, J.:

We are called on to decide the novel issue concerning the effect of the judicial declaration of the nullity of a second
or subsequent marriage, on the ground of psychological incapacity, on an individual’s criminal liability for bigamy.
We hold that the subsequent judicial declaration of nullity of marriage on the ground of psychological incapacity
does not retroact to the date of the celebration of the marriage insofar as the Philippines’ penal laws are concerned.
As such, an individual who contracts a second or subsequent marriage during the subsistence of a valid marriage is
criminally liable for bigamy, notwithstanding the subsequent declaration that the second marriage is void ab initio on
the ground of psychological incapacity.

Petitioner in this case, Veronico Tenebro, contracted marriage with private complainant Leticia Ancajas on April 10,
1990. The two were wed by Judge Alfredo B. Perez, Jr. of the City Trial Court of Lapu-lapu City. Tenebro and
Ancajas lived together continuously and without interruption until the latter part of 1991, when Tenebro informed
Ancajas that he had been previously married to a certain Hilda Villareyes on November 10, 1986. Tenebro showed
Ancajas a photocopy of a marriage contract between him and Villareyes. Invoking this previous marriage, petitioner
thereafter left the conjugal dwelling which he shared with Ancajas, stating that he was going to cohabit with
Villareyes.1

On January 25, 1993, petitioner contracted yet another marriage, this one with a certain Nilda Villegas, before Judge
German Lee, Jr. of the Regional Trial Court of Cebu City, Branch 15.2 When Ancajas learned of this third marriage,
she verified from Villareyes whether the latter was indeed married to petitioner. In a handwritten letter,3 Villareyes
confirmed that petitioner, Veronico Tenebro, was indeed her husband.

Ancajas thereafter filed a complaint for bigamy against petitioner.4 The Information,5 which was docketed as
Criminal Case No. 013095-L, reads:

That on the 10th day of April 1990, in the City of Lapu-lapu, Philippines, and within the jurisdiction of this Honorable
Court, the aforenamed accused, having been previously united in lawful marriage with Hilda Villareyes, and without
the said marriage having been legally dissolved, did then and there willfully, unlawfully and feloniously contract a
second marriage with LETICIA ANCAJAS, which second or subsequent marriage of the accused has all the
essential requisites for validity were it not for the subsisting first marriage.

CONTRARY TO LAW.

When arraigned, petitioner entered a plea of "not guilty".6

During the trial, petitioner admitted having cohabited with Villareyes from 1984-1988, with whom he sired two
children. However, he denied that he and Villareyes were validly married to each other, claiming that no marriage
ceremony took place to solemnize their union.7 He alleged that he signed a marriage contract merely to enable her
to get the allotment from his office in connection with his work as a seaman.8 He further testified that he requested
his brother to verify from the Civil Register in Manila whether there was any marriage at all between him and
Villareyes, but there was no record of said marriage.9

On November 10, 1997, the Regional Trial Court of Lapu-lapu City, Branch 54, rendered a decision finding the
accused guilty beyond reasonable doubt of the crime of bigamy under Article 349 of the Revised Penal Code, and
sentencing him to four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years and one
(1) day of prision mayor, as maximum.10 On appeal, the Court of Appeals affirmed the decision of the trial court.
Petitioner’s motion for reconsideration was denied for lack of merit.

Hence, the instant petition for review on the following assignment of errors:

I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED, AND THIS ERROR IS CORRECTIBLE IN
THIS APPEAL – WHEN IT AFFIRMED THE DECISION OF THE HONORABLE COURT A
QUOCONVICTING THE ACCUSED FOR (sic) THE CRIME OF BIGAMY, DESPITE THE NON-EXISTENCE
OF THE FIRST MARRIAGE AND INSUFFICIENCY OF EVIDENCE.

II. THE COURT ERRED IN CONVICTING THE ACCUSED FOR (sic) THE CRIME OF BIGAMY DESPITE
CLEAR PROOF THAT THE MARRIAGE BETWEEN THE ACCUSED AND PRIVATE COMPLAINANT HAD
BEEN DECLARED NULL AND VOID AB INITIO AND WITHOUT LEGAL FORCE AND EFFECT. 11

After a careful review of the evidence on record, we find no cogent reason to disturb the assailed judgment.

Under Article 349 of the Revised Penal Code, the elements of the crime of Bigamy are:

(1) that the offender has been legally married;

(2) that the first marriage has not been legally dissolved or, in case his or her spouse is absent, the absent
spouse could not yet be presumed dead according to the Civil Code;

(3) that he contracts a second or subsequent marriage; and

(4) that the second or subsequent marriage has all the essential requisites for validity.12

Petitioner’s assignment of errors presents a two-tiered defense, in which he (1) denies the existence of his first
marriage to Villareyes, and (2) argues that the declaration of the nullity of the second marriage on the ground of
psychological incapacity, which is an alleged indicator that his marriage to Ancajas lacks the essential requisites for
validity, retroacts to the date on which the second marriage was celebrated.13 Hence, petitioner argues that all four
of the elements of the crime of bigamy are absent, and prays for his acquittal.14

Petitioner’s defense must fail on both counts.

First, the prosecution presented sufficient evidence, both documentary and oral, to prove the existence of the first
marriage between petitioner and Villareyes. Documentary evidence presented was in the form of: (1) a copy of a
marriage contract between Tenebro and Villareyes, dated November 10, 1986, which, as seen on the document,
was solemnized at the Manila City Hall before Rev. Julieto Torres, a Minister of the Gospel, and certified to by the
Office of the Civil Registrar of Manila;15 and (2) a handwritten letter from Villareyes to Ancajas dated July 12, 1994,
informing Ancajas that Villareyes and Tenebro were legally married.16

To assail the veracity of the marriage contract, petitioner presented (1) a certification issued by the National
Statistics Office dated October 7, 1995;17 and (2) a certification issued by the City Civil Registry of Manila, dated
February 3, 1997.18 Both these documents attest that the respective issuing offices have no record of a marriage
celebrated between Veronico B. Tenebro and Hilda B. Villareyes on November 10, 1986.

To our mind, the documents presented by the defense cannot adequately assail the marriage contract, which in
itself would already have been sufficient to establish the existence of a marriage between Tenebro and Villareyes.

All three of these documents fall in the category of public documents, and the Rules of Court provisions relevant to
public documents are applicable to all. Pertinent to the marriage contract, Section 7 of Rule 130 of the Rules of
Court reads as follows:

Sec. 7. Evidence admissible when original document is a public record. – When the original of a document is in the
custody of a public officer or is recorded in a public office, its contents may be proved by a certified copy issued by
the public officer in custody thereof (Emphasis ours).

This being the case, the certified copy of the marriage contract, issued by a public officer in custody thereof, was
admissible as the best evidence of its contents. The marriage contract plainly indicates that a marriage was
celebrated between petitioner and Villareyes on November 10, 1986, and it should be accorded the full faith and
credence given to public documents.

Moreover, an examination of the wordings of the certification issued by the National Statistics Office on October 7,
1995 and that issued by the City Civil Registry of Manila on February 3, 1997 would plainly show that neither
document attests as a positive fact that there was no marriage celebrated between Veronico B. Tenebro and Hilda
B. Villareyes on November 10, 1986. Rather, the documents merely attest that the respective issuing offices have
no record of such a marriage. Documentary evidence as to the absence of a record is quite different from
documentary evidence as to the absence of a marriage ceremony, or documentary evidence as to the invalidity of
the marriage between Tenebro and Villareyes.

The marriage contract presented by the prosecution serves as positive evidence as to the existence of the marriage
between Tenebro and Villareyes, which should be given greater credence than documents testifying merely as to
absence of any record of the marriage, especially considering that there is absolutely no requirement in the law that
a marriage contract needs to be submitted to the civil registrar as a condition precedent for the validity of a
marriage. The mere fact that no record of a marriage exists does not invalidate the marriage, provided all requisites
for its validity are present.19 There is no evidence presented by the defense that would indicate that the marriage
between Tenebro and Villareyes lacked any requisite for validity, apart from the self-serving testimony of the
accused himself. Balanced against this testimony are Villareyes’ letter, Ancajas’ testimony that petitioner informed
her of the existence of the valid first marriage, and petitioner’s own conduct, which would all tend to indicate that the
first marriage had all the requisites for validity.

Finally, although the accused claims that he took steps to verify the non-existence of the first marriage to Villareyes
by requesting his brother to validate such purported non-existence, it is significant to note that the certifications
issued by the National Statistics Office and the City Civil Registry of Manila are dated October 7, 1995 and February
3, 1997, respectively. Both documents, therefore, are dated after the accused’s marriage to his second wife, private
respondent in this case.

As such, this Court rules that there was sufficient evidence presented by the prosecution to prove the first and
second requisites for the crime of bigamy.

The second tier of petitioner’s defense hinges on the effects of the subsequent judicial declaration20 of the nullity of
the second marriage on the ground of psychological incapacity.
Petitioner argues that this subsequent judicial declaration retroacts to the date of the celebration of the marriage to
Ancajas. As such, he argues that, since his marriage to Ancajas was subsequently declared void ab initio, the crime
of bigamy was not committed.21

This argument is not impressed with merit.

Petitioner makes much of the judicial declaration of the nullity of the second marriage on the ground of psychological
incapacity, invoking Article 36 of the Family Code. What petitioner fails to realize is that a declaration of the nullity of
the second marriage on the ground of psychological incapacity is of absolutely no moment insofar as the State’s
penal laws are concerned.

As a second or subsequent marriage contracted during the subsistence of petitioner’s valid marriage to Villareyes,
petitioner’s marriage to Ancajas would be null and void ab initio completely regardless of petitioner’s psychological
capacity or incapacity.22 Since a marriage contracted during the subsistence of a valid marriage is automatically
void, the nullity of this second marriage is not per se an argument for the avoidance of criminal liability for bigamy.
Pertinently, Article 349 of the Revised Penal Code criminalizes "any person who shall contract a second or
subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment rendered in the proper proceedings". A plain reading of the
law, therefore, would indicate that the provision penalizes the mere act of contracting a second or a subsequent
marriage during the subsistence of a valid marriage.

Thus, as soon as the second marriage to Ancajas was celebrated on April 10, 1990, during the subsistence of the
valid first marriage, the crime of bigamy had already been consummated. To our mind, there is no cogent reason for
distinguishing between a subsequent marriage that is null and void purely because it is a second or subsequent
marriage, and a subsequent marriage that is null and void on the ground of psychological incapacity, at least insofar
as criminal liability for bigamy is concerned. The State’s penal laws protecting the institution of marriage are in
recognition of the sacrosanct character of this special contract between spouses, and punish an individual’s
deliberate disregard of the permanent character of the special bond between spouses, which petitioner has
undoubtedly done.

Moreover, the declaration of the nullity of the second marriage on the ground of psychological incapacity is not an
indicator that petitioner’s marriage to Ancajas lacks the essential requisites for validity. The requisites for the validity
of a marriage are classified by the Family Code into essential (legal capacity of the contracting parties and their
consent freely given in the presence of the solemnizing officer)23 and formal (authority of the solemnizing officer,
marriage license, and marriage ceremony wherein the parties personally declare their agreement to marry before
the solemnizing officer in the presence of at least two witnesses).24 Under Article 5 of the Family Code, any male or
female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 3725 and
3826 may contract marriage.27

In this case, all the essential and formal requisites for the validity of marriage were satisfied by petitioner and
Ancajas. Both were over eighteen years of age, and they voluntarily contracted the second marriage with the
required license before Judge Alfredo B. Perez, Jr. of the City Trial Court of Lapu-lapu City, in the presence of at
least two witnesses.

Although the judicial declaration of the nullity of a marriage on the ground of psychological incapacity retroacts to the
date of the celebration of the marriage insofar as the vinculum between the spouses is concerned, it is significant to
note that said marriage is not without legal effects. Among these effects is that children conceived or born before the
judgment of absolute nullity of the marriage shall be considered legitimate.28 There is therefore a recognition written
into the law itself that such a marriage, although void ab initio, may still produce legal consequences. Among these
legal consequences is incurring criminal liability for bigamy. To hold otherwise would render the State’s penal laws
on bigamy completely nugatory, and allow individuals to deliberately ensure that each marital contract be flawed in
some manner, and to thus escape the consequences of contracting multiple marriages, while beguiling throngs of
hapless women with the promise of futurity and commitment.

As such, we rule that the third and fourth requisites for the crime of bigamy are present in this case, and affirm the
judgment of the Court of Appeals.
As a final point, we note that based on the evidence on record, petitioner contracted marriage a third time, while his
marriages to Villareyes and Ancajas were both still subsisting. Although this is irrelevant in the determination of the
accused’s guilt for purposes of this particular case, the act of the accused displays a deliberate disregard for the
sanctity of marriage, and the State does not look kindly on such activities. Marriage is a special contract, the key
characteristic of which is its permanence. When an individual manifests a deliberate pattern of flouting the
foundation of the State’s basic social institution, the State’s criminal laws on bigamy step in.

Under Article 349 of the Revised Penal Code, as amended, the penalty for the crime of bigamy is prision mayor,
which has a duration of six (6) years and one (1) day to twelve (12) years. There being neither aggravating nor
mitigating circumstance, the same shall be imposed in its medium period. Applying the Indeterminate Sentence
Law, petitioner shall be entitled to a minimum term, to be taken from the penalty next lower in degree, i.e., prision
correccional which has a duration of six (6) months and one (1) day to six (6) years. Hence, the Court of Appeals
correctly affirmed the decision of the trial court which sentenced petitioner to suffer an indeterminate penalty of four
(4) years and two (2) months of prision correccional, as minimum, to eight (8) years and one (1) day of prision
mayor, as maximum.

WHEREFORE, in view of all the foregoing, the instant petition for review is DENIED. The assailed decision of the
Court of Appeals in CA-G.R. CR No. 21636, convicting petitioner Veronico Tenebro of the crime of Bigamy and
sentencing him to suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional, as
minimum, to eight (8) years and one (1) day of prision mayor, as maximum, is AFFIRMED in toto.

SO ORDERED.

Davide, Jr., C.J. (Chairman), Panganiban, Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur.
Puno, J., join the opinion of J. Vitug.
Vitug, J., see separate opinion.
Quisumbing, J., join the dissent in view of void nuptia.
Carpio, J., see dissenting opinion.
Austria-Martinez, J., join the dissent of J. Carpio.
Carpio-Morales, J., join the dissent of J. Carpio.
Tinga, J., join the dissent of J. Carpio.
Callejo, Sr., J., see separate dissent.

SEPARATE OPINION>

VITUG, J.:

Veronico Tenebro has been charged with bigamy for contracting, while still being married to Hilda Villareyes, a
second marriage with private complainant Leticia Ancajas. Tenebro argues that since his second marriage with
Ancajas has ultimately been declared void ab initio on the ground of the latter’s psychological incapacity, he should
be acquitted for the crime of bigamy.

The offense of bigamy is committed when one contracts "a second or subsequent marriage before the former
marriage has been legally dissolved, or before the absent spouse has been declared presumptively dead by means
of a judgment rendered in the proper proceedings".1 Bigamy presupposes a valid prior marriage and a subsequent
marriage, contracted during the subsistence of the prior union, which would have been binding were it not for its
being bigamous.

Would the absolute nullity of either the first or the second marriage, prior to its judicial declaration as being void,
constitute a valid defense in a criminal action for bigamy?

I believe that, except for a void marriage on account of the psychological incapacity of a party or both parties to the
marriage under Article 36 of the Family Code (as so hereinafter explained), the answer must be in the affirmative.
Void marriages are inexistent from the very beginning, and no judicial decree is required to establish their nullity.2 As
early as the case of People vs. Aragon3 this Court has underscored the fact that the Revised Penal Code itself does
not, unlike the rule then prevailing in Spain, require the judicial declaration of nullity of a prior void marriage before it
can be raised by way of a defense in a criminal case for bigamy. Had the law contemplated otherwise, said the
Court, " an express provision to that effect would or should have been inserted in the law, (but that in) its absence,
(the courts) are bound by (the) rule of strict interpretation" of penal statutes. In contrast to a voidable marriage which
legally exists until judicially annulled (and, therefore, not a defense in a bigamy charge if the second marriage were
contracted prior to the decree of annulment)4 the complete nullity, however, of a previously contracted marriage,
being void ab initio and legally inexistent, can outrightly be defense in an indictment of bigamy.

It has been held that, by virtue of Article 40 of the Family Code, a person may be convicted of bigamy although the
first marriage is ultimately adjudged void ab initio if, at the time the second marriage is contracted, there has as yet
no judicial declaration of nullity of the prior marriage.5 I maintain strong reservations to this ruling. Article 40 of the
Family Code reads:

"Article 40. The absolute nullity of the previous marriage may be invoked for purposes of remarriage on the basis
solely of the final judgment declaring such previous marriage void."

It is only "for purpose of remarriage" that the law has expressed that the absolute nullity of the previous marriage
may be invoked "on the basis solely of the final judgment declaring such previous marriage void." It may not be
amiss to state that under the regime of the Civil Code of 1950, the Supreme Court, in Wiegel vs. Judge Sempio-
Diy,6 has held that a subsequent marriage of one of the spouses of a prior void marriage is itself (the subsequent
marriage) void if it were contracted before a judicial declaration of nullity of the previous marriage. Although this
pronouncement has been abandoned in a later decision of the court in Yap vs. Court of Appeals,7 the Family Code,
however has seen it fit to adopt the Wiegel rule but only for purpose of remarriage which is just to say that the
subsequent marriage shall itself be considered void. There is no clear indication to conclude that the Family Code
has amended or intended to amend the Revised penal Code or to abandon the settled and prevailing jurisprudence
on the matter.8

A void marriage under Article 36 of the Family Code is a class by itself. The provision has been from Canon law
primarily to reconcile the grounds for nullity of marriage under civil law with those of church laws.9 The
"psychological incapacity to comply" with the essential marital obligations of the spouses is completely distinct from
other grounds for nullity which are confined to the essential or formal requisites of a marriage, such as lack of legal
capacity or disqualification of the contracting parties, want of consent, absence of a marriage license, or the like.

The effects of a marriage attended by psychological incapacity of a party or the parties thereto may be said to have
the earmarks of a voidable, more than a void, marriage, remaining to be valid until it is judicially decreed to be a
nullity. Thus, Article 54 of the Family Code considers children conceived or born of such a void marriage before its
judicial declaration of nullity to be legitimate similar to the rule on a voidable marriage. It is expected, even as I
believe it safe to assume, that the spouses’ rights and obligations, property regime and successional rights would
continue unaffected, as if it were a voidable marriage, unless and until the marriage is judicially declared void for
basically two reasons: First, psychological incapacity, a newly-added ground for the nullity of a marriage under the
Family Code, breaches neither the essential nor the formal requisites of a valid marriages;10 and second, unlike the
other grounds for nullity of marriage (i.e., relationship, minority of the parties, lack of license, mistake in the identity
of the parties) which are capable of relatively easy demonstration, psychological incapacity, however, being a
mental state, may not so readily be as evident.11 It would have been logical for the Family Code to consider such a
marriage explicitly voidable rather than void if it were not for apparent attempt to make it closely coincide with the
Canon Law rules and nomenclature.

Indeed, a void marriage due to psychological incapacity appears to merely differ from a voidable marriage in that,
unlike the latter, it is not convalidated by either cohabitation or prescription. It might be recalled that prior to republic
Act No. 8533, further amending the Family Code, an action or defense of absolute nullity of marriage falling under
Article 36, celebrated before the effectivity of the Code, could prescribe in ten years following the effectivity of the
Family Code. The initial provision of the ten-year period of prescription seems to betray a real consciousness by the
framers that marriages falling under Article 36 are truly meant to be inexistent.

Considerations, both logical and practical, would point to the fact that a "void" marriage due to psychological
incapacity remains, for all intents and purposes, to be binding and efficacious until judicially declared otherwise.
Without such marriage having first been declared a nullity (or otherwise dissolved), a subsequent marriage could
constitute bigamy. Thus, a civil case questioning the validity of the first marriage would not be a prejudicial issue
much in the same way that a civil case assailing a prior "voidable" marriage (being valid until annulled) would not be
a prejudicial question to the prosecution of a criminal offense for bigamy.

In cases where the second marriage is void on grounds other than the existence of the first marriage, this Court has
declared in a line of cases that no crime of bigamy is committed.12 The Court has explained that for a person to be
held guilty of bigamy, it must, even as it needs only, be shown that the subsequent marriage has all the essential
elements of a valid marriage, were it not for the subsisting first union. Hence, where it is established that the second
marriage has been contracted without the necessary license and thus void,13 or that the accused is merely forced to
enter into the second (voidable) marriage,14 no criminal liability for the crime of bigamy can attach. In both and like
instances, however, the lapses refers to the elements required for contracting a valid marriage. If, then, all the
requisites for the perfection of the contract marriage, freely and voluntarily entered into, are shown to be extant, the
criminal liability for bigamy can unassailably arise.

Since psychological incapacity, upon the other hand, does not relate to an infirmity in the elements, either
essential or formal, in contacting a valid marriage, the declaration of nullity subsequent to the bigamous
marriage due to that ground, without more, would be inconsequential in a criminal charge for bigamy. The
judicial declaration of nullity of a bigamous marriage on the ground of psychological incapacity merely nullifies
the effects of the marriage but it does not negate the fact of perfection of the bigamous marriage. Its subsequent
declaration of nullity dissolves the relationship of the spouses but, being alien to the requisite conditions for the
perfection of the marriage, the judgment of the court is no defense on the part of the offender who had entered into
it.

Accordingly, I vote to dismiss the petition.

Footnotes

TAX STATUTES

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

[G.R. No. L-12436. May 31, 1961.]

LA CARLOTA SUGAR CENTRAL and ELIZALDE & CO., INC., Petitioners-Appellants, v. PEDRO JIMENEZ, AUDITOR
GENERAL OF THE PHILIPPINES, Respondent-Appellee.

Pacifico de Ocampo for Petitioners-Appellants.

Solicitor General for Respondent-Appellee.

SYLLABUS

1. TAXATION; EXCISE TAX; TAX EXEMPTION; FERTILIZERS IMPORTED BY FARMER THROUGH AGENT NOT EXEMPTED. —
An importation of fertilizers made by a farmer or planter through an agent, other than his cooperative, is not imported
directly as required by the exemption; hence, the same is taxable.

2. STATUTORY CONSTRUCTION; TAX EXEMPTION; EXEMPTING PROVISION CONSTRUED STRICTLY AGAINST TAXPAYER. —
Exempting provisions are to be construed liberally in favor of the taxing authority and strictly against exemption from
tax liability. As a result, statutory provisions governing the refund of taxes are strictly construed in favor of the State and
against the taxpayer (82 C.J.S. pp. 957-958; Helvering v. Northwest Steel Rolling Mills, 311 US 46, 85 L. ed. 29 S. Ct., 51
Am. Jur. p. 526).

DECISION

DIZON, J.:

Sometime in September, 1955 La Carlota Sugar Central — a domestic corporation hereinafter referred to as the Central,
managed, controlled and operated by Elizalde & Co., Inc., referred to hereinafter as Elizalde, imported 500 short tons of
ammonium sulphate and 350 short tons of ammonium phosphate. The corresponding letter of credit in the sum of
$60,930.00, U.S. currency, was opened through the Hongkong & Shanghai Banking Corporation in the name of the
Central and in favor of the Overseas Central Enterprises, Inc., 141 Battery St., San Francisco 11, California, U.S.A. The
invoices, bill of lading, and all other papers incident to said importation were also in the name of the Central.

When the fertilizers arrived in the Philippines, the Central Bank imposed on, and demanded from the Central 17%
exchange tax in accordance with the provisions of Republic Act No. 601, as amended, and the Central paid in that
connection the total sum of P20,872.09 (Annexes B and C attached to the Petition for Review).

On November 18, 1955 the Central filed, through the Hongkong & Shanghai Banking Corporation, a petition for the
refund of the P20,872.09 paid as above stated, claiming that it had imported the fertilizers mentioned heretofore upon
request and for the exclusive use of five haciendas known as "Esperanza", "Nahalin", "Valencia" — owned by Elizalde —
"Consuelo" and Maayon", these last two managed by the same company, and therefore the importation was exempt
from the 17% exchange tax in accordance with Sec. 2, Rep. Act 601, as amended by Act 1375. The Auditor of the Central
Bank, however, denied the petition on July 2, 1956. The Central requested the Auditor to reconsider his ruling, but after
a re-examination of all pertinent papers the reconsideration was denied. The Central then appealed to the Auditor
General of the Philippines, who on January 18, 1957, affirmed the ruling of the Auditor of the Central Bank upon the
ground that "the importation of the fertilizers here in question does not fall within the scope of the exempting
provisions of Section 2 of Republic Act No. 601, as amended by Republic Act No. 1375. Accordingly, the decision of the
Auditor, Central Bank of the Philippines, denying the aforementioned request for refund of 17% exchange tax, is hereby
affirmed." In view of this result, the Central and Elizalde filed the present petition for review.

The only question to be resolved is whether upon the undisputed facts of the case the importation of the fertilizers
mentioned heretofore is covered by the exemption provided by Sections 1 and 2 of Republic Act No. 601, as amended
by Republic Acts Nos. 1175, 1197 and 1375, which read as follows:jgc:chanrobles.com.ph

"SECTION 1. Except as herein otherwise provided, there shall be assessed, collected and paid a special excise tax of
seventeen per centum on the value in Philippine peso of foreign exchange sold by the Central Bank of the Philippines, or
any of its agents until June thirtieth, nineteen hundred and fifty-six.

"SEC. 2. The tax provided for in section one of this Act shall not be collected on foreign exchange used for the payment
of the cost, transportation and/or other charges of canned milk, canned beef, cattle, canned fish, cocoa beans, malt,
stabilizer and flavors, vitamin concentrate; supplies and equipment purchased directly by the Government or any of its
instrumentalities for its own exclusive use; machinery, equipment, accessories, and spare parts, for the use of industries,
miners, mining enterprises, planters and farmers; and fertilizers when imported by planters or farmers directly or
through their cooperatives; . . ."cralaw virtua1aw library

The law is, therefore, clear that imported fertilizers are exempt from the payment of the 17% tax only if the same were
imported by planters or farmers directly or through their cooperatives. In the present case, as appellants admit that the
Central "is not the planter ultimately benefited by the fertilizers, much less a cooperative within the purview of Rep. Act
No. 601, as amended", the only possible conclusion is that the imported fertilizers in question are not entitled to the
exemption provided by law.

It is, however, argued that the Central imported the fertilizers for the exclusive purpose of accommodating the
haciendas mentioned heretofore, who were to use the fertilizers; that the Central acted merely as an agent of the
aforesaid haciendas; that considering the relationship and corporate tie-up between the Central, on the one hand, and
Elizalde, on the other, the act of the Central in importing the fertilizers should be considered as an act of Elizalde and,
therefore, the act of the haciendas themselves, three of which were owned and two managed by Elizalde. We find these
contentions to be without merit.

As already stated, the exemption covers exclusively fertilizers imported by planters or farmers directly or through their
cooperatives. The word "directly" has been interpreted to mean "without anything intervening" (Words and Phrases,
Vol. 12A, p. 140 — citing Gulf Atlantic Warehouse, etc. v. Bennet, 51 So 2nd 544, 546, 36 Ala. App. 33); "proximately or
without intervening agency or person" (Idem, p. 142 — citing Employers’ Casualty Co v. Underwood, 286 p. 7, 10; 142
Okl. 208). Consequently, an importation of fertilizers made by a farmer or planter through an agent, other than his
cooperative, is not imported directly as required by the exemption. This conclusion acquires added force upon
consideration of the fact that the legal provision in question has already established an exception from the meaning or
scope of the term "directly" by providing coverage for fertilizers imported by planters or farmers through their
cooperatives. The latter, therefore, is the only agent of planters or farmers recognized by the exception, and we can not
recognize any other.

On the other hand, that the agent acted simply to accommodate the planter or farmer and without any idea of making
any profit from the transaction would seem to be immaterial considering the language employed in the statute under
consideration.

In connection with what has been stated heretofore, we have to bear in mind likewise that when the issue is whether or
not the exemption from a tax imposed by law is applicable, the rule is that the exempting provision is to be construed
liberally in favor of the taxing authority and strictly against exemption from tax liability, the result being that statutory
provisions for the refund of taxes are strictly construed in favor of the State and against the taxpayer (82 C.J.S. pp. 957-
958; Helvering v. Northwest Steel Rolling Mills, 311 US 46, 85 L. ed. 29 S. Ct., 51 Am. Jur. p. 526). Indeed, were we to
adopt appellants’ construction of the law by exempting from the 17% tax all fertilizers imported by planters or farmers
through any agent other than their cooperatives, we would be rendering useless the only exception expressly
established in the case of fertilizers imported by planters or farmers through their cooperatives.

IN VIEW OF THE FOREGOING, the ruling appealed from is hereby affirmed, with costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, De Leon and Natividad, JJ., concur.

Barrera, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 124043 October 14, 1998

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
COURT OF APPEALS, COURT OF TAX APPEALS and YOUNG MEN'S CHRISTIAN ASSOCIATION OF THE
PHILIPPINES, INC., respondents.

PANGANIBAN, J.:
Is the income derived from rentals of real property owned by the Young Men's Christian Association of the
Philippines, Inc. (YMCA) — established as "a welfare, educational and charitable non-profit corporation" — subject
to income tax under the National Internal Revenue Code (NIRC) and the Constitution?

The Case

This is the main question raised before us in this petition for review on certiorari challenging two Resolutions issued
by the Court of Appeals1 on September 28, 19952 and February 29, 19963 in CA-GR SP No. 32007. Both
Resolutions affirmed the Decision of the Court of Tax Appeals (CTA) allowing the YMCA to claim tax
exemption on the latter's income from the lease of its real property.

The Facts

The facts are undisputed.4 Private Respondent YMCA is a non-stock, non-profit institution, which conducts various
programs and activities that are beneficial to the public, especially the young people, pursuant to its religious,
educational and charitable objectives.

In 1980, private respondent earned, among others, an income of P676,829.80 from leasing out a portion of its
premises to small shop owners, like restaurants and canteen operators, and P44,259.00 from parking fees collected
from non-members. On July 2, 1984, the commissioner of internal revenue (CIR) issued an assessment to private
respondent, in the total amount of P415,615.01 including surcharge and interest, for deficiency income tax,
deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages.
Private respondent formally protested the assessment and, as a supplement to its basic protest, filed a letter dated
October 8, 1985. In reply, the CIR denied the claims of YMCA.

Contesting the denial of its protest, the YMCA filed a petition for review at the Court of Tax Appeals (CTA) on March
14, 1989. In due course, the CTA issued this ruling in favor of the YMCA:

. . . [T]he leasing of [private respondent's] facilities to small shop owners, to restaurant and canteen
operators and the operation of the parking lot are reasonably incidental to and reasonably necessary
for the accomplishment of the objectives of the [private respondents]. It appears from the testimonies
of the witnesses for the [private respondent] particularly Mr. James C. Delote, former accountant of
YMCA, that these facilities were leased to members and that they have to service the needs of its
members and their guests. The rentals were minimal as for example, the barbershop was only
charged P300 per month. He also testified that there was actually no lot devoted for parking space
but the parking was done at the sides of the building. The parking was primarily for members with
stickers on the windshields of their cars and they charged P.50 for non-members. The rentals and
parking fees were just enough to cover the costs of operation and maintenance only. The earning[s]
from these rentals and parking charges including those from lodging and other charges for the use of
the recreational facilities constitute [the] bulk of its income which [is] channeled to support its many
activities and attainment of its objectives. As pointed out earlier, the membership dues are very
insufficient to support its program. We find it reasonably necessary therefore for [private respondent]
to make [the] most out [of] its existing facilities to earn some income. It would have been different if
under the circumstances, [private respondent] will purchase a lot and convert it to a parking lot to
cater to the needs of the general public for a fee, or construct a building and lease it out to the
highest bidder or at the market rate for commercial purposes, or should it invest its funds in the buy
and sell of properties, real or personal. Under these circumstances, we could conclude that the
activities are already profit oriented, not incidental and reasonably necessary to the pursuit of the
objectives of the association and therefore, will fall under the last paragraph of Section 27 of the Tax
Code and any income derived therefrom shall be taxable.

Considering our findings that [private respondent] was not engaged in the business of operating or
contracting [a] parking lot, we find no legal basis also for the imposition of [a] deficiency fixed tax and
[a] contractor's tax in the amount[s] of P353.15 and P3,129.73, respectively.

xxx xxx xxx

 WHEREFORE, in view of all the foregoing, the following assessments are hereby dismissed for lack
of merit:

1980 Deficiency Fixed Tax — P353,15;

1980 Deficiency Contractor's Tax — P3,129.23;

1980 Deficiency Income Tax — P372,578.20.

While the following assessments are hereby sustained:

1980 Deficiency Expanded Withholding Tax — P1,798.93;

1980 Deficiency Withholding Tax on Wages — P33,058.82

plus 10% surcharge and 20% interest per annum from July 2, 1984 until fully paid but not to exceed
three (3) years pursuant to Section 51(e)(2) & (3) of the National Internal Revenue Code effective as
of 1984. 5

Dissatisfied with the CTA ruling, the CIR elevated the case to the Court of Appeals (CA). In its Decision of February
16, 1994, the CA6 initially decided in favor of the CIR and disposed of the appeal in the following manner:

Following the ruling in the afore-cited cases of Province of Abra vs. Hernando and Abra Valley
College Inc. vs. Aquino, the ruling of the respondent Court of Tax Appeals that "the leasing of
petitioner's (herein respondent's) facilities to small shop owners, to restaurant and canteen operators
and the operation of the parking lot are reasonably incidental to and reasonably necessary for the
accomplishment of the objectives of the petitioners, and the income derived therefrom are tax
exempt, must be reversed.

WHEREFORE, the appealed decision is hereby REVERSED in so far as it dismissed the

assessment for:

1980 Deficiency Income Tax P 353.15

1980 Deficiency Contractor's Tax P 3,129.23, &

1980 Deficiency Income Tax P 372,578.20

but the same is AFFIRMED in all other respect. 7

Aggrieved, the YMCA asked for reconsideration based on the following grounds:

The findings of facts of the Public Respondent Court of Tax Appeals being supported by substantial
evidence [are] final and conclusive.

II

The conclusions of law of [p]ublic [r]espondent exempting [p]rivate [r]espondent from the income on
rentals of small shops and parking fees [are] in accord with the applicable law and jurisprudence. 8

Finding merit in the Motion for Reconsideration filed by the YMCA, the CA reversed itself and promulgated on
September 28, 1995 its first assailed Resolution which, in part, reads:
 The Court cannot depart from the CTA's findings of fact, as they are supported by evidence beyond
what is considered as substantial.

xxx xxx xxx

The second ground raised is that the respondent CTA did not err in saying that the rental from small
shops and parking fees do not result in the loss of the exemption. Not even the petitioner would
hazard the suggestion that YMCA is designed for profit. Consequently, the little income from small
shops and parking fees help[s] to keep its head above the water, so to speak, and allow it to
continue with its laudable work.

The Court, therefore, finds the second ground of the motion to be meritorious and in accord with law
and jurisprudence.

WHEREFORE, the motion for reconsideration is GRANTED; the respondent CTA's decision is
AFFIRMED in toto.9

The internal revenue commissioner's own Motion for Reconsideration was denied by Respondent Court in its
second assailed Resolution of February 29, 1996. Hence, this petition for review under Rule 45 of the Rules of
Court. 10

The Issues

Before us, petitioner imputes to the Court of Appeals the following errors:

In holding that it had departed from the findings of fact of Respondent Court of Tax Appeals when it
rendered its Decision dated February 16, 1994; and

II

In affirming the conclusion of Respondent Court of Tax Appeals that the income of private
respondent from rentals of small shops and parking fees [is] exempt from taxation. 11

This Court's Ruling

The petition is meritorious.

First Issue:
Factual Findings of the CTA

Private respondent contends that the February 16, 1994 CA Decision reversed the factual findings of the CTA. On
the other hand, petitioner argues that the CA merely reversed the "ruling of the CTA that the leasing of private
respondent's facilities to small shop owners, to restaurant and canteen operators and the operation of parking lots
are reasonably incidental to and reasonably necessary for the accomplishment of the objectives of the private
respondent and that the income derived therefrom are tax exempt." 12 Petitioner insists that what the appellate court
reversed was the legal conclusion, not the factual finding, of the CTA. 13The commissioner has a point.

Indeed, it is a basic rule in taxation that the factual findings of the CTA, when supported by substantial evidence, will
be disturbed on appeal unless it is shown that the said court committed gross error in the appreciation of facts. 14 In
the present case, this Court finds that the February 16, 1994 Decision of the CA did not deviate from this rule. The
latter merely applied the law to the facts as found by the CTA and ruled on the issue raised by the CIR: "Whether or
not the collection or earnings of rental income from the lease of certain premises and income earned from parking
fees shall fall under the last paragraph of Section 27 of the National Internal Revenue Code of 1977, as amended." 15
Clearly, the CA did not alter any fact or evidence. It merely resolved the aforementioned issue, as indeed it was
expected to. That it did so in a manner different from that of the CTA did not necessarily imply a reversal of factual
findings.

The distinction between a question of law and a question of fact is clear-cut. It has been held that "[t]here is a
question of law in a given case when the doubt or difference arises as to what the law is on a certain state of facts;
there is a question of fact when the doubt or difference arises as to the truth or falsehood of alleged facts." 16 In the
present case, the CA did not doubt, much less change, the facts narrated by the CTA. It merely applied the law to
the facts. That its interpretation or conclusion is different from that of the CTA is not irregular or abnormal.

Second Issue:
Is the Rental Income of the YMCA Taxable?

We now come to the crucial issue: Is the rental income of the YMCA from its real estate subject to tax? At the
outset, we set forth the relevant provision of the NIRC:

Sec. 27. Exemptions from tax on corporations. — The following organizations shall not be taxed
under this Title in respect to income received by them as such —

xxx xxx xxx

(g) Civic league or organization not organized for profit but operated exclusively for the promotion of
social welfare;

(h) Club organized and operated exclusively for pleasure, recreation, and other non-profitable
purposes, no part of the net income of which inures to the benefit of any private stockholder or
member;

xxx xxx xxx

Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and
character of the foregoing organizations from any of their properties, real or personal, or from any of
their activities conducted for profit, regardless of the disposition made of such income, shall be
subject to the tax imposed under this Code. (as amended by Pres. Decree No. 1457)

Petitioner argues that while the income received by the organizations enumerated in Section 27 (now Section 26) of
the NIRC is, as a rule, exempted from the payment of tax "in respect to income received by them as such," the
exemption does not apply to income derived ". . . from any of their properties, real or personal, or from any of their
activities conducted for profit, regardless of the disposition made of such income . . . ."

Petitioner adds that "rental income derived by a tax-exempt organization from the lease of its properties, real or
personal, [is] not, therefore, exempt from income taxation, even if such income [is] exclusively used for the
accomplishment of its objectives." 17 We agree with the commissioner.

Because taxes are the lifeblood of the nation, the Court has always applied the doctrine of strict in interpretation in
construing tax exemptions. 18 Furthermore, a claim of statutory exemption from taxation should be manifest. and
unmistakable from the language of the law on which it is based. Thus, the claimed exemption "must expressly be
granted in a statute stated in a language too clear to be mistaken." 19

In the instant case, the exemption claimed by the YMCA is expressly disallowed by the very wording of the last
paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the
YMCA) from any of their properties, real or personal, be subject to the tax imposed by the same Code. Because the
last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property, 20 the
Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at
construction.
It is axiomatic that where the language of the law is clear and unambiguous, its express terms must be
applied. 21 Parenthetically, a consideration of the question of construction must not even begin, particularly when
such question is on whether to apply a strict construction or a liberal one on statutes that grant tax exemptions to
"religious, charitable and educational propert[ies] or institutions." 22

The last paragraph of Section 27, the YMCA argues, should be "subject to the qualification that the income from the
properties must arise from activities 'conducted for profit' before it may be considered taxable." 23This argument is
erroneous. As previously stated, a reading of said paragraph ineludibly shows that the income from any property of
exempt organizations, as well as that arising from any activity it conducts for profit, is taxable. The phrase "any of
their activities conducted for profit" does not qualify the word "properties." This makes from the property of the
organization taxable, regardless of how that income is used — whether for profit or for lofty non-profit purposes.

Verba legis non est recedendum. Hence, Respondent Court of Appeals committed reversible error when it allowed,
on reconsideration, the tax exemption claimed by YMCA on income it derived from renting out its real property, on
the solitary but unconvincing ground that the said income is not collected for profit but is merely incidental to its
operation. The law does not make a distinction. The rental income is taxable regardless of whence such income is
derived and how it is used or disposed of. Where the law does not distinguish, neither should we.

Constitutional Provisions

On Taxation

Invoking not only the NIRC but also the fundamental law, private respondent submits that Article VI, Section 28 of
par. 3 of the 1987 Constitution, 24 exempts "charitable institutions" from the payment not only of property taxes but
also of income tax from any source. 25 In support of its novel theory, it compares the use of the words "charitable
institutions," "actually" and "directly" in the 1973 and the 1987 Constitutions, on the one hand; and in Article VI,
Section 22, par. 3 of the 1935 Constitution, on the other hand. 26

Private respondent enunciates three points. First, the present provision is divisible into two categories: (1)
"[c]haritable institutions, churches and parsonages or convents appurtenant thereto, mosques and non-profit
cemeteries," the incomes of which are, from whatever source, all tax-exempt; 27 and (2) "[a]ll lands, buildings and
improvements actually and directly used for religious, charitable or educational purposes," which are exempt only
from property taxes. 28 Second, Lladoc v. Commissioner of Internal Revenue, 29which limited the exemption only to
the payment of property taxes, referred to the provision of the 1935 Constitution and not to its counterparts in the
1973 and the 1987 Constitutions. 30 Third, the phrase "actually, directly and exclusively used for religious, charitable
or educational purposes" refers not only to "all lands, buildings and improvements," but also to the above-quoted
first category which includes charitable institutions like the private respondent. 31

The Court is not persuaded. The debates, interpellations and expressions of opinion of the framers of the
Constitution reveal their intent which, in turn, may have guided the people in ratifying the Charter. 32 Such intent must
be effectuated.

Accordingly, Justice Hilario G. Davide, Jr., a former constitutional commissioner, who is now a member of this Court,
stressed during the Concom debates that ". . . what is exempted is not the institution itself . . .; those exempted from
real estate taxes are lands, buildings and improvements actually, directly and exclusively used for religious,
charitable or educational
purposes." 33 Father Joaquin G. Bernas, an eminent authority on the Constitution and also a member of the Concom,
adhered to the same view that the exemption created by said provision pertained only to property taxes. 34

In his treatise on taxation, Mr. Justice Jose C. Vitug concurs, stating that "[t]he tax exemption coversproperty taxes
only." 35 Indeed, the income tax exemption claimed by private respondent finds no basis in Article VI, Section 26, par.
3 of the Constitution.

Private respondent also invokes Article XIV, Section 4, par. 3 of the Character, 36 claiming that the YMCA "is a non-
stock, non-profit educational institution whose revenues and assets are used actually, directly and exclusively for
educational purposes so it is exempt from taxes on its properties and income." 37 We reiterate that private
respondent is exempt from the payment of property tax, but not income tax on the rentals from its property. The bare
allegation alone that it is a non-stock, non-profit educational institution is insufficient to justify its exemption from the
payment of income tax.

As previously discussed, laws allowing tax exemption are construed strictissimi juris. Hence, for the YMCA to be
granted the exemption it claims under the aforecited provision, it must prove with substantial evidence that (1) it falls
under the classification non-stock, non-profit educational institution; and (2) the income it seeks to be exempted
from taxation is used actually, directly, and exclusively for educational purposes. However, the Court notes that not
a scintilla of evidence was submitted by private respondent to prove that it met the said requisites.

Is the YMCA an educational institution within the purview of Article XIV, Section 4, par. 3 of the Constitution? We
rule that it is not. The term "educational institution" or "institution of learning" has acquired a well-known technical
meaning, of which the members of the Constitutional Commission are deemed cognizant. 38 Under the Education Act
of 1982, such term refers to schools. 39 The school system is synonymous with formal education, 40 which "refers to
the hierarchically structured and chronologically graded learnings organized and provided by the formal school
system and for which certification is required in order for the learner to progress through the grades or move to the
higher levels." 41 The Court has examined the "Amended Articles of Incorporation" and "By-Laws"43 of the YMCA, but
found nothing in them that even hints that it is a school or an educational institution. 44

Furthermore, under the Education Act of 1982, even non-formal education is understood to be school-based and
"private auspices such as foundations and civic-spirited organizations" are ruled out. 45 It is settled that the term
"educational institution," when used in laws granting tax exemptions, refers to a ". . . school seminary, college or
educational establishment . . . ." 46 Therefore, the private respondent cannot be deemed one of the educational
institutions covered by the constitutional provision under consideration.

. . . Words used in the Constitution are to be taken in their ordinary acceptation. While in its broadest
and best sense education embraces all forms and phases of instruction, improvement and
development of mind and body, and as well of religious and moral sentiments, yet in the common
understanding and application it means a place where systematic instruction in any or all of the
useful branches of learning is given by methods common to schools and institutions of learning. That
we conceive to be the true intent and scope of the term [educational institutions,] as used in the
Constitution. 47

Moreover, without conceding that Private Respondent YMCA is an educational institution, the Court also notes that
the former did not submit proof of the proportionate amount of the subject income that was actually, directly and
exclusively used for educational purposes. Article XIII, Section 5 of the YMCA by-laws, which formed part of the
evidence submitted, is patently insufficient, since the same merely signified that "[t]he net income derived from the
rentals of the commercial buildings shall be apportioned to the Federation and Member Associations as the National
Board may decide." 48 In sum, we find no basis for granting the YMCA exemption from income tax under the
constitutional provision invoked.

Cases Cited by Private

Respondent Inapplicable

The cases 49 relied on by private respondent do not support its cause. YMCA of Manila v. Collector of Internal
Revenue 50 and Abra Valley College, Inc. v. Aquino 51 are not applicable, because the controversy in both cases
involved exemption from the payment of property tax, not income tax. Hospital de San Juan de Dios, Inc. v. Pasay
City 52 is not in point either, because it involves a claim for exemption from the payment of regulatory fees,
specifically electrical inspection fees, imposed by an ordinance of Pasay City — an issue not at all related to that
involved in a claimed exemption from the payment of income taxes imposed on property leases. In Jesus Sacred
Heart College v. Com. of Internal Revenue, 53 the party therein, which claimed an exemption from the payment of
income tax, was an educational institution which submitted substantial evidence that the income subject of the
controversy had been devoted or used solely for educational purposes. On the other hand, the private respondent in
the present case has not given any proof that it is an educational institution, or that part of its rent income is actually,
directly and exclusively used for educational purposes.

Epilogue
In deliberating on this petition, the Court expresses its sympathy with private respondent. It appreciates the nobility
of its cause. However, the Court's power and function are limited merely to applying the law fairly and objectively. It
cannot change the law or bend it to suit its sympathies and appreciations. Otherwise, it would be overspilling its role
and invading the realm of legislation.

We concede that private respondent deserves the help and the encouragement of the government. It needs laws
that can facilitate, and not frustrate, its humanitarian tasks. But the Court regrets that, given its limited constitutional
authority, it cannot rule on the wisdom or propriety of legislation. That prerogative belongs to the political
departments of government. Indeed, some of the members of the Court may even believe in the wisdom and
prudence of granting more tax exemptions to private respondent. But such belief, however well-meaning and
sincere, cannot bestow upon the Court the power to change or amend the law.

WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals dated September 28, 1995 and
February 29, 1996 are hereby REVERSED and SET ASIDE. The Decision of the Court of Appeals dated February
16, 1995 is REINSTATED, insofar as it ruled that the income derived by petitioner from rentals of its real property is
subject to income tax. No pronouncement as to costs.

SO ORDERED.

Davide, Jr., Vitug and Quisumbing, JJ., concur.

Bellosillo, J., Please see Dissenting Opinion.

Separate Opinions

BELLOSILLO, J., dissenting;

I vote to deny the petition. The basic rule is that the factual findings of the Court of Tax Appeals when supported by
substantial evidence will not be disturbed on appeal unless it is shown that the court committed grave error in the
appreciation of facts.1 In the instant case, there is no dispute as to the validity of the findings of the Court of Tax
Appeals that private respondent Young Men's Christian Association (YMCA) is an association organized and
operated exclusively for the promotion of social welfare and other non-profitable purposes, particularly the physical
and character development of the youth.2 The enduring objectives of respondent YMCA as reflected in its
Constitution and By-laws are:

(a) To develop well-balanced Christian personality, mission in life, usefulness of individuals, and the
promotion of unity among Christians and understanding among peoples of all faiths, to the end that
the Brotherhood of Man under the Fatherhood of God may be fostered in an atmosphere of mutual
respect and understanding;

(b) To promote on equal basis the physical, mental, and spiritual welfare of the youth, with emphasis
on reverence for God, social discipline, responsibility for the common good, respect for human
dignity, and the observance of the Golden Rule;

(c) To encourage members of the Young Men's Christian Associations in the Philippines to
participate loyally in the life of their respective churches; to bring these churches closer together; and
to participate in the effort to realize the church Universal;

(d) To strengthen and coordinate the work of the Young Men's Christian Associations in the
Philippines and to foster the extension of the Youth Men's Christian Associations to new areas;
 (e) To help its Member Associations develop and adopt their programs to the needs of the youth;

(f) To assist the Member Associations in developing and maintaining a high standard of
management, operation and practice; and

(g) To undertake and sponsor national and international programs and activities in pursuance of its
purposes and objectives. 3

Pursuant to these objectives, YMCA has continuously organized and undertaken throughout the country various
programs for the youth through actual workshops, seminars, training, sports and summer camps, conferences on
the cultivation of Christian moral values, drug addiction, out-of-school youth, those with handicap and physical
defects and youth alcoholism. To fulfill these multifarious projects and attain the laudable objectives of YMCA, fund
raising has become an indispensable and integral part of the activities of the Association. YMCA derives its funds
from various sources such as membership dues, charges on the use of facilities like bowling and billiards, lodging,
interest income, parking fees, restaurant and canteen. Since the membership dues are very minimal, the
Association derives funds from rentals of small shops, restaurant, canteen and parking fees. For the taxable year
ending December 1980, YMCA earned gross rental income of P676,829.00 and P44,259.00 from parking fees
which became the subject of the questioned assessment by petitioner.

The majority of this Court upheld the findings of the Court of Tax Appeals that the leasing of petitioner's facilities to
small shop owners and to restaurant and canteen operators in addition to the operation of a parking lot are
reasonably necessary for and incidental to the accomplishment of the objectives of YMCA. 4In fact, these facilities
are leased to members in order to service their needs and those of their guests. The rentals are minimal, such as,
the rent of P300.00 for the barbershop. With regard to parking space, there is no lot actually devoted therefor and
the parking is done only along the sides of the building. The parking is primarily for members with car stickers but to
non-members, parking fee is P0.50 only. The rentals and parking fees are just enough to cover the operation and
maintenance costs of these facilities. The earnings which YMCA derives from these rentals and parking fees,
together with the charges for lodging and use of recreational facilities, constitute the bulk or majority of its income
used to support its programs and activities.

In its decision of 16 February 1994, the Court of Appeals thus committed grave error in departing from the findings
of the Court of Tax Appeals by declaring that the leasing of YMCA's facilities to shop owners and restaurant
operators and the operation of a parking lot are used for commercial purposes or for profit, which fact takes YMCA
outside the coverage of tax exemption. In later granting the motion for reconsideration filed by respondent YMCA,
the Court of Appeals correctly reversed its earlier decision and upheld the findings of the Court of Tax Appeals by
ruling that YMCA is not designed for profit and the little income it derives from rentals and parking fees helps
maintain its noble existence for the fulfillment of its goals for the Christian development of the youth.

Respondent YMCA is undoubtedly exempt from corporate income tax under the provisions of Sec. 27, pars. (g) and
(h), of the National Internal Revenue Code, to wit:

Sec. 27. Exemptions from tax on corporations. — The following organizations shall not be taxed
under this Title in respect to income received by them as such — . . . (g) civic league or organization
not organized for profit but operated exclusively for the promotion of social welfare; (h) club
organized and operated exclusively for pleasure, recreation and other non-profitable purposes, no
part of the net income of which inures to the benefit of any private stockholder or member . . . .
Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and
character of the foregoing organizations from any of their properties, real or personal, or from any of
their activities conducted for profit, regardless of the disposition made of such income, shall be
subject to tax imposed under this Code.

The majority of the Court accepted petitioner's view that while the income of organizations enumerated in Sec. 27
are exempt from income tax, such exemption does not however extend to their income of whatever kind or character
from any of their properties real or personal regardless of the disposition made of such income; that based on the
wording of the law which is plain and simple and does not need any interpretation, any income of a tax exempt entity
from any of its properties is a taxable income; hence, the rental income derived by a tax exempt organization from
the lease of its properties is not therefore exempt from income taxation even if such income is exclusively used for
the accomplishment of its objectives.
Income derived from its property by a tax exempt organization is not absolutely taxable. Taken in solitude, a word or
phrase such as, in this case, "the income of whatever kind and character . . . from any of their properties" might
easily convey a meaning quite different from the one actually intended and evident when a word or phrase is
considered with those with which it is associated. 5 It is a rule in statutory construction that every part of the statute
must be interpreted with reference to the context, that every part of the statute must be considered together with the
other parts and kept subservient to the general intent of the whole enactment.6 A close reading of the last paragraph
of Sec. 27 of the National Internal Revenue Code, in relation to the whole section on tax exemption of the
organizations enumerated therein, shows that the phrase "conducted for profit" in the last paragraph of Sec. 27
qualifies, limits and describes "the income of whatever kind and character of the foregoing organizations from any of
their properties, real or personal, or from any of their activities" in order to make such income taxable. It is the
exception to Sec. 27 pars. (g) and (h) providing for the tax exemptions of the income of said organizations. Hence, if
such income from property or any other property is not conducted for profit, then it is not taxable.

Even taken alone and understood according to its plain, simple and literal meaning, the word "income" which is
derived from property, real or personal, provided in the last paragraph of Sec. 27 means the amount of money
coming to a person or corporation within a specified time as profit from investment; the return in money from one's
business or capital invested.7 Income from property also means gains and profits derived from the sale or other
disposition of capital assets; the money which any person or corporation periodically receives either as profits from
business, or as returns from investments 8 The word "income" as used in tax statutes is to be taken in its ordinary
sense as gain or profit.9

Clearly, therefore, income derived from property whether real or personal connotes profit from business or from
investment of the same. If we are to apply the ordinary meaning of income from property as profit to the language of
the last paragraph of Sec. 27 of the NIRC, then only those profits arising from business and investment involving
property are taxable. In the instant case, there is no question that in leasing its facilities to small shop owners and in
operating parking spaces, YMCA does not engage in any profit-making business. Both the Court of Tax Appeals,
and the Court of Appeals in its resolution of 25 September 1995, categorically found that these activities conducted
on YMCA's property were aimed not only at fulfilling the needs and requirements of its members as part of YMCA's
youth program but, more importantly, at raising funds to finance the multifarious projects of the Association.

As the Court has ruled in one case, the fact that an educational institution charges tuition fees and other fees for the
different services it renders to the students does not in itself make the school a profit-making enterprise that would
place it beyond the purview of the law exempting it from taxation. The mere realization of profits out of its operation
does not automatically result in the loss of an educational institution's exemption from income tax as long as no part
of its profits inures to the benefit of any stockholder or individual.10 In order to claim exemption from income tax, a
corporation or association must show that it is organized and operated exclusively for religious, charitable, scientific,
athletic, cultural or educational purposes or for the rehabilitation of veterans, and that no part of its income inures to
the benefit of any private stockholder or individual. 11 The main evidence of the purpose of a corporation should be
its articles of incorporation and by-laws, for such purpose is required by statute to be stated in the articles of
incorporation, and the by-laws outline the administrative organization of the corporation which, in turn, is supposed
to insure or facilitate the accomplishment of said purpose. 12

The foregoing principle applies to income derived by tax exempt corporations from their property. The criterion or
test in order to make such income taxable is when it arises from purely profit-making business. Otherwise, when the
income derived from use of property is reasonable and incidental to the charitable, benevolent, educational or
religious purpose for which the corporation or association is created, such income should be tax-exempt.

In Hospital de San Juan de Dios, Inc. v. Pasay City 13 we held —

In this connection, it should be noted that respondent therein is a corporation organized for
"charitable, educational and religious purposes"; that no part of its net income inures to the benefit of
any private individual; that it is exempt from paying income tax; that it operates a hospital in which
MEDICAL assistance is given to destitute persons free of charge; that it maintains a pharmacy
department within the premises of said hospital, to supply drugs and medicines only to charity and
paying patients confined therein; and that only the paying patients are required to pay the medicines
supplied to them, for which they are charged the cost of the medicines, plus an additional 10%
thereof, to partly offset the cost of medicines supplied free of charge to charity patients. Under these
facts we are of the opinion and so hold that the Hospital may not be regarded as engaged in
 "business" by reason of said sale of medicines to its paying patients . . . (W)e held that the UST
Hospital was not established for profit-making purposes, despite the fact that it had 140 paying beds,
because the same were maintained only to partly finance the expenses of the free wards containing
203 beds for charity patients.

In YMCA of Manila v. Collector of Internal Revenue, 14 this Court explained —

It is claimed however that the institution is run as a business in that it keeps a lodging and boarding
house. It may be admitted that there are 64 persons occupying rooms in the main building as
lodgers or roomers and that they take their meals at the restaurant below. These facts however are
far from constituting a business in the ordinary acceptation of the word. In the first place, no profit is
realized by the association in any sense. In the second place it is undoubted, as it is undisputed, that
the purpose of the association is not primarily to obtain the money which comes from the lodgers
and boarders. The real purpose is to keep the membership continually within the sphere of influence
of the institution; and thereby to prevent, as far as possible, the opportunities which vice presents to
young men in foreign countries who lack home or other similar influences.

The majority, if not all, of the income of the organizations covered by the exemption provided in Sec. 27, pars. (g)
and (h), of the NIRC are derived from their properties, real or personal. If we are to interpret the last paragraph of
Sec. 27 to the effect that all income of whatever kind from the properties of said organization, real or personal, are
taxable, even if not conducted for profit, then Sec. 27, pars. (g) and (h), would be rendered ineffective and nugatory.
As this Court elucidated in Jesus Sacred Heart College v. Collector of Internal Revenue, 15 every responsible
organization must be so run as to at least insure its existence by operating within the limits of its own resources,
especially its regular income. It should always strive whenever possible to have a surplus. If the benefits of the
exemption would be limited to institutions which do not hope or propose to have such surplus, then the exemption
would apply only to schools which are on the verge of bankruptcy. Unlike the United States where a substantial
number of institutions of learning are dependent upon voluntary contributions and still enjoy economic stability, such
as Harvard, the trust fund of which has been steadily increasing with the years, there are and there have always
been very few educational enterprises in the Philippines which are supported by donations, and these organizations
usually have a very precarious existence. 16

Finally, the non-taxability of all income and properties of educational institutions finds enduring support in Art. XIV,
Sec. 4, par. 3, of the 1987 Constitution —

(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly
and exclusively for educational purposes shall be exempt from taxes and duties. Upon the
dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed
of in the manner provided by law.

In YMCA of Manila v. Collector of Internal Revenue 17 this Court categorically held and found YMCA to be an
educational institution exclusively devoted to educational and charitable purposes and not operated for profit. The
purposes of the Association as set forth in its charter and constitution are "to develop the Christian character and
usefulness of its members, to improve the spiritual, intellectual, social and physical condition of young men and to
acquire, hold, mortgage and dispose of the necessary lands, buildings and personal property for the use of said
corporation exclusively for religious, charitable and educational purposes, and not for investment or profit." YMCA
has an educational department, the aim of which is to furnish, at much less than cost, instructions on subjects that
will greatly increase the mental efficiency and wage-earning capacity of young men, prepare them in special lines of
business and offer them special lines of study. We ruled therein that YMCA cannot be said to be an institution used
exclusively for religious purposes or an institution devoted exclusively for charitable purposes or an institution
devoted exclusively to educational purposes, but it can be truthfully said that it is an institution used exclusively for
all three purposes and that, as such, it is entitled to be exempted from taxation.

Separate Opinions

BELLOSILLO, J., dissenting;

I vote to deny the petition. The basic rule is that the factual findings of the Court of Tax Appeals when supported by
substantial evidence will not be disturbed on appeal unless it is shown that the court committed grave error in the
appreciation of facts.1 In the instant case, there is no dispute as to the validity of the findings of the Court of Tax
Appeals that private respondent Young Men's Christian Association (YMCA) is an association organized and
operated exclusively for the promotion of social welfare and other non-profitable purposes, particularly the physical
and character development of the youth.2 The enduring objectives of respondent YMCA as reflected in its
Constitution and By-laws are:

(a) To develop well-balanced Christian personality, mission in life, usefulness of individuals, and the
promotion of unity among Christians and understanding among peoples of all faiths, to the end that
the Brotherhood of Man under the Fatherhood of God may be fostered in an atmosphere of mutual
respect and understanding;

(b) To promote on equal basis the physical, mental, and spiritual welfare of the youth, with emphasis
on reverence for God, social discipline, responsibility for the common good, respect for human
dignity, and the observance of the Golden Rule;

(c) To encourage members of the Young Men's Christian Associations in the Philippines to
participate loyally in the life of their respective churches; to bring these churches closer together; and
to participate in the effort to realize the church Universal;

(d) To strengthen and coordinate the work of the Young Men's Christian Associations in the
Philippines and to foster the extension of the Youth Men's Christian Associations to new areas;

(e) To help its Member Associations develop and adopt their programs to the needs of the youth;

(f) To assist the Member Associations in developing and maintaining a high standard of
management, operation and practice; and

(g) To undertake and sponsor national and international programs and activities in pursuance of its
purposes and objectives. 3

Pursuant to these objectives, YMCA has continuously organized and undertaken throughout the country various
programs for the youth through actual workshops, seminars, training, sports and summer camps, conferences on
the cultivation of Christian moral values, drug addiction, out-of-school youth, those with handicap and physical
defects and youth alcoholism. To fulfill these multifarious projects and attain the laudable objectives of YMCA, fund
raising has become an indispensable and integral part of the activities of the Association. YMCA derives its funds
from various sources such as membership dues, charges on the use of facilities like bowling and billiards, lodging,
interest income, parking fees, restaurant and canteen. Since the membership dues are very minimal, the
Association derives funds from rentals of small shops, restaurant, canteen and parking fees. For the taxable year
ending December 1980, YMCA earned gross rental income of P676,829.00 and P44,259.00 from parking fees
which became the subject of the questioned assessment by petitioner.

The majority of this Court upheld the findings of the Court of Tax Appeals that the leasing of petitioner's facilities to
small shop owners and to restaurant and canteen operators in addition to the operation of a parking lot are
reasonably necessary for and incidental to the accomplishment of the objectives of YMCA. 4In fact, these facilities
are leased to members in order to service their needs and those of their guests. The rentals are minimal, such as,
the rent of P300.00 for the barbershop. With regard to parking space, there is no lot actually devoted therefor and
the parking is done only along the sides of the building. The parking is primarily for members with car stickers but to
non-members, parking fee is P0.50 only. The rentals and parking fees are just enough to cover the operation and
maintenance costs of these facilities. The earnings which YMCA derives from these rentals and parking fees,
together with the charges for lodging and use of recreational facilities, constitute the bulk or majority of its income
used to support its programs and activities.

In its decision of 16 February 1994, the Court of Appeals thus committed grave error in departing from the findings
of the Court of Tax Appeals by declaring that the leasing of YMCA's facilities to shop owners and restaurant
operators and the operation of a parking lot are used for commercial purposes or for profit, which fact takes YMCA
outside the coverage of tax exemption. In later granting the motion for reconsideration filed by respondent YMCA,
the Court of Appeals correctly reversed its earlier decision and upheld the findings of the Court of Tax Appeals by
ruling that YMCA is not designed for profit and the little income it derives from rentals and parking fees helps
maintain its noble existence for the fulfillment of its goals for the Christian development of the youth.

Respondent YMCA is undoubtedly exempt from corporate income tax under the provisions of Sec. 27, pars. (g) and
(h), of the National Internal Revenue Code, to wit:

Sec. 27. Exemptions from tax on corporations. — The following organizations shall not be taxed
under this Title in respect to income received by them as such — . . . (g) civic league or organization
not organized for profit but operated exclusively for the promotion of social welfare; (h) club
organized and operated exclusively for pleasure, recreation and other non-profitable purposes, no
part of the net income of which inures to the benefit of any private stockholder or member . . . .
Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and
character of the foregoing organizations from any of their properties, real or personal, or from any of
their activities conducted for profit, regardless of the disposition made of such income, shall be
subject to tax imposed under this Code.

The majority of the Court accepted petitioner's view that while the income of organizations enumerated in Sec. 27
are exempt from income tax, such exemption does not however extend to their income of whatever kind or character
from any of their properties real or personal regardless of the disposition made of such income; that based on the
wording of the law which is plain and simple and does not need any interpretation, any income of a tax exempt entity
from any of its properties is a taxable income; hence, the rental income derived by a tax exempt organization from
the lease of its properties is not therefore exempt from income taxation even if such income is exclusively used for
the accomplishment of its objectives.

Income derived from its property by a tax exempt organization is not absolutely taxable. Taken in solitude, a word or
phrase such as, in this case, "the income of whatever kind and character . . . from any of their properties" might
easily convey a meaning quite different from the one actually intended and evident when a word or phrase is
considered with those with which it is associated. 5 It is a rule in statutory construction that every part of the statute
must be interpreted with reference to the context, that every part of the statute must be considered together with the
other parts and kept subservient to the general intent of the whole enactment.6 A close reading of the last paragraph
of Sec. 27 of the National Internal Revenue Code, in relation to the whole section on tax exemption of the
organizations enumerated therein, shows that the phrase "conducted for profit" in the last paragraph of Sec. 27
qualifies, limits and describes "the income of whatever kind and character of the foregoing organizations from any of
their properties, real or personal, or from any of their activities" in order to make such income taxable. It is the
exception to Sec. 27 pars. (g) and (h) providing for the tax exemptions of the income of said organizations. Hence, if
such income from property or any other property is not conducted for profit, then it is not taxable.

Even taken alone and understood according to its plain, simple and literal meaning, the word "income" which is
derived from property, real or personal, provided in the last paragraph of Sec. 27 means the amount of money
coming to a person or corporation within a specified time as profit from investment; the return in money from one's
business or capital invested.7 Income from property also means gains and profits derived from the sale or other
disposition of capital assets; the money which any person or corporation periodically receives either as profits from
business, or as returns from investments 8 The word "income" as used in tax statutes is to be taken in its ordinary
sense as gain or profit.9

Clearly, therefore, income derived from property whether real or personal connotes profit from business or from
investment of the same. If we are to apply the ordinary meaning of income from property as profit to the language of
the last paragraph of Sec. 27 of the NIRC, then only those profits arising from business and investment involving
property are taxable. In the instant case, there is no question that in leasing its facilities to small shop owners and in
operating parking spaces, YMCA does not engage in any profit-making business. Both the Court of Tax Appeals,
and the Court of Appeals in its resolution of 25 September 1995, categorically found that these activities conducted
on YMCA's property were aimed not only at fulfilling the needs and requirements of its members as part of YMCA's
youth program but, more importantly, at raising funds to finance the multifarious projects of the Association.

As the Court has ruled in one case, the fact that an educational institution charges tuition fees and other fees for the
different services it renders to the students does not in itself make the school a profit-making enterprise that would
place it beyond the purview of the law exempting it from taxation. The mere realization of profits out of its operation
does not automatically result in the loss of an educational institution's exemption from income tax as long as no part
of its profits inures to the benefit of any stockholder or individual.10 In order to claim exemption from income tax, a
corporation or association must show that it is organized and operated exclusively for religious, charitable, scientific,
athletic, cultural or educational purposes or for the rehabilitation of veterans, and that no part of its income inures to
the benefit of any private stockholder or individual. 11 The main evidence of the purpose of a corporation should be
its articles of incorporation and by-laws, for such purpose is required by statute to be stated in the articles of
incorporation, and the by-laws outline the administrative organization of the corporation which, in turn, is supposed
to insure or facilitate the accomplishment of said purpose. 12

The foregoing principle applies to income derived by tax exempt corporations from their property. The criterion or
test in order to make such income taxable is when it arises from purely profit-making business. Otherwise, when the
income derived from use of property is reasonable and incidental to the charitable, benevolent, educational or
religious purpose for which the corporation or association is created, such income should be tax-exempt.

In Hospital de San Juan de Dios, Inc. v. Pasay City 13 we held —

In this connection, it should be noted that respondent therein is a corporation organized for
"charitable, educational and religious purposes"; that no part of its net income inures to the benefit of
any private individual; that it is exempt from paying income tax; that it operates a hospital in which
MEDICAL assistance is given to destitute persons free of charge; that it maintains a pharmacy
department within the premises of said hospital, to supply drugs and medicines only to charity and
paying patients confined therein; and that only the paying patients are required to pay the medicines
supplied to them, for which they are charged the cost of the medicines, plus an additional 10%
thereof, to partly offset the cost of medicines supplied free of charge to charity patients. Under these
facts we are of the opinion and so hold that the Hospital may not be regarded as engaged in
"business" by reason of said sale of medicines to its paying patients . . . (W)e held that the UST
Hospital was not established for profit-making purposes, despite the fact that it had 140 paying beds,
because the same were maintained only to partly finance the expenses of the free wards containing
203 beds for charity patients.

In YMCA of Manila v. Collector of Internal Revenue, 14 this Court explained —

It is claimed however that the institution is run as a business in that it keeps a lodging and boarding
house. It may be admitted that there are 64 persons occupying rooms in the main building as
lodgers or roomers and that they take their meals at the restaurant below. These facts however are
far from constituting a business in the ordinary acceptation of the word. In the first place, no profit is
realized by the association in any sense. In the second place it is undoubted, as it is undisputed, that
the purpose of the association is not primarily to obtain the money which comes from the lodgers
and boarders. The real purpose is to keep the membership continually within the sphere of influence
of the institution; and thereby to prevent, as far as possible, the opportunities which vice presents to
young men in foreign countries who lack home or other similar influences.

The majority, if not all, of the income of the organizations covered by the exemption provided in Sec. 27, pars. (g)
and (h), of the NIRC are derived from their properties, real or personal. If we are to interpret the last paragraph of
Sec. 27 to the effect that all income of whatever kind from the properties of said organization, real or personal, are
taxable, even if not conducted for profit, then Sec. 27, pars. (g) and (h), would be rendered ineffective and nugatory.
As this Court elucidated in Jesus Sacred Heart College v. Collector of Internal Revenue, 15 every responsible
organization must be so run as to at least insure its existence by operating within the limits of its own resources,
especially its regular income. It should always strive whenever possible to have a surplus. If the benefits of the
exemption would be limited to institutions which do not hope or propose to have such surplus, then the exemption
would apply only to schools which are on the verge of bankruptcy. Unlike the United States where a substantial
number of institutions of learning are dependent upon voluntary contributions and still enjoy economic stability, such
as Harvard, the trust fund of which has been steadily increasing with the years, there are and there have always
been very few educational enterprises in the Philippines which are supported by donations, and these organizations
usually have a very precarious existence. 16

Finally, the non-taxability of all income and properties of educational institutions finds enduring support in Art. XIV,
Sec. 4, par. 3, of the 1987 Constitution —
 (3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly
and exclusively for educational purposes shall be exempt from taxes and duties. Upon the
dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed
of in the manner provided by law.

In YMCA of Manila v. Collector of Internal Revenue 17 this Court categorically held and found YMCA to be an
educational institution exclusively devoted to educational and charitable purposes and not operated for profit. The
purposes of the Association as set forth in its charter and constitution are "to develop the Christian character and
usefulness of its members, to improve the spiritual, intellectual, social and physical condition of young men and to
acquire, hold, mortgage and dispose of the necessary lands, buildings and personal property for the use of said
corporation exclusively for religious, charitable and educational purposes, and not for investment or profit." YMCA
has an educational department, the aim of which is to furnish, at much less than cost, instructions on subjects that
will greatly increase the mental efficiency and wage-earning capacity of young men, prepare them in special lines of
business and offer them special lines of study. We ruled therein that YMCA cannot be said to be an institution used
exclusively for religious purposes or an institution devoted exclusively for charitable purposes or an institution
devoted exclusively to educational purposes, but it can be truthfully said that it is an institution used exclusively for
all three purposes and that, as such, it is entitled to be exempted from taxation.

Footnotes

LABOR STATUTES

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 160123 June 17, 2015

CENTRO PROJECT MANPOWER SERVICES CORPORATION, Petitioner,

vs.
AGUINALDO NALUIS and THE COURT OF APPEALS, Respondents.

DECISION

BERSAMIN, J.:

In the interpretation of their provisions, labor contracts require the resolution of doubts in favor of the laborer
because of their being imbued with social justice considerations. This rule of interpretation is demanded by the
Labor Code1 and the Civil Code.2

Both the Labor Arbiter3 and the National Labor Relations Commission (NLRC)4 resolved the doubt in favor of the
employer when it held that respondent Aguinaldo Naluis (Naluis) had been properly repatriated, and, consequently,
not illegally dismissed. However, on April 23, 2003, the Court of Appeals (CA) set aside their resolutions, and ruled
to the contrary.5 Hence, this appeal by the employer.

Antecedents

Petitioner Centro Project Manpower Services Corporation (Centro Project), a local recruitment agency, engaged
Naluis to work abroad as a piufu6er· under Pacific Micronesia Corporation (Pacific Micronesia) in Garapan, Saipan,
in the Commonwealth of the Northern Mariana Islands (Northern Marianas). The work was covered by the primary
Employment Contract dated March 11, 1997,6 whereby his employment would last for 12 months, and would
commence upon his arrival in Northern Marianas. On June 3, 1997, the Department of Labor and Immigration of
Northern Mariana Islands issued an Authorization for Entry (AE)7 in his favor. On September 3, 1997, Centro Project
and Naluis executed an addendum to the primary Employment Contract8 to make the start of his employment
effective from his departure at the point of origin instead of his arrival in Northern Marianas.
Naluis left for Northern Mariana on September 13, 1997,9 the date of his actual deployment, and his employment
continued until his repatriation to the Philippines on June 3, 1998 allegedly due to the expiration of the employment
contract. Not having completed 12 months of work, he filed a complaint for illegal dismissal against Centro Project.

The Labor Arbiter found that Centro Project had been justified m repatriating Naluis, and accordingly dismissed the
complaint, to wit:

This Office finds the repatriation of complainant to the Philippines NOT A DISMISSAL BUT AS A RESULT OF THE
LAWS AND REGULATIONS OF THE COMMONWEALTH OF NORTHERN MARIANA ISLANDS AS PROVIDED
FOR IN THE AUTHORIZATION FOR ENTRY.

xxxx

Although complainant has not served the twelve (12) months period stated in the Contract of Employment, the
Employer has no other alternative but to repatriate complainant otherwise, the employer could be liable for violation
of the Commonwealth's Immigration Rules x x x.

xxxx

WHEREFORE, in view of the foregoing, the instant complaint is hereby DISMISSED lack of merit.10

Naluis appealed to the NLRC, which found that Centro Project had no choice but to terminate the employment
contract because the AE issued by the Department of Labor and Immigration of Northern Mariana Islands had
limited his stay in Northern Marianas, and that his employment had expired on May 13, 1998 as explicitly provided in
the employment contract executed between him and Centro Project. The NLRC thus disposed:

WHEREFORE, in view of the foregoing, this Commission resolves to affirm the Decision of the Labor Arbiter and
dismiss the instant appeal for lack of merit.11

Naluis assailed the decision of the NLRC in the CA.

On April 23, 2003, the CA promulgated its judgment setting aside the decision of the NLRC, holding that the AE did
not have any effect on Naluis' employment status; that the AE did not limit his stay in Northern Marianas; and that,
consequently, Centro Project had breached the contract by ordering his repatriation. The CA decreed as follows:

WHEREFORE, the petition is GRANTED. The assailed decision is REVERSED and SET ASIDE, and a new one
entered DIRECTING the private respondent to pay the petitioner the following:

a) Four (4) months salary corresponding to the unpaid portion of his contract at $520.00 (Five Hundred
Twenty U.S. Dollars) per month;

b) Guaranteed overtime pay at an average of thirty (30) to forty (40) hours per month in excess of straight
eight (8) hours regular work schedule corresponding to the unexpired portion of four ( 4) months in the
contract;

c) Placement fee of Thirteen Thousand Five Hundred (13,500.00) Pesos;

d) Legal holiday equivalent to ten (10) days with pay;

e) Twelve (12) days vacation leave with pay; and

f) Attorney's fees of Ten Thousand Pesos (₱10,000.00).

SO ORDERED.12

Issues
Hence, this appeal, whereby Centro Project submits that the AE categorically fixed the period of stay of Naluis; and
that even the primary Employment Contract clearly set the date for its expiration.

Naluis counters that the handwritten date of May 3, 1998 was inserted in the primary Employment Contract only
after he had signed it, as distinguished from all other stipulations that had been typewritten. Did the expiration date
contained in the AE issued by the Department of Labor and Immigration of Northern Mariana Islands validly cut
short Naluis' stay and thus justified the pre-termination of his work?

Ruling of the Court

The appeal lacks merit.

There is no dispute that Naluis did not complete the 12-month period stipulated in the primary Employment Contract.
However, the NLRC concluded that Centro Project had been justified in repatriating him because the AE had
stipulated a limit of stay for him. The NLRC thereby relied on a loose interpretation of the AE and the primary
Employment Contract.

In finding that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in so
concluding, the CA observed that:

x x x the document upon which the employer predicated its action to terminate and repatriate the petitioner i.e., the
Authorization of Entry issued by the immigration authorities of CNMI does not appear to limit the employee's stay in
the said country. The authorization upon its face simply shows that the person to whom it is issued should enter
CNMI not later than May 13, 1998 as a general rule or, if he is an employee, not later than three months from its
issuance. We submit that an authorization of entry is different from a limitation of stay in the country visited, which is
not indicated in any of the documents submitted by the respondent.13

We concur with the CA. The burden of proof to show that the employment contract had been validly terminated
pertained to the employer.14 To discharge its burden, the employer must rely on the strength of its own evidence.
However, Centro Project's reliance on the AE limiting

Naluis' stay was unwarranted, and, worse, it did not discharge its burden of proof as the employer to show that
Naluis' repatriation had been justified.

The recitals of the AE for Naluis were as follows:15

This letter allows authorized entry into the Commonwealth of the Northern Mariana Islands for Aguinaldo S. Naluis.

AGUINALDO S NALUIS
Expires Gender Birthdate Citizenship
5/13/98 M 4/11/57 PHL
Employer: PACIFIC MICRONESIA CORPORATION
Occupation: PLUMBER
Class: 706K Issue Date 6/3/97
Wage Rate: $3.25 Wage Type: HOURLY

You are hereby notified of the following requirements:

1. Present this Authorization for Entry letter to an Immigration Officer immediately upon arrival at your
designated port of entry into the Commonwealth of the Northern Mariana Islands.

xxxx
 3. The Entry Permit, if issued for the purpose of employment, expires automatically upon termination of such
employment and must be surrendered to your employer.

xxxx

5. You must enter the CNMI within 90 days of issuance of this "Authorization for Entry" letter if you are
entering for the purpose of employment. (emphasis supplied)
1âwphi 1

The AE thereby clearly indicated that the date of May 13, 1998 appearing thereon referred only to the expiration of
the document itself. Centro Project stretched its interpretation to bolster its contention that May 13, 1998 was the
limit of stay for Naluis in Northern Marianas. The interpretation is unacceptable, for item number 3 of the AE even
recognized any employment period if the AE was issued for the purpose of employment. This meant that contrary to
the position of Centro Project there was no clear and categorical entry in the AE to the effect that the AE limited his
stay in Northern Marianas.

It is fundamental that in the interpretation of contracts of employment, doubts are generally resolved in favor of the
worker.16 It is imperative to uphold this rule herein. Hence, any doubt or vagueness in the provisions of the contract
of employment should have been interpreted and resolved in favor of Naluis.17

Although Centro Project alleges that it feared that Naluis would eventually be declared an illegal alien had he not
been repatriated, the records do not support the allegation. For one, Centro Project did not demonstrate that its fear
was justified at all. On the contrary, its fear was, at best, imaginary because it did not submit evidence showing that
the Northern Marianas authorities had ever moved to declare him an illegal alien. Moreover, had Centro Project
been aware of any likelihood of him being soon declared an illegal alien, it could have easily advised him thereof,
and explained the situation to him in due course. Yet, he was not at all informed of the likelihood.

Denying its participation in the fixing of the expiration date, Centro Project argues that it was the Philippine
representative in Northern Marianas who had inserted by hand the date of expiration in the Employment Contract.

The argument has no basis.

Firstly, Centro Project's allegation on the expiration date being merely inserted by the Philippine representative in
Northern Marianas was not substantiated with credible proof. It supported its allegation by alluding to the fact that
the signature of the person who had verified the employment contract was similar to the handwritten insertion made
on the blank space of the employment contract. That was not enough, however, in view of the basic rule that mere
allegation is not evidence and is not equivalent to proof.18 Hence, the allegation, an essentially self-serving
statement, was devoid of any evidentiary weight.

And, secondly, even assuming that Centro Project did not have any participation in fixing the expiration date, it did
not amend the employment contract despite being fully aware that the term of 12 months was clearly indicated as
the period of Naluis' work. The primary Employment Contract was sent for approval to the principal employer
abroad, as well as to the immigration authorities of the Philippines and Northern Marianas. In such circumstances,
Centro Project could not but know that the period had been fixed by the immigration authorities of Northern
Marianas prior to his actual deployment. Thus, Centro Project was in bad faith in not taking any action when the
Philippine immigration authorities supposedly inserted the handwritten date of expiration of the contract. In fact, the
addendum to the employment contract, approved by the POEA on September 3, 1997, which categorically stated
that "the term of this contract shall be for a period of Twelve Months,"19 was executed even before he left for
Northern Marianas on September 13, 1997, and after the AE had already been issued by Northern Marianas on
June 3, 1997. Centro Project could have easily apprised him of the change. Also, the necessary amendments to the
primary contract or an addendum thereto could have been easily made prior to his deployment.

Undoubtedly, the term of the contract was 12 months. The AE could not be used as a valid cause for pre-terminating
the employment of Naluis. His repatriation was clearly a breach of the contract of employment, for which the CA
awarded to him the following money claims, to wit:

a) Four (4) months salary corresponding to the unpaid portion of his contract at $520.00 (Five Hundred
Twenty U.S. Dollars) per month;
 b) Guaranteed overtime pay at an average of thirty (30) to forty (40) hours per month in excess of straight
eight (8) hours regular work schedule corresponding to the unexpired portion of four ( 4) months in the
contract;

c) Placement fee of Thirteen Thousand Five Hundred (13,500.00) Pesos;

d) Legal holiday equivalent to ten (10) days with pay;

e) Twelve (12) days vacation leave with pay; and

f) Attorney's fees of Ten Thousand Pesos (₱10,000.00).

We affirm the awards except those for the guaranteed overtime pay and legal holiday pay. Under Section
1020of Republic Act No. 8042, the unjustly terminated employee is entitled to the full reimbursement of his
placement fee with interest at 12% per annum, plus his salaries for the unexpired portion of his employment
contract. We further allow the payment of vacation leave pay and sick leave pay because the employment
contract2' stipulated 12 days vacation leave with pay and seven days sick leave with pay that could be taken
after one year. With his premature repatriation being unjustified, Naluis should receive his vacation and sick
leave pays, but not the guaranteed overtime pay and legal holiday pay because the employment contract did
not extend such benefits.

WHEREFORE, the Court AFFIRMS the decision promulgated on April 23, 2003, subject to the DELETION of the
awards for guaranteed overtime pay and legal holiday; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE CASTRO JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes
NATURALIZATION LAWS

REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA
SECOND DIVISION

G.R. No. 127240 March 27, 2000

ONG CHIA, petitioner,

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

MENDOZA, J.:

This is a petition for review of the decision1 of the Court of Appeals reversing the decision of the Regional Trial Court,
Branch 24, Koronadal, South Cotabato2 admitting petitioner Ong Chia to Philippine citizenship.

The facts are as follows:

Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a nine-year old boy, he arrived at the port of
Manila on board the vessel "Angking." Since then, he has stayed in the Philippines where he found employment and
eventually started his own business, married a Filipina, with whom he had four children. On July 4, 1989, at the age
of 66, he filed a verified petition to be admitted as a Filipino citizen under C.A. No. 473, otherwise known as the
Revised Naturalization Law, as amended. Petitioner, after stating his qualifications as required in §2, and lack of the
disqualifications enumerated in §3 of the law, stated —

17. That he has heretofore made (a) petition for citizenship under the provisions of Letter of Instruction No.
270 with the Special Committee on Naturalization, Office of the Solicitor General, Manila, docketed as SCN
Case No. 031776, but the same was not acted upon owing to the fact that the said Special Committee on
Naturalization was not reconstituted after the February, 1986 revolution such that processing of petitions for
naturalization by administrative process was suspended;

During the hearings, petitioner testified as to his qualifications and presented three witnesses to corroborate his
testimony. So impressed was Prosecutor Isaac Alvero V. Moran with the testimony of petitioner that, upon being
asked by the court whether the State intended to present any witness present any witness against him, he
remarked:

Actually, Your Honor, with the testimony of the petitioner himself which is rather surprising, in the sense that
he seems to be well-versed with the major portion of the history of the Philippines, so, on our part, we are
convinced, Your Honor Please, that petitioner really deserves to be admitted as a citizen of the
Philippines. And for this reason, we do not wish to present any evidence to counteract or refute the
testimony of the witnesses for the petitioner, as well as the petitioner himself.3

Accordingly, on August 25, 1999, the trial court granted the petition and admitted petitioner to Philippine citizenship.
The State, however, through the Office of the Solicitor General, appealed all the names by which he is or had been
known; (2) failed to state all his former placer of residence in violation of C.A. No. 473, §7; (3) failed to conduct
himself in a proper and irreproachable manner during his entire stay in the Philippines, in violation of §2; (4) has no
known lucrative trade or occupation and his previous incomes have been insufficient or misdeclared, also in
contravention of §2; and (5) failed to support his petition with the appropriate documentary evidence.4

Annexed to the State's appellant's brief was a copy of a 1977 petition for naturalization filed by petitioner with the
Special Committee on Naturalization in SCN Case No. 031767,5 in which petitioner stated that in addition to his
name of "Ong Chia," he had likewise been known since childhood as "Loreto Chia Ong." As petitioner, however,
failed to state this other name in his 1989 petition for naturalization, it was contended that his petition must fail.6 The
state also annexed income tax returns7 allegedly filed by petitioner from 1973 to 1977 to show that his net income
could hardly support himself and his family. To prove that petitioner failed to conduct himself in a proper and
irreproachable manner during his stay in the Philippines, the State contended that, although petitioner claimed that
he and Ramona Villaruel had been married twice, once before a judge in 1953, and then again in church in 1977,
petitioner actually lived with his wife without the benefit of marriage from 1953 until they were married in 1977. It was
alleged that petitioner failed to present his 1953 marriage contract, if there be any. The State also annexed a copy of
petitioner's 1977 marriage contract8 and a Joint-Affidavit9 executed by petitioner and his wife. These documents show
that when petitioner married Ramona Villaruel on February 23, 1977, no marriage license had been required in
accordance with Art. 76 of the Civil Code because petitioner and Ramona Villaruel had been living together as
husband and wife since 1953 without the benefit of marriage. This, according to the State, belies his claim that when
he started living with his wife in 1953, they had already been married.

The State also argued that, as shown by petitioner's Immigrant Certificate of Residence, 10 petitioner resided at "J.M.
Basa Street, Iloilo," but he did not include said address in the petition.

On November 15, 1996, the Court of Appeals rendered its decision which, as already noted, reversed the trial court
and denied petitioner's application for naturalization. It ruled that due to the importance naturalization cases, the
State is not precluded from raising questions not presented in the lower court and brought up for the first time on
appeal. 11 The appellate court held:

As correctly observed by the Office of the Solicitor General, petitioner Ong Chia failed to state in this present
petition for naturalization his other name, "LORETO CHIA ONG," which name appeared in his previous
application under Letter of Instruction No. 270. Names and pseudonyms must be stated in the petition for
naturalization and failure to include the same militates against a decision in his favor. . . This is a mandatory
requirement to allow those persons who know (petitioner) by those other names to come forward and inform
the authorities of any legal objection which might adversely affect his application for citizenship.

Furthermore, Ong Chia failed to disclose in his petition for naturalization that he formerly resided in "J.M.
Basa St., Iloilo" and "Alimodian, Iloilo." Section 7 of the Revised Naturalization Law requires the applicant to
state in his petition "his present and former places of residence." This requirement is mandatory and failure
of the petitioner to comply with it is fatal to the petition. As explained by the Court, the reason for the
provision is to give the public, as well as the investigating agencies of the government, upon the publication
of the petition, an opportunity to be informed thereof and voice their objections against the petitioner. By
failing to comply with this provision, the petitioner is depriving the public and said agencies of such
opportunity, thus defeating the purpose of the law. . .

Ong Chia had not also conducted himself in a proper and irreproachable manner when he lived-in with his
wife for several years, and sired four children out of wedlock. It has been the consistent ruling that the
"applicant's 8-year cohabitation with his wife without the benefit of clergy and begetting by her three children
out of wedlock is a conduct far from being proper and irreproachable as required by the Revised
Naturalization Law", and therefore disqualifies him from becoming a citizen of the Philippines by
naturalization . . .

Lastly, petitioner Ong Chia's alleged annual income in 1961 of P5,000.00, exclusive of bonuses,
commissions and allowances, is not lucrative income. His failure to file an income tax return "because he is
not liable for income tax yet" confirms that his income is low. . . "It is not only that the person having the
employment gets enough for his ordinary necessities in life. It must be shown that the employment gives one
an income such that there is an appreciable margin of his income over expenses as to be able to provide for
an adequate support in the event of unemployment, sickness, or disability to work and thus avoid one's
becoming the object of charity or public charge." . . . Now that they are in their old age, petitioner Ong Chia
and his wife are living on the allowance given to them by their children. The monthly pension given by the
elder children of the applicant cannot be added to his income to make it lucrative because like bonuses,
commissions and allowances, said pensions are contingent, speculative and precarious. . .

Hence, this petition based on the following assignment of errors:

I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN RULING THAT IN

NATURALIZATION CASES, THE APPELLATE COURT CAN DENY AN APPLICATION FOR PHILIPPINE
CITIZENSHIP ON THE BASIS OF DOCUMENTS NOT PRESENTED BEFORE THE TRIAL COURT AND
NOT FORMING PART OF THE RECORDS OF THE CASE.
 II. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER HAS BEEN KNOWN BY SOME
OTHER NAME NOT STATED IN HIS PETITION IS NOT SUPPORTED BY THE EVIDENCE ON RECORD.

III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE PETITIONER STATED IN HIS
PETITION AND ITS ANNEXES HIS PRESENT AND FORMER PLACES OF RESIDENCE.

IV. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER FAILED TO CONDUCT
HIMSELF IN A PROPER AND IRREPROACHABLE MANNER IS NOT SUPPORTED BY THE EVIDENCE
ON RECORD.

Petitioner's principal contention is that the appellate court erred in considering the documents which had merely
been annexed by the State to its appellant's brief and, on the basis of which, justified the reversal of the trial court's
decision. Not having been presented and formally offered as evidence, they are mere "scrap(s) of paper devoid of
any evidentiary value," 12 so it was argued, because under Rule 132, §34 of the Revised Rules on Evidence, the
court shall consider no evidence which has not been formally offered.

The contention has no merit. Petitioner failed to note Rule 143 13 of the Rules of Court which provides that —

These rules shall not apply to land registration, cadastral and election cases, naturalization and insolvency
proceedings, and other cases not herein provided for, except by analogy or in a suppletory character and
whenever practicable and convenient. (Emphasis added).

Prescinding from the above, the rule on formal offer of evidence (Rule 132, §34) now being invoked by petitioner is
clearly not applicable to the present case involving a petition for naturalization. The only instance when said rules
may be applied by analogy or suppletorily in such cases is when it is "practicable and convenient." That is not the
case here, since reliance upon the documents presented by the State for the first time on appeal, in fact, appears to
be the more practical and convenient course of action considering that decisions in naturalization proceedings are
not covered by the rule on res judicata. 14 Consequently, a final favorable judgment does not preclude the State from
later on moving for a revocation of the grant of naturalization on the basis of the same documents.

Petitioner claims that as a result of the failure of the State to present and formally offer its documentary evidence
before the trial court, he was denied the right to object against their authenticity, effectively depriving him of his
fundamental right to procedural due process. 15 We are not persuaded. Indeed, the reason for the rule prohibiting the
admission of evidence which has not been formally offered is to afford the opposite party the chance to object to
their admissibility. 16 Petitioner cannot claim that he was deprived of the right to object to the authenticity of the
documents submitted to the appellate court by the State. He could have included his objections, as he, in fact, did,
in the brief he filed with the Court of Appeals. thus:

The authenticity of the alleged petition for naturalization (SCN Case No. 031767) which was supposedly filed
by Ong Chia under LOI 270 has not been established. In fact, the case number of the alleged petition for
naturalization. . . is 031767 while the case number of the petition actually filed by the appellee is 031776.
Thus, said document is totally unreliable and should not be considered by the Honorable Court in resolving
the instant appeal. 17

Indeed, the objection is flimsy as the alleged discrepancy is trivial, and, at most, can be accounted for as a
typographical error on the part of petitioner himself. That "SCN Case No. 031767," a copy of which was annexed to
the petition, is the correct case number is confirmed by the Evaluation Sheet 18 of the Special Committee on
Naturalization which was also docketed as "SCN Case No. 031767." Other than this, petitioner offered no evidence
to disprove the authenticity of the documents presented by the State.

Furthermore, the Court notes that these documents — namely, the petition in SCN Case No. 031767, petitioner's
marriage contract, the joint affidavit executed by him and his wife, and petitioner's income tax returns — are all
public documents. As such, they have been executed under oath. They are thus reliable. Since petitioner failed to
make a satisfactory showing of any flaw or irregularity that may cast doubt on the authenticity of these documents, it
is our conclusion that the appellate court did not err in relying upon them.
One last point. The above discussion would have been enough to dispose of this case, but to settle all the issues
raised, we shall briefly discuss the effect of petitioner's failure to include the address "J.M. Basa St., Iloilo" in his
petition, in accordance with §7, C.A. No. 473. This address appears on petitioner's Immigrant Certificate of
Residence, a document which forms part of the records as Annex A of his 1989 petition for naturalization. Petitioner
admits that he failed to mention said address in his petition, but argues that since the Immigrant Certificate of
Residence containing it had been fully published, 19 with the petition and the other annexes, such publication
constitutes substantial compliance with §7. 20 This is allegedly because the publication effectively satisfied the
objective sought to be achieved by such requirement, i.e., to give investigating agencies of the government the
opportunity to check on the background of the applicant and prevent suppression of information regarding any
possible misbehavior on his part in any community where he may have lived at one time or another. 21 It is settled,
however, that naturalization laws should be rigidly enforced and strictly construed in favor of the government and
against the applicant. 22 As noted by the State, C.A. No. 473, §7 clearly provides that the applicant for naturalization
shall set forth in the petition his present and former places of residence. 23 This provision and the rule of strict
application of the law in naturalization cases defeat petitioner's argument of "substantial compliance" with the
requirement under the Revised Naturalization Law. On this ground alone, the instant petition ought to be denied. 1âwphi1.nêt

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the instant petition is hereby DENIED.

SO ORDERED.

Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.

Footnotes

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-35947 October 20, 1992

REPUBLIC OF THE PHILIPPINES, movant-appellee,

vs.
WILLIAM LI YAO, petitioner-appellant.

ROMERO, J.:

This is an appeal from the order of the then Court of First Instance of Manila over twenty years ago, or on July 22, 1971,
cancelling the certificate of naturalization of William Li Yao as well as from the ordered dated December 29, 1971
denying Li Yao's motion for reconsiderations.

William Li Yao, a Chinese national, filed a petition for naturalization on June 3, 1949 with the then Court of First Instance
of Manila, which petition was docketed as Case No. 8225. 1

After several hearings on the petition were held wherein the Office of the Solicitor General, in the representation of the
Republic of the Philippines appeared, the lower court rendered a decision dated October 25, 1950, the dispositive
portion of which reads as follows:

IN VIEW OF ALL THE FOREGOING, the Court hereby declares William Li Yao, for all intents and purposes
a naturalized Filipino citizen, it appearing that he possesses all the qualifications to become a naturalized
Filipino and none of the disqualifications provided for by the law. However, in view of the provisions of
 Republic Act No. 530, this decision shall not become final and executory until after two (2) years from its
promulgation and after this Court, on proper hearing, with the attendance of the Solicitor General or his
representative, is satisfied, and so finds, that during the intervening time the applicant herein has (1) not
left the Philippines, (2) has dedicated himself continuously to a lawful calling or profession, (3) has not
been convicted of any offense and violation of the government promulgated rules, (4) or committed any
act prejudicial to the interest of the nation or contrary to any Government announce policies. After the
finding mentioned herein, this decision granting Philippine citizenship to the applicant herein shall be
registered and the oath provided by existing law shall be taken by said applicant, whereupon, and not
before, he will be entitled to all the privileges of the Filipino citizen and the certificate of naturalization
shall forthwith issue in his favor by the Clerk of this Court. 2

On November 20, 1952, acting on the petition of William Li Yao praying for the execution of the foregoing decision and
that he be allowed to take his oath of allegiance as a Filipino citizen, the lower court issued an order, the dispositive
portion of which reads as follows:

WHEREFORE, it appearing that the petitioner has complied, within the two year probation period, with
the provisions of Republic Act No. 530, he is hereby allowed to take his oath of allegiance as a Filipino
citizen, and Clerk of Court is directed to issue in his favor to the corresponding certificate of
naturalization. 3

About fifteen years later, or on January 5, 1968, the Republic of the Philippines, through the Solicitor General, filed a
motion to cancel William Li Yao's certificate of naturalization on the ground that it was fraudulently and illegally
obtained for the following reasons:

1. At the time of the filing of the petition, the applicant was not qualified to acquire Filipino citizenship
by naturalization because:

a. He was not a person of good moral character, having had illicit amorous relationship
(sic) with several women other than his lawfully wedded wife, by whom he fathered
illegitimate children (Li Siu Liat vs. Republic, L-25356, November 25, 1967).

b. Nor had he conducted himself in an irreproachable manner in his dealings with the
duly constituted authorities:

(i) In contracting marriage, he used the name Fransisco Li Yao (Exh. "J,"
p. 31, rec.) without prior judicial authority to use the aforesaid first
name Fransisco, the same not appearing to be his baptismal name
(Cosme Co Tian An vs. Republic, L-1983, August 31, 1966).

(ii) He was also known and had used the name and/or alias LI CHAY
TOO, JR. before the last World War, and under which name, a trust fund
was created for him (see Decision, Court of Tax Appeals, CTA Case No.
30, dated July 31, 1956; also Decision, Supreme Court, G.R. No. L-11861,
Dec. 28, 1963).

(iii) He evaded the payment of lawful taxes due to the government by

underdeclaration of income as reflected in his income tax returns for
the years 1946-1951 (see Decision, Supreme Court, William Li Yao v.
Collector of Internal Revenue, L-11875, December 28, 1963).

(iv) He committed violations of the Constitution and Anti-Dummy laws

prohibiting aliens from acquiring real properties by employing dummies
 in the formation of a private domestic corporation, which acquired the
real properties.

(v) He made it appear, falsely, in the baptismal certificate of an

illegitimate son he fathered, named William Jose Antonio, that the
latter's mother is Juanita Tan Ho Ti, his law-mother is another woman
(sic). 4

William Li Yao opposed the forgoing motion on July 22, 1971. The lower court, however, without touching on all the
grounds upon which the said motion was based, relied solely on ground (iii) that William Li Yao evaded the payment of
lawful taxes due the government by underdeclaration of income as reflected in his income tax returns for the years
1946-1951. It issued an order, the dispositive portion of which reads as follows:

WHEREFORE, the motion of the Republic of the Philippines to cancel Certificate of Naturalization No.
1139 dated November 20, 1952 issued to the petitioner is hereby granted, and the said Certificate of
Naturalization should be, as it is hereby cancelled. Without pronouncement as to cost. 5

William Li Yao filed a motion for reconsideration on December 29, 1971, which the lower court denied. 6

On January 7, 1972, William LI Yao filed a notice of appeal to this Court, manifesting that he was appealing from the
order of the lower court dated July 22, 1971, and from the order dated December 29, 1971. 7

After the parties had filed their respective briefs, petitioner-appellant Li Yao died. 8 The case has not, however, become
moot and academic since its disposition, either way, will have grave implications for the late petitioner-appellant's wife
and children.

The issue in this case is whether or not the cancellation of the certificate of naturalization of the deceased petitioner-
appellant William Li Yao made by the government through the Office of the Solicitor General is valid.

The appeal is without merit.

In his motion filed on January 5, 1968, the Solicitor General asked for the cancellation of the naturalization certificate of
appellant on the ground that it was "fraudelently and illegally obtained." This based on Section 18(a) of Com. Act No.
473, known as the Revised Naturalization Act, which provides that a naturalization certificate may be cancelled "[i]f it is
shown that said naturalization certificate was obtained fraudelently and illegally."

It is indisputable that a certificate of naturalization may be cancelled if it is subsequently discovered that the applicant
therefore obtained it by misleading the court upon any material fact. 9 Law and jurisprudence even authorize the
cancellation of a certificate of naturalization upon grounds had conditions arising subsequent to the granting of the
certificate. 10 Moreover, a naturalization proceeding is not a judicial adversary proceeding, the decision rendered
therein, not constituting res judicata as to any matter that would support a judgment cancelling a certificate of
naturalization on the ground of illegal or fraudulent procurement thereof. 11

In ordering the cancellation of the naturalization certificate previously issued to appellant, the lower court sustained the
government's motion for cancellation on the sole finding that Li Yao had committed underdeclaration of income and
underpayment of income tax.

In the case entitled In the Matter of the Petition for Naturalization as Citizen of the Philippines, Lim Eng Yu
vs. Republic, 12 It was held that the concealment of applicant's income to evade payment of lawful taxes shows that his
moral character is not irreproachable, thus disqualifying him for naturalization.

Assuming arguendo, that appellant, as alleged, has fully paid or settled his tax liability under P.D. No. 68 which granted a
tax amnesty, such payment is not a sufficient ground for lifting the order of the lower court of July 22, 1971 cancelling
his certificate of naturalization. The legal effect of payment under the decree is merely the removal of any civil, criminal
or administrative liability on the part of the taxpayer, only insofar as his tax case is concerned. Thus, paragraph 4 of the
decree provides;

4. That after full settlement of the accounts mentioned herein, the taxpayer shall be free of any civil,
criminal or administrative liability insofar as his tax case is involved (Emphasis supplied)

In other words, the tax amnesty does not have the effect of obliterating his lack of good moral character and
irreproachable conduct which are grounds for denaturalization.

The lower court based its order of cancellation of citizenship on the finding of evasion of payment of lawful taxes which
is sufficient ground, under Sec. 2 of the Revised Naturalization Law requiring, among others, that applicant conduct
himself "in a proper and irreproachable manner during the entire period of his residence in the Philippines in his relation
with constituted government as well as with the community in which he is living," 13 to strip him of his citizenship
without going into the other grounds for cancellation presented by the Solicitor General

Finally, taking into account the fact that naturalization laws should be rigidly enforced in favor of the Government and
against the applicant, this Court has repeatedly maintained the view that where the applicant failed to meet the
qualifications required for naturalization, the latter is not entitled to Filipino citizenship. 14 More specifically, the Court
has had occasion to state: "Admission to citizenship is one of the highest privileges that the Republic of the Philippines
can confer upon an alien. It is a privilege that should not be conferred except upon persons fully qualified for it, and
upon strict compliance with the law." 15 Philippine citizenship is a pearl of great price which should be cherished and
not taken for granted. Once acquired, its sheen must be burnished and not stained by any wrongdoing which could
constitute ample ground for divesting one of said citizenship. Hence, compliance with all the requirements of the law
must be proved to the satisfaction of the Court. 16

WHEREFORE, the instant appeal is hereby DISMISSED and the assailed decision AFFIRMED.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ., concur.

Footnotes
PROBATION LAWS

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 182748 December 13, 2011

ARNEL COLINARES, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

ABAD, J.:

This case is about a) the need, when invoking self-defense, to prove all that it takes; b) what distinguishes frustrated
homicide from attempted homicide; and c) when an accused who appeals may still apply for probation on remand of
the case to the trial court.

The Facts and the Case

The public prosecutor of Camarines Sur charged the accused Arnel Colinares (Arnel) with frustrated homicide
before the Regional Trial Court (RTC) of San Jose, Camarines Sur, in Criminal Case T-2213.1

Complainant Rufino P. Buena (Rufino) testified that at around 7:00 in the evening on June 25, 2000, he and Jesus
Paulite (Jesus) went out to buy cigarettes at a nearby store. On their way, Jesus took a leak by the roadside with
Rufino waiting nearby. From nowhere, Arnel sneaked behind and struck Rufino twice on the head with a huge stone,
about 15 ½ inches in diameter. Rufino fell unconscious as Jesus fled.

Ananias Jallores (Ananias) testified that he was walking home when he saw Rufino lying by the roadside. Ananias
tried to help but someone struck him with something hard on the right temple, knocking him out. He later learned
that Arnel had hit him.

Paciano Alano (Paciano) testified that he saw the whole incident since he happened to be smoking outside his
house. He sought the help of a barangay tanod and they brought Rufino to the hospital.

Dr. Albert Belleza issued a Medico-Legal Certificate2 showing that Rufino suffered two lacerated wounds on the
forehead, along the hairline area. The doctor testified that these injuries were serious and potentially fatal but Rufino
chose to go home after initial treatment.

The defense presented Arnel and Diomedes Paulite (Diomedes). Arnel claimed self-defense. He testified that he
was on his way home that evening when he met Rufino, Jesus, and Ananias who were all quite drunk. Arnel asked
Rufino where he supposed the Mayor of Tigaon was but, rather than reply, Rufino pushed him, causing his fall.
Jesus and Ananias then boxed Arnel several times on the back. Rufino tried to stab Arnel but missed. The latter
picked up a stone and, defending himself, struck Rufino on the head with it. When Ananias saw this, he charged
towards Arnel and tried to stab him with a gaff. Arnel was able to avoid the attack and hit Ananias with the same
stone. Arnel then fled and hid in his sister’s house. On September 4, 2000, he voluntarily surrendered at the Tigaon
Municipal Police Station.

Diomedes testified that he, Rufino, Jesus, and Ananias attended a pre-wedding party on the night of the incident.
His three companions were all drunk. On his way home, Diomedes saw the three engaged in heated argument with
Arnel.
On July 1, 2005 the RTC rendered judgment, finding Arnel guilty beyond reasonable doubt of frustrated homicide
and sentenced him to suffer imprisonment from two years and four months of prision correccional, as minimum, to
six years and one day of prision mayor, as maximum. Since the maximum probationable imprisonment under the
law was only up to six years, Arnel did not qualify for probation.

Arnel appealed to the Court of Appeals (CA), invoking self-defense and, alternatively, seeking conviction for the
lesser crime of attempted homicide with the consequent reduction of the penalty imposed on him. The CA entirely
affirmed the RTC decision but deleted the award for lost income in the absence of evidence to support it.3 Not
satisfied, Arnel comes to this Court on petition for review.

In the course of its deliberation on the case, the Court required Arnel and the Solicitor General to submit their
respective positions on whether or not, assuming Arnel committed only the lesser crime of attempted homicide with
its imposable penalty of imprisonment of four months of arresto mayor, as minimum, to two years and four months
of prision correccional, as maximum, he could still apply for probation upon remand of the case to the trial court.

Both complied with Arnel taking the position that he should be entitled to apply for probation in case the Court metes
out a new penalty on him that makes his offense probationable. The language and spirit of the probation law
warrants such a stand. The Solicitor General, on the other hand, argues that under the Probation Law no application
for probation can be entertained once the accused has perfected his appeal from the judgment of conviction.

The Issues Presented

The case essentially presents three issues:

1. Whether or not Arnel acted in self-defense when he struck Rufino on the head with a stone;

2. Assuming he did not act in self-defense, whether or not Arnel is guilty of frustrated homicide; and

3. Given a finding that Arnel is entitled to conviction for a lower offense and a reduced probationable penalty,
whether or not he may still apply for probation on remand of the case to the trial court.

The Court’s Rulings

One. Arnel claims that Rufino, Jesus, and Ananias attacked him first and that he merely acted in self-defense when
he hit Rufino back with a stone.

When the accused invokes self-defense, he bears the burden of showing that he was legally justified in killing the
victim or inflicting injury to him. The accused must establish the elements of self-defense by clear and convincing
evidence. When successful, the otherwise felonious deed would be excused, mainly predicated on the lack of
criminal intent of the accused.4

In homicide, whether consummated, frustrated, or attempted, self-defense requires (1) that the person whom the
offender killed or injured committed unlawful aggression; (2) that the offender employed means that is reasonably
necessary to prevent or repel the unlawful aggression; and (3) that the person defending himself did not act with
sufficient provocation.5

If the victim did not commit unlawful aggression against the accused, the latter has nothing to prevent or repel and
the other two requisites of self-defense would have no basis for being appreciated. Unlawful aggression
contemplates an actual, sudden, and unexpected attack or an imminent danger of such attack. A mere threatening
or intimidating attitude is not enough. The victim must attack the accused with actual physical force or with a
weapon.6

Here, the lower courts found that Arnel failed to prove the element of unlawful aggression. He alone testified that
Jesus and Ananias rained fist blows on him and that Rufino and Ananias tried to stab him. No one corroborated
Arnel’s testimony that it was Rufino who started it. Arnel’s only other witness, Diomedes, merely testified that he saw
those involved having a heated argument in the middle of the street. Arnel did not submit any medical certificate to
prove his point that he suffered injuries in the hands of Rufino and his companions.7
In contrast, the three witnesses—Jesus, Paciano, and Ananias—testified that Arnel was the aggressor. Although
their versions were mottled with inconsistencies, these do not detract from their core story. The witnesses were one
in what Arnel did and when and how he did it. Compared to Arnel’s testimony, the prosecution’s version is more
believable and consistent with reality, hence deserving credence.8

Two. But given that Arnel, the accused, was indeed the aggressor, would he be liable for frustrated homicide when
the wounds he inflicted on Rufino, his victim, were not fatal and could not have resulted in death as in fact it did not?

The main element of attempted or frustrated homicide is the accused’s intent to take his victim’s life. The
prosecution has to prove this clearly and convincingly to exclude every possible doubt regarding homicidal
intent.9And the intent to kill is often inferred from, among other things, the means the offender used and the nature,
location, and number of wounds he inflicted on his victim.10

Here, Arnel struck Rufino on the head with a huge stone. The blow was so forceful that it knocked Rufino out.
Considering the great size of his weapon, the impact it produced, and the location of the wounds that Arnel inflicted
on his victim, the Court is convinced that he intended to kill him.

The Court is inclined, however, to hold Arnel guilty only of attempted, not frustrated, homicide. In Palaganas v.
People,11 we ruled that when the accused intended to kill his victim, as shown by his use of a deadly weapon and
the wounds he inflicted, but the victim did not die because of timely medical assistance, the crime is frustrated
murder or frustrated homicide. If the victim’s wounds are not fatal, the crime is only attempted murder or attempted
homicide.

Thus, the prosecution must establish with certainty the nature, extent, depth, and severity of the victim’s wounds.
While Dr. Belleza testified that "head injuries are always very serious,"12 he could not categorically say that Rufino’s
wounds in this case were "fatal." Thus:

Q: Doctor, all the injuries in the head are fatal?

A: No, all traumatic injuries are potentially treated.

Q: But in the case of the victim when you treated him the wounds actually are not fatal on that very day?

A: I could not say, with the treatment we did, prevent from becoming fatal. But on that case the patient
preferred to go home at that time.

Q: The findings also indicated in the medical certificate only refers to the length of the wound not the depth
of the wound?

A: When you say lacerated wound, the entire length of the layer of scalp.

Q: So you could not find out any abrasion?

A: It is different laceration and abrasion so once the skin is broken up the label of the frontal lo[b]e, we
always call it lacerated wound, but in that kind of wound, we did not measure the depth.13

Indeed, Rufino had two lacerations on his forehead but there was no indication that his skull incurred fracture or that
he bled internally as a result of the pounding of his head. The wounds were not so deep, they merely required
suturing, and were estimated to heal in seven or eight days. Dr. Belleza further testified:

Q: So, in the medical certificate the wounds will not require surgery?

A: Yes, Madam.

Q: The injuries are slight?

A: 7 to 8 days long, what we are looking is not much, we give antibiotics and antit[e]tanus – the problem the
contusion that occurred in the brain.

xxxx

Q: What medical intervention that you undertake?

A: We give antibiotics, Your Honor, antit[e]tanus and suturing the wounds.

Q: For how many days did he stay in the hospital?

A: Head injury at least be observed within 24 hours, but some of them would rather go home and then come
back.

Q: So the patient did not stay 24 hours in the hospital?

A: No, Your Honor.

Q: Did he come back to you after 24 hours?

A: I am not sure when he came back for follow-up.14

Taken in its entirety, there is a dearth of medical evidence on record to support the prosecution’s claim that Rufino
would have died without timely medical intervention. Thus, the Court finds Arnel liable only for attempted homicide
and entitled to the mitigating circumstance of voluntary surrender.

Three. Ordinarily, Arnel would no longer be entitled to apply for probation, he having appealed from the judgment of
the RTC convicting him for frustrated homicide.

But, the Court finds Arnel guilty only of the lesser crime of attempted homicide and holds that the maximum of the
penalty imposed on him should be lowered to imprisonment of four months of arresto mayor, as minimum, to two
years and four months of prision correccional, as maximum. With this new penalty, it would be but fair to allow him
the right to apply for probation upon remand of the case to the RTC.

Some in the Court disagrees. They contend that probation is a mere privilege granted by the state only to qualified
convicted offenders. Section 4 of the probation law (PD 968) provides: "That no application for probation shall be
entertained or granted if the defendant has perfected the appeal from the judgment of conviction."15 Since Arnel
appealed his conviction for frustrated homicide, he should be deemed permanently disqualified from applying for
probation.

But, firstly, while it is true that probation is a mere privilege, the point is not that Arnel has the right to such privilege;
he certainly does not have. What he has is the right to apply for that privilege. The Court finds that his maximum jail
term should only be 2 years and 4 months. If the Court allows him to apply for probation because of the lowered
penalty, it is still up to the trial judge to decide whether or not to grant him the privilege of probation, taking into
account the full circumstances of his case.

Secondly, it is true that under the probation law the accused who appeals "from the judgment of conviction" is
disqualified from availing himself of the benefits of probation. But, as it happens, two judgments of conviction have
been meted out to Arnel: one, a conviction for frustrated homicide by the regional trial court, now set aside;
and, two, a conviction for attempted homicide by the Supreme Court.

If the Court chooses to go by the dissenting opinion’s hard position, it will apply the probation law on Arnel based on
the trial court’s annulled judgment against him. He will not be entitled to probation because of the severe penalty
that such judgment imposed on him. More, the Supreme Court’s judgment of conviction for a lesser offense and a
lighter penalty will also have to bend over to the trial court’s judgment—even if this has been found in error. And,
worse, Arnel will now also be made to pay for the trial court’s erroneous judgment with the forfeiture of his right to
apply for probation. Ang kabayo ang nagkasala, ang hagupit ay sa kalabaw (the horse errs, the carabao gets the
whip). Where is justice there?

The dissenting opinion also expresses apprehension that allowing Arnel to apply for probation would dilute the ruling
of this Court in Francisco v. Court of Appeals16 that the probation law requires that an accused must not have
appealed his conviction before he can avail himself of probation. But there is a huge difference between Francisco
and this case.

In Francisco, the Metropolitan Trial Court (MeTC) of Makati found the accused guilty of grave oral defamation and
sentenced him to a prison term of one year and one day to one year and eight months of prision correccional, a
clearly probationable penalty. Probation was his to ask! Still, he chose to appeal, seeking an acquittal, hence clearly
waiving his right to apply for probation. When the acquittal did not come, he wanted probation. The Court would not
of course let him. It served him right that he wanted to save his cake and eat it too. He certainly could not have both
appeal and probation.

The Probation Law, said the Court in Francisco, requires that an accused must not have appealed his conviction
before he can avail himself of probation. This requirement "outlaws the element of speculation on the part of the
accused—to wager on the result of his appeal—that when his conviction is finally affirmed on appeal, the moment of
truth well-nigh at hand, and the service of his sentence inevitable, he now applies for probation as an ‘escape hatch’
thus rendering nugatory the appellate court’s affirmance of his conviction."17

Here, however, Arnel did not appeal from a judgment that would have allowed him to apply for probation. He did not
have a choice between appeal and probation. He was not in a position to say, "By taking this appeal, I choose not to
apply for probation." The stiff penalty that the trial court imposed on him denied him that choice. Thus, a ruling that
would allow Arnel to now seek probation under this Court’s greatly diminished penalty will not dilute the sound ruling
in Francisco. It remains that those who will appeal from judgments of conviction, when they have the option to try for
probation, forfeit their right to apply for that privilege.

Besides, in appealing his case, Arnel raised the issue of correctness of the penalty imposed on him. He claimed that
the evidence at best warranted his conviction only for attempted, not frustrated, homicide, which crime called for a
probationable penalty. In a way, therefore, Arnel sought from the beginning to bring down the penalty to the level
where the law would allow him to apply for probation.

In a real sense, the Court’s finding that Arnel was guilty, not of frustrated homicide, but only of attempted homicide,
is an original conviction that for the first time imposes on him a probationable penalty. Had the RTC done him right
from the start, it would have found him guilty of the correct offense and imposed on him the right penalty of two
years and four months maximum. This would have afforded Arnel the right to apply for probation.
lavvphil

The Probation Law never intended to deny an accused his right to probation through no fault of his. The underlying
philosophy of probation is one of liberality towards the accused. Such philosophy is not served by a harsh and
stringent interpretation of the statutory provisions.18 As Justice Vicente V. Mendoza said in his dissent in Francisco,
the Probation Law must not be regarded as a mere privilege to be given to the accused only where it clearly
appears he comes within its letter; to do so would be to disregard the teaching in many cases that the Probation
Law should be applied in favor of the accused not because it is a criminal law but to achieve its beneficent
purpose.19

One of those who dissent from this decision points out that allowing Arnel to apply for probation after he appealed
from the trial court’s judgment of conviction would not be consistent with the provision of Section 2 that the probation
law should be interpreted to "provide an opportunity for the reformation of a penitent offender." An accused like
Arnel who appeals from a judgment convicting him, it is claimed, shows no penitence.

This may be true if the trial court meted out to Arnel a correct judgment of conviction. Here, however, it convicted
Arnel of the wrong crime, frustrated homicide, that carried a penalty in excess of 6 years. How can the Court expect
him to feel penitent over a crime, which as the Court now finds, he did not commit? He only committed attempted
homicide with its maximum penalty of 2 years and 4 months.
Ironically, if the Court denies Arnel the right to apply for probation under the reduced penalty, it would be sending
him straight behind bars. It would be robbing him of the chance to instead undergo reformation as a penitent
offender, defeating the very purpose of the probation law.

At any rate, what is clear is that, had the RTC done what was right and imposed on Arnel the correct penalty of two
years and four months maximum, he would have had the right to apply for probation. No one could say with
certainty that he would have availed himself of the right had the RTC done right by him. The idea may not even have
crossed his mind precisely since the penalty he got was not probationable.

The question in this case is ultimately one of fairness. Is it fair to deny Arnel the right to apply for probation when the
new penalty that the Court imposes on him is, unlike the one erroneously imposed by the trial court, subject to
probation?

WHEREFORE, the Court PARTIALLY GRANTS the petition, MODIFIES the Decision dated July 31, 2007 of the
Court of Appeals in CA-G.R. CR 29639, FINDS petitioner Arnel Colinares GUILTY beyond reasonable doubt of
attempted homicide, and SENTENCES him to suffer an indeterminate penalty from four months of arresto mayor, as
minimum, to two years and four months of prision correccional, as maximum, and to pay Rufino P. Buena the
amount of ₱20,000.00 as moral damages, without prejudice to petitioner applying for probation within 15 days from
notice that the record of the case has been remanded for execution to the Regional Trial Court of San Jose,
Camarines Sur, in Criminal Case T-2213.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

Associate Justice Associate Justice

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

Associate Justice Associate Justice

MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice

Footnotes

RULES OF COURT

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-38161 March 29, 1974

JUAN BELLO, FILOMENA C. BELLO, petitioners,

vs.
HON. COURT OF APPEALS, * HON. FRANCISCO LLAMAS, as Judge of Pasay City Court, and REPUBLIC OF THE PHILIPPINES, respondents.

Martinez and Martinez for petitioners.

Office of the Solicitor General, Dept. of Justice, for respondent.

TEEHANKEE, J.:p

The Court holds that the court of first instance of Pasay City in an appeal erroneously taken to it from the city court's
judgment convicting petitioners-accused of the charge of estafa within the concurrent original jurisdiction of said courts
should grant petitioners-accused's timely petition for certifying their appeal to the Court of Appeals as the proper court
rather than peremptorily grant the prosecution's motion for dismissal of the appeal and order the remand of the case to the
city court for execution of judgment. The appellate court's decision denying the relief sought by petitioners of compelling
the elevation of their appeal to it as the proper court simply because of the non-impleader of the court of first instance as a
nominal party notwithstanding that it was duly represented by the respondent People as the real party in interest through
the Solicitor General who expressed no objection to the setting aside of the court of first instance's dismissal order is set
aside as sacrificing substance to form and subordinating substantial justice to a mere matter of procedural technicality.

Petitioners spouses were charged on August 25, 1970 for estafa before the City Court of Pasay1 for allegedly having
misappropriated a lady's ring with a value of P1,000.00 received by them from Atty. Prudencio de Guzman for sale
on commission basis. After trial, they were convicted and sentenced under respondent city court's decision of
February 26, 1971 to six (6) months and one (1) day of prision correccional and to indemnify the offended party in
the sum of P1,000.00 with costs of suit.

Petitioners filed their notice of appeal of the adverse judgment to the Court of First Instance of Pasay City, but the
prosecution filed a "petition to dismiss appeal" on the ground that since the case was within
the concurrent jurisdiction of the city court and the court of first instance and the trial in the city court had been duly
recorded, the appeal should have been taken directly to the Court of Appeals as provided by section 87 of the
Judiciary Act, Republic Act 296, as amended.2

Petitioners opposed the prosecution's dismissal motion and invoking the analogous provision of Rule 50, section 3
directing that the Court of Appeals in cases erroneously brought to it "shall not dismiss the appeal, but shall certify
the case to the proper court, with a specific and clear statement of the grounds therefor," prayed of the court of first
instance if it should find the appeal to have been wrongly brought before it, to certify the same "to either the Court of
Appeals or the Supreme Court."3

The court of first instance per its order of October 29, 1971 did find that the appeal should have been taken directly
to the Court of Appeals but ordered the dismissal of the appeal and remand of the records to the city court "for
execution of judgment."4

Petitioners aver that they were not notified of the order of dismissal of their appeal and learned of it only when they
were called by the Pasay city court for execution of the judgment of conviction. Hence, they filed with the city court
their "motion to elevate appeal to Court of Appeals" of December 7, 1971 stating that "through inadvertence and/or
excusable neglect" they had erroneously filed a notice of appeal to the court of first instance instead of to the Court
of Appeals as the proper court and prayed that the city court, following precedents of this Court remanding appeals
before it to the proper court instead of dismissing appeals, "elevate the records ... to the Court of Appeals for proper
review."5

Respondent city court per its order of December 11, 1971 denied petitioners' motion "for having been erroneously
addressed to this court" instead of to the court of first instance6 ignoring petitioners' predicament that the court of first
instance had already turned them down and ordered the dismissal of their appeal without notice to them and that as
a consequence it was poised to execute its judgment of conviction against them.

Petitioners spouses then filed on January 14, 1972 their petition for prohibition and mandamus against the People
and respondent city court to prohibit the execution of the judgment and to compel respondent city court to elevate
their appeal to the Court of Appeals.7

The Solicitor General filed respondents' answer to the petition manifesting that "we shall not interpose any objection
whichever view point is adopted by this Honorable Court in resolving the two apparently conflicting or clashing
principles of law — finality of judicial decision or equity in judicial decision," after observing that "(F)rom the view
point of equity considering that petitioners' right to appeal lapsed or was lost through the fault, though not excusable,
of their counsel, and compounded by the alleged error of judgment committed by the Court of First Instance to which
the appeal was erroneously brought, we sympathize with petitioners' plight."

The Court of Appeals, however, per its decision of December 17, 1973 dismissed the petition, after finding that the
city court's judgment was directly appealable to it. Although recognizing that the "CFI instead of dismissing appeal,
could have in the exercise of its inherent powers directed appeal to be endorsed to this Court of Appeals" it held that
since petitioners did not implead the court of first instance as "principal party respondent" it could not "grant any
relief at all even on the assumption that petitioners can be said to deserve some equities," as follows:

... therefore, when they appealed to CFI, that was procedurally wrong; of course, CFI instead of
dismissing appeal, could have in the exercise of its inherent powers, directed appeal to
be endorsed to this Court of Appeals, but when instead of doing so, it dismissed, it also had power to
do so, and correction of it is difficult to see to be remediable by mandamus, but ignoring this
altogether, what this Court finds is that since it was CFI that dismissed the appeal and according to
petitioners, wrongly, it must follow that if CFI was wrong, this plea for mandamus to compel it to act
"correctly" should have been directed against said CFI, it should have been the CFI, Hon. Francisco
de la Rosa, who should have been made under Rule 65 Sec. 3, herein principal party respondent,
but he was not, this being the situation, this Court can not see how it can grant any relief at all even
on the assumption that petitioners can be said to deserve some equities.

Petitioners moved for reconsideration on January 2, 19748 and for elevation of their appeal to the Court of Appeals,
stressing the merits of their appeal and of their defense to the charge, viz, that the offended party Atty. de Guzman
had represented their son who was a suspect with two others for robbery before the Pasay city fiscal's office and
upon dismissal of the charge demanded payment from them as parents the sum of P1,000.00 as attorney's fees,
and since they had no money to pay him required them to sign the receipt dated June 25, 1970 in his favor for an
imaginary lady's ring to sell "on commission basis" for P1,000.00 (their "commission" to be any overprice) to assure
payment of the sum by the stated deadline of July 9, 1970 under penalty, of criminal prosecution for estafa; and that
they had then newly met Atty. de Guzman, whose services had been secured not by them but by the family of one
of the other suspects, implying the incredibility of his entrusting a lady's ring to both of them (husband and wife) for
sale on commission basis when his only association with them was his demand of payment of his P1,000-attorney's
fee for having represented their son-suspect.

Reconsideration having been denied by the appellate court "for lack of sufficient merit," petitioners filed the present
petition for review.9 The Court required the Solicitor General's comment on behalf of the People of the Philippines,
and upon receipt thereof resolved to consider the case as a special civil action with such comment as answer and
the case submitted for decision in the interest of justice and speedy adjudication.

The Court finds merits in the petition and holds that the court of first instance acted with grave abuse of discretion in
dismissing petitioners-accused's appeal which was erroneously brought to it and ordering remand of the records to
the city court for execution of judgment instead of certifying and endorsing the appeal to the Court of Appeals as the
proper court as timely prayed for by petitioners-accused in their opposition to the prosecution's motion to dismiss
appeal. We find that the Court of Appeals also acted with grave abuse of discretion in dismissing their petition
instead of setting aside the challenged order of the court of first instance peremptorily dismissing the appeal
pursuant to which respondent city court was poised to execute its judgment of conviction simply because the court
of first instance which is but a nominal party had not been impleaded as party respondent in disregard of the
substantive fact that the People as plaintiff and the real party in interest was duly impleaded as principal party
respondent and was represented in the proceedings by the Solicitor General.

The appellate court while recognizing that petitioners' appeal taken to the court of first instance was "procedurally
wrong" and that the court of first instance "in the exercise of its inherent powers could have certified the appeal to it
as the proper court instead of dismissing the appeal, gravely erred in holding that it could not "correct" the court of
first instance's "wrong action" and grant the relief sought of having the appeal elevated to it since said court's
presiding judge "who should have been-made under Rule 65, sec. 3 10 herein principal party respondent, but he was
not." The Court has always stressed as in Torre vs. Ericta 11 that a respondent judge is "merely a nominal party" in
special civil actions for certiorari, prohibition and mandamus and that he "is not a person "in interest" within the
purview (of Rule 65, section 5 12)" and "accordingly, he has no standing or authority to appeal from or seek a review
on certiorari" of an adverse decision of the appellate court setting aside his dismissal of a party's appeal and issuing
the writ of mandamus for him to allow the appeal.

It is readily seen from the cited Rule that the court of first instance or presiding judge who issued the challenged
order or decision is but a nominal party, the real parties in interest being "the person or persons interested in
sustaining the proceedings in the court" and who are charged with the duty of appearing and defending the
challenged act both "in their own behalf and in behalf of the court or judge affected by the proceedings." Hence,
theformal impleading of the court of first instance which issued the challenged order of dismissal was not
indispensable and could be "overlooked in the interest of speedy adjudication." 13

Since the real party in interest, the People as plaintiff in the criminal proceeding against petitioners-accused was
duly impleaded and represented by the Solicitor General to defend the proceedings in the court of first instance and
had expressed no objection to the appellate court's setting aside of the court of first instance's dismissal order, in the
interest of justice and equity the appellate court's act of dismissing the petition and denying the relief sought of
endorsing the appeal to the proper court simply because of the non impleader of the court of first instance as a
nominal party was tantamount to sacrificing substance to form and to subordinating substantial justice to a mere
matter of procedural technicality. The procedural infirmity of petitioners mis-directing their appeal to the court of first
instance rather than to the Court of Appeals, which they had timely sought to correct in the court of first instance
itself by asking that court to certify the appeal to the Court of Appeals as the proper court, should not be over-
magnified as to totally deprive them of their substantial right of appeal and leave them without any remedy.

The Court therefore grants herein the relief denied by respondent appellate court of mandamus to compel
respondent city court to elevate petitioners' appeal to the Court of Appeals as the proper court as being within the
context and spirit of Rule 50, section 3, providing for certification to the proper court by the Court of Appeals of
appealed cases erroneously brought to it, 14 particularly where petitioners-accused have shown prima facie (and
without this Court prejudging the merits of their appeal) that they have a valid cause for pursuing in good faith their
appeal (as against a manifestly dilatory or frivolous appeal) and to have a higher court appreciate their evidence in
support of their defense that they were prosecuted and sentenced to imprisonment (for estafa) for failure to pay a
purely civil indebtedness (the attorney's fee owed by their son to the complainant).
Here, petitioners-accused's counsel, misdirected their appeal to the court of first instance, confronted with the thorny
question (which has confused many a practitioner) 15 of concurrent criminal jurisdiction of city courts and municipal
courts of provincial and sub-provincial capitals with courts of first instance under sections 44 (f) and 87 (c) of the
Judiciary Act where the appeal from the municipal or city court's judgment should be taken directly to the Court of
Appeals as held in Esperat vs. Avila 16 as distinguished however from judgments of ordinary municipal courts in
similar cases within the concurrent jurisdiction of the courts of first instance where as held by this Court in People
vs. Valencia 17 the appeal should nevertheless be brought to the court of first instance which retains its appellate
jurisdiction under section 45 of the Judiciary Act.

It certainly was within the inherent power of the court of first instance in exercise of its power to "control its process
and orders so as to make them conformable to law and justice" 18 to grant petitioners-accused's timely plea to
endorse their appeal to the Court of Appeals as the proper court and within the context and spirit of Rule 50, section
3. In a mis-directed appeal to the Court of Appeals of a case that pertains to the court of first instance's jurisdiction,
the said Rule expressly provides that the Court of Appeals "shall not dismiss the appeal but shall certify the case to
the proper court" viz, the court of first instance in the given example. There is no logical reason why in
all fairness and justice the court of first instance in a misdirected appeal to it should not be likewise bound by
the same rule and therefore enjoined not to dismiss the appeal but to certify the case to the Court of Appeals as the
proper court. The paucity of the language of the Rule and its failure to expressly provide for such cases of
misdirected appeals to the court of first instance (owing possibly to the fact that at the time of the revision of the
Rules of Court in 1963 section 87 (c) had been newly amended under Republic Act 2613 approved on June 22,
1963 to enlarge the jurisdiction of city courts and municipal courts of provincial capitals and provide for
their concurrent jurisdiction with the courts of first instance and direct appeal from their judgments in such cases to
the Court of Appeals) should not be a cause for unjustly depriving petitioners of their substantial right of appeal.

This Court has in many cases involving the construction of statutes always cautioned against "narrowly" interpreting
a statute "as to defeat the purpose of the legislator" " 19 and stressed that "it is of the essence of judicial duty to
construe statutes so as to avoid such a deplorable result (of injustice or absurdity)" 20 and that therefore
"a literal interpretation is to be rejected if it would be unjust or lead to absurd results". 21 In the construction of
its own Rules of Court, this Court is all the more so bound to liberally construe them to avoid injustice, discrimination
and unfairness and to supply the void — that is certainly within the spirit and purpose of the Rule to eliminate
repugnancy and inconsistency — by holding as it does now that courts of first instance are equally bound as the
higher courts not to dismiss misdirected appeals timely made but to certify them to the proper appellate court.

ACCORDINGLY, the decision of the Court of Appeals dismissing the petition is hereby set aside and in lieu thereof,
judgment is hereby rendered granting the petition for prohibition against respondent city court which is hereby
enjoined from executing its judgment of conviction against petitioners-accused and further commanding said city
court to elevate petitioners' appeal from its judgment to the Court of Appeals for the latter's disposition on the merits.
No costs.

Makalintal, C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio, Fernandez, Muñoz Palma and Aquino, JJ.,
concur

Separate Opinions

ESGUERRA, J., dissenting:

I beg to dissent from the opinion that Section 3 of Rule 50 of the Rules of Court may be applied by analogy to this
case, considering that the dispositive portion of the draft decision commands the City Court to elevate the case to
the Court of Appeals. Under Section 31 of the Judiciary Act (Republic Act No. 296), "all cases erroneously brought
to the Supreme Court or to the Court of Appeals shall be sent to the proper court, which shall hear the same, as if it
had originally been brought before it." Section 3 of Rule 50 provides that "when the appealed case has been
erroneously brought to the Court of Appeals, it shall not dismiss the appeal but shall certify the case to the proper
court, with a specific and clear statement of the grounds therefor." These are the only legal provisions governing the
handling and disposition of erroneous appeals. Neither the Legislature nor the Rules of Court has provided the rules
for erroneous appeal to the Court of First Instance from the judgment of a City Court or the Municipal Court of a
provincial or sub-provincial capital in cases falling within their concurrent jurisdiction under the Judiciary Act, as
amended. I do not think the Supreme Court, by judicial fiat, can supply the deficiency unless it formally promulgates
a rule governing transfer or certification of cases erroneously appealed to the Court of First Instance from judgments
of inferior courts in cases directly appealable to the Court of Appeals. The void in the law is in the certification by the
Court of First Instance to the Court of Appeals in such cases.

We cannot apply Section 31 of the Judiciary Act and Section 3 of Rule 50 by analogy because We have to compel
the Court of First Instance to certify the case to the Court of Appeals. We cannot also compel the City Court of
Pasay City to do the same because the case was not appealed to it as it was its decision which was erroneously
appealed to the Court of First Instance. The proper court to certify and to be commanded to do so by mandamus is
the Court of First Instance, but this Court is not a party to this case and cannot be bound by any judgment rendered
herein.

That the People of the Philippines was impleaded as a party and represented by the Solicitor General is of no
significance to me. The People is not the one to be compelled to perform the act but the Judge of First Instance that
dismissed the appeal; and neither said Court nor the Judge thereof is a party respondent in these proceedings.

The petitioners here should have known, through their counsel, that the People of the Philippines and the Court of
First Instance of Pasay City are not one and the same entity, and that the former may not be compelled to perform
the act of certifying the case to the Court of Appeals while the latter can be. The respondent-appellate Court was
right in dismissing the petition to prohibit the execution of the judgment and to compel the City Court to elevate the
case to the Court of Appeals. Petitioners should have known that the Court of First Instance is an indispensable
party to these proceedings. For their counsel's fatal error, they should pay the price of having the judgment of
conviction become final.

Separate Opinions

ESGUERRA, J., dissenting:

I beg to dissent from the opinion that Section 3 of Rule 50 of the Rules of Court may be applied by analogy to this
case, considering that the dispositive portion of the draft decision commands the City Court to elevate the case to
the Court of Appeals. Under Section 31 of the Judiciary Act (Republic Act No. 296), "all cases erroneously brought
to the Supreme Court or to the Court of Appeals shall be sent to the proper court, which shall hear the same, as if it
had originally been brought before it." Section 3 of Rule 50 provides that "when the appealed case has been
erroneously brought to the Court of Appeals, it shall not dismiss the appeal but shall certify the case to the proper
court, with a specific and clear statement of the grounds therefor." These are the only legal provisions governing the
handling and disposition of erroneous appeals. Neither the Legislature nor the Rules of Court has provided the rules
for erroneous appeal to the Court of First Instance from the judgment of a City Court or the Municipal Court of a
provincial or sub-provincial capital in cases falling within their concurrent jurisdiction under the Judiciary Act, as
amended. I do not think the Supreme Court, by judicial fiat, can supply the deficiency unless it formally promulgates
a rule governing transfer or certification of cases erroneously appealed to the Court of First Instance from judgments
of inferior courts in cases directly appealable to the Court of Appeals. The void in the law is in the certification by the
Court of First Instance to the Court of Appeals in such cases.

We cannot apply Section 31 of the Judiciary Act and Section 3 of Rule 50 by analogy because We have to compel
the Court of First Instance to certify the case to the Court of Appeals. We cannot also compel the City Court of
Pasay City to do the same because the case was not appealed to it as it was its decision which was erroneously
appealed to the Court of First Instance. The proper court to certify and to be commanded to do so by mandamus is
the Court of First Instance, but this Court is not a party to this case and cannot be bound by any judgment rendered
herein.

That the People of the Philippines was impleaded as a party and represented by the Solicitor General is of no
significance to me. The People is not the one to be compelled to perform the act but the Judge of First Instance that
dismissed the appeal; and neither said Court nor the Judge thereof is a party respondent in these proceedings.

The petitioners here should have known, through their counsel, that the People of the Philippines and the Court of
First Instance of Pasay City are not one and the same entity, and that the former may not be compelled to perform
the act of certifying the case to the Court of Appeals while the latter can be. The respondent-appellate Court was
right in dismissing the petition to prohibit the execution of the judgment and to compel the City Court to elevate the
case to the Court of Appeals. Petitioners should have known that the Court of First Instance is an indispensable
party to these proceedings. For their counsel's fatal error, they should pay the price of having the judgment of
conviction become final.

Footnotes

EXPROPRIATION LAWS

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-14355 October 31, 1919

THE CITY OF MANILA, plaintiff-appellant,

vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.

City Fiscal Diaz for appellant.

Crossfield and O'Brien, Williams, Ferrier and Sycip, Delgado and Delgado, Filemon Sotto, and Ramon Salinas for
appellees.

JOHNSON, J.:

The important question presented by this appeal is: In expropriation proceedings by the city of Manila, may the
courts inquire into, and hear proof upon, the necessity of the expropriation?

That question arose in the following manner:

On the 11th day of December, 1916, the city of Manila presented a petition in the Court of First Instance of said city,
praying that certain lands, therein particularly described, be expropriated for the purpose of constructing a public
improvement. The petitioner, in the second paragraph of the petition, alleged:

That for the purpose of constructing a public improvement, namely, the extension of Rizal Avenue, Manila, it
is necessary for the plaintiff to acquire ownership in fee simple of certain parcels of land situated in the
district of Binondo of said city within Block 83 of said district, and within the jurisdiction of this court.

The defendant, the Comunidad de Chinos de Manila [Chinese Community of Manila], answering the petition of the
plaintiff, alleged that it was a corporation organized and existing under and by virtue of the laws of the Philippine
Islands, having for its purpose the benefit and general welfare of the Chinese Community of the City of Manila; that
it was the owner of parcels one and two of the land described in paragraph 2 of the complaint; that it denied that it
was either necessary or expedient that the said parcels be expropriated for street purposes; that existing street and
roads furnished ample means of communication for the public in the district covered by such proposed
expropriation; that if the construction of the street or road should be considered a public necessity, other routes were
available, which would fully satisfy the plaintiff's purposes, at much less expense and without disturbing the resting
places of the dead; that it had a Torrens title for the lands in question; that the lands in question had been used by
the defendant for cemetery purposes; that a great number of Chinese were buried in said cemetery; that if said
expropriation be carried into effect, it would disturb the resting places of the dead, would require the expenditure of a
large sum of money in the transfer or removal of the bodies to some other place or site and in the purchase of such
new sites, would involve the destruction of existing monuments and the erection of new monuments in their stead,
and would create irreparable loss and injury to the defendant and to all those persons owning and interested in the
graves and monuments which would have to be destroyed; that the plaintiff was without right or authority to
expropriate said cemetery or any part or portion thereof for street purposes; and that the expropriation, in fact, was
not necessary as a public improvement.

The defendant Ildefonso Tambunting, answering the petition, denied each and every allegation of the complaint, and
alleged that said expropriation was not a public improvement; that it was not necessary for the plaintiff to acquire the
parcels of land in question; that a portion of the lands in question was used as a cemetery in which were the graves
of his ancestors; that monuments and tombstones of great value were found thereon; that the land had
becomequasi-public property of a benevolent association, dedicated and used for the burial of the dead and that
many dead were buried there; that if the plaintiff deemed it necessary to extend Rizal Avenue, he had offered and
still offers to grant a right of way for the said extension over other land, without cost to the plaintiff, in order that the
sepulchers, chapels and graves of his ancestors may not be disturbed; that the land so offered, free of charge,
would answer every public necessity on the part of the plaintiff.

The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and each of the other
defendants, answering separately, presented substantially the same defense as that presented by the Comunidad
de Chinos de Manila and Ildefonso Tambunting above referred to.

The foregoing parts of the defense presented by the defendants have been inserted in order to show the general
character of the defenses presented by each of the defendants. The plaintiff alleged that the expropriation was
necessary. The defendants each alleged (a) that no necessity existed for said expropriation and (b) that the land in
question was a cemetery, which had been used as such for many years, and was covered with sepulchres and
monuments, and that the same should not be converted into a street for public purposes.

Upon the issue thus presented by the petition and the various answers, the Honorable Simplicio del Rosario, judge,
in a very elucidated opinion, with very clear and explicit reasons, supported by ambulance of authorities, decided
that there was no necessity for the expropriation of the particular strip of land in question, and absolved each and all
of the defendants from all liability under the complaint, without any finding as to costs.

From that judgment the plaintiff appealed and presented the above question as its principal ground of appeal.

The theory of the plaintiff is, that once it has established the fact, under the law, that it has authority to expropriate
land, it may expropriate any land it may desire; that the only function of the court in such proceedings is to ascertain
the value of the land in question; that neither the court nor the owners of the land can inquire into the advisible
purpose of purpose of the expropriation or ask any questions concerning the necessities therefor; that
the courts are mere appraisers of the land involved in expropriation proceedings, and, when the value of the land is
fixed by the method adopted by the law, to render a judgment in favor of the defendant for its value.

That the city of Manila has authority to expropriate private lands for public purposes, is not denied. Section 2429 of
Act No. 2711 (Charter of the city of Manila) provides that "the city (Manila) . . . may condemn private property
forpublic use."

The Charter of the city of Manila contains no procedure by which the said authority may be carried into effect. We
are driven, therefore, to the procedure marked out by Act No. 190 to ascertain how the said authority may be
exercised. From an examination of Act No. 190, in its section 241, we find how the right of eminent domain may be
exercised. Said section 241 provides that, "The Government of the Philippine Islands, or of any province or
department thereof, or of any municipality, and any person, or public or private corporation having, by law, the
right to condemn private property for public use, shall exercise that right in the manner hereinafter prescribed."

Section 242 provides that a complaint in expropriation proceeding shall be presented; that the complaint shall state
with certainty the right of condemnation, with a description of the property sought to be condemned together with the
interest of each defendant separately.

Section 243 provides that if the court shall find upon trial that the right to expropriate the land in question exists, it
shall then appoint commissioners.
Sections 244, 245 and 246 provide the method of procedure and duty of the commissioners. Section 248 provides
for an appeal from the judgment of the Court of First Instance to the Supreme Court. Said section 248 gives the
Supreme Court authority to inquire into the right of expropriation on the part of the plaintiff. If the Supreme Court on
appeal shall determine that no right of expropriation existed, it shall remand the cause to the Court of First Instance
with a mandate that the defendant be replaced in the possession of the property and that he recover whatever
damages he may have sustained by reason of the possession of the plaintiff.

It is contended on the part of the plaintiff that the phrase in said section, "and if the court shall find the right to
expropriate exists," means simply that, if the court finds that there is some law authorizing the plaintiff to expropriate,
then the courts have no other function than to authorize the expropriation and to proceed to ascertain the value of
the land involved; that the necessity for the expropriation is a legislative and not a judicial question.

Upon the question whether expropriation is a legislative function exclusively, and that the courts cannot intervene
except for the purpose of determining the value of the land in question, there is much legal legislature. Much has
been written upon both sides of that question. A careful examination of the discussions pro and con will disclose the
fact that the decisions depend largely upon particular constitutional or statutory provisions. It cannot be denied, if the
legislature under proper authority should grant the expropriation of a certain or particular parcel of land for some
specified public purpose, that the courts would be without jurisdiction to inquire into the purpose of that legislation.

If, upon the other hand, however, the Legislature should grant general authority to a municipal corporation to
expropriate private land for public purposes, we think the courts have ample authority in this jurisdiction, under the
provisions above quoted, to make inquiry and to hear proof, upon an issue properly presented, concerning whether
or not the lands were private and whether the purpose was, in fact, public. In other words, have no the courts in this
jurisdiction the right, inasmuch as the questions relating to expropriation must be referred to them (sec. 241, Act No.
190) for final decision, to ask whether or not the law has been complied with? Suppose in a particular case, it should
be denied that the property is not private property but public, may not the courts hear proof upon that question? Or,
suppose the defense is, that the purpose of the expropriation is not public but private, or that there exists no public
purpose at all, may not the courts make inquiry and hear proof upon that question?

The city of Manila is given authority to expropriate private lands for public purposes. Can it be possible that said
authority confers the right to determine for itself that the land is private and that the purpose is public, and that the
people of the city of Manila who pay the taxes for its support, especially those who are directly affected, may not
question one or the other, or both, of these questions? Can it be successfully contended that the phrase used in Act
No. 190, "and if the court upon trial shall find that such right exists," means simply that the court shall examine
thestatutes simply for the purpose of ascertaining whether a law exists authorizing the petitioner to exercise the right
of eminent domain? Or, when the case arrives in the Supreme Court, can it be possible that the phrase, "if the
Supreme Court shall determine that no right of expropriation exists," that that simply means that the Supreme Court
shall also examine the enactments of the legislature for the purpose of determining whether or not a law exists
permitting the plaintiff to expropriate?

We are of the opinion that the power of the court is not limited to that question. The right of expropriation is not an
inherent power in a municipal corporation, and before it can exercise the right some law must exist conferring the
power upon it. When the courts come to determine the question, they must only find (a) that a law or authority exists
for the exercise of the right of eminent domain, but (b) also that the right or authority is being exercised in
accordance with the law. In the present case there are two conditions imposed upon the authority conceded to the
City of Manila: First, the land must be private; and, second, the purpose must be public. If the court, upon trial, finds
that neither of these conditions exists or that either one of them fails, certainly it cannot be contended that the right
is being exercised in accordance with law.

Whether the purpose for the exercise of the right of eminent domain is public, is a question of fact. Whether the land
is public, is a question of fact; and, in our opinion, when the legislature conferred upon the courts of the Philippine
Islands the right to ascertain upon trial whether the right exists for the exercise of eminent domain, it intended that
the courts should inquire into, and hear proof upon, those questions. Is it possible that the owner of valuable land in
this jurisdiction is compelled to stand mute while his land is being expropriated for a use not public, with the right
simply to beg the city of Manila to pay him the value of his land? Does the law in this jurisdiction permit
municipalities to expropriate lands, without question, simply for the purpose of satisfying the aesthetic sense of
those who happen for the time being to be in authority? Expropriation of lands usually calls for public expense. The
taxpayers are called upon to pay the costs. Cannot the owners of land question the public use or the public
necessity?

As was said above, there is a wide divergence of opinion upon the authority of the court to question the necessity or
advisability of the exercise of the right of eminent domain. The divergence is usually found to depend upon particular
statutory or constitutional provisions.

It has been contended — and many cases are cited in support of that contention, and section 158 of volume 10 of
Ruling Case Law is cited as conclusive — that the necessity for taking property under the right of eminent domain is
not a judicial question. But those who cited said section evidently overlooked the section immediately following (sec.
159), which adds: "But it is obvious that if the property is taken in the ostensible behalf of a public
improvementwhich it can never by any possibility serve, it is being taken for a use not public, and the owner's
constitutional rights call for protection by the courts. While many courts have used sweeping expression in the
decisions in which they have disclaimed the power of supervising the power of supervising the selection of the sites
of public improvements, it may be safely said that the courts of the various states would feel bound to interfere to
prevent an abuse of the discretion delegated by the legislature, by an attempted appropriation of land in utter
disregard of the possible necessity of its use, or when the alleged purpose was a cloak to some sinister scheme."
(Norwich City vs. Johnson, 86 Conn., 151; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544; Wheeling, etc. R. R.
Co. vs. Toledo Ry. etc. Co., 72 Ohio St., 368; State vs. Stewart, 74 Wis., 620.)

Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in support of the contention of the
appellant, says:

The legislature, in providing for the exercise of the power of eminent domain, may directly determine the
necessity for appropriating private property for a particular improvement for public use, and it may select the
exact location of the improvement. In such a case, it is well settled that the utility of the proposed
improvement, the extent of the public necessity for its construction, the expediency of constructing it, the
suitableness of the location selected and the consequent necessity of taking the land selected for its site,
are all questions exclusively for the legislature to determine, and the courts have no power to interfere, or to
substitute their own views for those of the representatives of the people.

Practically every case cited in support of the above doctrine has been examined, and we are justified in making the
statement that in each case the legislature directly determined the necessity for the exercise of the right of eminent
domain in the particular case. It is not denied that if the necessity for the exercise of the right of eminent domain is
presented to the legislative department of the government and that department decides that there exists a necessity
for the exercise of the right in a particular case, that then and in that case, the courts will not go behind the action of
the legislature and make inquiry concerning the necessity. But, in the case of Wheeling, etc. R. R. Co. vs. Toledo,
Ry, etc., Co. (72 Ohio St., 368 [106 Am. St. rep., 622, 628]), which was cited in support of the doctrine laid down in
section 158 above quoted, the court said:

But when the statute does not designate the property to be taken nor how may be taken, then the necessity
of taking particular property is a question for the courts. Where the application to condemn or appropriate is
made directly to the court, the question (of necessity) should be raised and decided in limene.

The legislative department of the government was rarely undertakes to designate the precise property which should
be taken for public use. It has generally, like in the present case, merely conferred general authority to take land for
public use when a necessity exists therefor. We believe that it can be confidently asserted that, under such statute,
the allegation of the necessity for the appropriation is an issuable allegation which it is competent for the courts to
decide. (Lynch vs. Forbes, 161 Mass., 302 [42 Am. St. Rep., 402, 407].)

There is a wide distinction between a legislative declaration that a municipality is given authority to exercise the right
of eminent domain, and a decision by the municipality that there exist a necessity for the exercise of that right in a
particular case. The first is a declaration simply that there exist reasons why the right should be conferred upon
municipal corporation, while the second is the application of the right to a particular case. Certainly, the legislative
declaration relating to the advisability of granting the power cannot be converted into a declaration that a necessity
exists for its exercise in a particular case, and especially so when, perhaps, the land in question was not within the
territorial authority was granted.
Whether it was wise, advisable, or necessary to confer upon a municipality the power to exercise the right of
eminent domain, is a question with which the courts are not concerned. But when that right or authority is exercised
for the purpose of depriving citizens of their property, the courts are authorized, in this jurisdiction, to make inquiry
and to hear proof upon the necessity in the particular case, and not the general authority.

Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a further conclusive authority upon
the question that the necessity for the exercise of the right of eminent domain is a legislative and not a judicial
question. Cyclopedia, at the page stated, says:

In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of
exercising the right of eminent domain are questions essentially political and not judicial in their character.
The determination of those questions (the necessity and the expediency) belongs to the sovereign power;
the legislative department is final and conclusive, and the courts have no power to review it (the necessity
and the expediency) . . . . It (the legislature) may designate the particular property to be condemned, and its
determination in this respect cannot be reviewed by the courts.

The volume of Cyclopedia, above referred to, cites many cases in support of the doctrine quoted. While time has not
permitted an examination of all of said citations, many of them have been examined, and it can be confidently
asserted that said cases which are cited in support of the assertion that, "the necessity and expediency of exercising
the right of eminent domain are questions essentially political and not judicial," show clearly and invariably that in
each case the legislature itself usually, by a special law, designated the particular case in which the right of eminent
domain might be exercised by the particular municipal corporation or entity within the state. (Eastern R.
Co. vs.Boston, etc., R. Co., 11 Mass., 125 [15 Am. Rep., 13]; Brooklyn Park Com'rs vs. Armstrong, 45 N.Y., 234 [6
Am. Rep., 70]; Hairston vs. Danville, etc. Ry. Co., 208 U. S. 598; Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S.,
390; U.S. vs. Chandler-Dunbar Water Power Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U. S., 668;
Traction Co. vs. Mining Co., 196 U.S., 239; Sears vs. City of Akron, 246 U.S., 351 [erroneously cited as 242 U.S.].)

In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme Court of the United States said: "It is
erroneous to suppose that the legislature is beyond the control of the courts in exercising the power of eminent
domain, either as to the nature of the use or the necessity to the use of any particular property. For if the use be not
public or no necessity for the taking exists, the legislature cannot authorize the taking of private property against the
will of the owner, notwithstanding compensation may be required."

In the case of School Board of Carolina vs. Saldaña (14 Porto Rico, 339, 356), we find the Supreme Court of Porto
Rico, speaking through Justice MacLeary, quoting approvingly the following, upon the question which we are
discussing: "It is well settled that although the legislature must necessarily determine in the first instance whether
the use for which they (municipalities, etc.) attempt to exercise the power is a public one or not, their (municipalities,
etc.) determination is not final, but is subject to correction by the courts, who may undoubtedly declare the statute
unconstitutional, if it shall clearly appear that the use for which it is proposed to authorize the taking of private
property is in reality not public but private." Many cases are cited in support of that doctrine.

Later, in the same decision, we find the Supreme Court of Porto Rico says: "At any rate, the rule is quite well settled
that in the cases under consideration the determination of the necessity of taking a particular piece or a certain
amount of land rests ultimately with the courts." (Spring Valley etc. Co. vs. San Mateo, etc. Co., 64 Cal., 123.) .

In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41 L. R. A., N. S., 1024]), the Supreme
Court of Connecticut approvingly quoted the following doctrine from Lewis on Eminent Domain (3d ed.), section 599:
"In all such cases the necessity of public utility of the proposed work or improvement is a judicial question. In all
such cases, where the authority is to take property necessary for the purpose, the necessity of taking particular
property for a particular purpose is a judicial one, upon which the owner is entitled to be heard."
(Riley vs.Charleston, etc. Co., 71 S. C., 457, 489 [110 Am. St. Rep., 579]; Henderson vs. Lexington 132 Ky., 390,
403.)

The taking of private property for any use which is not required by the necessities or convenience of the inhabitants
of the state, is an unreasonable exercise of the right of eminent domain, and beyond the power of the legislature to
delegate. (Bennett vs. Marion, 106 Iowa, 628, 633; Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc.
Co. vs. Ely, etc. Co., 132 Ky., 692, 697.)
In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537, 564), the Supreme Court of the State of
Maryland, discussing the question before us, said: "To justify the exercise of this extreme power (eminent domain)
where the legislature has left it to depend upon the necessity that may be found to exist, in order to accomplish the
purpose of the incorporation, as in this case, the party claiming the right to the exercise of the power should be
required to show at least a reasonable degree of necessity for its exercise. Any rule less strict than this, with the
large and almost indiscriminate delegation of the right to corporations, would likely lead to oppression and the
sacrifice of private right to corporate power."

In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court said: "Its right to condemn property is not a
general power of condemnation, but is limited to cases where a necessity for resort to private property is shown to
exist. Such necessity must appear upon the face of the petition to condemn. If the necessary is denied the burden is
upon the company (municipality) to establish it." (Highland, etc. Co. vs. Strickley, 116 Fed., 852, 856;
Kiney vs.Citizens' Water & Light Co., 173 Ind., 252, 257 ; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544 [137
Am. St. Rep. 338].)

It is true that naby decisions may be found asserting that what is a public use is a legislative question, and many
other decisions declaring with equal emphasis that it is a judicial question. But, as long as there is a constitutional or
statutory provision denying the right to take land for any use other than a public use, it occurs to us that the question
whether any particular use is a public one or not is ultimately, at least, a judicial question. The legislative may, it is
true, in effect declare certain uses to be public, and, under the operation of the well-known rule that a statute will not
be declared to be unconstitutional except in a case free, or comparatively free, from doubt, the courts will certainly
sustain the action of the legislature unless it appears that the particular use is clearly not of a public nature. The
decisions must be understood with this limitation; for, certainly, no court of last resort will be willing to declare that
any and every purpose which the legislative might happen to designate as a public use shall be conclusively held to
be so, irrespective of the purpose in question and of its manifestly private character Blackstone in his Commentaries
on the English Law remarks that, so great is the regard of the law for private property that it will not authorize the
least violation of it, even for the public good, unless there exists a very great necessity therefor.

In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court of the United States said: "That
government can scarcely be deemed free where the rights of property are left solely defendant on the legislative
body, without restraint. The fundamental maxims of free government seem to require that the rights of personal
liberty and private property should be held sacred. At least no court of justice in this country would be warranted in
assuming that the power to violate and disregard them — a power so repugnant to the common principles of justice
and civil liberty — lurked in any general grant of legislature authority, or ought to be implied from any general
expression of the people. The people ought no to be presumed to part with rights so vital to their security and well-
being without very strong and direct expression of such intention." (Lewis on Eminent Domain, sec. 603;
Lecoul vs.Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann., 182.)

Blackstone, in his Commentaries on the English Law said that the right to own and possess land — a place to live
separate and apart from others — to retain it as a home for the family in a way not to be molested by others — is
one of the most sacred rights that men are heirs to. That right has been written into the organic law of every civilized
nation. The Acts of Congress of July 1, 1902, and of August 29, 1916, which provide that "no law shall be enacted in
the Philippine Islands which shall deprive any person of his property without due process of law," are but a
restatement of the time-honored protection of the absolute right of the individual to his property. Neither did said
Acts of Congress add anything to the law already existing in the Philippine Islands. The Spaniard fully recognized
the principle and adequately protected the inhabitants of the Philippine Islands against the encroachment upon the
private property of the individual. Article 349 of the Civil Code provides that: "No one may be deprived of his
property unless it be by competent authority, for some purpose of proven public utility, and after payment of the
proper compensation Unless this requisite (proven public utility and payment) has been complied with, it shall be
theduty of the courts to protect the owner of such property in its possession or to restore its possession to him , as
the case may be."

The exercise of the right of eminent domain, whether directly by the State, or by its authorized agents, is necessarily
in derogation of private rights, and the rule in that case is that the authority must be strictly construed. No species of
property is held by individuals with greater tenacity, and none is guarded by the constitution and laws more
sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right, and, for
greater public purposes, appropriates the land of an individual without his consent, the plain meaning of the law
should not be enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co., 13 Cal., 306 and cases cited
[73 Am. Dec., 576].)

The statutory power of taking property from the owner without his consent is one of the most delicate exercise of
government authority. It is to be watched with jealous scrutiny. Important as the power may be to the government,
the inviolable sanctity which all free constitutions attach to the right of property of the citizens, constrains the strict
observance of the substantial provisions of the law which are prescribed as modes of the exercise of the power, and
to protect it from abuse. Not only must the authority of municipal corporations to take property be expressly
conferred and the use for which it is taken specified, but the power, with all constitutional limitation and directions for
its exercise, must be strictly pursued. (Dillon on Municipal Corporations [5th Ed.], sec. 1040, and cases cited;
Tenorio vs. Manila Railroad Co., 22 Phil., 411.)

It can scarcely be contended that a municipality would be permitted to take property for some public use unless
some public necessity existed therefor. The right to take private property for public use originates in the necessity,
and the taking must be limited by such necessity. The appellant contends that inasmuch as the legislature has given
it general authority to take private property for public use, that the legislature has, therefore, settled the question of
the necessity in every case and that the courts are closed to the owners of the property upon that question. Can it
be imagined, when the legislature adopted section 2429 of Act No. 2711, that it thereby declared that it was
necessary to appropriate the property of Juan de la Cruz, whose property, perhaps, was not within the city limits at
the time the law was adopted? The legislature, then, not having declared the necessity, can it be contemplated that
it intended that a municipality should be the sole judge of the necessity in every case, and that the courts, in the face
of the provision that "if upon trial they shall find that a right exists," cannot in that trial inquire into and hear proof
upon the necessity for the appropriation in a particular case?

The Charter of the city of Manila authorizes the taking of private property for public use. Suppose the owner of the
property denies and successfully proves that the taking of his property serves no public use: Would the courts not
be justified in inquiring into that question and in finally denying the petition if no public purpose was proved? Can it
be denied that the courts have a right to inquire into that question? If the courts can ask questions and decide, upon
an issue properly presented, whether the use is public or not, is not that tantamount to permitting the courts to
inquire into the necessity of the appropriation? If there is no public use, then there is no necessity, and if there is no
necessity, it is difficult to understand how a public use can necessarily exist. If the courts can inquire into the
question whether a public use exists or not, then it seems that it must follow that they can examine into the question
of the necessity.

The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a
public character. The ascertainment of the necessity must precede or accompany, and not follow, the taking of the
land. (Morrison vs. Indianapolis, etc. Ry. Co., 166 Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R.
Co. vs. Toledo, Ry. etc. Co., 72 Ohio St., 368.)

The general power to exercise the right of eminent domain must not be confused with the right to exercise it in
aparticular case. The power of the legislature to confer, upon municipal corporations and other entities within the
State, general authority to exercise the right of eminent domain cannot be questioned by the courts, but that general
authority of municipalities or entities must not be confused with the right to exercise it in particular instances. The
moment the municipal corporation or entity attempts to exercise the authority conferred, it must comply with the
conditions accompanying the authority. The necessity for conferring the authority upon a municipal corporation to
exercise the right of eminent domain is admittedly within the power of the legislature. But whether or not the
municipal corporation or entity is exercising the right in a particular case under the conditions imposed by the
general authority, is a question which the courts have the right to inquire into.

The conflict in the authorities upon the question whether the necessity for the exercise of the right of eminent
domain is purely legislative and not judicial, arises generally in the wisdom and propriety of the legislature in
authorizing the exercise of the right of eminent domain instead of in the question of the right to exercise it in a
particular case. (Creston Waterworks Co. vs. McGrath, 89 Iowa, 502.)

By the weight of authorities, the courts have the power of restricting the exercise of eminent domain to the actual
reasonable necessities of the case and for the purposes designated by the law. (Fairchild vs. City of St. Paul. 48
Minn., 540.)
And, moreover, the record does not show conclusively that the plaintiff has definitely decided that their exists a
necessity for the appropriation of the particular land described in the complaint. Exhibits 4, 5, 7, and E clearly
indicate that the municipal board believed at one time that other land might be used for the proposed improvement,
thereby avoiding the necessity of distributing the quiet resting place of the dead.

Aside from insisting that there exists no necessity for the alleged improvements, the defendants further contend that
the street in question should not be opened through the cemetery. One of the defendants alleges that said cemetery
is public property. If that allegations is true, then, of course, the city of Manila cannot appropriate it for public use.
The city of Manila can only expropriate private property.

It is a well known fact that cemeteries may be public or private. The former is a cemetery used by the general
community, or neighborhood, or church, while the latter is used only by a family, or a small portion of the community
or neighborhood. (11 C. J., 50.)

Where a cemetery is open to public, it is a public use and no part of the ground can be taken for other public uses
under a general authority. And this immunity extends to the unimproved and unoccupied parts which are held in
good faith for future use. (Lewis on Eminent Domain, sec. 434, and cases cited.)

The cemetery in question seems to have been established under governmental authority. The Spanish Governor-
General, in an order creating the same, used the following language:

The cemetery and general hospital for indigent Chinese having been founded and maintained by the
spontaneous and fraternal contribution of their protector, merchants and industrials, benefactors of mankind,
in consideration of their services to the Government of the Islands its internal administration, government
and regime must necessarily be adjusted to the taste and traditional practices of those born and educated in
China in order that the sentiments which animated the founders may be perpetually effectuated.

It is alleged, and not denied, that the cemetery in question may be used by the general community of Chinese,
which fact, in the general acceptation of the definition of a public cemetery, would make the cemetery in question
public property. If that is true, then, of course, the petition of the plaintiff must be denied, for the reason that the city
of Manila has no authority or right under the law to expropriate public property.

But, whether or not the cemetery is public or private property, its appropriation for the uses of a public street,
especially during the lifetime of those specially interested in its maintenance as a cemetery, should be a question of
great concern, and its appropriation should not be made for such purposes until it is fully established that the
greatest necessity exists therefor.

While we do not contend that the dead must not give place to the living, and while it is a matter of public knowledge
that in the process of time sepulchres may become the seat of cities and cemeteries traversed by streets and daily
trod by the feet of millions of men, yet, nevertheless such sacrifices and such uses of the places of the dead should
not be made unless and until it is fully established that there exists an eminent necessity therefor. While cemeteries
and sepulchres and the places of the burial of the dead are still within
the memory and command of the active care of the living; while they are still devoted to pious uses and sacred
regard, it is difficult to believe that even the legislature would adopt a law expressly providing that such places,
under such circumstances, should be violated.

In such an appropriation, what, we may ask, would be the measure of damages at law, for the wounded sensibilities
of the living, in having the graves of kindred and loved ones blotted out and desecrated by a common highway or
street for public travel? The impossibility of measuring the damage and inadequacy of a remedy at law is too
apparent to admit of argument. To disturb the mortal remains of those endeared to us in life sometimes becomes
the sad duty of the living; but, except in cases of necessity, or for laudable purposes, the sanctity of the grave, the
last resting place of our friends, should be maintained, and the preventative aid of the courts should be invoked for
that object. (Railroad Company vs. Cemetery Co., 116 Tenn., 400; Evergreen Cemetery Association vs. The City of
New Haven, 43 Conn., 234; Anderson vs. Acheson, 132 Iowa, 744; Beatty vs. Kurtz, 2 Peters, 566.)

In the present case, even granting that a necessity exists for the opening of the street in question, the record
contains no proof of the necessity of opening the same through the cemetery. The record shows that adjoining and
adjacent lands have been offered to the city free of charge, which will answer every purpose of the plaintiff.
For all of the foregoing, we are fully persuaded that the judgment of the lower court should be and is hereby
affirmed, with costs against the appellant. So ordered.

Arellano, C.J., Torres, Araullo and Avanceña, JJ., concur.

Separate Opinions

MALCOLM, J., concurring:

The Government of the Philippine Islands is authorized by the Philippine Bill to acquire real estate for public use by
the exercise of the right of eminent domain. (Act of Congress of July 1, 1902, sec. 63.) A portion of this power has
been delegated by the Philippine Legislature to the city of Manila, which is permitted to "condemn private property
for public use." (Administrative Code of 1917, sec. 2429.) The Code of Civil Procedure, in prescribing how the right
of eminent domain may be exercised, also limits the condemnation to "private property for public use." (Sec. 241.)
As under the facts actually presented, there can be no question that a public street constitutes a public use, the only
remaining question is whether or not the Chinese Cemetery and the other property here sought to be taken by the
exercise of the right of eminent domain is "private property."

As narrowing our inquiry still further, let it be noted that cemeteries are of two classes, public and private. A public
cemetery is one used by the general community, or neighborhood, or church; while a private cemetery is one used
only by a family, or small portion of a community. (Lay vs. State, 12 Ind. App., 362; Cemetery
Association vs.Meninger [1875], 14 Kan., 312.) Our specific question, then, is, whether the Chinese Cemetery in the
city of Manila is a public, or a private graveyard. If it be found to be the former, it is not subject to condemnation by
the city of Manila; if it be found to be the latter, it is subject to condemnation.

The Chinese Cemetery of Manila was established during the Spanish administration in the Philippines by public
spirited Chinese. The order of the Governor-General giving governmental recognition to the cemetery reads as
follows: "The cemetery and general hospital for indigent Chinese having been founded and maintained by the
spontaneous and fraternal contribution of their protectors, merchants and industrials, benefactors of mankind, in
consideration of their services to the Government of the Islands, its internal administration, government and regime,
must necessarily be adjusted to the taste and traditional practices of those born and educated in China in order that
the sentiments which animated the founders may be perpetually effectuated." Sometimes after the inauguration of
the new regime in the Philippines, a corporation was organized to control the cemetery, and a Torrens title for the
lands in question was obtained.

From the time of its creation until the present the cemetery has been used by the Chinese community for the burial
of their dead. It is said that not less than four hundred graves, many of them with handsome monuments, would be
destroyed by the proposed street. This desecration is attempted as to the las t resting places of the dead of a people
who, because of their peculiar and ingrained ancestral workship, retain more than the usual reverence for the
departed. These facts lead us straight to the conclusion that the Chinese Cemetery is not used by a family or a
small portion of a community but by a particular race long existing in the country and of considerable numbers. The
case, then, is one of where the city of Manila, under a general authority permitting it to condemn private property for
public use, is attempting to convert a property already dedicated to a public use to an entirely different public use;
and this, not directly pursuant to legislative authority, but primarily through the sole advice of the consulting
architect.

Two well considered decisions coming from the American state courts on almost identical facts are worthy of our
consideration. The first is the case of The Evergreen Cemetery Association vs. The City of New Haven ([1875], 43
Conn., 234), of cited by other courts. Here the City of New Haven, Connecticut, under the general power conferred
upon it to lay out, construct, and maintain all necessary highways within its limits, proceeded to widen and straighten
one of its streets and in so doing took a small piece of land belonging to the Evergreen Cemetery Association. This
association was incorporated under the general statute. The city had no special power to take any part of the
cemetery for such purposes. It was found that the land taken was needed for the purposes of the cemetery and was
not needed for the purpose of widening and straightening the avenue. The court said that it is unquestionable that
the Legislature has the power to authorize the taking of land already applied to one public use and devote it to
another. When the power is granted to municipal or private corporations in express words, no question can arise.
But, it was added, "The same land cannot properly be used for burial lots and for a public highway at the same time.
. . . Land therefore applied to one use should not be taken for the other except in cases on necessity. . . . There is
no difficulty in effecting the desired improvement by taking land on the other side of the street. . . . The idea of
running a public street, regardless of graves, monuments, and the feelings of the living, through one of our public
cemeteries, would be shocking to the moral sense of the community, and would not be tolerated except upon the
direst necessity." It was then held that land already devoted to a public use cannot be taken by the public for
another use which is inconsistent with the first, without special authority from the Legislature, or authority granted by
necessary and reasonable implication.

The second decision is that of Memphis State Line Railroad Company vs. Forest Hill Cemetery Co. ([1906], 116
Tenn., 400.) Here the purpose of the proceedings was to condemn a right of way for the railway company through
the Forest Hill Cemetery. The railroad proposed to run through the southeast corner of the cemetery where no
bodies were interred. The cemetery had been in use for about eight years, and during this period thirteen hundred
bodies had been buried therein. The cemetery was under the control of a corporation which, by its character, held
itself out as being willing to sell lots to any one who applies therefor and pays the price demanded, except to
members of the Negro race. 1aw ph!l.net

It was found that there were two other routes along which the railroad might be located without touching the
cemetery, while the present line might be pursued without interfering with Forest Hill Cemetery by making a curve
around it. In the court below the railroad was granted the right of condemnation through the cemetery and damages
were assessed. On appeal, the certiorari applied for was granted, and the supersedeas awarded. The court, in
effect, found that the land of the Cemetery Company was devoted to a public purpose, and that under the general
language of the Tennessee statute of eminent domain it could not be taken for another public purpose. The court
said that in process of time the sepulchres of the dead "are made the seats of cities, and are traversed by streets,
and daily trodden by the feet of man. This is inevitable in the course of ages. But while these places are yet within
the memory and under the active care of the living, while they are still devoted to pious uses, they are sacred, and
we cannot suppose that the legislature intended that they should be violated, in the absence of special provisions
upon the subject authorizing such invasion, and indicating a method for the disinterment, removal, and reinterment
of the bodies buried, and directing how the expense thereof shall be borne." Two members of the court, delivering a
separate concurring opinion, concluded with this significant and eloquent sentence: "The wheels of commerce must
stop at the grave."

For the foregoing reasons, and for others which are stated in the principal decision, I am of the opinion that the
judgment of the lower court should be affirmed.

STREET, J., dissenting:

It may be admitted that, upon the evidence before us, the projected condemnation of the Chinese Cemetery is
unnecessary and perhaps ill-considered. Nevertheless I concur with Justice Moir in the view that the authorities of
the city of Manila are the proper judges of the propriety of the condemnation and that this Court should have nothing
to do with the question of the necessity of the taking.

MOIR, J., dissenting:

I dissent from the majority opinion in this case, which has not yet been written, and because of the importance of the
question involved, present my dissent for the record.

This is an action by the city of Manila for the expropriation of land for an extension of Rizal Avenue north. The
petition for condemnation was opposed by the "Comunidad de Chinos de Manila" and Ildefonso Tambunting and
various other who obtained permission of the trial court to intervene in the case.
All of the defendants allege in their opposition that the proposed extension of Rizal Avenue cuts through a part of
the Chinese Cemetery, North of Manila, and necessitates the destruction of many monuments and the removal of
many graves.

The Court of First Instance of Manila, Honorable S. del Rosario, judge after hearing the parties, decided that there
was no need for constructing the street as and where proposed by the city, and dismissed the petition.

The plaintiff appealed and sets up the following errors:

1. The court erred in deciding that the determination of the necessity and convenience of the expropriation of
the lands of the defendants lies with the court and not with the Municipal Board of the city of Manila.

2. The court erred in permitting the presentation of proofs over the objection and exception of the plaintiff
tending to demonstrate the lack of necessity of the projected street and the need of the lands in question.

3. The court erred in declaring that the plaintiff had no right to expropriate the lands in question.

4. The court erred in dismissing the complaint.

The right of the plaintiff to expropriate property for public use cannot be denied. The "right of eminent domain is
inherent in all sovereignties and therefore would exist without any constitutional recognition . . . . The right of
eminent domain antedates constitutions . . . . The right can only be denied or restricted by fundamental law and is
right inherent in society." (15 Cyc., pp. 557-8.) .

This general right was recognized in the Philippine Code of Civil Procedure effective October 1st, 1901, which
prescribed the manner of exercising the right. (Sections 241 et seq.)

It was further recognized in the Organic Act of July 1st, 1902, which provides in section 74 "that the Government of
the Philippine Islands may grant franchises . . . including the authority to exercise the right of eminent domain for the
construction and operation of works of public utility and service, and may authorize said works to be constructed and
maintained over and across the public property of the United States including . . . reservations." This provisions is
repeated in the Jones Law of August, 1916.

The legislature of the Islands conferred the right on the city of Manila. (Section 2429, Administrative Code of 1917;
section 2402, Administrative Code of 1916.)

Clearly having the right of expropriation, the city of Manila selected the line of its street and asked the court by
proper order to place the plaintiff in possession of the land described in the complaint, and to appoint
Commissioners to inspect the property, appraise the value, and assess the damages. Instead of doing so, the court
entered upon the question of the right of the city to take the property and the necessity for the taking.

The court says:

The controversy relates to whether or not the Chinese Cemetery, where a great majority of this race is
buried and other persons belonging to other nationalities have been formerly inhumed, is private or public;
whether or not said cemetery, in case it is public, would be susceptible to expropriation for the purpose of
public improvements proposed by the city of Manila; whether or not the latter is justified of the necessity and
expediency of similar expropriation before its right to the same would be upheld by the courts of justice; and
whether or not the appreciation of said necessity pertains to the legislative or the judicial department before
which the expropriation proceedings have been brought.

Relative to the first point, it is not necessary for the court to pass upon its consideration, in view of the
conclusion it has arrived at the appreciation of the other points connected with each other.

From the testimony of two reputable engineers produced by some of the defendants, it appears that the land
chosen by the plaintiff for the extension of Rizal Avenue to the municipality of Caloocan is not the best or the
less expensive, although upon it there may be constructed a straight road, without curves or winding; but
 that in order to construct said road upon said land, the city of Manila would have to remove and transfer to
other places about four hundred graves and monuments, make some grubbings, undergo some leveling and
build some bridges — the works thereon, together with the construction of the road and the value of the
lands expropriated, would mean an expenditure which will not be less than P180,000.

Beside that considerable amount, the road would have a declivity of 3 per cent which, in order to cover a
distance of one kilometer, would require an energy equivalent to that which would be expanded in covering
a distance of two and one-half kilometers upon a level road.

On the other hand, if the road would be constructed with the deviation proposed by Ildefonso Tambunting,
one of the defendants, who even offered to donate gratuitously to the city of Manila part of the land upon
which said road will have to be constructed, the plaintiff entity would be able to save more than hundreds of
thousand of pesos, which can be invested in other improvements of greater pressure and necessity for the
benefit of the taxpayers; and it will not have to employ more time and incur greater expenditures in the
removal and transfer of the remains buried in the land of the Chinese Community and of Sr. Tambunting,
although with the insignificant disadvantage that the road would be little longer by a still more insignificant
extension of 426 meters and 55 centimeters less than one-half kilometer, according to the plan included in
the records; but it would offer a better panorama to those who would use it, and who would not have to
traverse in their necessary or pleasure-making trips or walks any cemetery which, on account of its nature,
always deserves the respect of the travellers. It should be observed that the proposed straight road over the
cemetery, which the city of Manila is proposing to expropriate, does not lead to any commercial, industrial,
or agricultural center, and if with said road it is endeavored to benefit some community or created interest,
the same object may be obtained by the proposed deviation of the road by the defendants. The road traced
by the plaintiffs has the disadvantage that the lands on both sides thereof would not serve for residential
purposes, for the reason that no one has the pleasure to construct buildings upon cemeteries, unless it be in
very overcrowded cities, so exhausted of land that every inch thereof represents a dwelling house.

And it is against the ruling, that it lies with the court to determine the necessity of the proposed street and not with
the municipal board, that the appellant directs its first assignment of error.

It is a right of the city government to determine whether or not it will construct streets and where, and the court's
sole duty was to see that the value of the property was paid the owners after proper legal proceedings ascertaining
the value.

The law gives the city the right to take private property for public use. It is assumed it is unnecessary to argue that a
public road is a public use.

But it is argued that plaintiff must show that it is necessary to take this land for a public improvement. The law does
not so read, and it is believed that the great weight of authority, including the United States Supreme Court, is
against the contention.

The question of necessity is distinct from the question of public use, and former question is exclusively for
the legislature, except that if the constitution or statute authorizes the taking of property only in cases of
necessity, then the necessity becomes a judicial question. (McQuillen Municipal Corporations, Vol. IV, pp.
3090-3091.)

In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of
exercising the right of eminent domain are questions essentially political and not judicial in their character.
The determination of those questions belongs to the sovereign power; the legislative determination is final
and conclusive, and the courts have no power to review it. It rests with the legislature not only to determine
when the power of eminent domain may be exercised, but also the character, quality, method, and extent of
such exercise. And this power is unqualified, other than by the necessity of providing that compensation
shall be made. Nevertheless, under the express provisions of the constitution of some states the question of
necessity is made a judicial one, to be determined by the courts and not by the legislature.

While the legislature may itself exercise the right of determining the necessity for the exercise of the power
of eminent domain, it may, unless prohibited by the constitution, delegate this power to public officers or to
private corporations established to carry on enterprises in which the public are interested, and their
 determination that a necessity for the exercise of the power exists is conclusive. There is no restraint upon
the power except that requiring compensation to be made. And when the power has been so delegated it is
a subject of legislative discretion to determine what prudential regulations shall be established to secure a
discreet and judicious exercise of the authority. It has been held that in the absence of any statutory
provision submitting the matter to a court or jury the decision of the question of necessity lies with the body
of individuals to whom the state has delegated the authority to take, and the legislature may be express
provision confer this power on a corporation to whom the power of eminent domain is delegated unless
prohibited by the constitution. It is of course competent for the legislature to declare that the question shall
be a judicial one, in which case the court and not the corporation determines the question of necessity. (15
Cyc., pp. 629-632.)

To the same effect is Lewis on Eminen Domain (3d Edition, section 597).

I quote from the notes to Vol. 5, Encyclopedia of United States Supreme Court Reports, p. 762, as follows:

Neither can it be said that there is any fundamental right secured by the constitution of the United States to
have the questions of compensation and necessity both passed upon by one and the same jury. In many
states the question of necessity is never submitted to the jury which passes upon the question of
compensation. It is either settled affirmatively by the legislature, or left to the judgment of the corporation
invested with the right to take property by condemnation. The question of necessity is not one of a judicial
character, but rather one for determination by the lawmaking branch of the government. (Boom
Co. vs.Patterson, 98 U.S., 403, 406 [25 L. ed., 206]; United States vs. Jones, 109 U.S., 513 [27 L. ed.,
1015]; Backus vs. Fort Street Union Depot Co., 169 U.S., 557, 568 [42 L. ed., 853].)

Speaking generally, it is for the state primarily and exclusively, to declare for what local public purposes
private property, within its limits may be taken upon compensation to the owner, as well as to prescribe a
mode in which it may be condemned and taken. (Madisonville Tract. Co. vs. St. Bernard Min. Co., 196 U.S.,
239, 252 [49 L. ed., 462].)

Courts have no power to control the legislative authority in the exercise of their right to determine when it is
necessary or expedient to condemn a specific piece of property for public purposes. (Adirondack R.
Co. vs.New York States, 176 U.S., 335 [44 L. ed., 492].)

10 R. C. L. (p. 183), states the law as follows:

158. Necessity for taking ordinarily not judicial question. — The legislature, in providing for the exercise the
power of eminent domain, may directly determine the necessity for appropriating private property for a
particular improvement or public use, and it may select the exact location of the improvement. In such a
case, it is well settled that the utility of the proposed improvement, the extent of the public necessity for its
construction, the expediency of constructing it, the suitableness of the location selected and the consequent
necessity of taking the land selected for its site, are all questions exclusively for the legislature to determine,
and the courts have no power to interfere, or to substitute their own views for these of the representatives of
the people. Similarly, when the legislature has delegated the power of eminent domain to municipal or public
service corporation or other tribunals or bodies, and has given them discretion as to when the power is to be
called into exercise and to what extent, the court will not inquire into the necessity or propriety of the taking.

The United States Supreme Court recently said:

The uses to which this land are to be put are undeniably public uses. When that is the case the propriety or
expediency of the appropriation cannot be called in question by any other authority. (Cinnati vs. S. & N. R.
R. Co., 223 U.S., 390, quoting U.S. vs. Jones, 109, U.S., 519.)

And in Sears vs. City of Akron (246 U.S., 242), decided March 4th, 1918, it said:

Plaintiff contends that the ordinance is void because the general statute which authorized the appropriation
violates both Article 1, paragraph 10, of the Federal Constitution, and the Fourteenth Amendment, in that it
authorizes the municipality to determine the necessity for the taking of private property without the owners
 having an opportunity to be hear as to such necessity; that in fact no necessity existed for any taking which
would interfere with the company's project; since the city might have taken water from the Little Cuyahoga or
the Tuscarawas rivers; and furthermore, that it has taken ten times as much water as it can legitimately use.
It is well settled that while the question whether the purpose of a taking is a public one is judicial
(Hairston vs.Danville & W. R. Co., 208 U.S. 598 [52 L. ed., 637; 28 Sup. Ct. Rep., 331; 13 Ann. Cas., 1008]),
the necessityand the proper extent of a taking is a legislative question. (Shoemaker vs. United States, 147
U.S., 282, 298 [57 L. ed., 170, 184; 13 Supt. Ct. Rep., 361]; United States vs. Gettysburg Electric R. Co.,
160 U.S. 668, 685 [40 L. ed., 576, 582; 16 Sup. Ct. Rep., 427]; United States vs. Chandler-Dunbar Water
Power Co., 229 U.S., 53, 65 [57 L. ed., 1063, 1076; 33 Sup. Ct. Rep., 667].)

I think the case should be decided in accordance with foregoing citations, but one other point has been argued so
extensively that it ought to be considered.

It is contended for the defense that this Chinese Cemetery is a public cemetery and that it cannot therefore be taken
for public use. In its answer the "Comunidad de Chinos de Manila" says it is "a corporation organized and existing
under and by virtue of the laws of the Philippine Islands," and that it owns the land which plaintiff seeks to acquire.
The facts that it is private corporation owning land would seem of necessity to make the land it owns private land.
The fact that it belongs to the Chinese community deprives it of any public character.

But admitting that it is a public cemetery, although limited in its use to the Chinese Community of the city of Manila,
can it not be taken for public use? Must we let the reverence we feel for the dead and the sanctity of their final
resting-place obstruct the progress of the living? It will be instructive to inquire what other jurisdictions have held on
that point.

On the Application of Board of Street Openings of New York City to acquire St. Johns Cemetery (133 N.Y., 329) the
court of appeal said:

. . . The board instituted this proceeding under the act to acquire for park purposes the title to land below
One Hundred and Fifty-fifth street known as St. John's cemetery which belonged to a religious corporation in
the city of New York, commonly called Trinity Church. It was established as a cemetery as early as 1801,
and used for that purpose until 1839, during which time about ten thousand human bodies had been buried
therein. In 1839 an ordinance was passed by the city of New York forbidding interments south of Eighty-sixth
street, and since that time no interments have been made in the cemetery, but Trinity Church has preserved
and kept it in order and prevented any disturbance thereof.

It is contended on behalf of Trinity Church that under the general authority given by statute of 1887, this land
which had been devoted to cemetery purposes could not be taken for a park. The authority conferred upon
the board by the act is broad and general. It is authorized to take for park purposes any land south of One
Hundred and Fifty-fifth street. . . . .

The fact that lands have previously been devoted to cemetery purposes does not place them beyond the
reach of the power of eminent domain. That is an absolute transcendent power belonging to the sovereign
which can be exercised for the public welfare whenever the sovereign authority shall determine that a
necessity for its exercise exists. By its existence the homes and the dwellings of the living, and the resting-
places of the dead may be alike condemned.

It seems always to have been recognized in the laws of this state, that under the general laws streets and
highways could be laid out through cemeteries, in the absence of special limitation or prohibition. . . .

In Re Opening of Twenty-second Street (102 Penn. State Reports, 108) the Supreme Court of the State said:

This was an action for the opening of a street through a cemetery in the City of Philadelphia. It was
contended for the United American Mechanics and United Daughters of America Cemetery Association that
by an act of the legislature of the State approved March 20th, 1849, they were forever exempt from the
taking of any their property for streets, roads or alleys and this Act was formally accepted by the Cemetery
Company on April 9th, 1849, and there was, therefore, a contract between the Cemetery Company and the
State of Pennsylvania, which would be violated by the taking of any part of their property for street purposes.
It was further contended that there were 11,000 persons buried in the cemetery.
 The court held that property and contracts of all kinds must yield to the demand of the sovereign and that
under the power of eminent domain all properties could be taken, and that if there was a contract between
the State of Pennsylvania and the Cemetery Association, the contract itself could be taken for public use,
and ordered the opening of the street through the cemetery.

In Vol. 5, Encyclopedia of United States Supreme Court Reports (p. 759), it is said:

Although it has been held, that where a state has delegated the power of eminent domain to a person or
corporation and where by its exercise lands have been subject to a public use, they cannot be applied to
another public use without specific authority expressed or implied to that effect, yet, the general rule seems
to be that the fact that property is already devoted to a public use, does not exempt it from being
appropriated under the right of eminent domain but it may be so taken for a use which is clearly superior or
paramount to the one to which it is already devoted. (Citing many United States Supreme Court decisions.)

A few cases have been cited where the courts refused to allow the opening of streets through cemeteries, but in my
opinion they are not as well considered as the cases and authorities relied upon herein.

The holding of this court in this case reverses well settled principles of law of long standing and almost universal
acceptance.

The other assignments of error need not be considered as they are involved in the foregoing.

The decision should be reversed and the record returned to the Court of First Instance with instructions to proceed
with the case in accordance with this decision.