Republic of the Philippines CASE NO.

1
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.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ.,
concur.
 Republic of the Philippines CASE NO.2
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 172409 February 4, 2008

ROOS INDUSTRIAL CONSTRUCTION, INC. and OSCAR TOCMO, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and JOSE MARTILLOS, respondents.

DECISION

TINGA, J.:

In this Petition for Review on Certiorari 1 under Rule 45 of the 1997 Rules of Civil Procedure, petitioners Roos
Industrial Construction, Inc. and Oscar Tocmo assail the Court of Appeals’ 2 Decision dated 12 January 2006 in C.A.
G.R. SP No. 87572 and its Resolution 3 dated 10 April 2006 denying their Motion for Reconsideration. 4

The following are the antecedents.

On 9 April 2002, private respondent Jose Martillos (respondent) filed a complaint against petitioners for illegal
dismissal and money claims such as the payment of separation pay in lieu of reinstatement plus full backwages,
service incentive leave, 13th month pay, litigation expenses, underpayment of holiday pay and other equitable reliefs
before the National Capital Arbitration Branch of the National Labor Relations Commission (NLRC), docketed as
NLRC NCR South Sector Case No. 30-04-01856-02.

Respondent alleged that he had been hired as a driver-mechanic sometime in 1988 but was not made to sign any
employment contract by petitioners. As driver mechanic, respondent was assigned to work at Carmona, Cavite and
he worked daily from 7:00 a.m. to 10:00 p.m. at the rate of P200.00 a day. He was also required to work during legal
holidays but was only paid an additional 30% holiday pay. He likewise claimed that he had not been paid service
incentive leave and 13th month pay during the entire course of his employment. On 16 March 2002, his employment
was allegedly terminated without due process.5

Petitioners denied respondent’s allegations. They contended that respondent had been hired on several occasions
as a project employee and that his employment was coterminous with the duration of the projects. They also
maintained that respondent was fully aware of this arrangement. Considering that respondent’s employment had
been validly terminated after the completion of the projects, petitioners concluded that he is not entitled to
separation pay and other monetary claims, even attorney’s fees. 6

The Labor Arbiter ruled that respondent had been illegally dismissed after finding that he had acquired the status of
a regular employee as he was hired as a driver with little interruption from one project to another, a task which is
necessary to the usual trade of his employer.7 The Labor Arbiter pertinently stated as follows:

x x x If it were true that complainant was hired as project employee, then there should have been project
employment contracts specifying the project for which complainant’s services were hired, as well as the
duration of the project as required in Art. 280 of the Labor Code. As there were four (4) projects where
complainant was allegedly assigned, there should have been the equal number of project employment
contracts executed by the complainant. Further, for every project termination, there should have been the
equal number of termination report submitted to the Department of Labor and Employment. However, the
record shows that there is only one termination [report] submitted to DOLE pertaining to the last project
assignment of complainant in Carmona, Cavite.
 In the absence of said project employment contracts and the corresponding Termination Report to DOLE at
every project termination, the inevitable conclusion is that the complainant was a regular employee of the
respondents.

In the case of Maraguinot, Jr. v. NLRC, 284 SCRA 539, 556 [1998], citing capital Industrial Construction
Group v. NLRC, 221 SCRA 469, 473-474 [1993], it was ruled therein that a project employee may acquire
the status of a regular employee when the following concurs: (1) there is a continuous rehiring of project
employees even after the cessation of a project; and (2) the tasks performed by the alleged "project
employee" are vital, necessary and indispensable to the usual business or trade of the employer. Both
factors are present in the instant case. Thus, even granting that complainant was hired as a project
employee, he eventually became a regular employee as there was a continuous rehiring of this services.

xxx

In the instant case, apart from the fact that complainant was not made to sign any project employment
contract x x x he was successively transferred from one project after another, and he was made to perform
the same kind of work as driver.8

The Labor Arbiter ordered petitioners to pay respondent the aggregate sum of P224,647.17 representing
backwages, separation pay, salary differential, holiday pay, service incentive leave pay and 13 th month pay.9

Petitioners received a copy of the Labor Arbiter’s decision on 17 December 2003. On 29 December 2003, the last
day of the reglementary period for perfecting an appeal, petitioners filed a Memorandum of Appeal10 before the
NLRC and paid the appeal fee. However, instead of posting the required cash or surety bond within the
reglementary period, petitioners filed a Motion for Extension of Time to Submit/Post Surety Bond. 11 Petitioners
stated that they could not post and submit the required surety bond as the signatories to the bond were on leave
during the holiday season, and made a commitment to post and submit the surety bond on or before 6 January
2004. The NLRC did not act on the motion. Thereafter, on 6 January 2004, petitioners filed a surety bond equivalent
to the award of the Labor Arbiter.12

In a Resolution13 dated July 29, 2004, the Second Division of the NLRC dismissed petitioners’ appeal for lack of
jurisdiction. The NLRC stressed that the bond is an indispensable requisite for the perfection of an appeal by the
employer and that the perfection of an appeal within the reglementary period and in the manner prescribed by law is
mandatory and jurisdictional. In addition, the NLRC restated that its Rules of Procedure proscribes the filing of any
motion for extension of the period within which to perfect an appeal. The NLRC summed up that considering that
petitioners’ appeal had not been perfected, it had no jurisdiction to act on said appeal and the assailed decision, as
a consequence, has become final and executory.14 The NLRC likewise denied petitioners’ Motion for
Reconsideration15 for lack of merit in another Resolution.16 On 11 November 2004, the NLRC issued an entry of
judgment declaring its resolution final and executory as of 9 October 2004. On respondent’s motion, the Labor
Arbiter ordered that the writ of execution be issued to enforce the award. On 26 January 2005, a writ of execution
was issued.17

Petitioners elevated the dismissal of their appeal to the Court of Appeals by way of a special civil action of certiorari.
They argued that the filing of the appeal bond evinced their willingness to comply and was in fact substantial
compliance with the Rules. They likewise maintained that the NLRC gravely abused its discretion in failing to
consider the meritorious grounds for their motion for extension of time to file the appeal bond. Lastly, petitioners
contended that the NLRC gravely erred in issuing an entry of judgment as the assailed resolution is still open for
review.18 On 12 January 2006, the Court of Appeals affirmed the challenged resolution of the NLRC. Hence, the
instant petition.

Before this Court, petitioners reiterate their previous assertions. They insist on the application of Star Angel
Handicraft v. National Labor Relations Commission, et al. 19where it was held that a motion for reduction of bond
may be filed in lieu of the bond during the period for appeal. They aver that Borja Estate v. Ballad,20which
underscored the importance of the filing of a cash or surety bond in the perfection of appeals in labor cases, had not
been promulgated yet in 2003 when they filed their appeal. As such, the doctrine in Borja could not be given
retroactive effect for to do so would prejudice and impair petitioners’ right to appeal. Moreover, they point out that
judicial decisions have no retroactive effect.21
The Court denies the petition.

The Court reiterates the settled rule that an appeal from the decision of the Labor Arbiter involving a monetary
award is only deemed perfected upon the posting of a cash or surety bond within ten (10) days from such
decision.22 Article 223 of the Labor Code states:

ART. 223. Appeal.—Decisions, awards or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. …

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.

xxx

Contrary to petitioners’ assertion, the appeal bond is not merely procedural but jurisdictional. Without said bond, the
NLRC does not acquire jurisdiction over the appeal. 23 Indeed, non-compliance with such legal requirements is fatal
and has the effect of rendering the judgment final and executory. 24 It must be stressed that there is no inherent right
to an appeal in a labor case, as it arises solely from the grant of statute. 25

Evidently, the NLRC did not acquire jurisdiction over petitioners’ appeal within the ten (10)-day reglementary period
to perfect the appeal as the appeal bond was filed eight (8) days after the last day thereof. Thus, the Court cannot
ascribe grave abuse of discretion to the NLRC or error to the Court of Appeals in refusing to take cognizance of
petitioners’ belated appeal.

While indeed the Court has relaxed the application of this requirement in cases where the failure to comply with the
requirement was justified or where there was substantial compliance with the rules, 26 the overpowering legislative
intent of Article 223 remains to be for a strict application of the appeal bond requirement as a requisite for the
perfection of an appeal and as a burden imposed on the employer. 27 As the Court held in the case of Borja Estate v.
Ballad:28

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal
by the employer is underscored by the provision that an appeal may be perfected "only upon the posting of a
cash or surety bond." The word "only" makes it perfectly clear that the LAWMAKERS intended the posting of
a cash or surety bond by the employer to be

the exclusive means by which an employer’s appeal may be considered completed. The law however does
not require its outright payment, but only the posting of a bond to ensure that the award will be eventually
paid should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium
of such bond.29

Moreover, no exceptional circumstances obtain in the case at bar which would warrant a relaxation of the bond
requirement as a condition for perfecting the appeal. It is only in highly meritorious cases that this Court opts not to
strictly apply the rules and thus prevent a grave injustice from being done 30 and this is not one of those cases.

In addition, petitioners cannot take refuge behind the Court’s ruling in Star Angel. Pertinently, the Court stated
in Computer Innovations Center v. National Labor Relations Commission:31

Moreover, the reference in Star Angel to the distinction between the period to file the appeal and to perfect
the appeal has been pointedly made only once by this Court in Gensoli v. NLRC thus, it has not acquired the
sheen of venerability reserved for repeatedly-cited cases. The distinction, if any, is not particularly evident or
material in the Labor Code; hence, the reluctance of the Court to adopt such doctrine. Moreover, the present
provision in the NLRC Rules of Procedure, that "the filing of a motion to reduce bond shall not stop the
 running of the period to perfect appeal" flatly contradicts the notion expressed in Star Angel that there is a
distinction between filing an appeal and perfecting an appeal.

Ultimately, the disposition of Star Angel was premised on the ruling that a motion for reduction of the appeal
bond necessarily stays the period for perfecting the appeal, and that the employer cannot be expected to
perfect the appeal by posting the proper bond until such time the said motion for reduction is resolved. The
unduly stretched-out distinction between the period to file an appeal and to perfect an appeal was not
material to the resolution of Star Angel, and thus could properly be considered as obiter dictum.32

Lastly, the Court does not agree that the Borja doctrine should only be applied prospectively. In the first
place, Borja is not a ground-breaking precedent as it is a reiteration, emphatic though, of long standing
jurisprudence.33 It is well to recall too our pronouncement in Senarillos v. Hermosisima, et al. 34 that the judicial
interpretation of a statute constitutes part of the law as of the date it was originally passed, since the Court’s
construction merely establishes the contemporaneous legislative intent that the interpreted law carried into effect.
Such judicial doctrine does not amount to the passage of a new law but consists merely of a construction or
interpretation of a pre-existing one, as is the situation in this case. 35

At all events, the decision of the Labor Arbiter appears to be well-founded and petitioners’ ill-starred appeal
untenable.

WHEREFORE, the Petition is DENIED. Costs against petitioners.

SO ORDERED.

Quisumbing,Chairperson Carpio, Carpio-Morales, Velasco, Jr., JJ., concur.

 Republic of the Philippines
CASE NO.2 (A)
SUPREME COURT
Manila

EN BANC

G.R. No. L-10662 December 14, 1956

ROQUE SENARILLOS, petitioner-appellee,

vs.
EPIFANIO HERMOSISIMA, ET. AL., respondents-appellants.

Antonio Abad Tormis for appellee.

Office of the Solicitor General Ambrosio Padilla and Solicitor Troadio T. Quiazon, Jr. for appellants.

REYES, J.B.L., J.:

Upon petition of Roque Senarillos (appellee before us) and after due hearing, Judge M. M. Mejia of the Court of First
Instance of Cebu (in Case no. R-4001), issued a writ of mandamus to compel the respondents Municipal Mayor and
Council of Sibonga, Cebu, to reinstate petitioner to the position of Chief of Police of Sibonga, Cebu, declaring null
and void his removal from that post, although the same was approved by the council and confirmed by the Director
of Civil Service and the Board of Civil Service Appeals; and required the respondents Municipal Treasurer of
Sibonga and Provincial Treasurer of Cebu to pay petitioner Senarillos his salary at P840.00 per annum from
January 3, 1952, and taxing costs against respondents Municipal Mayor and Council of Sibonga. Respondents have
appealed.

The parties are agreed that Roque Senarillos, being a civil service eligible, was appointed Chief of Police of
Sibonga, Cebu, and served as such until January 2, 1952. On that date, upon charges filed by one Roque Geraldizo
and despite his denials, Senarillos was suspended by the Municipal Mayor of Sibonga, and investigated by a "police
committee" composed of three councilors, created by Resolution No. 2. Series 1952, of the municipal council.
Notwithstanding express protest on the part of Senarillos that the investigation should not be conducted by a
committee, but by full council, as provided by Republic Act 557. the committee proceeded to try his case, and on
April 15, 1952, rendered an adverse decision, signed later by the municipal council. This decision was appealed to,
and on August 28, 1952, was affirmed by, the Commissioner of civil Service, and later in October, 1954, by the Civil
Service Board of Appeals.lawphil.net

In the meantime, upon the expiration of the original period of suspension, Municipal Mayor Hermosisimo again
suspended Senarillos on the strength of Administrative Case No. V-6, which was never tried; and as the sixty days
of the second suspension expired, the Chief of Police was reinstated on May 25, 1952. However, on July 9, 1952
the Municipal Mayor filed a criminal case for swindling against Senarillos, and suspended him for the third time. The
criminal case was dismissed on July 24, 1954. Then on April 27, 1955, Senarillos resorted to the Court of First
Instance for relief.

That the investigation of police officers under Republic Act No. 557 (as distinguished from section 2272 of the
Administrative Code) must be conducted by the council itself, and not by a mere committee thereof, is now
established jurisprudence and no longer open to question since our decision in Festejo vs. Mayor of Nabua, 96 Phil.,
286; 51 Off. Gaz. p. 121, reaffirmed in subsequent decisions.

The second reason for invalidating the investigation is the fact that the charges were investigated by a
committee of the city council, not by the council itself. While it is true that we had held in Santos vs.
Mendoza, 48 Off. Gaz., No. 11, p. 4801, that such a procedure is valid, the law has been changed since the
above decision. Republic Act No. 557 has eliminated the provision authorizing investigation by a committee
of the council. We held that the change meant that the investigation should be by the council itself
(Festejo vs. Municipal Mayor of Nabua, G.R. No. L-4983, prom. December 22, 1954). We affirmed this
 doctrine in the recent case of Covacha vs. Amante, G.R. Nos. 8790-8797, August 14, 1956, 52 Off. Gaz. No.
11, p. 5109).

Therefore, it is clear that under the present law, the "police committee" constituted by the Municipal Council of
Sibonga had no jurisdiction to investigate the appellee Chief of Police; hence the decision against him was invalid,
even if concurred in by the rest of the councilors, specially since the petitioner called attention from the beginning to
the impropriety and illegality of the committee's actuations, and of his trial by only some and not all the members of
the council. The subsequent reaffirmation of their decision by the Civil Service authorities could not validate a
proceeding that was illegal and ab initio void.

That the decision of the Municipal Council of Sibonga was issued before the decision in Festejo vs. Mayor of Nabua
was rendered, would be, at the most, proof of good faith on the part of the police committee, but can not sustain the
validity of their action. It is elementary that the interpretation placed by this Court upon Republic Act 557 constitutes
part of the law as of the date it was originally passed, since this Court's construction merely establishes the
contemporaneous legislative intent that the interpreted law carried into effect.lawphil.net

Respondents also claim that petitioner was guilty of laches, on the strength of Unabia vs. Mayor of Cebu, 99 Phil.,
258 and related decisions. Suffice it to observe that the persistent efforts of the appellee to secure from the Civil
Service authorities a reversal of the unlawful decisions of the Municipal Council of Sibonga, and the harassment and
prosecution to which he was subjected by the mayor, who suspended petitioner-appellee three times, are more than
adequate evidence that the appellee did not sleep on his rights or abandon his office. His appeal was finally decided
by the Civil Service on October of 1954, and this case was filed less than a year later, in April 1955.

The decision appealed from is affirmed, with the sole modification that the reimbursement of petitioner-appellee's
salary shall not include the pay corresponding to the period from May 26, to July 8, 1952, since it was stipulated (p.
14) that he was paid for that time. Costs against respondents, Municipal Mayor and the Council of Sibonga, Cebu.
So ordered.

Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia and Felix, JJ.,
concur.
 Republic of the Philippines
CASE NO.3
SUPREME COURT
Manila

EN BANC

G.R. No. 34385 September 21, 1931

ALEJANDRA TORRES, ET AL., plaintiff-appellees,

vs.
FRANCISCO LIMJAP, Special Administrator of the estate of the deceased Jose B. Henson, defendant-
appellant.

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

G.R. No. 34386 September 21, 1931

SABINA VERGARA VDA. DE TORRES, ET AL., plaintiffs-appellees,

vs.
FRANCISCO LIMJAP, Special Administration of the estate of the deceased Jose B. Henson, defendant-
appellant.

Duran, Lim and Tuason for appellant.

Guevara, Francisco and Recto for appellees.

JOHNSON, J.:

These two actions were commenced in the Court of First Instance of Manila on April 16, 1930, for the purpose of
securing from the defendant the possession of two drug stores located in the City of Manila, covered by two chattel
mortgages executed by the deceased Jose B. Henson in favor of the plaintiffs.

In the first case the plaintiffs alleged that Jose B. Henson, in his lifetime, executed in their favor a chattel mortgage
(Exhibit A) on his drug store at Nos. 101-103 Calle Rosario, known as Farmacia Henson, to secure a loan of
P7,000, although it was made to appear in the instrument that the loan was for P20,000.

In the second case the plaintiffs alleged that they were the heirs of the late Don Florentino Torres; and that Jose B.
Henson, in his lifetime, executed in favor of Don Florentino Torres a chattel mortgage (also Exhibit A) on his three
drug stores known as Henson's Pharmacy, Farmacia Henson and Botica Hensonina, to secure a loan of P50,000,
which was later reduced to P26,000, and for which, Henson's Pharmacy at Nos. 71-73 Escolta, remained as the
only security by agreement of the parties.

In both cases the plaintiffs alleged that the defendant violated the terms of the mortgage and that, in consequence
thereof they became entitled to the possession of the chattels and to foreclose their mortgages thereon. Upon the
petition of the plaintiffs and after the filing of the necessary bonds, the court issued in each case an order directing
the sheriff of the City of Manila to take immediate possession of said drug stores.

The defendant filed practically the same answer to both complaints. He denied generally and specifically the
plaintiffs' allegations, and set up the following special defenses:

(1) That the chattel mortgages (Exhibit A, in G.R. No. 34385 and Exhibit A, in G.R. No. 34286) are null and void for
lack of sufficient particularity in the description of the property mortgaged; and

(2) That the chattels which the plaintiffs sought to recover were not the same property described in the mortgage.

The defendant also filed a counterclaim for damages in the sum of P20,000 in the first case and P100,000 in the
second case.
Upon the issue thus raised by the pleadings, the two causes were tried together by agreement of the parties. After
hearing the evidence adduced during the trial and on July 17, 1930, the Honorable Mariano Albert, judge, in a very
carefully prepared opinion, arrived at the conclusion (a) that the defendant defaulted in the payment of interest on
the loans secured by the mortgages, in violation of the terms thereof; (b) that by reason of said failure said
mortgages became due, and (c) that the plaintiffs, as mortgagees, were entitled to the possession of the drug stores
Farmacia Henson at Nos. 101-103 Calle Rosario and Henson's Pharmacy at Nos. 71-73 Escolta. Accordingly, a
judgment was rendered in favor of the plaintiffs and against the defendant, confirming the attachment of said drug
stores by the sheriff of the City of Manila and the delivery thereof to the plaintiffs. The dispositive part of the decision
reads as follows:

En virtud de todo lo expuesto, el Juzgado dicta sentencia confirmado en todas sus partes los ordenes de
fechas 16 y 17 de abril de presente ano, dictadas en las causas Nos. 37096 y 37097, respectivamente, y
declara definitiva la entrega hecha a los demandantes por el Sheriff de Manila de las boticas en cuestion.
Se condena en costas al demandado en ambas causas.

From the judgment the defendant appealed, and now makes the following assignments of error:

I. The lower court erred in failing to make a finding on the question of the sufficiency of the description of the
chattels mortgaged and in failing to hold that the chattel mortgages were null and void for lack of particularity
in the description of the chattels mortgaged.

II. The lower court erred in refusing to allow the defendant to introduce evidence tending to show that the
stock of merchandise found in the two drug stores was not in existence or owned by the mortgagor at the
time of the execution of the mortgages in question.

III. The lower court erred in holding that the administrator of the deceased is now estopped from contesting
the validity of the mortgages in question.

IV. The lower court erred in failing to make a finding on the counterclaims of the defendant.

With reference to the first assignment of error, we deem it unnecessary to discuss the question therein raised,
inasmuch as according to our view on the question of estoppel, as we shall hereinafter set forth in our discussion of
the third assignment of error, the defendant is estopped from questioning the validity of these chattel mortgages.

In his second assignment of error the appellant attacks the validity of the stipulation in said mortgages authorizing
the mortgagor to sell the goods covered thereby and to replace them with other goods thereafter acquired. He
insists that a stipulation authorizing the disposal and substitution of the chattels mortgaged does not operate to
extend the mortgage to after-acquired property, and that such stipulation is in contravention of the express provision
of the last paragraph of section 7 Act No. 1508, which reads as follows:

A chattel mortgage shall be deemed to cover only the property described therein and not like or substituted
property thereafter acquired by the mortgagor and placed in the same depository as the property originally
mortgaged, anything in the mortgage to the contrary notwithstanding.

In order to give a correct construction to the above-quoted provision of our Chattel Mortgage Law (Act No. 1508),
the spirit and intent of the law must first be ascertained. When said Act was placed on our statute books by the
United States Philippine Commission on July 2, 1906, the primary aim of that law-making body was undoubtedly to
promote business and trade in these Islands and to give impetus to the economic development of the country.
Bearing this in mind, it could not have been the intention of the Philippine Commission to apply the provision of
section 7 above quoted to stores open to the public for retail business, where the goods are constantly sold and
substituted with new stock, such as drug stores, grocery stores, dry-goods stores, etc. If said provision were
intended to apply to this class of business, it would be practically impossible to constitute a mortgage on such stores
without closing them, contrary to the very spirit about a handicap to trade and business, would restrain the
circulation of capital, and would defeat the purpose for which the law was enacted, to wit, the promotion of business
and the economic development of the country.
In the interpretation and construction of a statute the intent of the law-maker should always be ascertained and
given effect, and courts will not follow the letter of a statute when it leads away from the true intent and purpose of
the Legislature and to conclusions inconsistent with the spirit of the Act. On this subject, Sutherland, the foremost
authority on statutory construction, says:

The Intent of Statute is the Law. — If a statute is valid it is to have effect according to the purpose and intent
of the lawmaker. The intent is the vital part, the essence of the law, and the primary rule of construction is to
ascertain and give effect to that intent. The intention of the legislature in enacting a law is the law itself, and
must be enforced when ascertained, although it may not be consistent with the strict letter of the statute.
Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the
legislature and to conclusions inconsistent with the general purpose of the act. Intent is the spirit which gives
life to a legislative enactment. In construing statutes the proper course is to start out and follow the true
intent of the legislature and to adopt that sense which harmonizes best with the content and promotes in the
fullest manner the apparent policy and objects of the legislature. (Vol. II Sutherland, Statutory Construction,
pp. 693-695.)

A stipulation in the mortgage, extending its scope and effect to after-acquired property, is valid and binding —

. . . where the after-acquired property is in renewal of, or in substitution for, goods on hand when the
mortgage was executed, or is purchased with the proceeds of the sale of such goods, etc. (11 C.J., p. 436.)

Cobbey, a well-known authority on Chattel Mortgages, recognizes the validity of stipulations relating to after-
acquired and substituted chattels. His views are based on the decisions of the supreme courts of several states of
the Union. He says: "A mortgage may, by express stipulations, be drawn to cover goods put in stock in place of
others sold out from time to time. A mortgage may be made to include future acquisitions of goods to be added to
the original stock mortgaged, but the mortgage must expressly provide that such future acquisitions shall be held as
included in the mortgage. ... Where a mortgage covering the stock in trade, furniture, and fixtures in the mortgagor's
store provides that "all goods, stock in trade, furniture, and fixtures hereafter purchased by the mortgagor shall be
included in and covered by the mortgage," the mortgage covers all after-acquired property of the classes mentioned,
and, upon foreclosure, such property may be taken and sold by the mortgagee the same as the property in
possession of the mortgagor at the time the mortgage was executed." (Vol. I, Cobbey on Chattel Mortgages, sec.
361, pp. 474, 475.)

In harmony with the foregoing, we are of the opinion (a) that the provision of the last paragraph of section 7 of Act
No. 1508 is not applicable to drug stores, bazaars and all other stores in the nature of a revolving and floating
business; (b) that the stipulation in the chattel mortgages in question, extending their effect to after-acquired
property, is valid and binding; and (c) that the lower court committed no error in not permitting the defendant-
appellant to introduce evidence tending to show that the goods seized by the sheriff were in the nature of after-
acquired property.

With reference to the third assignment of error, we agree with the lower court that, from the facts of record, the
defendant-appellant is estopped from contenting the validity of the mortgages in question. This feature of the case
has been very ably and fully discussed by the lower court in its decision, and said discussion is made, by reference,
a part of this opinion.

As to the fourth assignment of error regarding the counterclaims of the defendant-appellant, it may be said that in
view of the conclusions reached by the lower court, which are sustained by this court, the lower court committed no
error in not making any express finding as to said counterclaims. As a matter of form, however, the counter-claims
should have been dismissed, but as the trial court decided both cases in favor of the plaintiffs and confirmed and
ratified the orders directing the sheriff to take possession of the chattels on behalf of the plaintiffs, there was, in
effect, a dismissal of the defendant's counterclaims.

For all of the foregoing, we are of the opinion and so hold that the judgment appealed from is in accordance with the
facts and the law, and the same should be and is hereby affirmed, with costs. So ordered.

Avanceña, C.J., Street, Malcolm, Villamor, Ostrand, Romualdez, Villa-Real, and Imperial, JJ., concur.
 Republic of the Philippines
CASE NO.4
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 186400 October 20, 2010

CYNTHIA S. BOLOS, Petitioner,

vs.
DANILO T. BOLOS, Respondent.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking a review of the December 10,
2008 Decision1 of the Court of Appeals (CA) in an original action for certiorari under Rule 65 entitled "Danilo T.
Bolos v. Hon. Lorifel Lacap Pahimna and Cynthia S. Bolos," docketed as CA-G.R. SP. No. 97872, reversing the
January 16, 2007 Order of the Regional Trial Court of Pasig City, Branch 69 (RTC), declaring its decision
pronouncing the nullity of marriage between petitioner and respondent final and executory.

On July 10, 2003, petitioner Cynthia Bolos (Cynthia) filed a petition for the declaration of nullity of her marriage to
respondent Danilo Bolos (Danilo) under Article 36 of the Family Code, docketed as JDRC No. 6211.

After trial on the merits, the RTC granted the petition for annulment in a Decision, dated August 2, 2006, with the
following disposition:

WHEREFORE, judgment is hereby rendered declaring the marriage between petitioner CYNTHIA S. BOLOS and
respondent DANILO T. BOLOS celebrated on February 14, 1980 as null and void ab initio on the ground of
psychological incapacity on the part of both petitioner and respondent under Article 36 of the Family Code with all
the legal consequences provided by law.

Furnish the Local Civil Registrar of San Juan as well as the National Statistics Office (NSO) copy of this decision.

SO ORDERED.2

A copy of said decision was received by Danilo on August 25, 2006. He timely filed the Notice of Appeal on
September 11, 2006.

In an order dated September 19, 2006, the RTC denied due course to the appeal for Danilo’s failure to file the
required motion for reconsideration or new trial, in violation of Section 20 of the Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages.

On November 23, 2006, a motion to reconsider the denial of Danilo’s appeal was likewise denied.

On January 16, 2007, the RTC issued the order declaring its August 2, 2006 decision final and executory and
granting the Motion for Entry of Judgment filed by Cynthia.

Not in conformity, Danilo filed with the CA a petition for certiorari under Rule 65 seeking to annul the orders of the
RTC as they were rendered with grave abuse of discretion amounting to lack or in excess of jurisdiction, to wit: 1)
the September 19, 2006 Order which denied due course to Danilo’s appeal; 2) the November 23, 2006 Order which
denied the motion to reconsider the September 19, 2006 Order; and 3) the January 16, 2007 Order which declared
the August 2, 2006 decision as final and executory. Danilo also prayed that he be declared psychologically
capacitated to render the essential marital obligations to Cynthia, who should be declared guilty of abandoning him,
the family home and their children.
As earlier stated, the CA granted the petition and reversed and set aside the assailed orders of the RTC. The
appellate court stated that the requirement of a motion for reconsideration as a prerequisite to appeal under A.M.
No. 02-11-10-SC did not apply in this case as the marriage between Cynthia and Danilo was solemnized on
February 14, 1980 before the Family Code took effect. It relied on the ruling of this Court in Enrico v. Heirs of Sps.
Medinaceli3 to the effect that the "coverage [of A.M. No. 02-11-10-SC] extends only to those marriages entered into
during the effectivity of the Family Code which took effect on August 3, 1988."

Cynthia sought reconsideration of the ruling by filing her Manifestation with Motion for Extension of Time to File
Motion for Reconsideration and Motion for Partial Reconsideration [of the Honorable Court’s Decision dated
December 10, 2008]. The CA, however, in its February 11, 2009 Resolution,4 denied the motion for extension of
time considering that the 15-day reglementary period to file a motion for reconsideration is non-extendible, pursuant
to Section 2, Rule 40, 1997 Rules on Civil Procedure citing Habaluyas v. Japson, 142 SCRA 208. The motion for
partial reconsideration was likewise denied.

Hence, Cynthia interposes the present petition via Rule 45 of the Rules of Court raising the following

ISSUES

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED DECISION DATED DECEMBER
10, 2008 CONSIDERING THAT:

A. THE PRONOUNCEMENT OF THE HONORABLE COURT IN ENRICO V. SPS. MEDINACELI IS

NOT APPLICABLE TO THE INSTANT CASE CONSIDERING THAT THE FACTS AND THE ISSUE
THEREIN ARE NOT SIMILAR TO THE INSTANT CASE.

B. ASSUMING ARGUENDO THAT THE PRONOUNCEMENT OF THE HONORABLE COURT IS

APLLICABLE TO THE INSTANT CASE, ITS RULING IN ENRICO V. SPS. MEDINACELI IS
PATENTLY ERRONEOUS BECAUSE THE PHRASE "UNDER THE FAMILY CODE" IN A.M. NO.
02-11-10-SC PERTAINS TO THE WORD "PETITIONS" RATHER THAN TO THE WORD
"MARRIAGES."

C. FROM THE FOREGOING, A.M. NO. 02-11-10-SC ENTITLED "RULE ON DECLARATION OF

ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES"
IS APPLICABLE TO MARRIAGES SOLEMNIZED BEFORE THE EFFECTIVITY OF THE FAMILY
CODE. HENCE, A MOTION FOR RECONSIDERATION IS A PRECONDITION FOR AN APPEAL
BY HEREIN RESPONDENT.

D. CONSIDERING THAT HEREIN RESPONDENT REFUSED TO COMPLY WITH A

PRECONDITION FOR APPEAL, A RELAXATION OF THE RULES ON APPEAL IS NOT PROPER
IN HIS CASE.

II

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED RESOLUTION DATED
FEBRUARY 11, 2009 CONSIDERING THE FOREGOING AND THE FACTUAL CIRCUMSTANCES OF THIS
CASE.

III

THE TENETS OF JUSTICE AND FAIR PLAY, THE NOVELTY AND IMPORTANCE OF THE ISSUE AND THE
SPECIAL CIRCUMSTANCES IN THIS CASE JUSTIFY AND WARRANT A LIBERAL VIEW OF THE RULES IN
FAVOR OF THE PETITIONER. MOREOVER, THE INSTANT PETITION IS MERITORIOUS AND NOT INTENDED
FOR DELAY.5
From the arguments advanced by Cynthia, the principal question to be resolved is whether or not A.M. No. 02-11-
10-SC entitled "Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages," is
applicable to the case at bench.

Petitioner argues that A.M. No. 02-11-10-SC is also applicable to marriages solemnized before the effectivity of the
Family Code. According to Cynthia, the CA erroneously anchored its decision to an obiter dictum in the aforecited
Enrico case, which did not even involve a marriage solemnized before the effectivity of the Family Code.

She added that, even assuming arguendo that the pronouncement in the said case constituted a decision on its
merits, still the same cannot be applied because of the substantial disparity in the factual milieu of the Enrico case
from this case. In the said case, both the marriages sought to be declared null were solemnized, and the action for
declaration of nullity was filed, after the effectivity of both the Family Code in 1988 and of A.M. No. 02-11-10-SC in
2003. In this case, the marriage was solemnized before the effectivity of the Family Code and A.M. No. 02-11-10-SC
while the action was filed and decided after the effectivity of both.

Danilo, in his Comment,6 counters that A.M. No. 02-11-10-SC is not applicable because his marriage with Cynthia
was solemnized on February 14, 1980, years before its effectivity. He further stresses the meritorious nature of his
appeal from the decision of the RTC declaring their marriage as null and void due to his purported psychological
incapacity and citing the mere "failure" of the parties who were supposedly "remiss," but not "incapacitated," to
render marital obligations as required under Article 36 of the Family Code.

The Court finds the petition devoid of merit.

Petitioner insists that A.M. No. 02-11-10-SC governs this case. Her stance is unavailing. The Rule on Declaration of
Absolute Nullity of Void Marriages and Annulment of Voidable Marriages as contained in A.M. No. 02-11-10-SC
which the Court promulgated on March 15, 2003, is explicit in its scope. Section 1 of the Rule, in fact, reads:

Section 1. Scope – This Rule shall govern petitions for declaration of absolute nullity of void marriages and
annulment of voidable marriages under the Family Code of the Philippines.

The Rules of Court shall apply suppletorily.

The categorical language of A.M. No. 02-11-10-SC leaves no room for doubt. The coverage extends only to those
marriages entered into during the effectivity of the Family Code which took effect on August 3, 1988. 7 The rule sets
a demarcation line between marriages covered by the Family Code and those solemnized under the Civil Code. 8

The Court finds Itself unable to subscribe to petitioner’s interpretation that the phrase "under the Family Code" in
A.M. No. 02-11-10-SC refers to the word "petitions" rather than to the word "marriages."

A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is
no room for construction or interpretation. There is only room for application. 9 As the statute is clear, plain, and free
from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This is what is
known as the plain-meaning rule or verba legis. It is expressed in the maxim, index animi sermo, or "speech is the
index of intention." Furthermore, there is the maxim verba legis non est recedendum, or "from the words of a statute
there should be no departure."10

There is no basis for petitioner’s assertion either that the tenets of substantial justice, the novelty and importance of
the issue and the meritorious nature of this case warrant a relaxation of the Rules in her favor. Time and again the
Court has stressed that the rules of procedure must be faithfully complied with and should not be discarded with the
mere expediency of claiming substantial merit.11 As a corollary, rules prescribing the time for doing specific acts or
for taking certain proceedings are considered absolutely indispensable to prevent needless delays and to orderly
and promptly discharge judicial business. By their very nature, these rules are regarded as mandatory. 12

The appellate court was correct in denying petitioner’s motion for extension of time to file a motion for
reconsideration considering that the reglementary period for filing the said motion for reconsideration is non-
extendible. As pronounced in Apex Mining Co., Inc. v. Commissioner of Internal Revenue, 13
The rule is and has been that the period for filing a motion for reconsideration is non-extendible. The Court has
made this clear as early as 1986 in Habaluyas Enterprises vs. Japzon. Since then, the Court has consistently and
strictly adhered thereto.1avvphil

Given the above, we rule without hesitation that the appellate court’s denial of petitioner’s motion for reconsideration
is justified, precisely because petitioner’s earlier motion for extension of time did not suspend/toll the running of the
15-day reglementary period for filing a motion for reconsideration. Under the circumstances, the CA decision has
already attained finality when petitioner filed its motion for reconsideration. It follows that the same decision was
already beyond the review jurisdiction of this Court.

In fine, the CA committed no reversible error in setting aside the RTC decision which denied due course to
respondent’s appeal and denying petitioner’s motion for extension of time to file a motion for reconsideration.

Appeal is an essential part of our judicial system. Its purpose is to bring up for review a final judgment of the lower
court. The courts should, thus, proceed with caution so as not to deprive a party of his right to appeal.14 In the recent
case of Almelor v. RTC of Las Pinas City, Br. 254,15 the Court reiterated: While the right to appeal is a statutory, not
a natural right, nonetheless it is an essential part of our judicial system and courts should proceed with caution so as
not to deprive a party of the right to appeal, but rather, ensure that every party-litigant has the amplest opportunity
for the proper and just disposition of his cause, free from the constraints of technicalities.

In the case at bench, the respondent should be given the fullest opportunity to establish the merits of his appeal
considering that what is at stake is the sacrosanct institution of marriage.

No less than the 1987 Constitution recognizes marriage as an inviolable social institution. This constitutional policy
is echoed in our Family Code. Article 1 thereof emphasizes its permanence and inviolability, thus:

Article 1. Marriage is a special contract of permanent union between a man and a woman entered into in
accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an
inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to
stipulation, except that marriage settlements may fix the property relations during the marriage within the limits
provided by this Code.

This Court is not unmindful of the constitutional policy to protect and strengthen the family as the basic autonomous
social institution and marriage as the foundation of the family. 16

Our family law is based on the policy that marriage is not a mere contract, but a social institution in which the State
is vitally interested. The State finds no stronger anchor than on good, solid and happy families. The break up of
families weakens our social and moral fabric and, hence, their preservation is not the concern alone of the family
members.17

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO*

Associate Justice Associate Justice
 DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest 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.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, 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.

RENATO C. CORONA
Chief Justice
 Republic of the Philippines
CASE NO.5
SUPREME COURT
Manila

EN BANC

G.R. No. 103578 January 29, 1993

JUDGE RODOLFO T. ALLARDE, petitioner,

vs.
THE COMMISSION ON AUDIT and the MUNICIPAL TREASURER OF MUNTINLUPA, respondents.

GRIÑO-AQUINO, J.:

This is a petition for certiorari and/or mandamus seeking to annul and set aside the decisions dated June 5, 1991,
November 5, 1991, August 20, 1991 and January 27, 1992 of the Commission on audit (COA) which denied
petitioner's request for inclusion of the monthly allowance he had been receiving from the Municipality of Muntinlupa
as Metropolitan Trial Court Judge, as part of his retirement benefits.

Petitioner Rodolfo T. Allarde was the Presiding Judge of Branch LXXX, Metropolitan Trial Court in Muntinlupa, Metro
Manila, until his courtesy resignation was accepted on January 13, 1987. He applied for retirement under Republic
Act No. 910, as amended by Presidential Decree No. 1438, which this Court approved on July 11, 1989.

In computing his total retirement pay, the Government Service Insurance System (GSIS) included the amount of
P240,000.00 representing the five-year lump sum of the P4,000.00-monthly allowance which he had been receiving
from the Municipality of Muntinlupa during his incumbency therein as judge, provided said lump sum of P240,000.00
should be charged to the funds of the municipality pursuant to Section 30 of Batas Pambansa Blg. 866, and subject
to the availability of funds. On April 16, 1990, the Sangguniang Bayan of Muntinlupa, by Resolution No. 90-145,
appropriated and awarded the amount of P240,000.00 in favor of the petitioner.

However, petitioner's claim for payment of that additional retirement benefit reached the Metro Manila Authority
which denied it on the ground that:

. . . the Commission on Audit who is the final authority on questions of money claims against the
government has already ruled (in similar cases as the one at bar) that (like) allowances formerly
granted you by the Municipal Government of Muntinlupa, by the very nature and intent of the grant,
"are expense items not to be equated with compensation for purposes of computing retirement
benefits." (p. 49, Rollo.)

On April 4, 1991, the petitioner filed his claim with the Commission on Audit (COA). On June 5, 1991, the COA
rendered Decision No. 1877 denying the claim.

On September 9, 1991, petitioner flied a Memorandum/Motion for Reconsideration of the decision, but the COA
issued Decision No. 1983 dated November 5, 1991, reiterating its denial of the petitioner's claim.

A second reconsideration met the same fate (COA Decision No. 2159, dated January 27, 1992). Hence, this petition
for review.

The sole issue in this case is: whether or not the P4,000.00 monthly allowance that the petitioner had been receiving
from the Municipality of Muntinlupa should be included in the computation of his retirement benefits under Republic
Act No. 910, as amended by Presidential Decree No. 1438.
Petitioner's claim is anchored on Section 3 of Republic Act No. 910. An Act Providing For The Retirement of
Justices and All Judges in the Judiciary, as amended by P.D. No. 1438 which provides:

Sec. 3. Upon retirement, a justice of the Supreme Court or of the Court of Appeals, or a judge of the
Court of First Instance, Circuit Criminal Court, Agrarian Relations, Tax Appeals, Juvenile and
Domestic Relations, city or municipal court, or any other court hereafter established shall be
automatically entitled to a lump sum of five years' gratuity computed on the basis of the highest
monthly salary plus the highest monthly aggregate of transportation, living and representation
allowances he was receiving on the date of his retirement; Provided, however, that if the reason for
the retirement be any permanent disability contracted during his incumbency in office and prior to the
date of retirement he shall receive only a gratuity equivalent to ten years' salary and allowances
aforementioned with no further annuity payable monthly during the rest of the retiree's natural life.

As clearly specified in the law, only transportation, living and representation allowances may be included in the
computation of the first
five-year lump sum retirement benefits for members of the judiciary.

It is an elementary principle of statutory construction that where the words and phrases of a statute are not obscure
or ambiguous, the meaning and intention of the legislature should be determined from the language employed, and
where there is no ambiguity in the words, there is no room for construction (Provincial Board of Cebu vs. Presiding
Judge of Cebu, CFI, Branch IV, 171 SCRA 1).

Accordingly, the provisions of Section 3, P.D. No. 1438, which are clear and unambiguous, should be given their
plain and natural meaning. Inasmuch as the law limits the computation of the lump sum of 5 years' gratuity to "the
highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowances
that the judge was receiving on the date of his retirement," it is understood that other allowances are
excluded. Inclusio unius est exclusio alterius.

The petitioner failed to prove that the P4,000.00 additional monthly allowance that he was receiving from the
Municipal Government of Muntinlupa was a representation, living or transportation allowance, for as indicated in the
sample disbursement voucher that he used to fill up whenever he claimed such allowance, the amount was in the
nature of reimbursement for expenses which Judge Allarde certified "were incurred by me while performing my
duties."
(p. 52, Rollo.)

The pertinent observations of the COA in its decision dated June 5, 1991 are quoted as follows:

Upon a close scrutiny and examination of PD 1438, we note that the allowances contemplated
therein are "transportation, living and representation allowances" being granted to Justices and
Judges from national and/or local funds as authorized by existing laws, rules and regulations which
constitute integral part of their remuneration. (Vide. WHEREAS clauses) That being so, these
allowances are deemed as commutable in character and, hence, partake of the nature of additional
compensation. For this reason, they are included in the computation of the retirement benefits of
Justices and Judges as provided in the said law.

In your case, however, it appears that the allowances you have been collecting from the Municipality
of Muntinlupa during your stint therein as Municipal Trial Court Judge were non-commutable or
reimbursable in nature, let alone the fact that there is no indication as to whether they were
transportation, living or representation allowances. This conclusion can be readily drawn from the
copy of a sample voucher forming part of the set of papers accompanying your present claim
whereby you sought to collect "payment of the allowance of P4,000.00 a month for the period
January
1-31, 1985" from the Municipality of Muntinlupa, and whereon you had to "certify that
the expenses were incurred by me (you) while performing my (your) duties covering the period
heretofore cited," thereby signifying the reimbursable nature thereof. (Emphasis and words in
parenthesis ours) Evidently then, the allowances that you now seek to collect as part of your
retirement gratuity are expense items that cannot be equated with salary or compensation. On this
score, it was patent error for the GSIS to identify such allowance as "RATA" and to include the
 aggregate amount thereof corresponding to a 60-month period in its computation of your retirement
gratuity as the local share of the Municipality of Muntinlupa. (p. 52, Rollo.)

Letter of Instruction No. 1418 which authorizes local governments to pay additional allowances to judges of the
courts within their territorial jurisdiction, limits the amount of such allowance and does not provide that it shall be
treated as part of the judge's remuneration in computing the retirement benefits.

WHEREAS, some local government units are ready, willing, and able to pay additional allowances to
Judges of the various courts within their respective territorial jurisdiction;

xxx xxx xxx

3. The allowances provided in this letter shall be borne exclusively by the National Government.
However, provincial, city and municipal governments may pay additional allowances to the members
and personnel of the Judiciary assigned in their respective areas out of available local funds but not
to exceed P1,500.00: Provided, that in Metropolitan Manila, the city and municipal governments
therein may pay additional allowances not exceeding P3,000.00. (Emphasis ours). (pp.
42-43, Rollo.)

As observed by the Solicitor General the use of the word "may" signifies that the allowance may not be demanded
as a matter of right, but is entirely dependent on the will of the municipality concerned (p. 43, Rollo). It should be
treated as an honorarium, an amount that is "given not as a matter of obligation but in appreciation for services
rendered, a voluntary donation in consideration for services which admit of no compensation in money" (Santiago
vs. Commission on Audit, 199 SCRA 128, 130).

As the Solicitor General aptly observed: such additional allowance does not constitute an integral part of the judge's
remuneration for it may or may not be given by the local government and it is dependent on the liberality of the
latter. If said allowance were to be included in the computation of the retirement benefits of judges, the result would
be inequality and disparity in their retirement benefits. For there are rich municipalities that can give generous
allowances to the judges of the courts within their territorial jurisdiction, and there are poorer municipalities that can
give less substantial amounts or none at all. The result would be an unseemly jockeying among the trial judges for
assignment in the wealthy municipalities, and injustice to those who may be assigned to the less affluent regions, for
while they may have the same rank and perform essentially the same tasks, their more fortunate colleagues would
be enjoying more benefits. The retirement law was not intended to deal unequally and unfairly with the judges.

WHEREFORE, finding no grave abuse of discretion in the decision of the Commission on Audit, the petition for
review is hereby DISMISSED.

SO ORDERED.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo
and Campos, Jr., JJ., concur.
 Republic of the Philippines CASE NO.6
SUPREME COURT
Manila

EN BANC

G.R. No. L-44143 August 31, 1988

THE PEOPLE OF THE PHILIPPINES, plaintiff,

vs.
EUSEBIO NAZARIO, accused-appellant.

The Solicitor General for plaintiff-appellee.

Teofilo Ragodon for accused-appellant.

SARMIENTO, J.:

The petitioner was charged with violation of certain municipal ordinances of the municipal council of Pagbilao, in
Quezon province. By way of confession and avoidance, the petitioner would admit having committed the acts
charged but would claim that the ordinances are unconstitutional, or, assuming their constitutionality, that they do
not apply to him in any event.

The facts are not disputed:

This defendant is charged of the crime of Violation of Municipal Ordinance in an information filed by
the provincial Fiscal, dated October 9, 1968, as follows:

That in the years 1964, 1965 and 1966, in the Municipality of Pagbilao, Province of
Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, being then the owner and operator of a fishpond situated in the
barrio of Pinagbayanan, of said municipality, did then and there willfully, unlawfully
and feloniously refuse and fail to pay the municipal taxes in the total amount of
THREE HUNDRED SIXTY TWO PESOS AND SIXTY TWO CENTAVOS (P362.62),
required of him as fishpond operator as provided for under Ordinance No. 4, series of
1955, as amended, inspite of repeated demands made upon him by the Municipal
Treasurer of Pagbilao, Quezon, to pay the same.

Contrary to law.

For the prosecution the following witnesses testified in substance as follows;

MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon —

In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused as I worked in
his fishpond in 1962 to 1964. The fishpond of Nazario is at Pinagbayanan, Pagbilao, Quezon. I
worked in the clearing of the fishpond, the construction of the dikes and the catching of fish.

On cross-examination, this witness declared:

I worked with the accused up to March 1964.

NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of Pinagbayanan,
Pagbilao, Quezon —
I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know the accused
since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao, Quezon. He still operates the
fishpond up to the present and I know this fact as I am the barrio captain of Pinagbayanan.

On cross-examination, this witness declared:

I came to know the accused when he first operated his fishpond since 1959.

On re-direct examination, this witness declared:

I was present during the catching of fish in 1967 and the accused was there.

On re-cross examination, this witness declared:

I do not remember the month in 1962 when the accused caught fish.

RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon, married —

As Municipal Treasurer I am in charge of tax collection. I know the accused even before I was
Municipal Treasurer of Pagbilao. I have written the accused a letter asking him to pay his taxes
(Exhibit B). Said letter was received by the accused as per registry return receipt, Exhibit B-1. The
letter demanded for payment of P362.00, more or less, by way of taxes which he did not pay up to
the present. The former Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused
(Exhibit C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D), requesting
information if accused paid taxes with that office. The Commission sent me a certificate (Exhibits D-
1, D-2 & D-3). The accused had a fishpond lease agreement. The taxes unpaid were for the years
1964, 1965 and 1966.

On cross-examination, this witness declared:

I have demanded the taxes for 38.10 hectares.

On question of the court, this witness declared:

What I was collecting from the accused is the fee on fishpond operation, not rental.

The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C, D, D-1, D-2, D-3,
E, F, F-1 and the same were admitted by the court, except Exhibits D, D-1, D-2 and D-3 which were
not admitted for being immaterial.

For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner and general
manager of the ZIP Manufacturing Enterprises and resident of 4801 Old Sta. Mesa, Sampaloc,
Manila, declared in substance as follows:

I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at Manila or at San
Juan. In 1964, 1965 and 1966, I was living in Manila and my business is in Manila and my family
lives at Manila. I never resided at Pagbilao, Quezon. I do not own a house at Pagbilao. I am a lessee
of a fishpond located at Pagbilao, Quezon, and I have a lease agreement to that effect with the
Philippine Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966, the contract of lease,
Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and 12, series of 1955, 1965
and 1966, were translated into English by the Institute of National Language to better understand the
ordinances. There were exchange of letters between me and the Municipal Treasurer of Pagbilao
regarding the payment of the taxes on my leased fishpond situated at Pagbilao. There was a letter of
demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by mail at my
residence at Manila. I answered the letter of demand, Exhibit 3, with Exhibit 3-A. I requested an
inspection of my fishpond to determine its condition as it was not then in operation. The Municipal
Treasurer Alvarez went there once in 1967 and he found that it was destroyed by the typhoon and
 there were pictures taken marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of
demand, Exhibit 5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit
5-A from Administrative Order No. 6, Exhibit 6. I received another letter of demand from Tomas
Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16, 1966, Exhibit 7, and I answered
the same with the letter marked as Exhibit 7-A, dated February 26, 1966. I received another letter of
demand from Treasurer Alvarez of Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In
1964, I went to Treasurer Caparros to ask for an application for license tax and he said none and he
told me just to pay my taxes. I did not pay because up to now I do not know whether I am covered by
the Ordinance or not. The letters of demand asked me to pay different amounts for taxes for the
fishpond. Because under Sec. 2309 of the Revised Administrative Code, municipal taxes lapse if not
paid and they are collecting on a lapsed ordinance. Because under the Tax Code, fishermen are
exempted from percentage tax and privilege tax. There is no law empowering the municipality to
pass ordinance taxing fishpond operators.

The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-C, 5, 5-A, 6, 6-A,
6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the court.

From their evidence the prosecution would want to show to the court that the accused, as lessee or
operator of a fishpond in the municipality of Pagbilao, refused, and still refuses, to pay the municipal
taxes for the years 1964, 1965 and 1966, in violation of Municipal Ordinance No. 4, series of 1955,
as amended by Municipal Ordinance No. 15, series of 1965, and finally amended by Municipal
Ordinance No. 12, series of 1966.

On the other hand, the accused, by his evidence, tends to show to the court that the taxes sought to
be collected have already lapsed and that there is no law empowering municipalities to pass
ordinances taxing fishpond operators. The defense, by their evidence, tried to show further that, as
lessee of a forest land to be converted into a fishpond, he is not covered by said municipal
ordinances; and finally that the accused should not be taxed as fishpond operator because there is
no fishpond yet being operated by him, considering that the supposed fishpond was under
construction during the period covered by the taxes sought to be collected.

Finally, the defendant claims that the ordinance in question is ultra vires as it is outside of the power
of the municipal council of Pagbilao, Quezon, to enact; and that the defendant claims that the
ordinance in question is ambiguous and uncertain.

There is no question from the evidences presented that the accused is a lessee of a parcel of forest
land, with an area of 27.1998 hectares, for fishpond purposes, under Fishpond Lease Agreement
No. 1066, entered into by the accused and the government, through the Secretary of Agriculture and
Natural Resources on August 21, 1959.

There is no question from the evidences presented that the 27.1998 hectares of land leased by the
defendant from the government for fishpond purposes was actually converted into fishpond and
used as such, and therefore defendant is an operator of a fishpond within the purview of the
ordinance in question. 1

The trial Court 2 returned a verdict of guilty and disposed as follows:

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond reasonable doubt of
the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended by Ordinance No. 15, series of
1965 and further amended by Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao, Quezon; and
hereby sentences him to pay a fine of P50.00, with subsidiary imprisonment in case of insolvency at the rate of
P8.00 a day, and to pay the costs of this proceeding.

SO ORDERED. 3

In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that:
I.

THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955, AS AMENDED
BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY ORDINANCE NO. 12, SERIES OF
1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS NULL AND VOID FOR BEING AMBIGUOUS AND
UNCERTAIN.

II.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS AMENDED, IS
UNCONSTITUTIONAL FOR BEING EX POST FACTO.

III.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION COVERS ONLY
OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND NOT TO LESSEES OF PUBLIC
LANDS.

IV.

THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF VALID,
CANNOT BE ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND DOES NOT COVER NON-
RESIDENTS. 4

The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965, and Ordinance
No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to this appeal, the salient portions
thereof are hereinbelow quoted:

Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao,
Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of fishpond on part thereof per
annum. 5

xxx xxx xxx

Sec. l (a). For the convenience of those who have or owners or managers of fishponds within the
territorial limits of this municipality, the date of payment of municipal tax relative thereto, shall begin
after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of
Fisheries. 6

xxx xxx xxx

Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao shall
pay a municipal tax in the amount of P3.00 per hectare or any fraction thereof per annum beginning
and taking effect from the year 1964, if the fishpond started operating before the year 1964. 7

The first objection refers to the ordinances being allegedly "ambiguous and uncertain." 8 The petitioner contends
that being a mere lessee of the fishpond, he is not covered since the said ordinances speak of "owner or manager."
He likewise maintains that they are vague insofar as they reckon the date of payment: Whereas Ordinance No. 4
provides that parties shall commence payment "after the lapse of three (3) years starting from the date said fishpond
is approved by the Bureau of Fisheries." 9 Ordinance No. 12 states that liability for the tax accrues "beginning and
taking effect from the year 1964 if the fishpond started operating before the year 1964." 10

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men "of common
intelligence must necessarily guess at its meaning and differ as to its application." 11 It is repugnant to the
Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targetted
by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its
provisions and becomes an arbitrary flexing of the Government muscle.
But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by
construction. Thus, in Coates v. City of Cincinnati, 12 the U.S. Supreme Court struck down an ordinance that had
made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner
annoying to persons passing by." 13 Clearly, the ordinance imposed no standard at all "because one may never
know in advance what 'annoys some people but does not annoy others.' " 14

Coates highlights what has been referred to as a "perfectly vague" 15 act whose obscurity is evident on its face. It is
to be distinguished, however, from legislation couched in imprecise language — but which nonetheless specifies a
standard though defectively phrased — in which case, it may be "saved" by proper construction.

It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to certain types of
activities. In that event, such statutes may not be challenged whenever directed against such activities. In Parker v.
Levy, 16 a prosecution originally under the U.S. Uniform Code of Military Justice (prohibiting, specifically, "conduct
unbecoming an officer and gentleman"), the defendant, an army officer who had urged his men not to go to Vietnam
and called the Special Forces trained to fight there thieves and murderers, was not allowed to invoke the void for
vagueness doctrine on the premise that accepted military interpretation and practice had provided enough
standards, and consequently, a fair notice that his conduct was impermissible.

It is interesting that in Gonzales v. Commission on Elections, 17 a divided Court sustained an act of Congress
(Republic Act No. 4880 penalizing "the too early nomination of candidates" 18 limiting the election campaign period,
and prohibiting "partisan political activities"), amid challenges of vagueness and overbreadth on the ground that the
law had included an "enumeration of the acts deemed included in the terms 'election campaign' or 'partisan political
activity" 19 that would supply the standards. "As thus limited, the objection that may be raised as to vagueness has
been minimized, if not totally set at rest." 20 In his opinion, however, Justice Sanchez would stress that the conduct
sought to be prohibited "is not clearly defined at all." 21 "As worded in R.A 4880, prohibited discussion could cover
the entire spectrum of expression relating to candidates and political parties." 22 He was unimpressed with the
"restrictions" Fernando's opinion had relied on: " 'Simple expressions of opinions and thoughts concerning the
election' and expression of 'views on current political problems or issues' leave the reader conjecture, to guesswork,
upon the extent of protection offered, be it as to the nature of the utterance ('simple expressions of opinion and
thoughts') or the subject of the utterance ('current political problems or issues')." 23

The Court likewise had occasion to apply the "balancing-of-interests" test, 24 insofar as the statute's ban on early
nomination of candidates was concerned: "The rational connection between the prohibition of Section 50-A and its
object, the indirect and modest scope of its restriction on the rights of speech and assembly, and the embracing
public interest which Congress has found in the moderation of partisan political activity, lead us to the conclusion
that the statute may stand consistently with and does not offend the Constitution." 25 In that case, Castro would have
the balance achieved in favor of State authority at the "expense" of individual liberties.

In the United States, which had ample impact on Castro's separate opinion, the balancing test finds a close kin,
referred to as the "less restrictive alternative " 26 doctrine, under which the court searches for alternatives available
to the Government outside of statutory limits, or for "less drastic means" 27 open to the State, that would render the
statute unnecessary. In United States v. Robel, 28 legislation was assailed, banning members of the (American)
Communist Party from working in any defense facility. The U.S. Supreme Court, in nullifying the statute, held that it
impaired the right of association, and that in any case, a screening process was available to the State that would
have enabled it to Identify dangerous elements holding defense positions. 29 In that event, the balance would have
been struck in favor of individual liberties.

It should be noted that it is in free expression cases that the result is usually close. It is said, however, that the
choice of the courts is usually narrowed where the controversy involves say, economic rights, 30 or as in
the Levy case, military affairs, in which less precision in analysis is required and in which the competence of the
legislature is presumed.

In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is unmistakable from their
very provisions that the appellant falls within its coverage. As the actual operator of the fishponds, he comes within
the term " manager." He does not deny the fact that he financed the construction of the fishponds, introduced fish
fries into the fishponds, and had employed laborers to maintain them. 31 While it appears that it is the National
Government which owns them, 32 the Government never shared in the profits they had generated. It is therefore
only logical that he shoulders the burden of tax under the said ordinances.
We agree with the trial court that the ordinances are in the character of revenue measures 33 designed to assist the
coffers of the municipality of Pagbilao. And obviously, it cannot be the owner, the Government, on whom liability
should attach, for one thing, upon the ancient principle that the Government is immune from taxes and for another,
since it is not the Government that had been making money from the venture.

Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits brought about
by the business, the appellant is clearly liable for the municipal taxes in question. He cannot say that he did not have
a fair notice of such a liability to make such ordinances vague.

Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that "the imposition of
tax has to depend upon an uncertain date yet to be determined (three years after the 'approval of the fishpond' by
the Bureau of Fisheries, and upon an uncertain event (if the fishpond started operating before 1964), also to be
determined by an uncertain individual or individuals." 34 Ordinance No. 15, in making the tax payable "after the lapse
of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries," 35 is unequivocal
about the date of payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and
taking effect from the year 1964 if the fishpond started operating before the year 1964 ," 36 does not give rise to any
ambiguity. In either case, the dates of payment have been definitely established. The fact that the appellant has
been allegedly uncertain about the reckoning dates — as far as his liability for the years 1964, 1965, and 1966 is
concerned — presents a mere problem in computation, but it does not make the ordinances vague. In addition, the
same would have been at most a difficult piece of legislation, which is not unfamiliar in this jurisdiction, but hardly a
vague law.

As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior thereto (Ordinance
No. 12), and for new fishponds, three years after their approval by the Bureau of Fisheries (Ordinance No. 15). This
is so since the amendatory act (Ordinance No. 12) merely granted amnesty unto old, delinquent fishpond operators.
It did not repeal its mother ordinances (Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still
prevail.

To the Court, the ordinances in question set forth enough standards that clarify imagined ambiguities. While such
standards are not apparent from the face thereof, they are visible from the intent of the said ordinances.

The next inquiry is whether or not they can be said to be ex post facto measures. The appellant argues that they
are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the payment of the imposed tax shall
"beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964.' In other
words, it penalizes acts or events occurring before its passage, that is to say, 1964 and even prior thereto." 37

The Court finds no merit in this contention. As the Solicitor General notes, "Municipal Ordinance No. 4 was passed
on May 14, 1955. 38 Hence, it cannot be said that the amendment (under Ordinance No. 12) is being made to apply
retroactively (to 1964) since the reckoning period is 1955 (date of enactment). Essentially, Ordinances Nos. 12 and
15 are in the nature of curative measures intended to facilitate and enhance the collection of revenues the originally
act, Ordinance No. 4, had prescribed. 39 Moreover, the act (of non-payment of the tax), had been, since 1955, made
punishable, and it cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have noted, it
operates to grant amnesty to operators who had been delinquent between 1955 and 1964. It does not mete out a
penalty, much less, a retrospective one.

The appellant assails, finally, the power of the municipal council of Pagbilao to tax "public forest land." 40 In Golden
Ribbon Lumber Co., Inc. v. City of Butuan 41 we held that local governments' taxing power does not extend to forest
products or concessions under Republic Act No. 2264, the Local Autonomy Act then in force. (Republic Act No.
2264 likewise prohibited municipalities from imposing percentage taxes on sales.)

First of all, the tax in question is not a tax on property, although the rate thereof is based on the area of fishponds
("P3.00 per hectare" 42). Secondly, fishponds are not forest lands, although we have held them to the agricultural
lands. 43 By definition, "forest" is "a large tract of land covered with a natural growth of trees and underbush; a large
wood." 44 (Accordingly, even if the challenged taxes were directed on the fishponds, they would not have been taxes
on forest products.)

They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not charged against
sales, which would have offended the doctrine enshrined by Golden Ribbon Lumber, 45 but rather on occupation,
which is allowed under Republic Act No. 2264. 46 They are what have been classified as fixed annual taxes and this
is obvious from the ordinances themselves.

There is, then, no merit in the last objection.

WHEREFORE, the appeal is DISMISSED. Costs against the appellant.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Cortes, Griño-Aquino and Medialdea,
JJ., concur.

Melencio-Herrera, and Regalado, J., took no part.

Gancayco, J., is on leave.

 Republic of the Philippines
CASE NO.7
SUPREME COURT
Manila

EN BANC

G.R. No. L-26100 February 28, 1969

CITY OF BAGUlO, REFORESTATION ADMINISTRATION,

FRANCISCO G. JOAQUIN, SR., FRANCISCO G. JOAQUIN, JR., and TERESITA J. BUCHHOLZ petitioners,
vs.
HON. PIO R. MARCOS, Judge of the Court of First Instance of Baguio,
BELONG LUTES, and the HONORABLE COURT OF APPEALS, respondents.

1st Assistant City Fiscal Dionisio C. Claridad, Augusto Tobias and Feria, Feria, Lugtu and La'O for petitioners.
Bernardo C. Ronquillo for respondents.

SANCHEZ, J.:

Petitioners attack the jurisdiction of the Court of First Instance of Baguio to reopen cadastral proceedings under
Republic Act 931. Private petitioner's specifically question the ruling of the Court of Appeals that they have no
personality to oppose reopening. The three-pronged contentions of all the petitioners are: (1) the reopening petition
was filed outside the 40-year period next preceding the approval of Republic Act 931; (2) said petition was not
published; and (3) private petitioners, as lessees of the public land in question, have court standing under Republic
Act 931. The facts follow:

On April 12, 1912, the cadastral proceedings sought to be reopened, Civil Reservation Case No. 1, GLRO Record
No. 211, Baguio Townsite, were instituted by the Director of Lands in the Court of First Instance of Baguio. It is not
disputed that the land here involved (described in Plan Psu-186187) was amongst those declared public lands by
final decision rendered in that case on November 13, 1922.

On July 25, 1961, respondent Belong Lutes petitioned the cadastral court to reopen said Civil Reservation Case No.
1 as to the parcel of land he claims. His prayer was that the land be registered in his name upon the grounds that:
(1) he and his predecessors have been in actual, open, adverse, peaceful and continuous possession and
cultivation of the land since Spanish times, or before July 26, 1894, paying the taxes thereon; and (2) his
predecessors were illiterate Igorots without personal notice of the cadastral proceedings aforestated and were not
able to file their claim to the land in question within the statutory period.

On December 18, 1961, private petitioners Francisco G. Joaquin, Sr., Francisco G. Joaquin, Jr., and Teresita J.
Buchholz registered opposition to the reopening. Ground: They are tree farm lessees upon agreements executed by
the Bureau of Forestry in their favor for 15,395.65 square meters on March. 16, 1959, for 12,108 square meters on
July 24, 1959, and for 14,771 square meters on July 17, 1959, respectively.

On May 5, 1962, the City of Baguio likewise opposed reopening.

On May 8, 1962, upon Lutes' opposition, the cadastral court denied private petitioners' right to intervene in the case
because of a final declaratory relief judgment dated March 9, 1962 in Yaranon vs. Castrillo [Civil Case 946, Court of
First Instance of Baguio] which declared that such tree farm leases were null and void.

On May 18, 1962, private petitioners moved to reconsider. They averred that said declaratory relief judgment did not
bind them, for they were not parties to that action.

On September 14, 1962, the cadastral court reversed its own ruling of May 8, 1962, allowed petitioners to cross-
examine the witnesses of respondent Lutes.

On October 16, 1962, Lutes replied to and moved to dismiss private petitioners' opposition to his reopening petition.
On October 25, 1962, private petitioners' rejoinder was filed.
On August 5, 1963, the cadastral court dismissed private petitioners' opposition to the reopening. A motion to
reconsider was rejected by the court on November 5, 1963.

On January 6, 1964, it was the turn of the City of Baguio to lodge a motion to dismiss the petition to reopen. This
motion was adopted as its own by the Reforestation Administration. They maintained the position that the
declaratory judgment in Civil Case 946 was not binding on those not parties thereto. Respondent Lutes opposed on
February 24, 1964. On April 6, 1964, private petitioners reiterated their motion to dismiss on jurisdictional grounds.

On September 17, 1964, the court denied for lack of merit the City's motion as well as the April 6, 1964 motion to
dismiss made by private petitioners.

On November 13, 1964, all the petitioners went to the Court of Appeals on certiorari, prohibition, and mandamus
with preliminary injunction. 1 They then questioned the cadastral court's jurisdiction over the petition to reopen and
the latter's order of August 5, 1963 dismissing private petitioners' opposition. The appellate court issued a writ of
preliminary injunction upon a P500-bond.

Then came the judgment of the Court of Appeals of September 30, 1965. The court held that petitioners were not
bound by the declaratory judgment heretofore hated. Nevertheless, the appellate court ruled that as lessees, private
petitioners had no right to oppose the reopening of the cadastral case. Petitioners moved to reconsider. It was
thwarted on May 6, 1966.

Petitioners now seek redress from this Court. On July 6, 1966, respondents moved to dismiss the petition before us.
On August 5, 1966, petitioners opposed. On August 12, 1966, we gave due course.

1. Do private petitioners have personality to appear in the reopening proceedings?

First, to the controlling statute, Republic Act 931, effective June 20, 1953.

The title of the Act reads —

AN ACT TO AUTHORIZE THE FILING IN THE PROPER COURT, UNDER CERTAIN CONDITIONS, OF CERTAIN
CLAIMS OF TITLE TO PARCELS OF LAND THAT HAVE BEEN DECLARED PUBLIC LAND, BY VIRTUE OF
JUDICIAL DECISIONS RENDERED WITHIN THE FORTY YEARS NEXT PRECEDING THE APPROVAL OF THIS
ACT.

Section 1 thereof provides —

SECTION 1. All persons claiming title to parcels of land that have been the object of cadastral proceedings,
who at the time of the survey were in actual possession of the same, but for some justifiable reason had
been unable to file their claim in the proper court during the time limit established by law, in case such
parcels of land, on account of their failure to file such claims, have been, or are about to be declared land of
the public domain by virtue of judicial proceedings instituted within the forty years next preceding the
approval of this Act, are hereby granted the right within five years 2 after the date on which this Act shall
take effect, to petition for a reopening of the judicial proceedings under the provisions of Act Numbered
Twenty-two hundred and fifty-nine, as amended, only with respect to such of said parcels of land as
have not been alienated, reserved, leased, granted, or otherwise provisionally or permanently disposed of
by the Government, and the competent Court of First Instance, upon receiving such petition, shall notify the
Government through the Solicitor General, and if after hearing the parties, said court shall find that all
conditions herein established have been complied with, and that all taxes, interests and penalties thereof
have been paid from the time when land tax should have been collected until the day when the motion is
presented, it shall order said judicial proceedings reopened as if no action has been taken on such parcels. 3

We concede that in Leyva vs. Jandoc, L-16965, February 28, 1962, a land registration case where oppositors were
"foreshore lessees of public land", a principle was hammered out that although Section 34, Land Registration
Act, 4 "apparently authorizes any person claiming any kind of interest to file an opposition to an application for
registration, ... nevertheless ... the opposition must be based on a right of dominion or some other real right
independent of, and not at all subordinate to, the rights of the Government." 5 The opposition, according to
the Leyva decision, "must necessarily be predicated upon the property in question being part of the public
domain." Leyva thus pronounced that "it is incumbent upon the duly authorized representatives of the Government
to represent its interests as well as private claims intrinsically dependent upon it."

But the Leyva case concerned an ordinary land registration proceeding under the provisions of the Land
Registration Act. Normally and logically, lessees cannot there present issues of ownership. The case at bar,
however, stands on a different footing. It involves a special statute R.A. 931, which allows a petition for reopening on
lands "about to be declared" or already "declared land of the public domain" by virtue of judicial proceedings. Such
right, however, is made to cover limited cases, i.e., "only with respect to such of said parcels of land as have not
been alienated, reserved, leased, granted, or otherwise provisionally or permanently disposed of by the
Government." 6 The lessee's right is thus impliedly recognized by R.A. 931. This statutory phrase steers the present
case clear from the impact of the precept forged by Leyva. So it is, that if the land subject of a petition to reopen has
already been leased by the government, that petition can no longer prosper.

This was the holding in Director of Land vs. Benitez, L-21368, March 31, 1966. The reopening petition there filed
was opposed by the Director of Lands in behalf of 62 lessees of public land holding revocable permits issued by the
government. We struck down the petition in that Case because the public land, subject-matter of the suit, had
already been leased by the government to private persons.

Of course, the Benitez ruling came about not by representations of the lessees alone, but through the Director of
Lands. But we may well scale the heights of injustice or abet violations of R.A. 931 if we entertain the view that only
the Director of Lands 7 can here properly oppose the reopening petition. Suppose the lands office fails to do so? Will
legitimate lessees be left at the mercy of government officials? Should the cadastral court close its eyes to
the fact of lease that may be proved by the lessees themselves, and which is enough to bar the reopening petition?
R.A. 931 could not have intended that this situation should happen. The point is that, with the fact of lease, no
question of ownership need be inquired into pursuant to R.A. 931. From this standpoint, lessees have sufficient legal
interest in the proceedings.

The right of private petitioners to oppose a reopening petition here becomes the more patent when we take stock of
their averment that they have introduced improvements on the land affected. It would seem to us that
lessees insofar as R.A. 931 is concerned, come within the purview of those who, according to the Rules of
Court, 8 may intervene in an action. For, they are persons who have "legal interest in the matter in litigation, or in the
success of either of the parties." 9 In the event herein private petitioners are able to show that they are legitimate
lessees, then their lease will continue. And this because it is sufficient that it be proven that the land is leased to
withdraw it from the operation of Republic Act 931 and place it beyond the reach of a petition for reopening. 10

In line with the Court of Appeals' conclusion, not disputed by respondent Lutes herein, the cadastral court should
have ruled on the validity of private petitioners 'tree farm leases — on the merits. Because there is need for Lutes'
right to reopen and petitioners' right to continue as lessees to be threshed out in that court.

We, accordingly, hold that private petitioners, who aver that they are lessees, have the necessary personality to
intervene in and oppose respondent Lutes' petition for reopening.

2. Petitioners next contend that the reopening petition below, filed under R.A. 931, should have been published in
accordance with the Cadastral Act.

To resolve this contention, we need but refer to a very recent decision of this Court in De Castro vs. Marcos, supra,
involving exactly the same set of facts bearing upon the question. We there held, after a discussion of law and
jurisprudence, that: "In sum, the subject matter of the petition for reopening — a parcel of land claimed by
respondent Akia — was already embraced in the cadastral proceedings filed by the Director of Lands.
Consequently, the Baguio cadastral court already acquired jurisdiction over the said property. The petition,
therefore, need not be published." We find no reason to break away from such conclusion.

Respondent Lutes attached to the record a certified true copy of the November 13, 1922 decision in the Baguio
Townsite Reservation case to show, amongst others, that the land here involved was part of that case. Petitioners
do not take issue with respondent Lutes on this point of fact.
We here reiterate our ruling in De Castro, supra, that the power of the cadastral court below over petitions to
reopen, as in this case, is not jurisdictionally tainted by want of publication.

3. A question of transcendental importance is this: Does the cadastral court have power to reopen the cadastral
proceedings upon the application of respondent Lutes?

The facts are: The cadastral proceedings sought to be reopened were instituted on April 12, 1912. Final decision
was rendered on November 13, 1922. Lutes filed the petition to reopen on July 25, 1961.

It will be noted that the title of R.A. 931, heretofore transcribed, authorizes "the filing in the proper court, under
certain conditions, of certain claims of title to parcels of land that have been declared public land, by virtue of judicial
decisions rendered within the forty years next preceding the approval of this Act." The body of the statute, however,
in its Section 1, speaks of parcels of land that "have been, or are about to be declared land of the public domain, by
virtue of judicial proceedings instituted within the forty years next preceding the approval of this Act." There thus
appears to be a seeming inconsistency between title and body.

It must be stressed at this point that R.A. 931 is not under siege on constitutional grounds. No charge has been
made hero or in the courts below that the statute offends the constitutional injunction that the subject of legislation
must be expressed in the title thereof. Well-entrenched in constitutional law is the precept that constitutional
questions will not be entertained by courts unless they are "specifically raised, insisted upon and adequately
argued." 11 At any rate it cannot be seriously disputed that the subject of R.A. 931 is expressed in its title.

This narrows our problem down to one of legal hermeneutics.

Many are the principles evolved in the interpretation of laws. It is thus not difficult to stray away from the true path of
construction, unless we constantly bear in mind the goal we seek. The office of statutory interpretation, let us not for
a moment forget, is to determine legislative intent. In the words of a well-known authority, "[t]he true object of all
interpretation is to ascertain the meaning and will of the law-making body, to the end that it may be enforced." 12 In
varying language, "the, purpose of all rules or maxims" in interpretation "is to discover the true intention of the
law." 13 They "are only valuable when they subserve this purpose." 14 In fact, "the spirit or intention of a statute
prevails over the letter thereof." 15 A statute "should be construed according to its spirit and reason, disregarding as
far as necessary, the letter of the law." 16 By this, we do not "correct the act of the Legislature, but rather ... carry out
and give due course to" its true intent. 17

It should be certain by now that when engaged in the task of construing an obscure expression in the law 18 or
where exact or literal rendering of the words would not carry out the legislative intent, 19 the title thereof may be
resorted to in the ascertainment of congressional will. Reason therefor is that the title of the law may properly be
regarded as an index of or clue or guide to legislative intention. 20 This is especially true in this jurisdiction. For the
reason that by specific constitutional precept, "[n]o bill which may be enacted into law shall embrace more than one
subject which shall be expressed in the title of the bill." 21 In such case, courts "are compelled by the Constitution to
consider both the body and the title in order to arrive at the legislative intention." 22

With the foregoing guideposts on hand, let us go back to the situation that confronts us. We take another look at the
title of R.A. 931, viz: "AN ACT TO AUTHORIZE THE FILING IN THE PROPER COURT, UNDER CERTAIN
CONDITIONS, OF CERTAIN CLAIMS OF TITLE TO PARCELS OF LAND THAT HAVE BEEN DECLARED PUBLIC
LAND, BY VIRTUE OF JUDICIAL DECISIONS RENDERED WITHIN THE FORTY YEARS NEXT PRECEDING
THE APPROVAL OF THIS ACT." Readily to be noted is that the title is not merely composed of catchwords. 23 It
expresses in language clear the very substance of the law itself. From this, it is easy to see that Congress intended
to give some effect to the title of R.A. 931.

To be carefully noted is that the same imperfection in the language of R.A. 931 aforesaid — from which surfaces a
seeming inconsistency between the title and the body — attended Commonwealth Act 276, the present statute's
predecessor. That prior law used the very same language in the body thereof and in its title. We attach meaning to
this circumstance. Had the legislature meant to shake off any legal effects that the title of the statute might have, it
had a chance to do so in the reenactment of the law. Congress could have altered with great facility the wording of
the title of R.A. 931. The fact is that it did not.
It has been observed that "in modern practice the title is adopted by the Legislature, more thoroughly read than the
act itself, and in many states is the subject of constitutional regulation." 24 The constitutional in jurisdiction that the
subject of the statute must be expressed in the title of the bill, breathes the spirit of command because "the
Constitution does not exact of Congress the obligation to read during its deliberations the entire text of the
bill." 25 Reliance, therefore, may be placed on the title of a bill, which, while not an enacting part, no doubt "is in
some sort a part of the act, although only a formal part." 26 These considerations are all the more valid here because
R.A. 931 was passed without benefit of congressional debate in the House from which it originated as House Bill
1410, 27 and in the Senate. 28

The title now under scrutiny possesses the strength of clarity and positiveness. It recites that it authorizes court
proceedings of claims to parcels of land declared public land "by virtue of judicial decisions rendered within the forty
years next preceding the approval of this Act." That title is written "in capital letters" — by Congress itself; such kind
of a title then "is not to be classed with words or titles used by compilers of statutes" because "it is the legislature
speaking." 29 Accordingly, it is not hard to come to a deduction that the phrase last quoted from R.A. 931 — "by
virtue of judicial decisions rendered" — was but inadvertently omitted from the body. Parting from this premise, there
is, at bottom, no contradiction between title and body. In line with views herein stated, the title belongs to that type of
titles which; should be regarded as part of the rules or provisions expressed in the body. 30 At the very least, the
words "by virtue of judicial decisions rendered" in the title of the law stand in equal importance to the phrase in
Section 1 thereof, "by virtue of judicial proceedings instituted."

Given the fact then that there are two phrases to consider the choice of construction we must give to the statute
does not need such reflection. We lean towards a liberal view. And this, because of the principle long accepted that
remedial legislation should receive the blessings of liberal construction. 31 And, there should be no quibbling as to
the fact that R.A. 931 is a piece of remedial legislation. In essence, it provides a mode of relief to landowners who,
before the Act, had no legal means of perfecting their titles. This is plainly evident from the explanatory note thereof,
which reads:

This bill is intended to give an opportunity to any person or claimant who has any interest in any parcel of
land which has been declared as public land in cadastral proceeding for failure of said person or claimant to
present his claim within the time prescribed by law.

There are many meritorious cases wherein claimants to certain parcels of land have not had the opportunity
to answer or appear at the hearing of cases affecting their claims in the corresponding cadastral
proceedings for lack of sufficient notice or for other reasons and circumstances which are beyond their
control. Under C.A. No. 276, said persons or claimants have no more legal remedy as the effectivity of said
Act expired in 1940.

This measure seeks to remedy the lack of any existing law within said persons or claimants with meritorious
claims or interests in parcels of land may seek justice and protection. This bill proposes to give said persons
or claimants their day in court. Approval of this bill is earnestly requested.

In fine, we say that lingual imperfections in the drafting of a statute should never be permitted to hamstring judicial
search for legislative intent, which can otherwise be discovered. Legal technicalities should not abort the beneficent
effects intended by legislation.

The sum of all the foregoing is that, as we now view Republic Act 931, claims of title that may be filed thereunder
embrace those parcels of land that have been declared public land "by virtue of judicial decisions rendered within
the forty years next preceding the approval of this Act." Therefore, by that statute, the July 25, 1961 petition of
respondent Belong Lutes to reopen Civil Reservation Case No. 1, GLRO Record No. 211 of the cadastral court of
Baguio, the decision on which was rendered on November 13, 1922, comes within the 40-year period.lawphi1.nêt

FOR THE REASONS GIVEN, the petition for certiorari is hereby granted; the cadastral court's orders of August 5,
1963, November 5, 1963 and September 17, 1964 are hereby declared null and void and the cadastral court is
hereby directed to admit petitioners' oppositions and proceed accordingly. No costs. So ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee and Barredo, JJ., concur.
Concepcion, C.J., Castro and Capistrano, JJ., took no part..