STATUTORY CONSTRUCTION

SY 2020- 2021
1st Semester
Judge Emilio R. Y. Legaspi III

A. Definition of Statutory Construction

Caltex Inc. vs. Palomar (18 SCRA 427)
Romualdez vs. Sandiganbayan (GR No. 152259 July 29, 2004) 479 Phil 265

B. Nature of the Rules of Statutory Construction

PCFI vs. NTC (216 Phil 185)(131 SCRA 200)

C. Distinguish Statutory Construction from Interpretation.

D. Judiciary’s Role in Statutory Construction

Floresca vs. Philex (136 SCRA 141) (# also read dissenting opinions of Justices
Melencio-Herrera and Gutierrez)

E. Strict vs. Liberal Construction

Fetalino vs. Barcelona (GR No. 191890 December 4, 2012)
Legaspi vs. Creative Play Corner School (655 Phil 285) GR No. 169942, January 24,
2011)
People vs. Veneracion (319 Phil 364) GR No. 11987-88, October 12, 1985

F. What is Judicial Legislation?

Floresca vs. Philex Mining (220 Phil 533, GR No. L-30642 April 30, 1985)
Fort Bonifacio vs. Commissioner of Internal Revenue (GR No. 173425 September 4,
2012)
Corpus vs. People (GR No. 180016 April 29, 2014)

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 A. Definition of Statutory Construction

Caltex Inc. vs. Palomar (18 SCRA 427)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

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

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

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

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

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

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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
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(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
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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
5
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.

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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
7
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
8
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.
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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.

Romualdez vs. Sandiganbayan (GR No. 152259 July 29, 2004) 479 Phil 265

10
 EN BANC

G.R. No. 152259             July 29, 2004

ALFREDO T. ROMUALDEZ, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN (Fifth Division) and the PEOPLE of the
PHILIPPINES, respondents.

DECISION

PANGANIBAN, J.:

Repetitive motions to invalidate or summarily terminate a criminal indictment prior to plea and
trial, however they may be named or identified -- whether as a motion to quash or motion to
dismiss or by any other nomenclature -- delay the administration of justice and unduly burden
the court system. Grounds not included in the first of such repetitive motions are generally
deemed waived and can no longer be used as bases of similar motions subsequently filed.

Section 5 of the Anti-Graft Law is constitutional. It penalizes certain presidential relatives who
"intervene, directly or indirectly, in any business, transaction, contract or application with the
Government." This provision is not vague or "impermissibly broad," because it can easily be
understood with the use of simple statutory construction. Neither may the constitutionality of
a criminal statute such as this be challenged on the basis of the "overbreadth" and the "void-
for-vagueness" doctrines, which apply only to free-speech cases.

The Case

Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court, seeking to set aside
the November 20, 20012 and the March 1, 20023 Resolutions of the Sandiganbayan in
Criminal Case No. 13736. The first Resolution disposed thus:

"WHEREFORE, for lack of merit, the Motion to Dismiss is hereby DENIED. The
arraignment of the accused and the pre-trial of the case shall proceed as scheduled." 4

The second Resolution denied reconsideration.

The Facts

The facts of the case are narrated by the Sandiganbayan as follows:

"[The People of the Philippines], through the Presidential Commission on Good

Government (PCGG), filed on July 12, 1989 an information before [the anti-graft court]

11
charging the accused [with] violation of Section 5, Republic Act No. 3019, 5 as
amended. The Information reads:

'That on or about and during the period from July 16, 1975 to July 29, 1975, in
Metro Manila, Philippines, and within the jurisdiction of [the Sandiganbayan],
said [petitioner], brother-in-law of Ferdinand E. Marcos, former President of the
Philippines, and therefore, related to the latter by affinity within the third civil
degree, did then and there wil[l]fully and unlawfully, and with evident bad faith,
for the purpose of promoting his self-interested [sic] and/or that of others,
intervene directly or indirectly, in a contract between the National Shipyard and
Steel Corporation (NASSCO), a government-owned and controlled corporation
and the Bataan Shipyard and Engineering Company (BASECO), a private
corporation, the majority stocks of which is owned by former President
Ferdinand E. Marcos, whereby the NASSCO sold, transferred and conveyed to
the BASECO its ownership and all its titles and interests over all equipment and
facilities including structures, buildings, shops, quarters, houses, plants and
expendable and semi-expendable assets, located at the Engineer Island known
as the Engineer Island Shops including some of its equipment and machineries
from Jose Panganiban, Camarines Norte needed by BASECO in its
shipbuilding and ship repair program for the amount of P5,000,000.00.

'Contrary to law.'

"On December 27, 1996, the accused filed his first 'MOTION TO DISMISS AND TO
DEFER ARRAIGNMENT' claiming that no valid preliminary investigation was
conducted in the instant case. He asserts that if a preliminary investigation could be
said to have been conducted, the same was null and void having been undertaken by
a biased and partial investigative body.

"On January 9, 1997, [the Sandiganbayan], through the First Division, issued an order
giving the accused fifteen days to file a Motion for Reinvestigation with the Office of
the Special Prosecutor.

"[Petitioner] questioned said order before the Supreme Court via a petition for
Certiorari and Prohibition with prayer for temporary restraining order. On January 21,
1998, the Supreme Court dismissed the petition for failure to show that [the
Sandiganbayan] committed grave abuse of discretion in issuing the assailed order.

"On November 9, 1998, the [petitioner] filed with the Office of the Special Prosecutor a
Motion to Quash.

"On September 22, 1999, x x x Special Prosecution Officer (SPO) III Victorio U.
Tabanguil, manifested that the prosecution had already concluded the reinvestigation
of the case. He recommended the dismissal of the instant case. Both the Deputy
Special Prosecutor and the Special Prosecutor approved the recommendation.
However, Ombudsman Aniano A. Desierto disagreed and directed the prosecutors to
let the [petitioner] present his evidence in Court.

"Subsequently, [petitioner] filed on October 8, 1999 his second 'MOTION TO QUASH

AND TO DEFER ARRAIGNMENT'.

"On February 9, 2000, the [Sandiganbayan] denied the motion for lack of merit.
12
 "On June 19, 2001, [the] accused filed a 'MOTION FOR LEAVE TO FILE MOTION TO
DISMISS'. On June 29, 2001, the [Sandiganbayan] admitted the motion and admitted
the attached (third) Motion to Dismiss.

"The [Motion to Dismiss] raise[d] the following grounds:

'I. THE CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW OF

[PETITIONER] WAS VIOLATED DURING THE PRELIMINARY
INVESTIGATION STAGE IN THE FOLLOWING WAYS:

'A. NO VALID PRELIMINARY INVESTIGATION WAS CONDUCTED IN THE

INSTANT CASE; AND

'B. THE PRELIMINARY INVESTIGATION WAS CONDUCTED BY A BIASED

AND PARTIAL INVESTIGATOR

'II. THE CONSTITUTIONAL RIGHT OF [PETITIONER] TO BE INFORMED OF

THE NATURE AND CAUSE OF THE ACCUSATION AGAINST HIM WAS
VIOLATED

'III. PURSUANT TO ARTICLE VII, SECTION 17 OF THE 1973

CONSTITUTION, [PETITIONER] IS IMMUNE FROM CRIMINAL
PROSECUTION

'IV. THE CRIMINAL ACTION OR LIABILITY HAS BEEN EXTINGUISHED BY

PRESCRIPTION'"6

Ruling of the Sandiganbayan

The Sandiganbayan explained that all the grounds invoked by petitioner, except the third
one, had already been raised by him and passed upon in its previous Resolutions. 7 In
resolving the third ground, the anti-graft court pointed out that Section 17 of the 1973
Constitution became effective only in 1981 when the basic law was amended. Since his
alleged illegal intervention had been committed on or about 1975, the amended provision
was inapplicable to him.8

In denying the Motion for Reconsideration filed by petitioner, the Sandiganbayan passed
upon the other grounds he had raised. It ruled that his right to a preliminary investigation was
not violated, because he had been granted a reinvestigation. 9 It further held that his right to
be informed of the nature and cause of the accusation was not trampled upon, either,
inasmuch as the Information had set forth the essential elements of the offense charged. 10

Hence, this Petition.11

The Issues

In his Memorandum, petitioner assigns the following errors for our consideration:

"Whether or not the Honorable Sandiganbayan erred and gravely abused its
discretion amounting to lack of, or in excess of jurisdiction –

13
 I. In not dismissing and/or quashing Criminal Case No. 13736 despite clear and
incontrovertible evidence that:

A. Section 5 of Republic Act No. 3019 is unconstitutional because its

vagueness violates the due process right of an individual to be informed of the
nature and the cause of the accusation against him;

B. Section 5 of Republic Act No. 3019 is unconstitutional because it violates the

due process right of an individual to be presumed innocent until the contrary is
proved;

C. The constitutional right of petitioner x x x to be informed of the nature and

the cause of the accusation against him was violated;

D. The constitutional right to due process of law of petitioner x x x was violated

during the preliminary investigation stage in the following ways:

[i] No valid preliminary investigation was con-ducted for Criminal Case

No. 13736; and

[ii] The preliminary investigation was conducted by a biased and partial

investigator.

E. The criminal action or liability has been extinguished by prescription; and

F. Pursuant to Article VII, Section 17 of the 1973 Constitution, petitioner x x x is

immune from criminal prosecution.

And

II. In light of the foregoing, in denying petitioner['s] x x x right to equal protection of the
laws."12

Simply stated, the issues are as follows: (1) whether Section 5 of Republic Act 3019 is
unconstitutional; (2) whether the Information is vague; (3) whether there was a valid
preliminary investigation; (4) whether the criminal action or liability has been extinguished by
prescription; and (5) whether petitioner is immune from criminal prosecution under then
Section 17 of Article VII of the 1973 Constitution.

The Court's Ruling

The Petition has no merit.

First Issue:
Constitutionality of Section 5,
Republic Act 3019

Petitioner challenged the constitutionality of Section 5 of RA 3019 for the first time in the
Sandiganbayan through a Supplemental Motion to Dismiss. Attached to his December 7,
2001 Motion for Reconsideration of the Order denying his Motion to Dismiss was this
Supplemental Motion which was, in effect, his third motion to quash. 13 We note that the

14
Petition for Certiorari before us challenges the denial of his original, not his Supplemental,
Motion to Dismiss.

Upon the denial of his original Motion to Quash on February 9, 2000, petitioner could have
filed a motion for reconsideration of the denial. Had reconsideration been turned down, the
next proper remedy would have been either (1) a petition for certiorari 14 -- if there was grave
abuse of discretion -- which should be filed within 60 days from notice of the assailed
order;15 or (2) to proceed to trial without prejudice to his right, if final judgment is rendered
against him, to raise the same questions before the proper appellate court. 16 But instead of
availing himself of these remedies, he filed a "Motion to Dismiss" on June 19, 2001.

Impropriety of
Repetitive Motions

There is no substantial distinction between a "motion to quash" and a "motion to dismiss."

Both pray for an identical relief, which is the dismissal of the case. Such motions are
employed to raise preliminary objections, so as to avoid the necessity of proceeding to trial.
A motion to quash is generally used in criminal proceedings to annul a defective indictment.
A motion to dismiss, the nomenclature ordinarily used in civil proceedings, is aimed at
summarily defeating a complaint. Thus, our Rules of Court use the term "motion to quash" in
criminal,17 and "motion to dismiss" in civil, proceedings.18

In the present case, however, both the "Motion to Quash" and the "Motion to Dismiss" are
anchored on basically the same grounds and pray for the same relief. The hairsplitting
distinction posited by petitioner does not really make a difference.

By filing a Motion to Dismiss, petitioner submitted in effect a prohibited second motion to

quash. A party is not permitted to raise issues, whether similar or different, by installment.
The Rules abhor repetitive motions. Otherwise, there would be no end to preliminary
objections, and trial would never commence. A second motion to quash delays the
administration of justice and unduly burdens the courts. Moreover, Rule 117 provides that
grounds not raised in the first motion to quash are generally deemed waived. 19 Petitioner's
"Motion to Dismiss" violates this rule.

Constitutionality of
the Challenged Provision

If only for the foregoing procedural lapses, the Petition deserves to be dismissed outright.
However, given the importance of this case in curtailing graft and corruption, the Court will
nevertheless address the other issues on their merit. Petitioner challenges the validity of
Section 5 of Republic Act 3019, a penal statute, on the ground that the act constituting the
offense is allegedly vague and "impermissibly broad."

It is best to stress at the outset that the overbreadth 20 and the vagueness21 doctrines have
special application only to free-speech cases. They are not appropriate for testing the validity
of penal statutes. Mr. Justice Vicente V. Mendoza explained the reason as follows:

"A facial challenge is allowed to be made to a vague statute and to one which is
overbroad because of possible 'chilling effect' upon protected speech. The theory is
that '[w]hen statutes regulate or proscribe speech and no readily apparent
construction suggests itself as a vehicle for rehabilitating the statutes in a single
prosecution, the transcendent value to all society of constitutionally protected
15
 expression is deemed to justify allowing attacks on overly broad statutes with no
requirement that the person making the attack demonstrate that his own conduct
could not be regulated by a statute drawn with narrow specificity.' The possible harm
to society in permitting some unprotected speech to go unpunished is outweighed by
the possibility that the protected speech of others may be deterred and perceived
grievances left to fester because of possible inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes have general
in terrorem effect resulting from their very existence, and, if facial challenge is allowed
for this reason alone, the State may well be prevented from enacting laws against
socially harmful conduct. In the area of criminal law, the law cannot take chances as in
the area of free speech.

xxxxxxxxx

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical
tools developed for testing "on their faces" statutes in free speech cases or, as they
are called in American law, First Amendment cases. They cannot be made to do
service when what is involved is a criminal statute. With respect to such statute, the
established rule is that 'one to whom application of a statute is constitutional will not
be heard to attack the statute on the ground that impliedly it might also be taken as
applying to other persons or other situations in which its application might be
unconstitutional.' As has been pointed out, 'vagueness challenges in the First
Amendment context, like overbreadth challenges typically produce facial invalidation,
while statutes found vague as a matter of due process typically are invalidated [only]
'as applied' to a particular defendant.'" 22 (underscoring supplied)

"To this date, the Court has not declared any penal law unconstitutional on the ground
of ambiguity."23 While mentioned in passing in some cases, the void-for-vagueness
concept has yet to find direct application in our jurisdiction. In Yu Cong Eng v.
Trinidad,24 the Bookkeeping Act was found unconstitutional because it violated the
equal protection clause, not because it was vague. Adiong v. Comelec25 decreed as
void a mere Comelec Resolution, not a statute. Finally, Santiago v. Comelec26 held
that a portion of RA 6735 was unconstitutional because of undue delegation of
legislative powers, not because of vagueness.

Indeed, an "on-its-face" invalidation of criminal statutes would result in a mass acquittal of

parties whose cases may not have even reached the courts. Such invalidation would
constitute a departure from the usual requirement of "actual case and controversy" and
permit decisions to be made in a sterile abstract context having no factual concreteness.
In Younger v. Harris, this evil was aptly pointed out by the U.S. Supreme Court in these
words:27

"[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring
correction of these deficiencies before the statute is put into effect, is rarely if ever an
appropriate task for the judiciary. The combination of the relative remoteness of the
controversy, the impact on the legislative process of the relief sought, and above all
the speculative and amorphous nature of the required line-by-line analysis of detailed
statutes, x x x ordinarily results in a kind of case that is wholly unsatisfactory for
deciding constitutional questions, whichever way they might be decided."

16
For this reason, generally disfavored is an on-its-face invalidation of statutes, described as a
"manifestly strong medicine" to be employed "sparingly and only as a last resort." In
determining the constitutionality of a statute, therefore, its provisions that have allegedly
been violated must be examined in the light of the conduct with which the defendant has
been charged.28

As conduct -- not speech -- is its object, the challenged provision must be examined only "as
applied" to the defendant, herein petitioner, and should not be declared unconstitutional for
overbreadth or vagueness.

The questioned provision reads as follows:

"Section 5. Prohibition on certain relatives. — It shall be unlawful for the spouse or for
any relative, by consanguinity or affinity, within the third civil degree, of the President
of the Philippines, the Vice-President of the Philippines, the President of the Senate,
or the Speaker of the House of Representatives, to intervene, directly or indirectly, in
any business, transaction, contract or application with the Government: Provided, That
this section shall not apply to any person who, prior to the assumption of office of any
of the above officials to whom he is related, has been already dealing with the
Government along the same line of business, nor to any transaction, contract or
application already existing or pending at the time of such assumption of public office,
nor to any application filed by him the approval of which is not discretionary on the
part of the official or officials concerned but depends upon compliance with requisites
provided by law, or rules or regulations issued pursuant to law, nor to any act lawfully
performed in an official capacity or in the exercise of a profession."

Petitioner also claims that the phrase "to intervene directly or indirectly, in any business,
transaction, contract or application with the Government" is vague and violates his right to be
informed of the cause and nature of the accusation against him. 29 He further complains that
the provision does not specify what acts are punishable under the term intervene, and thus
transgresses his right to be presumed innocent. 30 We disagree.

Every statute is presumed valid.31 On the party challenging its validity weighs heavily the
onerous task of rebutting this presumption. 32 Any reasonable doubt about the validity of the
law should be resolved in favor of its constitutionality. 33 To doubt is to sustain, as tersely put
by Justice George Malcolm. In Garcia v. Executive Secretary,34 the rationale for the
presumption of constitutionality was explained by this Court thus:

"The policy of the courts is to avoid ruling on constitutional questions and to presume
that the acts of the political departments are valid in the absence of a clear and
unmistakable showing to the contrary. To doubt is to sustain. This presumption is
based on the doctrine of separation of powers which enjoins upon each department a
becoming respect for the acts of the other departments. The theory is that as the joint
act of Congress and the President of the Philippines, a law has been carefully studied
and determined to be in accordance with the fundamental law before it was finally
enacted."35

In the instant case, petitioner has miserably failed to overcome such presumption. This Court
has previously laid down the test for determining whether a statute is vague, as follows:

"x x x [A] statute establishing a criminal offense must define the offense with sufficient
definiteness that persons of ordinary intelligence can understand what conduct is
17
 prohibited by the statute. It can only be invoked against that species of legislation that
is utterly vague on its face, i.e., that which cannot be clarified either by a saving clause
or by construction.

"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 in
its application. In such instance, the statute is repugnant to the Constitution in two (2)
respects - it violates due process for failure to accord persons, especially the parties
targeted by it, fair notice of what conduct to avoid; and, it leaves law enforcers
unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of
the Government muscle.36 But the doctrine does not apply as against legislations that
are merely couched in imprecise language but which nonetheless specify a standard
though defectively phrased; or to those that are apparently ambiguous yet fairly
applicable to certain types of activities. The first may be 'saved' by proper
construction, while no challenge may be mounted as against the second whenever
directed against such activities.37 With more reason, the doctrine cannot be invoked
where the assailed statute is clear and free from ambiguity, as in this case.

"The test in determining whether a criminal statute is void for uncertainty is whether
the language conveys a sufficiently definite warning as to the proscribed conduct
when measured by common understanding and practice. 38 It must be stressed,
however, that the 'vagueness' doctrine merely requires a reasonable degree of
certainty for the statute to be upheld - not absolute precision or mathematical
exactitude, as petitioner seems to suggest. Flexibility, rather than meticulous
specificity, is permissible as long as the metes and bounds of the statute are clearly
delineated. An act will not be held invalid merely because it might have been more
explicit in its wordings or detailed in its provisions, especially where, because of the
nature of the act, it would be impossible to provide all the details in advance as in all
other statutes."39

A simpler test was decreed in Dans v. People,40 in which the Court said that there was
nothing vague about a penal law that adequately answered the basic query "What is the
violation?"41 Anything beyond -- the hows and the whys -- are evidentiary matters that the law
itself cannot possibly disclose, in view of the uniqueness of every case. 42

The question "What is the violation?" is sufficiently answered by Section 5 of RA 3019, as

follows:

1. The offender is a spouse or any relative by consanguinity or affinity within the third
civil degree of the President of the Philippines, the Vice-President of the Philippines,
the President of the Senate, or the Speaker of the House of Representatives; and

2. The offender intervened directly or indirectly in any business, transaction, contract

or application with the government.

Applicability of
Statutory Construction

As to petitioner's claim that the term intervene is vague, this Court agrees with the Office of
the Solicitor General that the word can easily be understood through simple statutory
construction. The absence of a statutory definition of a term used in a statute will not render
the law "void for vagueness," if the meaning can be determined through the judicial function
18
of construction.43 Elementary is the principle that words should be construed in their ordinary
and usual meaning.

"x x x. A statute is not rendered uncertain and void merely because general terms are
used therein, or because of the employment of terms without defining them; 44 much
less do we have to define every word we use. Besides, there is no positive
constitutional or statutory command requiring the legislature to define each and every
word in an enactment. Congress is not restricted in the form of expression of its will,
and its inability to so define the words employed in a statute will not necessarily result
in the vagueness or ambiguity of the law so long as the legislative will is clear, or at
least, can be gathered from the whole act x x x.

"x x x [I]t is a well-settled principle of legal hermeneutics that words of a statute will be
interpreted in their natural, plain and ordinary acceptation and signification, 45 unless it
is evident that the legislature intended a technical or special legal meaning to those
words.46 The intention of the lawmakers - who are, ordinarily, untrained philologists
and lexicographers - to use statutory phraseology in such a manner is always
presumed."47

The term intervene should therefore be understood in its ordinary acceptation, which is to "to

come between."48 Criminally liable is anyone covered in the enumeration of Section 5 of RA
3019 -- any person who intervenes in any manner in any business, transaction, contract or
application with the government. As we have explained, it is impossible for the law to provide
in advance details of how such acts of intervention could be performed. But the courts may
pass upon those details once trial is concluded. Thus, the alleged vagueness of intervene is
not a ground to quash the information prior to the commencement of the trial.

In sum, the Court holds that the challenged provision is not vague, and that in any event, the
"overbreath" and "void for vagueness" doctrines are not applicable to this case.

Second Issue:
Allegedly Vague Information

Other than arguing on the alleged intrinsic vagueness of intervene, petitioner further
contends that the Information itself is also unconstitutionally vague, because it does not
specify the acts of intervention that he supposedly performed. 49 Again, we disagree.

When allegations in the information are vague or indefinite, the remedy of the accused is not
a motion to quash, but a motion for a bill of particulars. 50 The pertinent provision in the Rules
of Court is Section 9 of Rule 116, which we quote:

"Section 9. Bill of particulars. -- The accused may, before arraignment, move for a bill
of particulars to enable him properly to plead and prepare for trial. The motion shall
specify the alleged defects of the complaint or information and the details desired."

The rule merely requires the information to describe the offense with sufficient particularity as
to apprise the accused of what they are being charged with and to enable the court to
pronounce judgment. 51 The particularity must be such that persons of ordinary intelligence
may immediately know what is meant by the information. 52

While it is fundamental that every element of the offense must be alleged in the
information,53 matters of evidence -- as distinguished from the facts essential to the nature of
19
the offense -- need not be averred.54 Whatever facts and circumstances must necessarily be
alleged are to be determined by reference to the definition and the essential elements of the
specific crimes.55

In the instant case, a cursory reading of the Information shows that the elements of a
violation of Section 5 of RA 3019 have been stated sufficiently. Likewise, the allegations
describe the offense committed by petitioner with such particularity as to enable him to
prepare an intelligent defense. Details of the acts he committed are evidentiary matters that
need not be alleged in the Information.

Third Issue:
Preliminary Investigation

Clearly, petitioner already brought the issue of lack of preliminary investigation when he
questioned before this Court in GR No. 128317 the Sandiganbayan's Order giving him 15
days to file a Motion for Reinvestigation with the Office of the Special
Prosecutor.56 Citing Cojuangco v. Presidential Commission on Good Government, 57 he
undauntedly averred that he was deprived of his right to a preliminary investigation, because
the PCGG acted both as complainant and as investigator. 58

In the case cited above, this Court declared that while PCGG had the power to conduct a
preliminary investigation, the latter could not do so with the "cold neutrality of an impartial
judge" in cases in which it was the agency that had gathered evidence and subsequently
filed the complaint.59 On that basis, this Court nullified the preliminary investigation conducted
by PCGG and directed the transmittal of the records to the Ombudsman for appropriate
action.

It is readily apparent that Cojuangco does not support the quashal of the Information against
herein petitioner. True, the PCGG initiated the present Complaint against him; hence, it could
not properly conduct the preliminary investigation. However, he was accorded his rights --
the Sandiganbayan suspended the trial and afforded him a reinvestigation by the
Ombudsman. The procedure outlined in Cojuangco was thus followed.

The Sandiganbayan's actions are in accord also with Raro v. Sandiganbayan,60 which held

that the failure to conduct a valid preliminary investigation would not warrant the quashal of
an information. If the information has already been filed, the proper procedure is for the
Sandiganbayan to hold the trial in abeyance while the preliminary investigation is being
conducted or completed.61

Fourth Issue:
Prescription

The issue of prescription was the principal basis of the Motion to Quash filed by petitioner
with the Sandiganbayan on October 8, 1999. 62 Such issue should be disregarded at this
stage, since he failed to challenge its ruling debunking his Motion within the 60-day period for
the filing of a petition for certiorari. A party may not circumvent this rule by filing a subsequent
motion that raises the same issue and the same arguments.

Furthermore, it is easy to see why this argument being raised by petitioner is utterly
unmeritorious. He points out that according to the Information, the offense was committed
"during the period from July 16, 1975 to July 29, 1975." He argues that when the Information
was filed on July 12, 1989,63 prescription had already set in, because the prescriptive period
20
for a violation of Republic Act No. 3019 is only ten (10) years from the time the offense was
allegedly committed. The increase of this prescriptive period to fifteen (15) years took effect
only on March 16, 1982, upon the enactment of Batas Pambansa Blg. 195. 64

Act No. 3326, as amended,65 governs the prescription of offenses penalized by special laws.
Its pertinent provision reads:

"Sec. 2. Prescription shall begin to run from the day of the commission of the violation
of the law, and if the same not be known at the time, from the discovery thereof and
the institution of judicial proceedings for its investigation and punishment.

"The prescription shall be interrupted when proceedings are instituted against the
guilty person, and shall begin to run again if the proceedings are dismissed for
reasons not constituting jeopardy."

Consistent with the provision quoted above, this Court has previously reckoned the
prescriptive period of cases involving RA 3019 (committed prior to the February 1986 EDSA
Revolution) from the discovery of the violation.66 In Republic v. Desierto, the Court explained:

"This issue confronted this Court anew, albeit in a larger scale, in Presidential Ad Hoc
Fact-Finding Committee on Behest Loans v. Desierto. In the said recent case, the
Board of Directors of the Philippine Seeds, Inc. and Development Bank of the
Philippines were charged with violation of paragraphs (e) and (g) of Section 3 of RA
No. 3019, by the Presidential Ad Hoc Fact-Finding Committee on Behest Loans,
created by then President Fidel V. Ramos to investigate and to recover the so-called
'Behest Loans', where the Philippine Government guaranteed several foreign loans to
corporations and entities connected with the former President Marcos. x x x In holding
that the case had not yet prescribed, this Court ruled that:

'In the present case, it was well-nigh impossible for the State, the aggrieved
party, to have known the violations of RA No. 3019 at the time the questioned
transactions were made because, as alleged, the public officials concerned
connived or conspired with the 'beneficiaries of the loans.' Thus, we agree with
the COMMITTEE that the prescriptive period for the offenses with which the
respondents in OMB-0-96-0968 were charged should be computed from the
discovery of the commission thereof and not from the day of such commission.

xxx      xxx      xxx

'People v. Duque is more in point, and what was stated there stands reiteration:
In the nature of things, acts made criminal by special laws are frequently not
immoral or obviously criminal in themselves; for this reason, the applicable
statute requires that if the violation of the special law is not known at the time,
the prescription begins to run only from the discovery thereof, i.e., discovery of
the unlawful nature of the constitutive act or acts.' (Italics supplied)

"There are striking parallelisms between the said Behest Loans Case and the present
one which lead us to apply the ruling of the former to the latter. First, both cases arose
out of seemingly innocent business transactions; second, both were 'discovered' only
after the government created bodies to investigate these anomalous
transactions; third, both involve prosecutions for violations of RA No. 3019;
and, fourth, in both cases, it was sufficiently raised in the pleadings that the
21
 respondents conspired and connived with one another in order to keep the alleged
violations hidden from public scrutiny.

"This Court's pronouncement in the case of Domingo v. Sandiganbayan is quite

relevant and instructive as to the date when the discovery of the offense should be
reckoned, thus:

'In the present case, it was well-nigh impossible for the government, the
aggrieved party, to have known the violations committed at the time the
questioned transactions were made because both parties to the transactions
were allegedly in conspiracy to perpetuate fraud against the government. The
alleged anomalous transactions could only have been discovered after the
February 1986 Revolution when one of the original respondents, then President
Ferdinand Marcos, was ousted from office. Prior to said date, no person would
have dared to question the legality or propriety of those transactions.
Hence, the counting of the prescriptive period would commence from the date
of discovery of the offense, which could have been between February 1986
after the EDSA Revolution and 26 May 1987 when the initiatory complaint was
filed.'"67

The above pronouncement is squarely applicable to the present case. The general rule that
prescription shall begin to run from the day of the commission of the crime cannot apply to
the present case. It is not legally prudent to charge the State, the aggrieved party, with
knowledge of the violation of RA 3019 at the time the alleged intervention was made. The
accused is the late President Ferdinand E. Marcos' brother-in-law. He was charged with
intervening in a sale involving a private corporation, the majority stocks of which was
allegedly owned by President Marcos.

Prior to February 1986, no person was expected to have seriously dared question the legality
of the sale or would even have thought of investigating petitioner's alleged involvement in the
transaction. It was only after the creation68 of PCGG69 and its exhaustive investigations that
the alleged crime was discovered. This led to the initiation on November 29, 1988 of a
Complaint against former President Marcos and petitioner for violation of the Anti-Graft and
Corrupt Practices Act. Consequently, the filing of the Information on July 12, 1989 was well
within the prescriptive period of ten years from the discovery of the offense.

Fifth Issue
Immunity from Prosecution

Petitioner argues that he enjoys derivative immunity, because he allegedly served as a high-
ranking naval officer -- specifically, as naval aide-de-camp -- of former President
Marcos.70 He relies on Section 17 of Article VII of the 1973 Constitution, as amended, which
we quote:

"The President shall be immune from suit during his tenure. Thereafter, no suit
whatsoever shall lie for official acts done by him or by others pursuant to his specific
orders during his tenure.

"x x x             x x x             x x x"

22
As the Sandiganbayan aptly pointed out, the above provision is not applicable to petitioner
because the immunity amendment became effective only in 1981 while the alleged crime
happened in 1975.

In Estrada v. Desierto,71 this Court exhaustively traced the origin of executive immunity in

order to determine the extent of its applicability. We explained therein that executive
immunity applied only during the incumbency of a President. It could not be used to shield a
non-sitting President from prosecution for alleged criminal acts done while sitting in office.
The reasoning of petitioner must therefore fail, since he derives his immunity from one who is
no longer sitting as President. Verily, the felonious acts of public officials and their close
relatives "are not acts of the State, and the officer who acts illegally is not acting as such but
stands on the same footing as any other trespasser."

In sum, petitioner utterly fails to show that the Sandiganbayan gravely abused its discretion
in issuing the assailed Resolutions.72 On the contrary, it acted prudently, in accordance with
law and jurisprudence.

WHEREFORE, the Petition is DISMISSED, and the questioned Resolutions of the

Sandiganbayan AFFIRMED. Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., Quisumbing, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., and
Azcuna, JJ., concur.
Puno, Ynares-Santiago, and Sandoval-Gutierrez, JJ., in the result.
Corona, J., on leave.
Tinga, J., in the result. Please see separate opinion.
Chico-Nazario, J., no part. Ponente of assailed SB Resolutions.

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

SEPARATE OPINION

TINGA, J.:

I concur in the result of the ponencia and the proposition that Section 5 of the Anti-Plunder
Law is constitutional. The validity of the provision has been passed upon by the Court before
in Estrada v. Sandiganbayan.1 I also agree with the ponencia's reiteration of the ruling
in Estrada that Section 5 is receptive to the basic principle in statutory construction that
words should be construed in their ordinary and usual meaning. 2

However, with all due respect, I raise serious objections to the ponencia's holding that the
so-called "void for vagueness" doctrine has special application only to free speech
cases,3 and the undeclared proposition that penal

23
laws may not be stricken down on the ground of ambiguity. 4 I am aware that the assertions
rely upon the separate opinions of the herein ponente5 and Mr. Justice Vicente
Mendoza6 in Estrada. I am also aware that the critical portion of Mr. Justice Mendoza's
separate opinion in Estrada was cited with approval by Mr. Justice
Bellosillo's ponencia therein.7

The incontrovertible reality though is that the majority's pronouncement in Estrada that penal
statutes cannot be challenged on vagueness grounds did not form part of the ratio decidendi.
The ratio, in the words of Justice Bellosillo, was: "as it is written, the Plunder Law contains
ascertainable standards and well-defined parameters which would enable the accused to
determine the nature of his violation," 8 and thus the law does not suffer from
unconstitutionality. The discussion on the vagueness aspect was not decisive of the main
issue and, therefore, clearly obiter dictum. I submit that it is erroneous to resolve the present
petition on the basis of that dictum in Estrada.

As the obiter dictum in Estrada is needlessly made a ratio in the present case,

the ponencia herein has even unwittingly elevated to doctrinal level the proposition that the
constitutionality of penal laws cannot be challenged on the ground of vagueness. I humbly
submit that the stance is flawed and contrary to fundamental principles of due process.

The Bill of Rights occupies a position of primacy in the fundamental law. 9 It is thus
sacrosanct in this jurisdiction that no person shall be deprived of life, liberty or property
without due process of law.10

A challenge to a penal statute premised on the argument that the law is vague is a proper
invocation of the due process clause. A statute that lacks comprehensible standards that
men of common intelligence must necessarily guess at its meaning and differ as to its
application violates the due process clause, for failure to accord persons fair notice of the
conduct to avoid.11 As held by the Court in People v. Dela Piedra:12

Due process requires that the terms of a penal statute must be sufficiently explicit to
inform those who are subject to it what conduct on their part will render them liable to
its penalties. A criminal statute that "fails to give a person of ordinary intelligence fair
notice that his contemplated conduct is forbidden by the statute," or is so indefinite
that "it encourages arbitrary and erratic arrests and convictions," is void for
vagueness. The constitutional vice in a vague or indefinite statute is the injustice to
the accused in placing him on trial for an offense, the nature of which he is given no
fair warning.13

It should also be reckoned that the Bill of Rights likewise guarantees that no person shall be
held to answer for a criminal offense without due process of law, 14 and that the accused
enjoys the right to be informed of the nature and cause of the accusation against him or
her.15 The Bill of Rights ensures the fullest measure of protection to an accused. If a
particular mode of constitutional challenge, such as one predicated on the "void for
vagueness" doctrine, is available to an ordinary person deprived of property or means of
expression, then more so should it be accessible to one who is in jeopardy of being deprived
of liberty or of life.16

"Vagueness" and "Overbreadth" Are Distinct Concepts

24
A fundamental flaw, to my mind, in the analysis employed by the ponencia and some of the
separate opinions in Estrada is the notion that the "vagueness" and "overbreadth" doctrines
are the same and should be accorded similar treatment. This is erroneous.

Mr. Justice Kapunan, in his dissenting opinion in Estrada, offers a correct distinction between
"vagueness" and "overbreadth":

A view has been proferred that "vagueness and overbreadth doctrines are not
applicable to penal laws." These two concepts, while related, are distinct from each
other. On one hand, the doctrine of overbreadth applies generally to statutes
that infringe upon freedom of speech. On the other hand, the "void-for-
vagueness" doctrine applies to criminal laws, not merely those that regulate
speech or other fundamental constitutional right. (not merely those that
regulate speech or other fundamental constitutional rights.) The fact that a
particular criminal statute does not infringe upon free speech does not mean that a
facial challenge to the statute on vagueness grounds cannot succeed. 17

This view should be sustained, especially in light of the fact that the "void for vagueness"
doctrine has long been sanctioned as a means to invalidate penal statutes.

"Void For Vagueness" Invalidation of Penal Statutes has Long-Standing Jurisprudential

History

As early as 1926, the United States Supreme Court held in Connally v. General Construction
Co., thus: 18

That the terms of a penal statute creating a new offense must be sufficiently explicit to
inform those who are subject to it what conduct on their part will render them liable to
its penalties is a well- recognized requirement, consonant alike with ordinary notions
of fair play and the settled rules of law; and a statute which either forbids or requires
the doing of an act in terms so vague that men of common intelligence must
necessarily guess at its meaning and differ as to its application violates the first
essential of due process of law.

Thus in Connally, a statute prescribing penalties for violation of an eight-hour workday law
was voided, presenting as it did, a "double uncertainty, fatal to its validity as a criminal
statute."19

In Lanzetta v. State of New Jersey,20 a challenge was posed to a statute defining a

"gangster" and prescribing appropriate penalties, for being void for vagueness. The U.S.
Supreme Court ruled that the definition of a "gang" under the statute was vague, and the
statute void for vagueness. It was of no moment that the information against the accused
described the offense with particularity.

If on its face the challenged provision is repugnant to the due process clause,
specification of details of the offense intended to be charged would not serve to
validate it. (United States v. Reese, 92 U.S. 214, 221; Czarra v. Board of Medical
Supervisors, 25 App.D.C. 443, 453.) It is the statute, not the accusation under it,
that prescribes the rule to govern conduct and warns against transgression.
(See Stromberg v. California, 283 U.S. 359, 368 , 51 S.Ct. 532, 535, 73 A.L. R. 1484;
Lovell v. Griffin, 303 U.S. 444 , 58 S.Ct. 666.) No one may be required at peril of life,

25
 liberty or property to speculate as to the meaning of penal statutes. All are entitled to
be informed as to what the State commands or forbids. 21 (Emphasis supplied)

In Bouie v. City of Columbia,22 civil rights protesters were charged with violating a criminal
trespass statute proscribing entry upon the lands of another after notice prohibiting such
entry. A state court construed the statute as applicable to the act of remaining on the
premises of another after receiving notice to leave. The U.S. Supreme Court reversed,
applying again the "void for vagueness" doctrine. Said Court admitted that "typical
applications of the principle, the uncertainty as to the statute's prohibition resulted from
vague or overbroad language in the statute itself." 23 Yet the Court noted that "[t]here can be
no doubt that a deprivation of the right of fair warning can result not only from vague statutory
language but also from an unforeseeable and retroactive judicial expansion of narrow and
precise statutory language."24 Accordingly, the Court overturned the convictions, holding that
"the crime for which [they] were convicted was not enumerated in the statute at the time of
their conduct," thus denying the accused due process of law. 25

In Papachristou v. City of Jacksonville,26 a statute penalizing vagrancy was voided by the

U.S. Supreme Court, again for being vague:

This ordinance is void for vagueness, both in the sense that it "fails to give a person of
ordinary intelligence fair notice that his contemplated conduct is forbidden by the
statute," (United States v. Harriss, 347 U.S. 612, 617), and because it encourages
arbitrary and erratic arrests and convictions (Thornhill v. Alabama, 310 U.S. 88;
Herndon v. Lowry, 301 U.S. 242).27

Kolender v. Lawson28 involves another affirmation of the well-established doctrine. There, the

US Supreme Court invalidated a loitering statute requiring a loiterer to produce credible and
reliable identification when requested by a peace officer. It elucidated:

Although the doctrine focuses on both actual notice to citizens and arbitrary
enforcement, we have recognized recently that the more important aspect of the
vagueness doctrine "is not actual notice, but the other principal element of the
doctrine-the requirement that a legislature establish minimal guidelines to govern law
enforcements. Where the legislature fails to provide such minimal guidelines, a
criminal statute may permit "a standardless sweep [that] allows policemen,
prosecutors and juries to pursue their personal predilections. 29

In the fairly recent case of City of Chicago v. Morales,30 the U.S. Supreme Court affirmed a
lower court ruling invalidating as void for vagueness an ordinance prohibiting "criminal street
gang members" from loitering in public places, as well as the conviction based on the
invalidated ordinance. The US Court again asserted:

For it is clear that the vagueness of this enactment makes a facial challenge
appropriate. This is not an ordinance that "simply regulates business behavior and
contains a scienter requirement." (See Hoffman Estates v. Flipside, Hoffman Estates,
Inc., 455 U. S. 489, 499 (1982)). It is a criminal law that contains no mens
rea requirement (see Colautti v. Franklin , 439 U. S. 379, 395 (1979)), and infringes
on constitutionally protected rights (see id. , at 391). When vagueness permeates the
text of such a law, it is subject to facial attack.

Vagueness may invalidate a criminal law for either of two independent reasons. First,
it may fail to provide the kind of notice that will enable ordinary people to understand
26
 what conduct it prohibits; second, it may authorize and even encourage arbitrary and
discriminatory enforcement. (See Kolender v. Lawson, 461 U. S., at 357).31

Given the wealth of jurisprudence invalidating penal statutes for suffering from vagueness, it
is mystifying why the notion that the doctrine applies only to "free-speech" cases has gained
a foothold in this Court. It might be argued that the above-cited cases are foreign
jurisprudence, inapplicable to this jurisdiction. Yet it is submitted that the rule is applicable
here, not because of its repeated affirmation by American courts, but because such rule is
lucidly consistent with our own fundamental notions of due process, as enunciated in our
own Constitution.

What then is the standard of due process which must exist both as a procedural and
as substantive requisite to free the challenged ordinance, or any government action
for that matter, from the imputation of legal infirmity; sufficient to spell its doom? It is
responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due
process requirement, official action, to paraphrase Cardozo, must not outrun the
bounds of reasons and result in sheer oppression. Due process is thus hostile to any
official action marred by lack of reasonableness. Correctly has it been identified as
freedom from arbitrariness. It is the embodiment of the sporting idea of fair play. It
exacts fealty "to those strivings for justice" and judges the act of officialdom of
whatever branch" in the light of reason drawn from considerations of fairness that
reflect [democratic] traditions of legal and political thought." It is not a narrow or
"technical conception with fixed content unrelated to time, place and circumstances,"
decisions based on such a clause requiring a "close and perceptive inquiry into
fundamental principles of our society."32

The dissent of Justice White, joined by Justice Rehnquist, in Kolender v. Lawson finds some
kinship with Mr. Justice Mendoza's views in Estrada, insofar as they point out a distinction
between the "vagueness" doctrine, as applied to criminal statutes, on one hand, and as
applied to US First Amendment cases, on the other.

The usual rule is that the alleged vagueness of a criminal statute must be judged in
light of the conduct that is charged to be violative of the statute. If the actor is given
sufficient notice that his conduct is within the proscription of the statute, his conviction
is not vulnerable on vagueness grounds, even if as applied to other conduct, the law
would be unconstitutionally vague. None of our cases "suggests that one who has
received fair warning of the criminality of his own conduct from the statute in question
is nonetheless entitled to attack it because the language would not give similar fair
warning ;with respect to other conduct which might be within its broad and literal
ambit. One to whose conduct a statute clearly applies may not successfully challenge
it for vagueness." The correlative rule is that a criminal statute is not unconstitutionally
vague on its face unless it is "impermissibly vague in all of its applications."

These general rules are equally applicable to cases where First Amendment or other
"fundamental" interests are involved. The Court has held that in such circumstances
"more precision in drafting may be required because of the vagueness doctrine in the
case of regulation of expression, a "greater degree of specificity" is demanded than in
other contexts. But the difference in such cases "relates to how strict a test of
vagueness shall be applied in judging a particular criminal statute." It does not permit
the challenger of the statute to confuse vagueness and overbreadth by attacking the
enactment as being vague as applied to conduct other than his own. Of course, if his
27
 own actions are themselves protected by the First Amendment or other
constitutional provision, or if the statute does not fairly warn that it is
proscribed, he may not be convicted. But it would be unavailing for him to claim
that although he knew his own conduct was unprotected and was plainly enough
forbidden by the statute, others may be in doubt as to whether their acts are banned
by the law.33 (Emphasis supplied)

Still, the quoted dissenting opinion concedes the applicability of the "void for vagueness" rule
in striking infirm criminal statutes. It just enunciates a greater demand for "specificity" in
statutes which may infringe on free speech protections.

Moreover, Mr. Justice Mendoza likewise invoked American jurisprudence in support of his
view that the overbreadth and vagueness doctrines apply only to free speech cases. 34 He
cites, among others, U.S. v. Salerno35

and Broadrick v. Oklahoma.36 In Salerno, the US Supreme Court notes that the "overbreadth"

doctrine was inapplicable outside the context of the First Amendment. 37 Notably though, the
US Court did not make the same assertion as to the "vagueness" doctrine. Had it done so
in Salerno, it would have been incongruent with its previous rulings, as well as with its
subsequent ones.

Broadrick v. Oklahoma did not pertain to a challenge to a penal statute, but rather an

Oklahoma law restricting the political activities of that state's classified civil
servants.38 Again, Broadrick may advert to a correct interpretation of the "overbreadth"
doctrine. However, in the face of numerous jurisprudence affirming the "vagueness"
challenge of American penal laws neither Broadrick nor Salerno can be utilized to assert a
converse rule.

Mr. Justice Mendoza's opinion also cites from the American constitutional law textbook of
Sullivan and Gunther, to assert that "vagueness challenges in the First Amendment context,
like overbreadth challenges, typically produce facial invalidation, while statutes found vague
as a matter of due process typically are invalidated only as

applied to a particular defendant." 39 This may be a correct restatement of the American rule.
Yet, it does not necessarily mean that penal laws are not susceptible to a "void for
vagueness" challenge. In fact, in the same page cited in Mr. Justice Mendoza's opinion,
Sullivan and Gunther cite cases wherein American penal laws were stricken down for being
vague, such as Connally v. General Construction Co., Kolender v. Lawson, and Papachristou
v. Jacksonville.40

The same citation likewise refers to the odd situation wherein unlike in First Amendment
cases, due process invalidations for vagueness apply only to a particular defendant. Sullivan
and Gunther posit that the broader protection afforded in First Amendment cases follow from
"a special concern about the 'chilling effect' of vague statutes on protected
speech."41 However, the ponencia latches onto this distinction in order to foist the bugaboo of
"mass acquittal" of criminals due to the facial invalidation of criminal statutes. 42 Moreover,
the ponencia asserts that such invalidation would constitute a departure from the usual
requirement of actual case and controversy and permit decisions to be made in a sterile
abstract context having no factual concreteness. 43

Such concerns are overwrought. In this jurisdiction, judicial review over the constitutionality
of statutes, penal or otherwise, avails only upon the concurrence of (1) the existence of an
28
appropriate case; (2) an interest personal and substantial by the party raising the
constitutional question; (3) a plea that the function be exercised at the earliest opportunity;
and (4) a necessity that the constitutional question be passed upon in order to decide the
case.44 Challenges to the validity of laws are not lightly undertaken, and the non-existence of
any of the four conditions precedent bar a successful challenge. Surely, not just anybody
picked off the street prepossesses the requisite standing, nor could just any case present
itself as the proper vehicle for a constitutional attack.

These conditions precedent successfully weigh the concerns of the State, fearful of
instabilities brought by frequent invalidations of the laws it passes, and with the basic
component of justice that a person to whom a wrong is done by the State can seek
vindication from the courts. Our basic jurisprudential barrier has shielded this Court for
generations from exercising unwarranted and unmitigated judicial review. There is no need to
further raise the bar for review, especially on such flimsy foundations, lest we insulate
ourselves from the pleas of the truly prejudiced, truly injured, truly violated.

At the same time, the ponencia raises the concern that the invalidation of a void law will
unnecessarily benefit those without actual cases or controversies. It must be remembered
though that the Court will not unhesitatingly strike down a statute if a narrower alternative
affording the same correct relief is available. Within the confines of this discretion, all the
tools of searching inquiry are at the Court's disposal to carve as narrow a rule as necessary.

Still and all, if there is no alternative but to strike down a void law, there should be no
hesitation on the part of this Court in ruling it so, no matter the effective scope and reach of
the decision. The State has no business promulgating void laws, which stick out like a cancer
infecting our constitutional order. When faced with the proper opportunity, it is the Court's
duty to excise the tumor no matter how painful. Unfortunately, the solution advocated by
the ponencia barring penal statutes from "void for vagueness" assaults hides the patient from
the doctor.

People v. Dela Piedra, earlier cited,45 did not invalidate the statute questioned therein on the
"void for vagueness" ground. Yet it affirms that the "void for vagueness" challenge to a penal
law may be sustained if the statute contravenes due process. The circumstance, as
the ponencia herein points out, that no penal law has been declared unconstitutional on the
ground of ambiguity, does not mean that no penal law can ever be invalidated on that
ground.

As long as the due process clause remains immanent in our Constitution, its long reach
should be applied to deter and punish unwarranted deprivations of life, liberty or property.
Violations of due process are myriad, ranging as they do from the simple to the complicated,
from the isolated to the intermittent, from the abashed to the brazen. No advance statement
can outrightly cast an act as beyond the ambit of the due process clause, especially when
applied to the lot of an accused, for such is simply presumptuous and anathema to the spirit
of fair play.

I may disagree with the eventual conclusions of Justices Kapunan, Ynares-Santiago and
Sandoval-Gutierrez in the Estrada case that Section 5 of the Anti-Plunder Law is void for
vagueness. Yet, I submit that their inquiry as to whether the said criminal statute was void for
being vague is a juristic exercise worth pursuing. If the ponencia affirms the earlier erroneous
pronouncement as asserted in the main by Mr. Justice Mendoza in Estrada, then I express
the same fear articulated by Mr. Justice Kapunan in his dissent, that "such stance is

29
tantamount to saying that no criminal law can be challenged however repugnant it is to the
constitutional right to due process."46

DANTE O. TINGA
Associate Justice

30
31
 B. Nature of the Rules of Statutory Construction

PCFI vs. NTC (216 Phil 185)(131 SCRA 200)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-63318 August 18, 1984

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,

vs.
NATIONAL TELECOMMUNICATIONS COMMISSION and PHILIPPINE LONG DISTANCE
TELEPHONE CO., respondents.

Tomas C. Llamas for petitioners.

The Solicitor General for respondent NTC.

Eliseo Alampay, Jr., Graciano C. Regala and Augusto San Pedro for private respondents.

RESOLUTION

MAKASIAR, J.:

On March 2, 1983, petitioner filed the instant petition praying, among others, that the
decision of respondent NTC dated November 22, 1982 and the order dated January 14,
1983 be annulled and set aside on the grounds therein stated (pp. 2-19, rec.).

After the petitioner, the private respondent, and the Solicitor General for public respondent
NTC filed their respective comments and memoranda (pp. 47-53, 96-106, 109-116, 127-142,
147-164, 206-221, rec.), on November 25, 1983, the decision sought to be reconsidered was
promulgated, annulling and setting aside the challenged decision and order, respectively
dated November 22, 1982 and January 14, 1983 (pp. 225-232, rec.).

Said decision is not unanimous as it bears the concurrence of only 9 members of this Court,
while 3 members took no part and 1 member reserved his vote (p 232, rec.)

In a resolution dated January 10, 1984 and released on January 17, 1984, the Court granted
respondent PLDT's motion for 15-day extension from the expiration of the reglementary
period within which to file a motion for reconsideration (pp. 233, 236, rec.).

On January 12, 1984, PLDT filed its motion for reconsideration (pp. 237-268, rec.).

32
On February 27, 1984, respondent PLDT filed a motion to admit attached supplemental
motion for reconsideration (pp. 281-301, rec.).

On February 27, 1984, public respondent NTC, thru the Solicitor General, filed a
manifestation and motion that it is joining core, respondent PLDT in its motion for
reconsideration thereby adopting the same as its own (pp. 302-303, 305-306, rec.).

In a resolution dated March 1, 1984 and issued on March 2, 1984, the Court admitted the
supplemental motion for reconsideration of PLDT, noted the manifestation and motion of the
Solicitor General for and in behalf of respondent NTC that it is joining the motion for
reconsideration of PLDT and adopting it as its own, and required petitioner to convenient
within 10 days from notice on the aforesaid supplemental motion for reconsideration of PLDT
(p. 304-A, rec.).

On March 28, 1984, petitioner filed its comment on respondent's motion for reconsideration
(pp. 310-317, rec.).

In a resolution dated April 3, 1984 and issued on April 11, 1984, the Court denied the motion
for reconsideration (p. 318A, rec.).

On April 6, 1984, respondent PLDT filed a motion to strike out "discussion (e)" in petitioner's
"comment on respondents' motions" dated March 20, 1984 (pp. 319-321, rec.).

In a resolution dated April 12, 1984 and issued on April 16, 1984, the Court required
petitioner's counsel Atty. Tomas Llamas to comment within 10 days from notice on the
aforesaid motion to strike out (p. 323, rec.).

On April 17, 1984, respondent PLDT, thru counsel, filed a motion for leave to file within 15
days from date a second motion for reconsideration (pp. 324-326, rec.).

On April 27, 1984, petitioner filed an opposition to the aforesaid motion of PLDT for leave to
file within 15 days to file a second motion for reconsideration (pp. 328-330, rec.).

On May 2, 1984, private respondent PLDT filed a second motion for reconsideration with an
annex (pp. 332-344, rec.).

In a resolution dated May 8, 1984 but issued on May 11, 1984, the Court granted the motion
of PLDT to file a second motion for reconsideration within 15 days from April 16, 1984, noted
the opposition of petitioner to said motion, and required petitioner to comment within 15 days
from notice on the aforesaid second motion for reconsideration of PLDT for the
reconsideration of the decision of November 25, 1983 (p. 345, rec.).

On May 4, 1984, petitioner filed its comment on the second motion for reconsideration of
private respondent (pp. 346-350, rec.).

In a resolution dated May 10, 1984 and issued on May 16, 1984, the Court required
respondents to file a reply within 10 days from notice on the aforesaid comment of petitioner
on private respondent PLDT's motion praying that the discussion (par. 3) in petitioner's
comment on the first motion for reconsideration and the supplemental motion for
reconsideration be deleted (p. 352, rec.).

33
On May 21, 1984, public respondent NTC filed a manifestation joining private respondent
PLDT and adopting the latter's second motion for reconsideration (pp. 353-354, rec.), which
the Court granted in a resolution dated May 29, 1984 and issued on June 6, 1984 (p. 355-A).

On May 28,1984, respondent PLDT filed a motion for extension of 10 days or until June 7,
1984 within which to submit the required reply in the resolution of May 10, 1984 and issued
on May 16, 1984 (pp. 356-357, rec.), which was granted in a resolution dated June 5, 1984
and issued on July 3, 1984 (p. 357-A, rec.).

On June 1, 1984, petitioner filed its comment on PLDT's second motion for reconsideration,
with a motion to declare final the decision with respect to public respondent NTC (pp.
358362, rec.).

A day before June 1, 1984, or on May 31, 1984, private respondent PLDT filed its reply to
petitioner's "comment on motion of private respondent" dated May 4, 1984 [motion to strike]
(pp. 366-369, rec.).

On July 16, 1984, after its motions for extension were granted, public respondent NTC thru
the Solicitor General, finally filed its reply (pp. 370-371, 372-A, 373, 375-381, rec.).

It should be emphasized that the resolution of this Court dated April 3, 1984 but issued on
April 11, 1984, denying the first motion for reconsideration did not state that the denial is
final (see p. 318-A, rec.).

And the motion of May 29, 1984 but filed on June 1, 1984 of petitioner to declare as final the
decision of November 25, 1983 (which motion was included in plaintiff's comment on PLDT's
second motion for reconsideration) with respect to public respondent NTC (pp. 361-362,
rec.), was not acted upon by this Court, ostensibly because as early as May 21, 1984, public
respondent NTC, thru the Solicitor General, filed a manifestation that it is joining private
respondent PLDT in its second motion for reconsideration dated May 18, 1984 and adopting
it as its own (pp. 353-354, rec.).

II

It is not disputed — and should be emphasized that on August 31, 1982, this Court set aside
the NTC order dated April 14, 1982 in the case of Samuel Bautista vs. NTC, et al. (16 SCRA
411) provisionally approving the revised schedule of rates for the Subscriber Investments
Plan, on the ground that there was necessity of a hearing by the Commission before it could
have acted on the PLDT application for said revised schedule, to give opportunity to the
public, especially herein petitioner and the Solicitor General to substantiate their objections to
the said schedule as excessive and unreasonable, especially for the low-income and middle-
income groups, which cannot afford telephone connections and that there is no need to
increase the rate because PLDT is financially sound.

Thereafter, in NTC Case No. 82-87 entitled "Re Philippine Long Distance Telephone Co.
respondent NTC conducted several hearings on PLDT's revised Subscriber Investments
Plan schedule at which written oppositions were filed by herein petitioner PCFI, the Solicitor
General, Atty. Samuel Bautista, Flora Alabanza, the municipality of Marikina, and the
Integrated Telecommunications Suppliers' Association of the Philippines (ITESAP). Other
oppositors failed to file their written oppositions. The hearings on the merits actually started
on August 4, 1982 and continued for four (4) subsequent dates.

34
The oppositors, thru counsel, thoroughly cross-examined the witness for the applicant, Mr.
Romeo Sisteban applicant's Vice-President for Budget and Financial Planning.

None of the oppositors opted to present evidence but merely filed Memoranda and thereafter
manifested that the case is submitted for decision Because PLDT made some concessions
in favor of the oppositors, oppositors ITESAP, Eastern Telecommunications, Inc., Philippine
Global Communications, Inc. (Philcom), Globe-Mackay Cable and Radio Corporation
(GMCR) withdrew their opposition and manifested that they are no longer opposing the
application after which respondent NTC issued the challenged decision of November 22,
1982.

Respondent NTC rendered the challenged decision dated November 22, 1982, approving the
revised schedule on the ground that the rates are within the 50% of cost limit provided in
P.D. No. 217, that they are just and reasonable and in consonance with the public policies
declared in said decree, and that such approval is in the public interest (see NTC decision of
Nov. 22, 1982, pp. 2-19, rec.).

It is undisputed therefore that petitioner and the other oppositors were accorded due
process.

From said decision dated November 22, 1982, petitioner filed the instant petition.

III

The decision promulgated on November 25, 1983 interprets the rule-making authority
delegated in Section 2 of P.D. No. 217 to the then Department of Public Works,
Transportation and Communications as mandatory, which construction is not supported by
the actual phraseology of said Section 2, which reads thus:

The Department of Public Works, Transportation and Communications, through

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

The basic canon of statutory interpretation is that the word used in the law must be given its
ordinary meaning, unless a contrary intent is manifest from the law itself. Hence, the phrase
"may be promulgated" should not be construed to mean "shall" or "must". It shall be
interpreted in its ordinary sense as permissive or discretionary on the part of the delegate —
department or the Board 6f Communications then, now the National Telecommunications
Commission — whether or not to promulgate pertinent rules and regulations. There is
nothing in P.D. No. 217 which commands that the phrase "may be promulgated" should be
construed as "shall be promulgated." The National Telecommunications Commission can
function and has functioned without additional rules, aside from the existing Public Service
Law, as amended, and the existing rules already issued by the Public Service Commission,
as well as the 1978 rules issued by the Board of Communications, the immediate
predecessor of respondent NTC. It should be recalled that the PLDT petition for approval of
its revised SIP schedule was filed on March 20,1980.

P.D. No. 217 does not make the rules and regulations to be promulgated by the respondent
NTC as essential to the exercise of its jurisdiction over applications for SIP schedules. In Ang
Tibay vs. CIR (69 Phil. 635), this Court, through Mr. Justice Jose P. Laurel, did not include
35
the promulgation of rules and regulations as among the seven (7) requirements of due
process in quasi-judicial proceedings before a quasi-judicial body such as the respondent
NTC.

What is patently mandatory on the ministry or National Telecommunications Commission is

the immediate implementation of the policies declared in P.D. No. 217. To repeat, the
ministry or the NTC "shall see to it that the herein declared policies for the telephone industry
are immediately implemented ..." The formulation of rules and regulations is purely
discretionary on the part of the delegate.

Both words "shall and "may be" are employed in the lone sentence of Section 2 of P.D. No.
217. This graphically demonstrates that P.D. No. 217 preserves the distinction between their
ordinary, usual or nominal senses.

This is emphasized by the fact that under Section 3 of P.D. No. 217, only "the pertinent
provisions" of the Public Service Act, as amended, which are in conflict with the provisions of
P.D. No. 217, had been repealed or modified by said P.D. No. 217.

Section 3 of P.D. No. 217 states:

The pertinent provisions of the Public Service Act, as amended, the franchise
of the Philippine Long Distance Telephone Company under Act 3436, as
amended, all existing legislative and/or municipal franchises and other laws,
executive orders, proclamations, rules and regulations or parts thereof, as are
in conflict with the provisions of this Decree are hereby repealed or modified
accordingly.

And under the Public Service Act, as amended (C.A. No. 146), the board of Communications
then, now the NTC, can fix a provisional amount for the subscriber's investment to be
effective immediately, without hearing (par. 3 of Sec. 16, C.A. 146, as amended).

Section 16 (c) of C.A. No. 146, as amended, provides:

(c) To fix and determine individual or joint rates, toll charges, classifications, or
schedules thereof, as well as communication, mileage, kilometrage, and oilier
special rates which shall be imposed, observed, and followed thereafter by any
public service: Provided That the Commission may, in its discretion approve
rates proposed by public services provisionally and without necessity of any
hearing, but it shall call a hearing thereon within thirty days thereafter, upon
publication and notice to the concerns operating in the territory affects Provided
further, That in case the public service equipment of an operator is used
principally or secondarily for the promotion of a private business, the net profits
of said private business shall be considered in relation with the public service of
such operator for the purpose of fixing the rates.

The Rules of Practice and Procedures promulgated on January 25, 1978 by the Board of
Communications, the immediate predecessor of respondent NTC, pursuant to Section 11 of
the Public Service Act, otherwise known as Commonwealth Act No. 146, as amended,
govern the rules of practice and procedure before the BOC then, now respondent NTC.
Section 2 of said Rules defines their scope, including exempting parties from the application
of the rules in the interest of justice and to best serve the public interest, and the NTC may

36
apply such suitable procedure to improve the service in the transaction of public service.
Thus, Section 2 of Rule 1 of said Rules reads:

Sec. 2. Scope. — These rules govern pleadings, practice and procedure before
the Board of Communications in all matters of hearing, investigation and
proceedings within the jurisdiction of the Board. However, in the broader
interest of justice and in order to best serve the public interest, the Board may,
in any particular matter, except it from these rules and apply such suitable
procedure to improve the service in the transaction of the public business.

Sections 4 and 5 of Rule 2 of said rules insure the appearance of the Solicitor General and
other consumers or users. The notice of hearing is required to be published and to be served
on the affected parties by Section 2 of Rule 8; while Section I of Rule 9 allows the filing of
written oppositions to the application Under Section 3 of Rule 15, the BOC then, now the
NTC, may grant, on motion of the applicant or on its own initiative, provisional relief based on
the pleading, supporting affidavits and other documents attached thereto, without prejudice
to a final decision after completion of the hearing which shall be caged within thirty (30) days
from the grant of the provisional relief.

Finally, Section 1 of Rule 19 provides for the suppletory application of the Rules of Court
governing proceedings before the Court of First Instance then, now the Regional Trial
Courts, which are not inconsistent with the rules of practice and procedure promulgated by
the BOC on January 25, 1978.

There is nothing in P.D. No. 217 modifying, much less repeating Section 16 (c) of the Public
Service Act, as amended.

It is true that P.D. No. 1874 promulgated on July 21, 1983 amending Section 2 of P.D. No.
217 expressly authorizes the National Telecommunications Commission (now the successor
of the Board of Communications) to approve "such amounts for subscriber investments as
applied for provisionally and without the necessity of a hearing; but shall call a hearing
thereon within thirty (30) days thereafter, upon publication and notice to all parties affected."
But such amendment merely reiterates or confirms paragraph (c) of Section 16 of C.A. No.
146, as amended, otherwise known as the Public Service Law, and serves merely to clarify
the seeming ambiguity of the repealing clause in Section 3 of P.D. No. 217 to dissipate an
doubts on such power of the National Telecommunications Commission.

The construction of the majority decision of November 25, 1983 of the word "may" to mean
"shall" is too strained, if not tortured.

IV

WE cannot subscribe to the view that the National Telecommunications Commission should
or must promulgate "pertinent rules and regulations because the existing substantive and
procedural laws as well as the rules promulgated by the Public Service Commission under
and pursuant to the Public Service Law, otherwise known as CA No. 146, as amended, are
more than adequate to determine the reasonability of the amounts of investment of
telephone subscribers, the viability of the company and the other factors that go into
determining such amounts and such viability. The existing laws and rules on rate-making are
more than sufficient for a proper determination of such amounts of investments of individual
subscribers and the profitability of the venture.

37
The adequacy of the existing Public Service Law, otherwise known as C.A. No. 146, as
amended, and rules had been demonstrated, because they have been applied in the
following cases involving PLDT:

1. PLDT vs. PSC, G.R. No. L-26762, Aug. 31, 1970, 34 SCRA 609;

2. Republic vs. PLDT, G.R. No. L-18841, Jan. 27, 1969, 26 SCRA 620;

3. PLDT vs. PSC, G.R. Nos. L-24198 & L-24207-10, Dec. 18, 1968, 26 SCRA
427;

4. Republic Telephone Co. vs. PLDT, G.R. No. L-21070; PLDT vs. Republic
Telephone Co., G.R. No. L-21075, both decided on Sept. 23, 1968, 25 SCRA
80;

5. PLDT vs. Medina, G.R. No. L-24658, April 3, 1968, 23 SCRA 1; and

6. PLDT vs. Medina, G.R. Nos. L-24340-44, July 18, 1967, 20 SCRA 669.

As heretofore stated, as early as January 25, 1978, other pertinent rules of practice and
procedure were promulgated by the then Board of Communications, now the respondent
National Telecommunications Commission, implementing P.D. No, 217, in addition to the
applicable provisions of the Public Service Law, as amended, and the rules previously issue
by the Public Service Commission (Annex 2 to the Memo of respondent PLDT filed on
August 15, 1983, pp. 147-165, rec.).

Even before 1978, respondent applied the procedure prescribed by the Public Service Law,
as amended, and the rules previously issued by the Public Service Commission, the NTC
predecessor, in several cases involving similar applications for SIP schedules of Filipino
Telephone Corporation (BOC Case No. 73-064; see BOC decision in said cases dated
December 5, 1974, May 11, 1978, March 15, 1977, Feb. 19, 1976 and Aug. 31, 1978 —
Annexes 3, 4, 4-A, 5, pp. 166-195, rec.).

The majority opinion recognizes that for the last three years, the PLDT had earned a yearly
average net profit of over P100 million and the existing subscribers have been receiving their
corresponding quarterly dividends on their investments.

It should be stressed that Section 5 of Article XIV of the 1973 Constitution, as amended,
expressly directs that "the State shall encourage equity participation in public utilities by the
general public." As above-stated, the existing individual subscribers of PLDT had been
sharing in the net profits of the company every quarter after the promulgation of P.D. 217 on
June 16, 1973.

The amount that is provisionally approved under the subscriber's investment plan for
PBX/PAEX trunks and for business telephones in Metro Manila and the provinces, whether
new installations or transfers, appears to be reasonable, including those for the leased lines
or outside local.

To lighten the burden of subscribers, investments may be paid in installments or under some
convenient arrangements which the NTC may authorize, which is now expressly provided for
in Section 1 of P.D. 1874 amending Sec. 6 of P.D. 217.

38
Section 1 of P.D. 1874 directs that:

Section 1, paragraph 6 of the Presidential Decree No. 217 is hereby amended

to read as follows:

6. In any subscriber self-financing plan, the amount of subscriber

self-financing wilt in no case, exceed fifty per centum (50%) of the
amount which results from dividing the telephone utility's gross
investment in telephone plant in service by its number of primary
stations in service, both as reported in the utility's latest audited
annual report rendered he National Telecommunications
Commission; PROVIDED, however, that the amount payable by
the telephone subscriber may be paid on installment or under
such payment arrangement as the National Telecommunications
Commission may authorize.

It should be likewise emphasized that pursuant to the mandate of Section 5, Article XIV of
the 1973 Constitution, as amended, the law-making authority, in issuing both P.D. Nos. 217
and 1874, established the all-important policy of making available on regular and
uninterrupted basis the telephone service because it is

a crucial element in the conduct of business activity ... and is essential for the
smooth and efficient function of industry,

... efficient telephone service contributes directly to national development by

facilitating trade and commerce;

... the telephone industry is one of the most highly capital intensive industries;

... the telephone industry has fundamentally different financing characteristics

from other utilities in that capital requirements per telephone unit installed
increase as the number of customers serviced also increases instead of
decreasing in cost per unit as in power and water utilities;

... continued reliance on the traditional sources of capital funds through foreign

and domestic borrowing and through public ownership of common capital stock
will result in a high cost of capital heavy cash requirements for amortization and
thus eventually in higher effective cost of telephone service to subscribers;

... the subscribers to telephone service tend to be among the residents of urban

areas and among the relatively higher income segment of the population;

... it is in the interest of the national economy to encourage savings and to

place these savings in productive enterprises and

... it is the announced policies of the government to encourage the spreading

out of ownership in public utilities (see Whereases of P.D. 217; emphasis
supplied).

39
P.D. No. 217 further states as the basic policies of the State concerning the telephone
industry "in the interest of social, economic and general well-being of the people ...

1. The attainment of efficient telephone service for as wide an area as possible

at the lowest reasonable cost to the subscriber;

2. The expansion of telephone service shall be financed through an optimal

combination of domestic and foreign sources of financing and an optimal
combination of debt and equity funds so as to minimize the aggregate cost of
capital of telephone utilities;

3. Consistent with the declared policy of the State to attain widespread

ownership of public utilities obtained from ownership funds shall be raised from
a broad base of investors, involving as large a number of individual investors as
may be possible;

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

5. As part of any subscriber self-financing plan, when the issuance of preferred
stock is contemplated, it is required that the subscriber be assured, in all cases
of a fixed annual income from his investment and that these preferred capital
stocks be convertible into common shares, after a reasonable period and under
reasonable terms, at the option of the preferred stockholder; and

6. In any subscriber self-financing plan, the amount of subscriber self-financing

wig, in no case, exceed fifty per centum (50%) of the cost of the installed
telephone line, as may be determined from time to time by the regulatory
bodies of the State.

The same policies and objectives are substantially re-stated and capsulized in the three
Whereases of P.D. No. 1874 amending P.D. No. 217 as pointed out in the basic policies
aforestated in P.D. No. 217 that the cost per telephone unit increases in proportion to the
increase in the number of customers served; and that foreign borrowing will impose heavy
cash requirements for amortizations of such foreign loans which would result in the higher
effective costs of telephone service to subscribers and ultimately would be a heavy drain on
our dollar reserves, which will result in our inability to meet our other foreign commitments
and mark the image of the Republic of the Philippines in international trade relations. Thus,
P.D. No. 217 stresses that in the interest of the national economy it is essential to encourage
savings and to place these savings (subscriber's investments) in productive enterprises.

PLDT is profitable for the subscribers-investors as shown by its net profit and the dividends
received quarterly by the existing subscribers.

There is no showing — not even an allegation — that the net profits realized by PLDT all
these years have been dissipated and not plowed back into the firm to improve its service.

40
But the rising cost of materials and labor needed to improve the PLDT service, aggravated
by the devaluation of our currency, all the more justify the revised SIP schedule approved by
the respondent NTC.

The approved revised SIP schedule, which appears reasonable and fair is herein
reproduced:

REVISED SIP SCHEDULE

Revised SIP Rates

Service Metr Provin

Category o cial
Mani
la

     

I. New    
Installation
s —

1. P5,0 P3,000
PBX/PABX 00
Trunk

2. Phone:    

Single line 3,50 2,000

0

Party line 2,00 1,500

0

3. Phone:    

Single line 1,80 1,300

0

Party line 900 800

4. Leased 2,50 2,500

line 0

5. Tie trunk 2,50 2,500

or tie line 0

6. Outside 2,50 2,500

local 0

     

II.    
Transfers

41
 —

1. 1,50 1,200
PBX/PABX 0

2. Phone:    

Single line 800 600

Party line 600 500

3.    
Residential
Phone:

Single line 600 500

Party line 500 300

4. Leased 800 800

line

5. Tie trunk 800 800

or tie line

6. Outside 800 800

local

(pp. 34-35, rec.).

With the dividends that will be received quarterly under the revised SIP schedule, the
subscribers (whether of phone installations for business with or without trunk lines, as wen as
transfers of the same; or of residential phones whether single or party line as well as
transfers of the same), will recover their investments after some years and will thereafter
remain stockholders and part-owners of PLDT. All the subscribers therefore, are assured not
only of profits from but also preservation of, their investments, which are not donations to
PLDT.

There are always two sides — sometimes more — to a case or proposition or issue. There
are many cases decided by this Court where this Court had reconsidered Its decisions and
even reversed Itself, conformably to the environmental facts and the applicable law.

After a re-study of the facts and the law, illuminated by mutual exchange of views the
members of the Court may and do change their minds.

To repeat, the decision of November 25, 1983 was not a unanimous decision
for it has the concurrence of only nine (9) members of the Court, because three
(3) took no part and one (1) reserved his vote (p. 232, rec.).

WHEREFORE, THE DECISION OF NOVEMBER 25, 1983 SHOULD BE AS IT IS HEREBY

RECONSIDERED AND SET ASIDE AND THE PETTION IS HEREBY DISMISSED. NO
COSTS.

42
SO ORDERED.

Concepcion, Jr., Guerrero, Escolin, De la Fuente and Cuevas, JJ., concur.

Aquino and Plana, JJ., concur in the result.

Fernando, C.J., took no part.

Separate Opinions

TEEHANKEE, J., dissenting:

I join the dissents of Justices Abad Santos and Relova. I only wish to add that there has
been a departure here from the Court's usual practice and rules (cf. Rule 52, sec. 2; Rule 51,
sec. 1; and Rule 56, Secs. 1 and 11) of setting the case for rehearing and hearing the parties
in oral argument when a new majority (because of a change of votes or new members or for
whatever reason) is inclined to reconsider and overturn the original majority; more so, on a
second motion for reconsideration, the first motion for reconsideration having been denied
without a dissenting vote and the parties not having been previously heard in oral argument.

GUTIERREZ, JR., J., separate opinion:

My concurrence in Mr. Justice Makasiar's ponencia is not without certain misgivings. I agree
with the Court's views on the powers of the National Telecommunications Commission, the
applicability of existing rules and regulations, and the policy declarations in P.D. Nos. 217
and 1874. However, while now convinced that the increase in mandatory investments for
subscribers is based on law and that there is no showing of arbitrariness in the law's
implementation, I must confess that I see no justification for the continued inefficient services
rendered by the respondent telephone company. When the Court was deliberating on the
motion for reconsideration, my own residential telephone was out of order. And I believe that
our experiences in our neighborhood do not represent isolated cases. I have yet to hear from
or about satisfied PLDT customers.

My point is —increased rates and increases in the "subscribers' self-financing plan" must be
matched by equivalent and demonstrably improved telephone service. More than its duty to
increase rates and subscribers' fees whenever warranted, the respondent Commission has
the statutory and greater obligation to supervise "the attainment of efficient telephone service
for as wide an area as possible at the lowest reasonable cost to the subscribers."

I am aware that almost all major or components of our telephone system must be imported
from foreign sources. Since the Philippine peso is now worth one American nickel the cost of
services based on imported materials must increase. Loans contracted when the foreign
exchange rate was not so disadvantageous now require double or treble amortizations in
depreciated pesos. The Court cannot assume the role of King Canute. Only the financial
experts in the political departments can return the peso to a respectable value. Moreover, it

43
is indeed to the nation's advantage to look for local capital sources instead of resorting to
more foreign borrowings.

I must stress, however, that consumers would not mind paying reasonable increases if they
get satisfactory services. The respondent telephone company has yet to solve this
elementary and glaringly obvious problem. Pinpointing the cause and applying the solution
should be the company's number one concern.

ABAD SANTOS, J., dissenting:

I vote to deny the second Motion for Reconsideration. I am amazed that the decision which
was promulgated as recently as November 25, 1983, with no dissenting opinion to dilute its
acceptability should now be reconsidered. My amazement is heightened by the fact that
when the case was discussed on July 26, 1984, I had the impression that the motion was
doomed so that a request to defer action on it would have met the same fate had not the
request been put on a pag-bigyan basis.

The case involves a simple problem of statutory construction — that of Section 2 of

Presidential Decree No. 217. It reads as follows:

The Department of Public Works, Transportation and Commissions, through its

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

The issue is whether or not the National Telecommunications (NTC) must first promulgate
the rules and regulations mentioned in the decree before it can approve the Subscriber
Investment Plan (SIP) of private respondent Philippine Long Distance Telephone Co.
(PLDT).

The decision, without any dissenting opinion, sustained the petitioner's contention that it is
the duty of NTC to first Promulgate rules and regulations.

The resolution, which is not unanimous, does not subscribe to the view that the NTC should
or must promulgate rules and regulations because, it is said, the decree must be given its
ordinary meaning; the word used is the permissive "may" and not the mandatory "shall The
non-unanimous resolution thus relies on the canons index animi sermo est (speech is the
indication of intent) and a verba legis non est recedendum (from the words of the statute
there should be no departure).

Any lawyer of modest sophistication knows that canons of statutory construction march in
pairs of opposite. Thus with the canons above mentioned we have the following
opposite: verba intention, non e contra, debent incservice (words ought to be more
subservient to the intent and not the intent to the words). Sutherland explains the limits of
literalism thus:

The literal interpretation of the words of an act should not prevail if it creates a
result contrary to the apparent intention of the legislature and if the words are
sufficiently flexible to admit of a construction which will effectuate the legislative
intention The intention prevails over the letter, and the letter must if possible be
read so as to conform to the spirit of the act. 'While the intention of the
44
 legislature must be ascertained from the words used to express it, the manifest
reason and obvious purpose of the law should not be sacrificed to a literal
interpretation of such words. Thus words or clauses may be enlarged or
restricted to harmonize with other provisions of an act. The particular inquiry is
not what is the abstract force of the words or what they may comprehend, but
in what sense were they intended to be understood or what understanding do
they convey as used in the particular act. (Vol. 2A Statutory Construction, pp.
65-66 [1972].)

It is an elementary rule in statutory construction that the word "may" in a statute is permissive
while the word "shall" is mandatory. The rule, however, is not absolute. Thus Professor Luis
J. Gonzaga states:

According to Black, 'Where the statute provides for the doing of some act which
is required by justice or public duty, or where it invests a public body,
municipality or officer with power and authority to take some action which
concerns the public interest or rights of individuals, the permissive language
win be construed as mandatory and the execution of the power may be insisted
upon as a duty. Thus, where the statute provided that 'the commissioners may
take into consideration the enhanced value to the remaining land of an owner
whose land was taken for highway purposes it was held that the word may
should be given a mandatory meaning and is the same as the word 'shall',
since it directs the doing of a thing for the sake of justice or the public good.
Similarly, a statute by which municipal corporations are 'authorized and
empowered to provide for the support of indigent persons within their limits or
to make public improvements as to open and repair streets, remove
obstructions from highways, construct sewers and the like, are to be construed
as mandatory although they only purport to grant permission or authority since
the public has an interest in such matters and the grant of authority is therefore
equivalent to the imposition of duty." (Statutes and their Construction, pp. 98-99
[1969].)

In the case at bar compelling reasons dictate that the provision of the decree should be
construed as mandatory mother than merely directory. They are stated in the unanimous
decision as follows:

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

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

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

45
 2. In the absence of such rules and regulations, there is outright confusion
among the rights of PLDT, the consumers and the government itself. As may
clearly be after how can the Decision be said to have assured that most of the
population will enjoy telephone facilities? Did the Decision likewise assure the
financial viability of PLDT? Was the government's duty to provide telephone
service to its constituents subserved by the Decision? These questions can
never be answered unless such rules and regulations are set up.

3. Finally, it should be emphasized that NTC is estopped from claiming that

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

Why then did NTC refuse to act on such petition if and when there is no need
for the promulgation of such rules and regulations? After all NTC could have
simply ruled that the petition in G.R. No. 618R2 is unnecessary because such
rules and regulations are also unnecessary. (pp. 135-136, Rollo)

The above reasons also rebut the contention in the non-unanimous resolution that the
existing substantive and procedure laws as well as the rules promulgated by the Public
Service Commission are more than adequate to determine the reasonableness of the
amounts of investment of telephone subscribers, etc.

The PLDT's SIP is an unreasonable imposition by a utility company on a captive public. The
injury is compounded by the fact that although the company makes mega profits its service,
to use a McEnroe expression, is the pits.

Melencio-Herrera, J., concur.

RELOVA, J., dissenting:

For the reasons stated in my ponencia of November 25, 1983, I vote to DENY the second
motion for reconsideration, dated May 2, 1984, filed by private respondent Philippine Long
Distance Telephone Company, through counsel. The argument advanced in the motion that
Presidential Decree No. 217 was amended by Presidential Decree No. 1874 which was
issued on July 21, 1983, is without merit. Section 4 of said PD 1874 specifically provides that
"all decisions or orders of the National Telecommunications Commission heretofore issued
approving subscribers investment plans or revisions thereof, are hereby declared valid and
legal in all respects, excepting such decisions or orders as, on the date of this decree, are
pending review by the Supreme Court." The case at bar was filed with this Court on March 3,
1983 or before the issuance of Presidential Decree No. 1874.

Besides, Section 1 of Presidential Decree No. 217 which was promulgated on June 16, 1973
declares that "in the interest of the social, economic and general well being of the people, the
State hereby adopts the following basic policies of the telephone industry:

1. The attainment of efficient telephone service for as wide an area as possible at the lowest
reasonable cost to the subsciber.

xxx xxx xxx

46
Melencio-Herrera, J., concur.

Separate Opinions

TEEHANKEE, J., dissenting:

I join the dissents of Justices Abad Santos and Relova. I only wish to add that there has
been a departure here from the Court's usual practice and rules (cf. Rule 52, sec. 2; Rule 51,
sec. 1; and Rule 56, Secs. 1 and 11) of setting the case for rehearing and hearing the parties
in oral argument when a new majority (because of a change of votes or new members or for
whatever reason) is inclined to reconsider and overturn the original majority; more so, on a
second motion for reconsideration, the first motion for reconsideration having been denied
without a dissenting vote and the parties not having been previously heard in oral argument.

GUTIERREZ, JR., J., separate opinion:

My concurrence in Mr. Justice Makasiar's ponencia is not without certain misgivings. I agree
with the Court's views on the powers of the National Telecommunications Commission, the
applicability of existing rules and regulations, and the policy declarations in P.D. Nos. 217
and 1874. However, while now convinced that the increase in mandatory investments for
subscribers is based on law and that there is no showing of arbitrariness in the law's
implementation, I must confess that I see no justification for the continued inefficient services
rendered by the respondent telephone company. When the Court was deliberating on the
motion for reconsideration, my own residential telephone was out of order. And I believe that
our experiences in our neighborhood do not represent isolated cases. I have yet to hear from
or about satisfied PLDT customers.

My point is —increased rates and increases in the "subscribers' self-financing plan" must be
matched by equivalent and demonstrably improved telephone service. More than its duty to
increase rates and subscribers' fees whenever warranted, the respondent Commission has
the statutory and greater obligation to supervise "the attainment of efficient telephone service
for as wide an area as possible at the lowest reasonable cost to the subscribers."

I am aware that almost all major or components of our telephone system must be imported
from foreign sources. Since the Philippine peso is now worth one American nickel the cost of
services based on imported materials must increase. Loans contracted when the foreign
exchange rate was not so disadvantageous now require double or treble amortizations in
depreciated pesos. The Court cannot assume the role of King Canute. Only the financial
experts in the political departments can return the peso to a respectable value. Moreover, it
is indeed to the nation's advantage to look for local capital sources instead of resorting to
more foreign borrowings.

I must stress, however, that consumers would not mind paying reasonable increases if they
get satisfactory services. The respondent telephone company has yet to solve this
elementary and glaringly obvious problem. Pinpointing the cause and applying the solution
should be the company's number one concern.

ABAD SANTOS, J., dissenting:

47
I vote to deny the second Motion for Reconsideration. I am amazed that the decision which
was promulgated as recently as November 25, 1983, with no dissenting opinion to dilute its
acceptability should now be reconsidered. My amazement is heightened by the fact that
when the case was discussed on July 26, 1984, I had the impression that the motion was
doomed so that a request to defer action on it would have met the same fate had not the
request been put on a pag-bigyan basis.

The case involves a simple problem of statutory construction — that of Section 2 of

Presidential Decree No. 217. It reads as follows:

The Department of Public Works, Transportation and Commissions, through its

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

The issue is whether or not the National Telecommunications (NTC) must first promulgate
the rules and regulations mentioned in the decree before it can approve the Subscriber
Investment Plan (SIP) of private respondent Philippine Long Distance Telephone Co.
(PLDT).

The decision, without any dissenting opinion, sustained the petitioner's contention that it is
the duty of NTC to first Promulgate rules and regulations.

The resolution, which is not unanimous, does not subscribe to the view that the NTC should
or must promulgate rules and regulations because, it is said, the decree must be given its
ordinary meaning; the word used is the permissive "may" and not the mandatory "shall The
non-unanimous resolution thus relies on the canons index animi sermo est (speech is the
indication of intent) and a verba legis non est recedendum (from the words of the statute
there should be no departure).

Any lawyer of modest sophistication knows that canons of statutory construction march in
pairs of opposite. Thus with the canons above mentioned we have the following
opposite: verba intention, non e contra, debent incservice (words ought to be more
subservient to the intent and not the intent to the words). Sutherland explains the limits of
literalism thus:

The literal interpretation of the words of an act should not prevail if it creates a
result contrary to the apparent intention of the legislature and if the words are
sufficiently flexible to admit of a construction which will effectuate the legislative
intention The intention prevails over the letter, and the letter must if possible be
read so as to conform to the spirit of the act. 'While the intention of the
legislature must be ascertained from the words used to express it, the manifest
reason and obvious purpose of the law should not be sacrificed to a literal
interpretation of such words. Thus words or clauses may be enlarged or
restricted to harmonize with other provisions of an act. The particular inquiry is
not what is the abstract force of the words or what they may comprehend, but
in what sense were they intended to be understood or what understanding do
they convey as used in the particular act. (Vol. 2A Statutory Construction, pp.
65-66 [1972].)

48
It is an elementary rule in statutory construction that the word "may" in a statute is permissive
while the word "shall" is mandatory. The rule, however, is not absolute. Thus Professor Luis
J. Gonzaga states:

According to Black, 'Where the statute provides for the doing of some act which
is required by justice or public duty, or where it invests a public body,
municipality or officer with power and authority to take some action which
concerns the public interest or rights of individuals, the permissive language
win be construed as mandatory and the execution of the power may be insisted
upon as a duty. Thus, where the statute provided that 'the commissioners may
take into consideration the enhanced value to the remaining land of an owner
whose land was taken for highway purposes it was held that the word may
should be given a mandatory meaning and is the same as the word 'shall',
since it directs the doing of a thing for the sake of justice or the public good.
Similarly, a statute by which municipal corporations are 'authorized and
empowered to provide for the support of indigent persons within their limits or
to make public improvements as to open and repair streets, remove
obstructions from highways, construct sewers and the like, are to be construed
as mandatory although they only purport to grant permission or authority since
the public has an interest in such matters and the grant of authority is therefore
equivalent to the imposition of duty." (Statutes and their Construction, pp. 98-99
[1969].)

In the case at bar compelling reasons dictate that the provision of the decree should be
construed as mandatory mother than merely directory. They are stated in the unanimous
decision as follows:

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

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

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

2. In the absence of such rules and regulations, there is outright confusion

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

49
 3. Finally, it should be emphasized that NTC is estopped from claiming that
there is no need to promulgate such rules and regulations. In the case of PCFI
vs. NTC, G.R. No. 61892, now pending resolution before this Honorable
Tribunal, NTC totally refused to act on a petition filed by PLDT precisely for the
promulgation of such rules and regulations.

Why then did NTC refuse to act on such petition if and when there is no need
for the promulgation of such rules and regulations? After all NTC could have
simply ruled that the petition in G.R. No. 618R2 is unnecessary because such
rules and regulations are also unnecessary. (pp. 135-136, Rollo)

The above reasons also rebut the contention in the non-unanimous resolution that the
existing substantive and procedure laws as well as the rules promulgated by the Public
Service Commission are more than adequate to determine the reasonableness of the
amounts of investment of telephone subscribers, etc.

The PLDT's SIP is an unreasonable imposition by a utility company on a captive public. The
injury is compounded by the fact that although the company makes mega profits its service,
to use a McEnroe expression, is the pits.

Melencio-Herrera, J., concur.

RELOVA, J., dissenting:

For the reasons stated in my ponencia of November 25, 1983, I vote to DENY the second
motion for reconsideration, dated May 2, 1984, filed by private respondent Philippine Long
Distance Telephone Company, through counsel. The argument advanced in the motion that
Presidential Decree No. 217 was amended by Presidential Decree No. 1874 which was
issued on July 21, 1983, is without merit. Section 4 of said PD 1874 specifically provides that
"all decisions or orders of the National Telecommunications Commission heretofore issued
approving subscribers investment plans or revisions thereof, are hereby declared valid and
legal in all respects, excepting such decisions or orders as, on the date of this decree, are
pending review by the Supreme Court." The case at bar was filed with this Court on March 3,
1983 or before the issuance of Presidential Decree No. 1874.

Besides, Section 1 of Presidential Decree No. 217 which was promulgated on June 16, 1973
declares that "in the interest of the social, economic and general well being of the people, the
State hereby adopts the following basic policies of the telephone industry:

1. The attainment of efficient telephone service for as wide an area as possible at the lowest
reasonable cost to the subsciber.

xxx xxx xxx

Melencio-Herrera, J., concur.

50
C. Distinguish Statutory Construction from Interpretation.

51
 D. Judiciary’s Role in Statutory Construction

Floresca vs. Philex (136 SCRA 141)

(# also read dissenting opinions of Justices Melencio-Herrera and Gutierrez)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

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

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

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

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

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

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

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:

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

52
Petitioners are the heirs of the deceased employees of Philex Mining Corporation
(hereinafter referred to as Philex), who, while working at its copper mines underground
operations at Tuba, Benguet on June 28, 1967, died as a result of the cave-in that buried
them in the tunnels of the mine. Specifically, the complaint alleges that Philex, in violation of
government rules and regulations, negligently and deliberately failed to take the required
precautions for the protection of the lives of its men working underground. Portion of the
complaint reads:

xxx xxx xxx

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

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

xxx xxx xxx

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

xxx xxx xxx

53
 (pp. 42-44, rec.)

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

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

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

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

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

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

Art. 2231. In quasi-delicts, exemplary damages may be granted if the

defendant acted with gross negligence.

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

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

Petitioners thus filed the present petition.

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

54
 I

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS-

PETITIONERS' COMPLAINT FOR LACK OF JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR

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

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

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

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

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by

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

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

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

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

55
Philex maintains that the fact that an employer was negligent, does not remove the case
from the exclusive character of recoveries under the Workmen's Compensation Act; because
Section 4-A of the Act provides an additional compensation in case the employer fails to
comply with the requirements of safety as imposed by law to prevent accidents. In fact, it
points out that Philex voluntarily paid the compensation due the petitioners and all the
payments have been accepted in behalf of the deceased miners, except the heirs of Nazarito
Floresca who insisted that they are entitled to a greater amount of damages under the Civil
Code.

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

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

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

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

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

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

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

56
It should be underscored that petitioners' complaint is not for compensation based on the
Workmen's Compensation Act but a complaint for damages (actual, exemplary and moral) in
the total amount of eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did
not invoke the provisions of the Workmen's Compensation Act to entitle them to
compensation thereunder. In fact, no allegation appeared in the complaint that the
employees died from accident arising out of and in the course of their employments. The
complaint instead alleges gross and reckless negligence and deliberate failure on the part of
Philex to protect the lives of its workers as a consequence of which a cave-in occurred
resulting in the death of the employees working underground. Settled is the rule that in
ascertaining whether or not the cause of action is in the nature of workmen's compensation
claim or a claim for damages pursuant to the provisions of the Civil Code, the test is the
averments or allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil.
100).

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

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

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

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

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

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

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

57
sustained injury either in his person, property or relative rights, through the act or default of
another (25 C.J.S. 452).

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

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

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

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

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

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application
of Section 6 of the Workmen's Compensation Act on the injured workers' right
to sue third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes,
58
 again speaking for the Court, pointed out that the injured worker has the choice
of remedies but cannot pursue both courses of action simultaneously and thus
balanced the relative advantage of recourse under the Workmen's
Compensation Act as against an ordinary action.

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

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

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

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

WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular
court because they became cognizant of the fact that Philex has been remiss in its
59
contractual obligations with the deceased miners only after receiving compensation under
the Act. Had petitioners been aware of said violation of government rules and regulations by
Philex, and of its negligence, they would not have sought redress under the Workmen's
Compensation Commission which awarded a lesser amount for compensation. The choice of
the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it
was not an intelligent choice. The case should therefore be remanded to the lower court for
further proceedings. However, should the petitioners be successful in their bid before the
lower court, the payments made under the Workmen's Compensation Act should be
deducted from the damages that may be decreed in their favor.

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

To emphasize, the 1935 Constitution declares that:

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

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

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

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

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

Art. 3. Declaration of basic policy.—The State shall afford protection to labor,

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

60
The aforestated constitutional principles as implemented by the aforementioned articles of
the New Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of
the New Labor Code. Section 5 of the Workmen's Compensation Act (before it was amended
by R.A. No. 772 on June 20, 1952), predecessor of Article 173 of the New Labor Code, has
been superseded by the aforestated provisions of the New Civil Code, a subsequent law,
which took effect on August 30, 1950, which obey the constitutional mandates of social
justice enhancing as they do the rights of the workers as against their employers. Article 173
of the New Labor Code seems to diminish the rights of the workers and therefore collides
with the social justice guarantee of the Constitution and the liberal provisions of the New Civil
Code.

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

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

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

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

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

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

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

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by

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

61
 Employers contracting laborecsrs in the Philippine Islands for work outside the
same may stipulate with such laborers that the remedies prescribed by this Act
shall apply exclusively to injuries received outside the Islands through
accidents happening in and during the performance of the duties of the
employment; and all service contracts made in the manner prescribed in this
section shall be presumed to include such agreement.

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

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by

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

Employers contracting laborers in the Philippine Islands for work outside the
same shall stipulate with such laborers that the remedies prescribed by this Act
shall apply to injuries received outside the Island through accidents happening
in and during the performance of the duties of the employment. Such stipulation
shall not prejudice the right of the laborers to the benefits of the Workmen's
Compensation Law of the place where the accident occurs, should such law be
more favorable to them (As amended by section 5 of Republic Act No. 772).

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

Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of

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

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

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

It is patent, therefore, that recovery under the New Civil Code for damages arising from
negligence, is not barred by Article 173 of the New Labor Code. And the damages
recoverable under the New Civil Code are not administered by the System provided for by
62
the New Labor Code, which defines the "System" as referring to the Government Service
Insurance System or the Social Security System (Art. 167 [c], [d] and [e] of the New Labor
Code).

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

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution

shall form a part of the legal system of the Philippines.

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

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

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

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

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

It should be stressed likewise that there is no similar provision on social justice in the
American Federal Constitution, nor in the various state constitutions of the American Union.
Consequently, the restrictive nature of the American decisions on the Workmen's
63
Compensation Act cannot limit the range and compass of OUR interpretation of our own
laws, especially Article 1711 of the New Civil Code, vis-a-vis Article 173 of the New Labor
Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the 1935 Constitution
then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies of
Article II of the 1973 Constitution.

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

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

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

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

The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New
Labor Code subvert the rights of the petitioners as surviving heirs of the deceased mining
employees. Section 5 of the Workmen's Compensation Act and Article 173 of the New Labor
Code are retrogressive; because they are a throwback to the obsolete laissez-faire doctrine
of Adam Smith enunciated in 1776 in his treatise Wealth of Nations (Collier's Encyclopedia,
Vol. 21, p. 93, 1964), which has been discarded soon after the close of the 18th century due
to the Industrial Revolution that generated the machines and other mechanical devices
(beginning with Eli Whitney's cotton gin of 1793 and Robert Fulton's steamboat of 1807) for
production and transportation which are dangerous to life, limb and health. The old socio-
political-economic philosophy of live-and-let-live is now superdesed by the benign Christian
shibboleth of live-and-help others to live. Those who profess to be Christians should not
adhere to Cain's selfish affirmation that he is not his brother's keeper. In this our civilization,
each one of us is our brother's keeper. No man is an island. To assert otherwise is to be as
atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030)
invoked by the dissent, The Prisley case was decided in 1837 during the era of economic
royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic
reactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule
humiliates man and debases him; because the decision derisively refers to the lowly worker
as "servant" and utilizes with aristocratic arrogance "master" for "employer." It robs man of
his inherent dignity and dehumanizes him. To stress this affront to human dignity, WE only
have to restate the quotation from Prisley, thus: "The mere relation of the master and the
servant never can imply an obligation on the part of the master to take more care of the
servant than he may reasonably be expected to do himself." This is the very selfish doctrine
that provoked the American Civil War which generated so much hatred and drew so much
precious blood on American plains and valleys from 1861 to 1864.
64
"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the
law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the
law killeth; its spirit giveth life."

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

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

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

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

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

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

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

65
faithfully and diligently furnished all the safety measures and contrivances decreed by the
law to protect the employee.

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

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

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

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

xxx xxx xxx

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

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

On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost
among them is the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon
vs. Wainright (372 US 335), Escubedo vs. Illinois (378 US 478), which guaranteed the
accused under custodial investigation his rights to remain silent and to counsel and to be
66
informed of such rights as even as it protects him against the use of force or intimidation to
extort confession from him. These rights are not found in the American Bill of Rights. These
rights are now institutionalized in Section 20, Article IV of the 1973 Constitution. Only the
peace-and-order adherents were critical of the activism of the American Supreme Court led
by Chief Justice Earl Warren.

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

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

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

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

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

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

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

It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a
separate concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of
political question as beyond the ambit of judicial review. There is nothing in both the
American and Philippine Constitutions expressly providing that the power of the courts is
limited by the principle of separation of powers and the doctrine on political questions. There
67
are numerous cases in Philippine jurisprudence applying the doctrines of separation of
powers and political questions and invoking American precedents.

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

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

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

SO ORDERED.

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

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

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

 Separate Opinions

MELENCIO-HERRERA, J., dissenting:

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

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF

DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

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

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

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

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

as the majority rules, both options cannot be exercised simultaneously, and the exercise of
68
one will preclude the exercise of the other. The petitioners had already exercised their option
to come under the Workmen's Compensation Act, and they have already received
compensation payable to them under that Act. Stated differently, the remedy under the
Workmen's Compensation Act had already become a "finished transaction".

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

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

B.

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

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

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

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

Sec. 112. Hawaii

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

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

Compensation is not payable when injury is due to employee's willful intention

to injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

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

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

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by

this Act to an employee

69
 by reason of a personal injury entitling him to compensation

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

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

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

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

3. The original second paragraph of Section 5 provided:

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

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

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

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

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

5. There should be no question but that the original first paragraph of Section 5 of the
Workmen's Compensation Act, formulated in 1927, provided that an injured worker or
employee, or his heirs, if entitled to compensation under the Act, cannot have independent
recourse neither to the Civil Code nor to any other law relative to the liability of the employer.
After 1927, there were occasions when the legislator had the opportunity to amend the first
paragraph of Section 5 such that the remedies under the Act would not be exclusive; yet, the
70
legislator refrained from doing so. That shows the legislatives continuing intent to maintain
the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the
Act itself.

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

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

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

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

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

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

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

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

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

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

GUTIERREZ, JR., J., dissenting:

71
To grant the petition and allow the victims of industrial accidents to file damages suits based
on torts would be a radical innovation not only contrary to the express provisions of the
Workmen's Compensation Act but a departure from the principles evolved in the long history
of workmen's compensation. At the very least, it should be the legislature and not this Court
which should remove the exclusory provision of the Workmen's Compensation Act, a
provision reiterated in the present Labor Code on employees' compensation.

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

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

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

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

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

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

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

The nature of the compensation principle is explained as follows:

72
An appreciation of the nature of the compensation principle is essential to an
understanding of the acts and the cases interpreting them.

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

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those

persons who enjoy the product of a business- whether it be in the form of
goods or services- should ultimately bear the cost of the injuries or deaths that
are incident to the manufacture, preparation and distribution of the product. ...

xxx xxx xxx

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

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

Compensation, then, differs from the conventional damage suit in two important
respects: Fault on the part of either employer or employee is eliminated; and
compensation payable according to a definitely limited schedule is substituted
73
 for damages. All compensation acts alike work these two major changes,
irrespective of how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee

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

The importance of the compromise character of compensation cannot be

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

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

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

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by

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

Article 173 of the labor Code also provides:

74
 ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability
of the State Insurance Fund under this Title shall be exclusive and in place of
all other liabilities of the employer to the employee his dependents or anyone
otherwise entitled to receive damages on behalf of the employee or his
dependents.

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

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

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

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF

DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

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

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

75
By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to
apply to the complaint involved in the instant case. That "special law", in reference to the
complaint, can be no other than the Workmen's Compensation

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

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

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

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

B.

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

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

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

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

Sec. 112. Hawaii

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

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

Compensation is not payable when injury is due to employee's willful intention

to injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

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

76
2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by

this Act to an employee

by reason of a personal injury entitling him to compensation

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

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

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

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

3. The original second paragraph of Section 5 provided:

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

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

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

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

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

77
5. There should be no question but that the original first paragraph of Section 5 of the
Workmen's Compensation Act, formulated in 1927, provided that an injured worker or
employee, or his heirs, if entitled to compensation under the Act, cannot have independent
recourse neither to the Civil Code nor to any other law relative to the liability of the employer.
After 1927, there were occasions when the legislator had the opportunity to amend the first
paragraph of Section 5 such that the remedies under the Act would not be exclusive; yet, the
legislator refrained from doing so. That shows the legislatives continuing intent to maintain
the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the
Act itself.

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

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

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

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

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

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

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

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

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the
Court is unjustifiably legislating.
78
It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the
Complaint.

GUTIERREZ, JR., J., dissenting:

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

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

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

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

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

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

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

compromise. In return for the near certainty of receiving a sum of money fixed by law, the
injured worker gives up the right to subject the employer to a tort suit for huge amounts of
damages. Thus, liability not only disregards the element of fault but it is also a pre-
determined amount based on the wages of the injured worker and in certain cases, the
actual cost of rehabilitation. The worker does not receive the total damages for his pain and
suffering which he could otherwise claim in a civil suit. The employer is required to act swiftly
on compensation claims. An administrative agency supervises the program. And because
79
the overwhelming mass of workingmen are benefited by the compensation system, individual
workers who may want to sue for big amounts of damages must yield to the interests of their
entire working class.

The nature of the compensation principle is explained as follows:

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

understanding of the acts and the cases interpreting them.

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

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those

persons who enjoy the product of a business- whether it be in the form of
goods or services- should ultimately bear the cost of the injuries or deaths that
are incident to the manufacture, preparation and distribution of the product. ...

xxx xxx xxx

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

In order that the compensation principle may operate properly and with fairness
to all parties it is essential that the anticipated accident cost be predictable and
that it be fixed at a figure that will not disrupt too violently the traffic in the
80
 product of the industry affected. Thus predictability and moderateness of cost
are necessary from the broad economic viewpoint. ....

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

Compensation, when regarded from the viewpoint of employer and employee

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

The importance of the compromise character of compensation cannot be

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

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

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

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by

this Act to an employee by reason of a personal injury entitling him to
compensation shall exclude all other rights and remedies accruing to the
81
 employee, his personal representatives, dependents or nearest of kin against
the employer under the Civil Code and other laws because of said injury. ...

Article 173 of the labor Code also provides:

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

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

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

Footnotes

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

E. Strict vs. Liberal Construction

Fetalino vs. Barcelona (GR No. 191890 December 4, 2012)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 191890               December 04, 2012

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

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

DECISION

BRION, J.:

82
Before us is a Petition for Certiorari, Mandamus and Prohibition with Application for Writ of
Preliminary Injunction and/or Temporary Restraining Order, 1 seeking to nullify and enjoin the
implementation of Commission on Elections (Co melee) Resolution No. 8808 issued on
March 30, 2010.2 Republic Act (R.A.) No. 1568, as amended,3 extends a five-year lump sum
gratuity to the chairman or any member of the Comelec upon retirement, after completion of
the term of office; incapacity; death; and resignation after reaching 60 years of age but
before expiration of the term of office. The Comelec en banc determined that former
Comelec Commissioners Evalyn I. Fetalino4 and Amado M. Calderon5 (petitioners) -
whose ad interim appointments were not acted upon by the Commission on Appointments
(CA) and, who were subsequently, not reappointed — are not entitled to the five-year lump
sum gratuity because they did not complete in full the seven year term of office.

The Antecedent Facts

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

Subsequently, on March 15, 2005, the petitioners applied for their retirement benefits and
monthly pension with the Comelec, pursuant to R.A. No. 1568. 9 The Comelec initially
approved the petitioners’ claims pursuant to its Resolution No. 06-1369 10 dated December
11, 2006 whose dispositive portion reads:

The Commission RESOLVED, as it hereby RESOLVES, to approve the recommendation of

Director Alioden D. Dalaig, Law Department, to grant the request of former Comelec
Commissioners Evalyn Fetalino and Amado Calderon for the payment of their retirement
benefits, subject to release of funds for the purpose by the Department of Budget and
Management.11

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

In the presently assailed Resolution No. 8808 16 dated March 30, 2010, the Comelec, on the
basis of the Law Department’s study, completely disapproved the petitioners’ claim for a
lump sum benefit under R.A. No. 1568. The Comelec reasoned out that:

Of these four (4) modes by which the Chairman or a Commissioner shall be entitled to lump
sum benefit, only the first instance (completion of term) is pertinent to the issue we have
formulated above. It is clear that the non-confirmation and non-renewal of appointment is
not a case of resignation or incapacity or death. The question rather is: Can it be considered
as retirement from service for having completed one’s term of office?
83
 xxxx

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

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

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

Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to

APPROVE and ADOPT the study of the Law Department on the payment of retirement
benefits to members of the Commission.

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

Name Position Date of Service

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

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

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

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

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

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

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

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

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

The Petitions
84
The petitioners sought the nullification of Comelec Resolution No. 8808 via a petition
for certiorari under Rule 65 of the Rules of Court. Petitioner intervenor Manuel A. Barcelona,
Jr. later joined the petitioners in questioning the assailed resolution. Like the petitioners,
Barcelona did not complete the full seven-year term as Comelec Commissioner since he
served only from February 12, 2004 to July 10, 2005. The petitioners and Barcelona
commonly argue that:

(1) the non-renewal of their ad interim appointments by the CA until Congress already

adjourned qualifies as retirement under the law and entitles them to the full five-year
lump sum gratuity;

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

(3) they now have a vested right over the full retirement benefits provided by RA No.
1568 in view of the finality of Resolution No. 06- 1369. 19

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

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

The Case for the Respondents

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

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

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

Third, it argues that the petitioners do not have any vested right on their retirement
benefits considering that the retirements benefits afforded by R.A. No. 1568 are purely
85
 gratuitous in nature; they are not similar to pension plans where employee
participation is mandatory so that they acquire vested rights in the pension as part of
their compensation. Without such vested rights, the Comelec concludes that the
petitioners were not deprived of their property without due process of law. 26

The Court’s Ruling

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

Preliminary Considerations

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

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

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

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

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

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

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

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

(3) Death while in the service; and

86
 (4) Resignation after reaching the age of sixty (60) years but before the expiration of
the term of office. In addition, the officer should have rendered not less than twenty
years of service in the government at the time of retirement.

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

We note that the termination of the petitioners’ ad interim appointments could hardly be

considered as incapacity since it was not the result of any disability that rendered them
incapable of performing the duties of a Commissioner. Thus, incapacity is likewise effectively
removed from active consideration.

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

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

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

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

More importantly, we agree with the Solicitor General that the petitioners’ service, if any,
could only amount to tenure in office and not to the term of office contemplated by Section 1
of R.A. No. 1568. Tenure and term of office have well-defined meanings in law and
jurisprudence. As early as 1946, the Court, in Topacio Nueno v. Angeles,34 provided clear
distinctions between these concepts in this wise:
87
The term means the time during which the officer may claim to hold the office as of
right, and fixes the interval after which the several incumbents shall succeed one
another. The tenure represents the term during which the incumbent actually holds
the office. The term of office is not affected by the hold-over. The tenure may be shorter
than the term for reasons within or beyond the power of the incumbent. There is no principle,
law or doctrine by which the term of an office may be extended by reason of war. [emphasis
ours]

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

While we characterized an ad interim appointment in Matibag v. Benipayo36 "as a permanent

appointment that takes effect immediately and can no longer be withdrawn by the President
once the appointee has qualified into office," we have also positively ruled in that case that
"an ad interim appointment that has lapsed by inaction of the Commission on
Appointments does not constitute a term of office."37 We consequently ruled:

However, an ad interim appointment that has lapsed by inaction of the Commission on

Appointments does not constitute a term of office. The period from the time the ad
interim appointment is made to the time it lapses is neither a fixed term nor an
unexpired term. To hold otherwise would mean that the President by his unilateral action
could start and complete the running of a term of office in the COMELEC without the consent
of the Commission on Appointments. This interpretation renders inutile the confirming power
of the Commission on Appointments.38 (emphasis ours; italics supplied)

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

Ortiz v. COMELEC cannot be applied to the present case

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

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

88
A close reading of Ortiz reveals that it does not have the same fact situation as the present
case and is thus not decisive of the present controversy. We note that the impact of the
principle of stare decisis that Barcelona cited as basis is limited; specific judicial decisions
are binding only on the parties to the case and on future parties with similar or
identical factual situations.41 Significantly, the factual situation in Ortiz is totally different so
that its ruling cannot simply be bodily lifted and applied arbitrarily to the present case.

First, in Ortiz, Ortiz’s appointment was a regular appointment made by then President

Marcos, while the petitioners were appointed by President Ramos ad interim or during the
recess of Congress.

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

Third, in Ortiz, the Court addressed the issue of whether a constitutional official, whose

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

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

The petitioners’ appeal to liberal construction of Section 1 of R.A. No. 1568 is misplaced
since the law is clear and unambiguous. We emphasize that the primary modality of
addressing the present case is to look into the provisions of the retirement law itself. Guided
by the rules of statutory construction in this consideration, we find that the language of the
retirement law is clear and unequivocal; no room for construction or interpretation exists, only
the application of the letter of the law.

The application of the clear letter of the retirement law in this case is supported by
jurisprudence. As early as 1981, in the case of In Re: Claim of CAR Judge Noel,42 the Court
strictly adhered to the provisions of R.A. No. 910 and did not allow the judge’s claim of
monthly pension and annuity under the aforementioned law, considering that his length of
government service fell short of the minimum requirements.

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

In Borromeo, the court had occasion to say: "It is axiomatic that retirement laws are liberally
construed and administered in favor of the persons intended to be benefited. All doubts as to
the intent of the law should be resolved in favor of the retiree to achieve its humanitarian
purposes." Such interpretation in favor of the retiree is unfortunately not called for nor
warranted, where the clear intent of the applicable law and rules are demonstrably
against the petitioner's claim. (Paredes v. City of Manila, G.R. No. 88879, March 21,
89
1991). Section 4 is explicit and categorical in its prohibition and, unfortunately for Judge
Reyes, applies squarely to the instant case.44 (emphasis ours; italics supplied)

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

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

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

xxxx

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

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

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

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

In some instances, the lacking element—such as the time to reach an age limit or comply
with length of service is de minimis. It could be that the amount of accumulated leave credits
is tremendous in comparison to the lacking period of time.

90
More important, there must be present an essential factor before an application under
the Plana or Britanico rulings may be granted. The Court allows a making up or
compensating for lack of required age or service only if satisfied that the career of the retiree
was marked by competence, integrity, and dedication to the public service; it was only a
bowing to policy considerations and an acceptance of the realities of political will which
brought him or her to premature retirement. (emphases and italics ours; citation omitted)

In the present case, as previously mentioned, Ortiz cannot be used as authority to justify a

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

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

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

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

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

In the present case, Section 1 of R.A. No. 1568, by its plain terms, is clear that retirement
entails the completion of the term of office. To construe the term "retirement" in Section 1 of
R.A. No. 1568 to include termination of an ad interim appointment is to read into the clear
91
words of the law exemptions that its literal wording does not support; to depart from the
meaning expressed by the words of R.A. No. 1568 is to alter the law and to legislate, and not
to interpret. We would thereby violate the timehonored rule on the constitutional separation of
powers. The words of Justice E. Finley Johnson in the early case of Nicolas v. Alberto52 still
ring true today, viz.:

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

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

The Comelec did not violate the rule on finality of judgments

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

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

Sec. 13. Finality of Decisions or Resolutions. –

a. In ordinary actions, special proceedings, provisional remedies and special reliefs a

decision or resolution of the Commission en banc shall become final and executory after
thirty (30) days from its promulgation.

A simple reading of this provision shows that it only applies to ordinary actions, special
proceedings, provisional remedies and special reliefs. Under Section 5, Rule 1 of the
Comelec Rules of Procedures, ordinary actions refer to election protests, quo
warranto, and appeals from decisions of courts in election protest cases; special
proceedings refer to annulment of permanent list of voters, registration of political parties
and accreditation of citizens’ arms of the Commission; provisional remedies refer to
injunction and/or restraining order; and special reliefs refer to certiorari, prohibition,
mandamus and contempt. Thus, it is clear that the proceedings that precipitated the issuance
of Resolution No. 06-1369 do not fall within the coverage of the actions and proceedings
under Section 13, Rule 18 of the Comelec Rules of Procedure. Thus, the Comelec did not
violate its own rule on finality of judgments.1âwphi1

No denial of due process

We also find no merit in the petitioners’ contention that that they were denied due process of
law when the Comelec issued Resolution No. 8808 without affording them the benefit of a
notice and hearing. We have held in the past that "[t]he essence of due process is simply the
opportunity to be heard, or as applied to administrative proceedings, an opportunity to
92
explain one’s side or an opportunity to seek a reconsideration of the action or ruling
complained of. [Thus, a] formal or trial-type hearing is not at all times and in all instances
essential. The requirements are satisfied where the parties are given fair and reasonable
opportunity to explain their side of the controversy at hand. What is frowned upon is absolute
lack of notice and hearing." 54 In Bautista v. Commission on Elections,55 we emphasized:

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

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

No vested rights over retirement benefits

As a last point, we agree with the Solicitor General that the retirement benefits granted to the
petitioners under Section 1 of R.A. No. 1568 are purely gratuitous in nature; thus, they have
no vested right over these benefits. 58 Retirement benefits as provided under R.A. No. 1568
must be distinguished from a pension which is a form of deferred compensation for services
performed; in a pension, employee participation is mandatory, thus, employees acquire
contractual or vested rights over the pension as part of their compensation. 59 In the absence
of any vested right to the R.A. No. 1568 retirement benefits, the petitioners' due process
argument must perforce fail.

WHEREFORE, premises considered, we hereby DISMISS the petition for certiorari filed by

petitioners Evalyn I. Fetalino and Amado M. Calderon for lack of merit. We likewise DENY
Manuel A. Barcelona, Jr.'s petition for intervention for lack of merit. No costs.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

93
 (On Leave)
MARIA LOURDES P. A. SERENO*
Chief Justice

ANTONIO T. CARPIO**
Acting Chief Justice

(no part due to relationship to party) TERESITA J. LEONARDO-DE

PRESBITERO J. VELASCO, JR. CASTRO
Associate Justice Associate Justice

I join the dissent of J. Reyes

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

MARIANO C. DEL CASTILLO ROBERTO A. ABAD

Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

(with my dissenting position)

JOSE CATRAL MENDOZA
BIENVENIDO L. REYES
Associate Justice
Associate Justice

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

Associate Justice Associate Justice

CERTIFICATION

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

ANTONIO T. CARPIO
Acting Chief Justice

Legaspi vs. Creative Play Corner School (655 Phil 285)

GR No. 169942, January 24, 2011)

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 169942               January 24, 2011

94
BARANGAY DASMARIÑAS thru BARANGAY CAPTAIN MA. ENCARNACION R.
LEGASPI, Petitioner,
vs.
CREATIVE PLAY CORNER SCHOOL, DR. AMADO J. PIAMONTE, REGINA PIAMONTE
TAMBUNTING, CELINE CONCEPCION LEBRON and CECILE CUNA
COLINA, Respondents.

DECISION

DEL CASTILLO, J.:

"Utter disregard of [the rules of procedure] cannot justly be rationalized by harking on the
policy of liberal construction."1

This Petition for Review on Certiorari assails the Resolution2 dated July 21, 2005 of the Court
of Appeals (CA) in CA-G.R. SP No. 89723 denying petitioner’s Second Motion for Extension
of Time to File Petition for Review and consequently dismissing the Petition for Review for
having been filed beyond the period allowed by the Rules of Court. Likewise assailed is the
Resolution3 dated September 29, 2005 denying the Motion for Reconsideration thereto.

Factual Antecedents

On June 28, 2004, petitioner Barangay Dasmariñas thru Ma. Encarnacion R. Legaspi
(Legaspi) filed a Complaint-Affidavit4 before the Office of the Prosecutor of Makati docketed
as I.S. No. 04-F-10389, charging respondent Creative Play Corner School (CPC) and its
alleged owners, respondents Dr. Amado J. Piamonte (Piamonte), Regina Piamonte
Tambunting (Tambunting), Celine Concepcion Lebron (Lebron) and Cecille Cuna Colina
(Colina) with Falsification and Use of Falsified Documents. Petitioner alleged that
respondents falsified and used the Barangay Clearance and Official Receipt purportedly
issued in the name of CPC by the Office of the Barangay Captain of Dasmariñas Village,
Makati City of which Lepaspi was Barangay Captain.

In their Counter-Affidavit,5 Lebron and Colina denied having falsified the subject documents.

They averred that petitioner's assertion that they were owners of CPC is a mere allegation
without proof. They also pointed out that the complaint neither shows any operative act
committed by any of the respondents in perpetrating the crime charged nor identified who
among them actually committed it. They thus insisted that no probable cause exists to
warrant their indictment for the offense charged. For their part, Tambunting and Piamonte in
their respective Counter-Affidavits6 affirmed the arguments made by Lebron and Colina. In
addition, Tambunting alleged that the subject documents were not received by any relevant
office while Piamonte claimed that he had no participation whatsoever in the operation of
CPC. Both of them averred that petitioner was not able to discharge its burden of presenting
sufficient evidence to support the belief that they committed the crime charged.

Ruling of the Prosecutor

In a Resolution7 dated September 29, 2004, Assistant City Prosecutor Carolina Esguerra-

Ochoa (Prosecutor Ochoa) recommended the dismissal of the case because of failure to
establish probable cause. Prosecutor Ochoa noted the absence of any finding from pertinent
police laboratory tests and/or law enforcement agency confirming that the subject documents
were indeed falsified, forged or tampered or if so, that respondents were the ones who
falsified, forged or tampered the same. Prosecutor Ochoa concluded that petitioner failed to
95
show any cause which would engender the belief that respondents are probably guilty of the
offense charged.

City Prosecutor Feliciano Aspi approved the Resolution and released the same on November
4, 2004.

Petitioner thus brought the case before the Department of Justice (DOJ) through a Petition
for Review.

Ruling of the Department of Justice

Petitioner refuted the prosecutor’s finding of lack of probable cause. It claimed that since it
was Legaspi's signature which was forged, she was in the best position to attest to the fact of
falsification and therefore her affidavit speaks volumes. Petitioner likewise argued that the
documents attached to the complaint, i.e. sample format of Barangay Clearances
legitimately issued by the Office of the Barangay Captain showing Legaspi's signature and
Certifications regarding the allegation of tampered official receipt, were sufficient to support a
finding of probable cause. After all, a finding of probable cause does not mean conviction; it
simply manifests that there is sufficient evidence to procure a conviction. It is enough that it is
believed that the act complained of constitutes the offense charged. Thus, petitioner sought
for the reversal and setting aside of the Resolution of the Prosecution Office and prayed for
the issuance of an order directing it to cause the filing of the corresponding criminal
information against respondents.

Respondents, on the other hand, basically reiterated the allegations in their respective
counter-affidavits and maintained that Prosecutor Ochoa did not err in holding that no
probable cause exists against them.

The DOJ, though, after finding that no error which would justify the reversal of the assailed
resolution was committed by Prosecutor Ochoa and that the petition was filed late, dismissed
the Petition for Review through a Resolution 8 dated February 21, 2005. Petitioner filed
a Motion for Reconsideration9 thereto but same was also denied in a Resolution 10 dated April
25, 2005.

Still unsatisfied, petitioner challenged this dismissal through a Petition for Review before the
CA.

Ruling of the Court of Appeals

But before petitioner was able to file its petition, it first sought for an extension of time 11 of 15
days from May 13, 200512 or until May 28, 2005 within which to file the same due to
counsel’s heavy workload. The CA granted the extension in a Resolution 13 dated May 23,
2005. Subsequently, petitioner asked for another extension 14 of five days from May 28, 2005
until June 2, 2005 for the same reason given in its first motion for extension. However,
petitioner filed the petition by mail only on June 7, 2005. 15 Because of these, the CA issued
the following assailed Resolution of July 21, 2005:

In a Resolution dated May 23, 2005, this Court granted petitioner an additional period of
fifteen (15) days from May 13, 2005 or until May 28, 2005 within which to file its petition for
review. However, instead of filing its petition on May 28, 2005, petitioner filed [the] Second
Motion for Extension of Time to File Petition for Review requesting for an additional period of
five days from May 28, 2005 or until June 2, 2005 within which to file its petition for review.
96
Section 4, Rule 43 of the Rules of Court provides that we may grant an additional period of
fifteen (15) days only within which to file the petition for review and no further extension shall
be granted except for the most compelling reason. We do not find petitioner’s reason to be
compelling to grant another extension. In this second motion, petitioner gave the same
reason it gave us in its first motion for extension of time to file petition for review, i.e.
pressures of other equally important pleadings. The original period of fifteen days and the
extension of fifteen days granted are not unreasonable as they add up to thirty days within
which petitioner can prepare, perfect and file its petition.

In addition, records of the case show that petitioner filed its petition for review on June 7,
2005 or five days late from the extension sought from us.

WHEREFORE, premises considered, we hereby DENY the ‘Second Motion for Extension of
Time to File Petition for Review’ and DISMISS the Petition for Review for having been filed
beyond the period allowed by the Revised Rules of Civil Procedure.

SO ORDERED.16

Petitioner filed a Motion for Reconsideration17 explaining therein that aside from the first and
second motions for extension, it also filed a Final Motion for Additional Time to File Petition
for Review18 asking for another five days from June 2, 2005 or until June 7, 2005 within
which to file the petition. This new request for extension was allegedly on account of a
sudden death in the family of the handling lawyer, Atty. Maria Katrina Bote-Veguillas (Atty.
Bote-Veguillas). Thus, petitioner argued that when the petition was filed on June 7, 2005, it
was still within the period of extension prayed for in said final motion for extension. At any
rate, petitioner prayed that the CA set aside rules of technicalities as it claimed that the slight
delay in the filing of the petition did not after all result to the prejudice of respondents. More
importantly, it believed that the merits of the case justify the relaxation of technical rules.

After respondents filed their Comment,19 the CA issued its September 29, 2005

Resolution20 denying the Motion for Reconsideration. The CA ratiocinated that while Section
4, Rule 43 of the Rules of Court allows it a great leeway in the exercise of discretion in
granting an additional period of 15 days for filing a petition for review, said Rules, however,
limit such discretion in the grant of a second extension only to the most compelling reasons
presented by the movant. And, considering that the reason given by petitioner for the
extension sought in its first and second motions for extension, i.e. pressure and large volume
of work of counsel, is, as held by jurisprudence, not an excuse for filing a petition out of time,
the CA was constrained to deny the second motion for extension and consequently, dismiss
the petition for review.

With respect to the final motion for extension, the CA gave three reasons for it to disregard
the same: First, a third extension is not authorized by the Rules of Court. Second, the reason
given for the extension sought was the sudden death of a relative of the handling lawyer Atty.
Bote-Veguillas. However, no details as to the degree of relationship between Atty. Bote-
Veguillas and the deceased was given for the court to determine whether such reason is
indeed compelling. Third, the reason given is not sufficiently persuasive because petitioner’s
counsel of record is Dela Vega Matta Bote-Veguillas and Associates Law Offices and not
Atty. Bote-Veguillas alone. This means that any member of the law firm could have prepared,
perfected and filed the petition for the law firm other than Atty. Bote-Veguillas if the latter has
indeed gone through a personal tragedy. The CA thus saw no reason to grant petitioner's
Motion for Reconsideration.

97
This notwithstanding, petitioner still firmly believes that the case should have been resolved
on the merits and hence, it is now before this Court via this Petition for Review on Certiorari.

Issues

Petitioner advances the following grounds:

The Honorable Court of Appeals gravely erred in dismissing the Petition For Review on a
mere technicality, without considering the substantive grounds on which the Petition For
Review was based.

The Honorable Court of Appeals gravely erred in not considering that respondents’ rights had
not been prejudiced in any way by the short delay of ten days on account of the requests for
extension of time to file Petition for Review.

The Honorable Court of Appeals gravely erred when it dismissed the Petition for Review
despite the clear and categorical existence of probable cause that would justify the filing of
criminal cases against the respondents.21

Petitioner’s Arguments

Petitioner harps on the policy of liberal construction embodied in Section 6, Rule 1 of the
Rules of Court which provides that the rules shall be liberally construed in order to promote
their object and to assist the parties in obtaining just, speedy and inexpensive determination
of every action. It cites several jurisprudence 22 where this Court set aside technical rules to
give way to the merits of the case. Petitioner notes that the CA in dismissing the petition
merely focused on the technical infirmity and did not even bother to take a look at its
substance. Petitioner believes that if only the CA examined the records of the case, it would
find that the substantial merits of the case are enough to override technical deficiencies. It
likewise argues that Cosmo Entertainment Management, Inc. v. La Ville Commercial
Corporation23 relied upon by respondents does not apply because although the Court
dismissed the appeal in said case for having been filed beyond the reglementary period and
did not find "pressure of work on equally important cases" as compelling reason to grant an
extension of time to file the same, still the merits of the case were nevertheless examined
and considered.

Moreover, petitioner avers that even if the petition was filed 10 days beyond the extended
period, respondents have not been prejudiced in any way by such delay as they were free
and not detained. Petitioner also posits that since it received the CA’s resolution denying its
Second Motion for Extension on July 27, 2005 or after it has filed the Petition for Review and
paid the corresponding docket fees, such belated filing of the petition has already become
moot and the more equitable action of the CA should have been to admit the petition.

Lastly, petitioner believes that there is probable cause for the charge of falsification and use
of falsified documents against respondents and that it was able to discharge its burden of
establishing the same.1avvphi1

Respondents’ Arguments

Respondents find no error on the part of the CA in denying petitioner’s Second Motion for
Extension and in dismissing the petition. They cited Cosmo Entertainment Management, Inc.
v. La Ville Commercial Corporation24 wherein this Court held that "pressure of work on
98
equally important cases" is not a compelling reason to merit an extension of time. Besides,
even assuming that petitioner’s Second Motion for Extension was granted, respondents point
out that the petition was nevertheless filed beyond the period requested. With respect to
petitioner's Final Motion for Extension, the CA has already adequately explained the reasons
why it cannot consider the same.

Moreover, respondents call this Court’s attention to petitioner’s repeated transgression of

technical rules: first, before the DOJ where it belatedly filed thereat its petition for review and
again, before the CA. To respondents, petitioner's utter disregard of the rules should not be
countenanced and hence the Court must not excuse it from complying therewith.

Respondents also put forward the principle that the determination of probable cause is an
executive function and that as a matter of sound judicial policy, courts should refrain from
interfering in the conduct of investigation. It is precisely because of this principle that the DOJ
has a wide latitude of discretion in the determination of what constitutes sufficient evidence to
establish probable cause. This means that petitioner can assail the decision of the
prosecuting arm of the government only if the same is tainted with grave abuse of discretion.
In this case, however, it is clear that there is no grave abuse of discretion. As petitioner was
not able to point out any operative act committed by any of the respondents in perpetrating
the crime charged or when and who among them perpetrated it, the CA, therefore, was
correct in dismissing the petition. Finally, respondents argue that the issues raised are
factual and hence cannot be passed upon by this Court in this Petition for Review on
Certiorari. In sum, respondents pray that the present petition be dismissed and the assailed
CA resolutions affirmed.

Our Ruling

We deny the petition.

Section 4, Rule 43 of the Rules of Court provides:

Section 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of
the award, judgment, final order or resolution, or from the date of its last publication, if
publication is required by law for its effectivity, or of the denial of petitioner’s motion for new
trial or reconsideration duly filed in accordance with the governing law of the court or
agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper
motion and the payment of the full amount of the docket fee before the expiration of
the reglementary period, the Court of Appeals may grant an additional period of
fifteen (15) days only within which to file the petition for review. No further extension
shall be granted except for the most compelling reason and in no case to exceed
fifteen (15) days. (Emphasis supplied.)

From the above, it is clear that the CA, after it has already allowed petitioner an extension of
15 days within which to file a petition for review, may only grant a further extension when
presented with the most compelling reason but same is limited only to a period of 15 days.
Thus, when the CA denied petitioner’s Second Motion for Extension of five days, it was
merely following the abovementioned provision of the rules after it found the reason for the
second extension as not compelling. And, considering that the CA has already sufficiently
explained how it was able to arrive at the conclusion that there is no compelling reason for
such second extension, we deem it unnecessary to repeat the same especially since we are
in total agreement with the ratiocination of the CA.

99
As to petitioner’s invocation of liberal application of the rules, we cannot heed the same. "It is
true that litigation is not a game of technicalities and that the rules of procedure should not be
strictly followed in the interest of substantial justice. However, it does not mean that the
Rules of Court may be ignored at will. It bears emphasizing that procedural rules should not
be belittled or dismissed simply because their non-observance may have resulted in
prejudice to a party’s substantial rights. Like all rules, they are required to be followed except
only for the most persuasive of reasons."25

While petitioner cites several jurisprudence wherein this Court set aside procedural rules, an
imperative existed in those cases that warranted a liberal application of the rules. We have
examined the records of this case, however, and we are convinced that the present case is
not attended by such an imperative that justifies relaxation of the rules. Moreover, as pointed
out by respondents, petitioner had not only once transgressed procedural rules. This Court
has previously held that "[t]echnical rules may be relaxed only for the furtherance of justice
and to benefit the deserving."26 Petitioner’s low regard of procedural rules only shows that it
is undeserving of their relaxation.

Also, we cannot subscribe to petitioner’s argument that considering that no prejudice was
caused to respondents by the belated filing of the petition as the latter were free and not
detained hence, the CA should have just disregarded such belated filing. Likewise, the filing
of the petition and payment of the corresponding docket fees prior to petitioner’s receipt of
the CA’s resolution denying its Second Motion for Extension does not, contrary to petitioner’s
position, render such belated filing moot. If such would be the case, the delay in the delivery
of court resolutions caused by the limitations of postal service would serve as a convenient
cover up for a pleading or a motion’s belated filing. This would be contrary to the aim of
procedural rules which is to secure an effective and expeditious administration of justice.

Besides, even if the CA ignores the petition’s belated filing, the same would have been
dismissed for being an improper remedy. It has been held that "[t]he remedy of a party
desiring to elevate to the appellate court an adverse resolution of the Secretary of Justice is
a petition for certiorari under Rule 65. A Rule 43 petition for review is a wrong mode of
appeal."27

With the foregoing, it is clear that the present petition is unworthy of this Court’s attention and
should be denied.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed Resolutions
dated July 21, 2005 and September 29, 2005 of the Court of Appeals in CA-G.R. SP No.
89723 are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

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

100
 Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

101
102
 People vs. Veneracion (319 Phil 364)
GR No. 11987-88, October 12, 1985

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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

THE PEOPLE OF THE PHILIPPINES, petitioner,

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

KAPUNAN, J.:

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

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

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

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

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

That on or about August 2, 1994, in the City of Manila, Philippines, the said
accused, conspiring and confederating together with one alias "LANDO" and
other persons whose true names, identifies and present whereabouts are still
103
 unknown and helping one another, with treachery, taking advantage of their
superior strength and nocturnity, and ignominy, and with the use of force and
violence, that is, by taking ANGEL ALQUIZA y LAGMAN into a warehouse,
covering her mouth, slashing her vagina, hitting her head with a thick piece of
wood and stabbing her neck did then and there wilfully, unlawfully and
feloniously have carnal knowledge of the person of said ANGEL ALQUIZA y
LAGMAN, a minor, seven (7) years of age, against the latter's will and consent
and on said occasion the said ABUNDIO LAGUNDAY, a.k.a. "LANDO" and
others, caused her fatal injuries which were the direct cause of her death
immediately thereafter.

CONTRARY TO LAW.

Subsequently thereafter, Ernesto Cordero y Maristela, a.k.a. "Booster," of 1198

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

That on or about the 2nd day of August, 1994, in the City of

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

CONTRARY TO LAW.

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

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

After trial and presentation of the evidence of the prosecution and the defense, the trial court
rendered a decision2 on January 31, 1995 finding the defendants Henry Lagarto y Petilla and
104
Ernesto Cordero y Maristela guilty beyond reasonable doubt of the crime of Rape with
Homicide and sentenced both accused with the "penalty of reclusion perpetua with all the
accessories provided for by law."3 Disagreeing with the sentence imposed, the City
Prosecutor of Manila on February 8, 1995, filed a Motion for Reconsideration, praying that
the Decision be "modified in that the penalty of death be imposed" against respondents
Lagarto and Cordero, in place of the original penalty (reclusion perpetua). Refusing to act on
the merits of the said Motion for Reconsideration, respondent Judge, on February 10, 1995,
issued an Order denying the same for lack of jurisdiction. The pertinent portion reads:

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

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

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

SO ORDERED.

Hence, the instant petition.

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

We find for petitioner.

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

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

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

105
 Sec. 11. Article 335 of the same Code is hereby amended to read as follows:

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

1. By using force or intimidation.

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

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

The crime of rape shall be punished by reclusion perpetua.

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

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

When the rape is attempted or frustrated and a homicide is committed by

reason or on the occasion thereof, the penalty shall be reclusion perpetua to
death.

When by reason or on the occasion of the rape, a homicide is committed, the

penalty shall be death. . . .6

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

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

[W]hen . . . private opinions not only form part of their decision but constitute a
decisive factor in arriving at a conclusion and determination of a case or the
penalty imposed, resulting in an illegality and reversible error, then we are
constrained to state our opinion, not only to correct the error but for the
guidance of the courts. We have no quarrel with the trial judge or with anyone
else, layman or jurist as to the wisdom or folly of the death penalty. Today there
are quite a number of people who honestly believe that the supreme penalty is
106
 either morally wrong or unwise or ineffective. However, as long as that penalty
remains in the statute books, and as long as our criminal law provides for its
imposition in certain cases, it is the duty of judicial officers to respect and apply
the law regardless of their private opinions. It is a well settled rule that the
courts are not concerned with the wisdom, efficacy or morality of laws. That
question falls exclusively within the province of the Legislature which enacts
them and the Chief Executive who approves or vetoes them. The only function
of the judiciary is to interpret the laws and, if not in disharmony with the
Constitution, to apply them. And for the guidance of the members of the
judiciary we feel it incumbent upon us to state that while they as citizens or as
judges may regard a certain law as harsh, unwise or morally wrong, and may
recommend to the authority or department concerned, its amendment,
modification, or repeal, still, as long as said law is in force, they must apply it
and give it effect as decreed by the law-making body. 8

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

WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED. The case is

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

SO ORDERED.

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

Separate Opinions

NARVASA, C.J., concurring:

I concur with the conclusions and dispositions set forth in the opinion of Mr. Justice Kapunan.
I draw up this separate opinion merely to address a question which may be raised in relation
to the appeal taken by the accused from the judgment of conviction rendered by respondent
Judge. It will be recalled that respondent Judge declined to act on the merits of motion for
reconsideration filed by the prosecution — praying that his decision sentencing both accused
to suffer reclusion perpetua be "modified in that the penalty of death be imposed" — for the
reason that since the accused had already "complied with the legal requirements for the
perfection of an appeal," the Trial Court had lost jurisdiction over the cases. It was precisely
107
that refusal that prompted the institution in this Court of the special civil action of certiorari at
bar.

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

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

REGALADO, J., concurring:

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

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

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

Also, these reglementary requisites for consolidation require two or more ordinary civil or

criminal actions, and not a special civil action in combination with the former. The impropriety
of the latter situation is specially underscored where the resolution of the controversy in the
special civil action is a pre-judicial matter in the appealed criminal case. These
108
considerations apply to both the trial courts in the exercise of original jurisdiction and to the
appellate courts in the implementation of revisory power.

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

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

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

Nor is that all. Appellants have come to this Court through the medium of an appeal by writ of
error from a judgment of the trial court imposing the wrong penalty of reclusion perpetua. If
the mistake in the penalty is now rectified with the death sentence being substituted therefor,
as undeniably it should be, then the case will consequently be before this Court on automatic
review. That provision calling for automatic review when capital punishment is
inflicted7 serves equally the interests of both the defense and the prosecution through
protective features established by case law.

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

The automatic review of the death sentence ensures the right of the condemned person to
procedural due process on appeal, and safeguards the interests of the State by exacting the
109
corresponding penal sanction decreed by law. The disposition adopted by the Court in this
case subserves the ends of these fundamental policies, hence my unqualified assent thereto.

VITUG, J., dissenting:

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

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

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

Davide, Jr., J. concurs.

Separate Opinions

NARVASA, C.J., concurring:

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

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

The judgment in question is void, and has been annulled and set aside by this Court,
because rendered "without or in excess of . . . jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction," in so far as it imposes, in light of the facts found to have
been proven beyond reasonable doubt, a penalty other than that peremptorily prescribed by
law. The judgment being void, the appeal attempted to be taken therefrom is inefficacious.
The Trial Court may not be deemed to have thereby lost jurisdiction of the cases. It cannot
thus be said that it is being required by this Court to act in cases over which it has already
lost jurisdiction. There exists no legal obstacle to the remand of the cases to it and its
modification of the judgment so that it may comply with the mandatory prescription of the law.
110
REGALADO, J., concurring:

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

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

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

Also, these reglementary requisites for consolidation require two or more ordinary civil or

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

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

It would even be worse if, as suggested, this certiorari action should be dismissed and the
appellate review be conducted with the judgment containing an unauthorized penalty as the
basis therefor, with this Court closing its eyes to such a flagrant mistake. This time the cart
precedes the horse. True, an appeal throws the judgment a quo open for review and the
Court may raise the penalty to the appropriate punitive level. But, as the People pertinently
observes, what is there to prevent appellants from withdrawing their appeal upon sensing
111
from the arguments that, instead of the acquittal or reduced penalty aspired for, the ultimate
denouement would be the death sentence?

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

Nor is that all. Appellants have come to this Court through the medium of an appeal by writ of
error from a judgment of the trial court imposing the wrong penalty of reclusion perpetua. If
the mistake in the penalty is now rectified with the death sentence being substituted therefor,
as undeniably it should be, then the case will consequently be before this Court on automatic
review. That provision calling for automatic review when capital punishment is
inflicted7 serves equally the interests of both the defense and the prosecution through
protective features established by case law.

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

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

VITUG, J., dissenting:

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

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

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

Davide, Jr., J. concurs.

112
F. What is Judicial Legislation?

Floresca vs. Philex Mining

(220 Phil 533, GR No. L-30642 April 30, 1985)

113
114
Fort Bonifacio vs. Commissioner of Internal Revenue
(GR No. 173425 September 4, 2012)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 173425               September 4, 2012

FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner,

vs.
COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER,
REVENUE DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL
REVENUE, Respondents.

DECISION

DEL CASTILLO, J.:

Courts cannot limit the application or coverage of a law, nor can it impose conditions not
provided therein. To do so constitutes judicial legislation.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the July 7,
2006 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 61436, the dispositive
portion of which reads.

WHEREFORE, the instant petition is hereby DISMISSED. ACCORDINGLY, the Decision

dated October 12, 2000 of the Court of Tax Appeals in CTA Case No. 5735, denying
petitioner’s claim for refund in the amount of Three Hundred Fifty-Nine Million Six Hundred
Fifty-Two Thousand Nine Pesos and Forty-Seven Centavos (₱ 359,652,009.47), is
hereby AFFIRMED.

SO ORDERED.2

Factual Antecedents

Petitioner Fort Bonifacio Development Corporation (FBDC) is a duly registered domestic

corporation engaged in the development and sale of real property. 3 The Bases Conversion
Development Authority (BCDA), a wholly owned government corporation created under
Republic Act (RA) No. 7227,4 owns 45% of petitioner’s issued and outstanding capital stock;
while the Bonifacio Land Corporation, a consortium of private domestic corporations, owns
the remaining 55%.5

On February 8, 1995, by virtue of RA 7227 and Executive Order No. 40, 6 dated December 8,
1992, petitioner purchased from the national government a portion of the Fort Bonifacio
reservation, now known as the Fort Bonifacio Global City (Global City). 7

On January 1, 1996, RA 77168 restructured the Value-Added Tax (VAT) system by amending

certain provisions of the old National Internal Revenue Code (NIRC). RA 7716 extended the
115
coverage of VAT to real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business.9

On September 19, 1996, petitioner submitted to the Bureau of Internal Revenue (BIR)
Revenue District No. 44, Taguig and Pateros, an inventory of all its real properties, the book
value of which aggregated ₱ 71,227,503,200. 10 Based on this value, petitioner claimed that it
is entitled to a transitional input tax credit of ₱ 5,698,200,256, 11 pursuant to Section 10512 of
the old NIRC.

In October 1996, petitioner started selling Global City lots to interested buyers. 13

For the first quarter of 1997, petitioner generated a total amount of ₱ 3,685,356,539.50 from
its sales and lease of lots, on which the output VAT payable was ₱
368,535,653.95.14 Petitioner paid the output VAT by making cash payments to the BIR
totalling ₱ 359,652,009.47 and crediting its unutilized input tax credit on purchases of goods
and services of ₱ 8,883,644.48.15

Realizing that its transitional input tax credit was not applied in computing its output VAT for
the first quarter of 1997, petitioner on November 17, 1998 filed with the BIR a claim for
refund of the amount of ₱ 359,652,009.47 erroneously paid as output VAT for the said
period.16

Ruling of the Court of Tax Appeals

On February 24, 1999, due to the inaction of the respondent Commissioner of Internal
Revenue (CIR), petitioner elevated the matter to the Court of Tax Appeals (CTA) via a
Petition for Review.17

In opposing the claim for refund, respondents interposed the following special and affirmative
defenses:

xxxx

8. Under Revenue Regulations No. 7-95, implementing Section 105 of the Tax Code as
amended by E.O. 273, the basis of the presumptive input tax, in the case of real estate
dealers, is the improvements, such as buildings, roads, drainage systems, and other similar
structures, constructed on or after January 1, 1988.

9. Petitioner, by submitting its inventory listing of real properties only on September 19, 1996,
failed to comply with the aforesaid revenue regulations mandating that for purposes of
availing the presumptive input tax credits under its Transitory Provisions, "an inventory as of
December 31, 1995, of such goods or properties and improvements showing the quantity,
description, and amount should be filed with the RDO no later than January 31, 1996. x x x" 18

On October 12, 2000, the CTA denied petitioner’s claim for refund. According to the CTA,
"the benefit of transitional input tax credit comes with the condition that business taxes
should have been paid first." 19 In this case, since petitioner acquired the Global City property
under a VAT-free sale transaction, it cannot avail of the transitional input tax credit. 20 The
CTA likewise pointed out that under Revenue Regulations No. (RR) 7-95, implementing
Section 105 of the old NIRC, the 8% transitional input tax credit should be based on the
value of the improvements on land such as buildings, roads, drainage system and other

116
similar structures, constructed on or after January 1, 1998, and not on the book value of the
real property.21 Thus, the CTA disposed of the case in this manner:

WHEREFORE, in view of all the foregoing, the claim for refund representing alleged overpaid
value-added tax covering the first quarter of 1997 is hereby DENIED for lack of merit.

SO ORDERED.22

Ruling of the Court of Appeals

Aggrieved, petitioner filed a Petition for Review 23 under Rule 43 of the Rules of Court before
the CA.

On July 7, 2006, the CA affirmed the decision of the CTA. The CA agreed that petitioner is
not entitled to the 8% transitional input tax credit since it did not pay any VAT when it
purchased the Global City property.24 The CA opined that transitional input tax credit is
allowed only when business taxes have been paid and passed-on as part of the purchase
price.25 In arriving at this conclusion, the CA relied heavily on the historical background of
transitional input tax credit.26 As to the validity of RR 7-95, which limited the 8% transitional
input tax to the value of the improvements on the land, the CA said that it is entitled to great
weight as it was issued pursuant to Section 245 27 of the old NIRC.28

Issues

Hence, the instant petition with the principal issue of whether petitioner is entitled to a refund
of ₱ 359,652,009.47 erroneously paid as output VAT for the first quarter of 1997, the
resolution of which depends on:

3.05.a. Whether Revenue Regulations No. 6-97 effectively repealed or repudiated Revenue
Regulations No. 7-95 insofar as the latter limited the transitional/presumptive input tax credit
which may be claimed under Section 105 of the National Internal Revenue Code to the
"improvements" on real properties.

3.05.b. Whether Revenue Regulations No. 7-95 is a valid implementation of Section 105 of
the National Internal Revenue Code.

3.05.c. Whether the issuance of Revenue Regulations No. 7-95 by the Bureau of Internal
Revenue, and declaration of validity of said Regulations by the Court of Tax Appeals and
Court of Appeals, were in violation of the fundamental principle of separation of powers.

3.05.d. Whether there is basis and necessity to interpret and construe the provisions of
Section 105 of the National Internal Revenue Code.

3.05.e. Whether there must have been previous payment of business tax by petitioner on its
land before it may claim the input tax credit granted by Section 105 of the National Internal
Revenue Code.

3.05.f. Whether the Court of Appeals and Court of Tax Appeals merely speculated on the
purpose of the transitional/presumptive input tax provided for in Section 105 of the National
Internal Revenue Code.

117
3.05.g. Whether the economic and social objectives in the acquisition of the subject property
by petitioner from the Government should be taken into consideration. 29

Petitioner’s Arguments

Petitioner claims that it is entitled to recover the amount of ₱ 359,652,009.47 erroneously

paid as output VAT for the first quarter of 1997 since its transitional input tax credit of ₱
5,698,200,256 is more than sufficient to cover its output VAT liability for the said period. 30

Petitioner assails the pronouncement of the CA that prior payment of taxes is required to
avail of the 8% transitional input tax credit.31 Petitioner contends that there is nothing in
Section 105 of the old NIRC to support such conclusion. 32

Petitioner further argues that RR 7-95, which limited the 8% transitional input tax credit to the
value of the improvements on the land, is invalid because it goes against the express
provision of Section 105 of the old NIRC, in relation to Section 100 33 of the same Code, as
amended by RA 7716.34

Respondents’ Arguments

Respondents, on the other hand, maintain that petitioner is not entitled to a transitional input
tax credit because no taxes were paid in the acquisition of the Global City
property.35 Respondents assert that prior payment of taxes is inherent in the nature of a
transitional input tax.36 Regarding RR 7-95, respondents insist that it is valid because it was
issued by the Secretary of Finance, who is mandated by law to promulgate all needful rules
and regulations for the implementation of Section 105 of the old NIRC. 37

Our Ruling

The petition is meritorious.

The issues before us are no longer new or novel as these have been resolved in the related
case of Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue.38

Prior payment of taxes is not required

for a taxpayer to avail of the 8%
transitional input tax credit

Section 105 of the old NIRC reads:

SEC. 105. Transitional input tax credits. – A person who becomes liable to value-added tax
or any person who elects to be a VAT-registered person shall, subject to the filing of an
inventory as prescribed by regulations, be allowed input tax on his beginning inventory of
goods, materials and supplies equivalent to 8% of the value of such inventory or the actual
value-added tax paid on such goods, materials and supplies, whichever is higher, which shall
be creditable against the output tax. (Emphasis supplied.)

Contrary to the view of the CTA and the CA, there is nothing in the above-quoted provision to
indicate that prior payment of taxes is necessary for the availment of the 8% transitional input
tax credit. Obviously, all that is required is for the taxpayer to file a beginning inventory with
the BIR.

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To require prior payment of taxes, as proposed in the Dissent is not only tantamount to
judicial legislation but would also render nugatory the provision in Section 105 of the old
NIRC that the transitional input tax credit shall be "8% of the value of [the beginning]
inventory or the actual [VAT] paid on such goods, materials and supplies, whichever is
higher" because the actual VAT (now 12%) paid on the goods, materials, and supplies would
always be higher than the 8% (now 2%) of the beginning inventory which, following the view
of Justice Carpio, would have to exclude all goods, materials, and supplies where no taxes
were paid. Clearly, limiting the value of the beginning inventory only to goods, materials, and
supplies, where prior taxes were paid, was not the intention of the law. Otherwise, it would
have specifically stated that the beginning inventory excludes goods, materials, and supplies
where no taxes were paid. As retired Justice Consuelo Ynares-Santiago has pointed out in
her Concurring Opinion in the earlier case of Fort Bonifacio:

If the intent of the law were to limit the input tax to cases where actual VAT was paid, it could
have simply said that the tax base shall be the actual value-added tax paid. Instead, the law
as framed contemplates a situation where a transitional input tax credit is claimed even if
there was no actual payment of VAT in the underlying transaction. In such cases, the tax
base used shall be the value of the beginning inventory of goods, materials and supplies. 39

Moreover, prior payment of taxes is not required to avail of the transitional input tax credit
because it is not a tax refund per se but a tax credit. Tax credit is not synonymous to tax
refund. Tax refund is defined as the money that a taxpayer overpaid and is thus returned by
the taxing authority.40 Tax credit, on the other hand, is an amount subtracted directly from
one’s total tax liability.41 It is any amount given to a taxpayer as a subsidy, a refund, or an
incentive to encourage investment. Thus, unlike a tax refund, prior payment of taxes is not a
prerequisite to avail of a tax credit. In fact, in Commissioner of Internal Revenue v. Central
Luzon Drug Corp.,42 we declared that prior payment of taxes is not required in order to avail
of a tax credit.43 Pertinent portions of the Decision read:

While a tax liability is essential to the availment or use of any tax credit, prior tax payments
are not. On the contrary, for the existence or grant solely of such credit, neither a tax liability
nor a prior tax payment is needed. The Tax Code is in fact replete with provisions granting or
allowing tax credits, even though no taxes have been previously paid.

For example, in computing the estate tax due, Section 86(E) allows a tax credit -- subject to
certain limitations -- for estate taxes paid to a foreign country. Also found in Section 101(C) is
a similar provision for donor’s taxes -- again when paid to a foreign country -- in computing
for the donor’s tax due. The tax credits in both instances allude to the prior payment of taxes,
even if not made to our government.

Under Section 110, a VAT (Value-Added Tax) - registered person engaging in transactions --
whether or not subject to the VAT -- is also allowed a tax credit that includes a ratable portion
of any input tax not directly attributable to either activity. This input tax may either be the VAT
on the purchase or importation of goods or services that is merely due from -- not necessarily
paid by -- such VAT-registered person in the course of trade or business; or the transitional
input tax determined in accordance with Section 111(A). The latter type may in fact be an
amount equivalent to only eight percent of the value of a VAT-registered person’s beginning
inventory of goods, materials and supplies, when such amount -- as computed -- is higher
than the actual VAT paid on the said items. Clearly from this provision, the tax credit refers to
an input tax that is either due only or given a value by mere comparison with the VAT
actually paid -- then later prorated. No tax is actually paid prior to the availment of such
credit.
119
In Section 111(B), a one and a half percent input tax credit that is merely presumptive is
allowed. For the purchase of primary agricultural products used as inputs -- either in the
processing of sardines, mackerel and milk, or in the manufacture of refined sugar and
cooking oil -- and for the contract price of public works contracts entered into with the
government, again, no prior tax payments are needed for the use of the tax credit.

More important, a VAT-registered person whose sales are zero-rated or effectively zero-
rated may, under Section 112(A), apply for the issuance of a tax credit certificate for the
amount of creditable input taxes merely due -- again not necessarily paid to -- the
government and attributable to such sales, to the extent that the input taxes have not been
applied against output taxes. Where a taxpayer is engaged in zero-rated or effectively zero-
rated sales and also in taxable or exempt sales, the amount of creditable input taxes due that
are not directly and entirely attributable to any one of these transactions shall be
proportionately allocated on the basis of the volume of sales. Indeed, in availing of such tax
credit for VAT purposes, this provision -- as well as the one earlier mentioned -- shows that
the prior payment of taxes is not a requisite.

It may be argued that Section 28(B)(5)(b) of the Tax Code is another illustration of a tax
credit allowed, even though no prior tax payments are not required. Specifically, in this
provision, the imposition of a final withholding tax rate on cash and/or property dividends
received by a nonresident foreign corporation from a domestic corporation is subjected to the
condition that a foreign tax credit will be given by the domiciliary country in an amount
equivalent to taxes that are merely deemed paid. Although true, this provision actually refers
to the tax credit as a condition only for the imposition of a lower tax rate, not as a deduction
from the corresponding tax liability. Besides, it is not our government but the domiciliary
country that credits against the income tax payable to the latter by the foreign corporation,
the tax to be foregone or spared.

In contrast, Section 34(C)(3), in relation to Section 34(C)(7)(b), categorically allows as

credits, against the income tax imposable under Title II, the amount of income taxes merely
incurred -- not necessarily paid -- by a domestic corporation during a taxable year in any
foreign country. Moreover, Section 34(C)(5) provides that for such taxes incurred but not
paid, a tax credit may be allowed, subject to the condition precedent that the taxpayer shall
simply give a bond with sureties satisfactory to and approved by petitioner, in such sum as
may be required; and further conditioned upon payment by the taxpayer of any tax found
due, upon petitioner’s redetermination of it.

In addition to the above-cited provisions in the Tax Code, there are also tax treaties and
special laws that grant or allow tax credits, even though no prior tax payments have been
made.

Under the treaties in which the tax credit method is used as a relief to avoid double taxation,
income that is taxed in the state of source is also taxable in the state of residence, but the tax
paid in the former is merely allowed as a credit against the tax levied in the latter. Apparently,
payment is made to the state of source, not the state of residence. No tax, therefore, has
been previously paid to the latter.

Under special laws that particularly affect businesses, there can also be tax credit incentives.
To illustrate, the incentives provided for in Article 48 of Presidential Decree No. (PD) 1789,
as amended by Batas Pambansa Blg. (BP) 391, include tax credits equivalent to either five
percent of the net value earned, or five or ten percent of the net local content of export. In

120
order to avail of such credits under the said law and still achieve its objectives, no prior tax
payments are necessary.

From all the foregoing instances, it is evident that prior tax payments are not indispensable to
the availment of a tax credit. Thus, the CA correctly held that the availment under RA 7432
did not require prior tax payments by private establishments concerned. However, we do not
agree with its finding that the carry-over of tax credits under the said special law to
succeeding taxable periods, and even their application against internal revenue taxes, did
not necessitate the existence of a tax liability.

The examples above show that a tax liability is certainly important in the availment or use,
not the existence or grant, of a tax credit. Regarding this matter, a private establishment
reporting a net loss in its financial statements is no different from another that presents a net
income. Both are entitled to the tax credit provided for under RA 7432, since the law itself
accords that unconditional benefit. However, for the losing establishment to immediately
apply such credit, where no tax is due, will be an improvident usance. 44

In this case, when petitioner realized that its transitional input tax credit was not applied in
computing its output VAT for the 1st quarter of 1997, it filed a claim for refund to recover the
output VAT it erroneously or excessively paid for the 1st quarter of 1997. In filing a claim for
tax refund, petitioner is simply applying its transitional input tax credit against the output VAT
it has paid. Hence, it is merely availing of the tax credit incentive given by law to first time
VAT taxpayers. As we have said in the earlier case of Fort Bonifacio, the provision on
transitional input tax credit was enacted to benefit first time VAT taxpayers by mitigating the
impact of VAT on the taxpayer.45 Thus, contrary to the view of Justice Carpio, the granting of
a transitional input tax credit in favor of petitioner, which would be paid out of the general
fund of the government, would be an appropriation authorized by law, specifically Section
105 of the old NIRC.

The history of the transitional input tax credit likewise does not support the ruling of the CTA
and CA. In our Decision dated April 2, 2009, in the related case of Fort Bonifacio, we
explained that:

If indeed the transitional input tax credit is integrally related to previously paid sales taxes,
the purported causal link between those two would have been nonetheless extinguished long
ago. Yet Congress has reenacted the transitional input tax credit several times; that fact
simply belies the absence of any relationship between such tax credit and the long-abolished
sales taxes.

Obviously then, the purpose behind the transitional input tax credit is not confined to the
transition from sales tax to VAT.

There is hardly any constricted definition of "transitional" that will limit its possible meaning to
the shift from the sales tax regime to the VAT regime. Indeed, it could also allude to the
transition one undergoes from not being a VAT-registered person to becoming a VAT-
registered person. Such transition does not take place merely by operation of law, E.O. No.
273 or Rep. Act No. 7716 in particular. It could also occur when one decides to start a
business. Section 105 states that the transitional input tax credits become available either to
(1) a person who becomes liable to VAT; or (2) any person who elects to be VAT-registered.
The clear language of the law entitles new trades or businesses to avail of the tax credit once
they become VAT-registered. The transitional input tax credit, whether under the Old NIRC
or the New NIRC, may be claimed by a newly-VAT registered person such as when a
121
business as it commences operations. If we view the matter from the perspective of a
starting entrepreneur, greater clarity emerges on the continued utility of the transitional input
tax credit.

Following the theory of the CTA, the new enterprise should be able to claim the transitional
input tax credit because it has presumably paid taxes, VAT in particular, in the purchase of
the goods, materials and supplies in its beginning inventory. Consequently, as the CTA held
below, if the new enterprise has not paid VAT in its purchases of such goods, materials and
supplies, then it should not be able to claim the tax credit. However, it is not always true that
the acquisition of such goods, materials and supplies entail the payment of taxes on the part
of the new business. In fact, this could occur as a matter of course by virtue of the operation
of various provisions of the NIRC, and not only on account of a specially legislated
exemption.

Let us cite a few examples drawn from the New NIRC. If the goods or properties are not
acquired from a person in the course of trade or business, the transaction would not be
subject to VAT under Section 105. The sale would be subject to capital gains taxes under
Section 24 (D), but since capital gains is a tax on passive income it is the seller, not the
buyer, who generally would shoulder the tax.

If the goods or properties are acquired through donation, the acquisition would not be subject
to VAT but to donor’s tax under Section 98 instead. It is the donor who would be liable to pay
the donor’s tax, and the donation would be exempt if the donor’s total net gifts during the
calendar year does not exceed ₱ 100,000.00.

If the goods or properties are acquired through testate or intestate succession, the transfer
would not be subject to VAT but liable instead for estate tax under Title III of the New NIRC.
If the net estate does not exceed ₱ 200,000.00, no estate tax would be assessed.

The interpretation proffered by the CTA would exclude goods and properties which are
acquired through sale not in the ordinary course of trade or business, donation or through
succession, from the beginning inventory on which the transitional input tax credit is based.
This prospect all but highlights the ultimate absurdity of the respondents’ position. Again,
nothing in the Old NIRC (or even the New NIRC) speaks of such a possibility or qualifies the
previous payment of VAT or any other taxes on the goods, materials and supplies as a pre-
requisite for inclusion in the beginning inventory.

It is apparent that the transitional input tax credit operates to benefit newly VAT-registered
persons, whether or not they previously paid taxes in the acquisition of their beginning
inventory of goods, materials and supplies. During that period of transition from non-VAT to
VAT status, the transitional input tax credit serves to alleviate the impact of the VAT on the
taxpayer. At the very beginning, the VAT-registered taxpayer is obliged to remit a significant
portion of the income it derived from its sales as output VAT. The transitional input tax credit
mitigates this initial diminution of the taxpayer's income by affording the opportunity to offset
the losses incurred through the remittance of the output VAT at a stage when the person is
yet unable to credit input VAT payments.

There is another point that weighs against the CTA’s interpretation. Under Section 105 of the
Old NIRC, the rate of the transitional input tax credit is "8% of the value of such inventory or
the actual value-added tax paid on such goods, materials and supplies, whichever is higher."
If indeed the transitional input tax credit is premised on the previous payment of VAT, then it
does not make sense to afford the taxpayer the benefit of such credit based on "8% of the
122
value of such inventory" should the same prove higher than the actual VAT paid. This intent
that the CTA alluded to could have been implemented with ease had the legislature shared
such intent by providing the actual VAT paid as the sole basis for the rate of the transitional
input tax credit.46

In view of the foregoing, we find petitioner entitled to the 8% transitional input tax credit
provided in Section 105 of the old NIRC. The fact that it acquired the Global City property
under a tax-free transaction makes no difference as prior payment of taxes is not a pre-
requisite.

Section 4.105-1 of RR 7-95 is

inconsistent with Section 105 of the old
NIRC

As regards Section 4.105-147 of RR 7-95 which limited the 8% transitional input tax credit to
the value of the improvements on the land, the same contravenes the provision of Section
105 of the old NIRC, in relation to Section 100 of the same Code, as amended by RA 7716,
which defines "goods or properties," to wit:

SEC. 100. Value-added tax on sale of goods or properties. – (a) Rate and base of tax. –
There shall be levied, assessed and collected on every sale, barter or exchange of goods or
properties, a value-added tax equivalent to 10% of the gross selling price or gross value in
money of the goods or properties sold, bartered or exchanged, such tax to be paid by the
seller or transferor.

(1) The term "goods or properties" shall mean all tangible and intangible objects which are
capable of pecuniary estimation and shall include:

(A) Real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business; x x x

In fact, in our Resolution dated October 2, 2009, in the related case of Fort Bonifacio, we
ruled that Section 4.105-1 of RR 7-95, insofar as it limits the transitional input tax credit to the
value of the improvement of the real properties, is a nullity. 48 Pertinent portions of the
Resolution read:

As mandated by Article 7 of the Civil Code, an administrative rule or regulation cannot

contravene the law on which it is based. RR 7-95 is inconsistent with Section 105 insofar as
the definition of the term "goods" is concerned. This is a legislative act beyond the authority
of the CIR and the Secretary of Finance. The rules and regulations that administrative
agencies promulgate, which are the product of a delegated legislative power to create new
and additional legal provisions that have the effect of law, should be within the scope of the
statutory authority granted by the legislature to the objects and purposes of the law, and
should not be in contradiction to, but in conformity with, the standards prescribed by law.

To be valid, an administrative rule or regulation must conform, not contradict, the provisions
of the enabling law.1âwphi1 An implementing rule or regulation cannot modify, expand, or
subtract from the law it is intended to implement. Any rule that is not consistent with the
statute itself is null and void.

While administrative agencies, such as the Bureau of Internal Revenue, may issue
regulations to implement statutes, they are without authority to limit the scope of the statute
123
to less than what it provides, or extend or expand the statute beyond its terms, or in any way
modify explicit provisions of the law. Indeed, a quasi-judicial body or an administrative
agency for that matter cannot amend an act of Congress. Hence, in case of a discrepancy
between the basic law and an interpretative or administrative ruling, the basic law prevails.

To recapitulate, RR 7-95, insofar as it restricts the definition of "goods" as basis of

transitional input tax credit under Section 105 is a nullity. 49

As we see it then, the 8% transitional input tax credit should not be limited to the value of the
improvements on the real properties but should include the value of the real properties as
well.

In this case, since petitioner is entitled to a transitional input tax credit of ₱ 5,698,200,256,
which is more than sufficient to cover its output VAT liability for the first quarter of 1997, a
refund of the amount of ₱ 359,652,009.47 erroneously paid as output VAT for the said
quarter is in order.

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated July 7, 2006
of the Court of Appeals in CA-G.R. SP No. 61436 is REVERSED and SET ASIDE.
Respondent Commissioner of Internal Revenue is ordered to refund to petitioner Fort
Bonifacio Development Corporation the amount of ₱ 359,652,009.47 paid as output VAT for
the first quarter of 1997 in light of the transitional input tax credit available to petitioner for the
said quarter, or in the alternative, to issue a tax credit certificate corresponding to such
amount.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE
ARTURO D. BRION
CASTRO
Associate Justice
Associate Justice

DIOSDADO M. PERALTA LUCAS P. BERSAMIN

Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

124
 BIENVENDIO L. REYES ESTELA M. PERLAS-BERNABE
Associate Justice Associate Justice

CERTIFICATION

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.

MARIA LOURDES P. A. SERENO

Chief Justice

125
126
 Corpus vs. People
(GR No. 180016 April 29, 2014)

Republic of the Philippines

SUPREME COURT
Baguio City

EN BANC

G.R. No. 180016               April 29, 2014

LITO CORPUZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

PERALTA, J.:

This is to resolve the Petition for Review on Certiorari, under Rule 45 of the Rules of Court,
dated November 5, 2007, of petitioner Lito Corpuz (petitioner), seeking to reverse and set
aside the Decision1 dated March 22, 2007 and Resolution2 dated September 5, 2007 of the
Court of Appeals (CA), which affirmed with modification the Decision 3 dated July 30, 2004 of
the Regional Trial Court (RTC), Branch 46, San Fernando City, finding the petitioner guilty
beyond reasonable doubt of the crime of Estafa under Article 315, paragraph (1), sub-
paragraph (b) of the Revised Penal Code.

The antecedent facts follow.

Private complainant Danilo Tangcoy and petitioner met at the Admiral Royale Casino in
Olongapo City sometime in 1990. Private complainant was then engaged in the business of
lending money to casino players and, upon hearing that the former had some pieces of
jewelry for sale, petitioner approached him on May 2, 1991 at the same casino and offered to
sell the said pieces of jewelry on commission basis. Private complainant agreed, and as a
consequence, he turned over to petitioner the following items: an 18k diamond ring for men;
a woman's bracelet; one (1) men's necklace and another men's bracelet, with an aggregate
value of ₱98,000.00, as evidenced by a receipt of even date. They both agreed that
petitioner shall remit the proceeds of the sale, and/or, if unsold, to return the same items,
within a period of 60 days. The period expired without petitioner remitting the proceeds of the
sale or returning the pieces of jewelry. When private complainant was able to meet petitioner,
the latter promised the former that he will pay the value of the said items entrusted to him,
but to no avail.

Thus, an Information was filed against petitioner for the crime of estafa, which reads as
follows:

That on or about the fifth (5th) day of July 1991, in the City of Olongapo, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, after having
received from one Danilo Tangcoy, one (1) men's diamond ring, 18k, worth ₱45,000.00; one
(1) three-baht men's bracelet, 22k, worth ₱25,000.00; one (1) two-baht ladies' bracelet, 22k,
worth ₱12,000.00, or in the total amount of Ninety-Eight Thousand Pesos (₱98,000.00),
127
Philippine currency, under expressed obligation on the part of said accused to remit the
proceeds of the sale of the said items or to return the same, if not sold, said accused, once in
possession of the said items, with intent to defraud, and with unfaithfulness and abuse of
confidence, and far from complying with his aforestated obligation, did then and there wilfully,
unlawfully and feloniously misappropriate, misapply and convert to his own personal use and
benefit the aforesaid jewelries (sic) or the proceeds of the sale thereof, and despite repeated
demands, the accused failed and refused to return the said items or to remit the amount of
Ninety- Eight Thousand Pesos (₱98,000.00), Philippine currency, to the damage and
prejudice of said Danilo Tangcoy in the aforementioned amount.

CONTRARY TO LAW.

On January 28, 1992, petitioner, with the assistance of his counsel, entered a plea of not
guilty. Thereafter, trial on the merits ensued.

The prosecution, to prove the above-stated facts, presented the lone testimony of Danilo
Tangcoy. On the other hand, the defense presented the lone testimony of petitioner, which
can be summarized, as follows:

Petitioner and private complainant were collecting agents of Antonio Balajadia, who is
engaged in the financing business of extending loans to Base employees. For every
collection made, they earn a commission. Petitioner denied having transacted any business
with private complainant.

However, he admitted obtaining a loan from Balajadia sometime in 1989 for which he was
made to sign a blank receipt. He claimed that the same receipt was then dated May 2, 1991
and used as evidence against him for the supposed agreement to sell the subject pieces of
jewelry, which he did not even see.

After trial, the RTC found petitioner guilty beyond reasonable doubt of the crime charged in
the Information. The dispositive portion of the decision states:

WHEREFORE, finding accused LITO CORPUZ GUILTY beyond reasonable doubt of the
felony of Estafa under Article 315, paragraph one (1), subparagraph (b) of the Revised Penal
Code;

there being no offsetting generic aggravating nor ordinary mitigating circumstance/s to vary
the penalty imposable;

accordingly, the accused is hereby sentenced to suffer the penalty of deprivation of liberty
consisting of an imprisonment under the Indeterminate Sentence Law of FOUR (4) YEARS
AND TWO (2) MONTHS of Prision Correccional in its medium period AS MINIMUM, to
FOURTEEN (14) YEARS AND EIGHT (8) MONTHS of Reclusion Temporal in its minimum
period AS MAXIMUM; to indemnify private complainant Danilo Tangcoy the amount of
₱98,000.00 as actual damages, and to pay the costs of suit.

SO ORDERED.

The case was elevated to the CA, however, the latter denied the appeal of petitioner and
affirmed the decision of the RTC, thus:

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WHEREFORE, the instant appeal is DENIED. The assailed Judgment dated July 30, 2004 of
the RTC of San Fernando City (P), Branch 46, is hereby AFFIRMED with MODIFICATION on
the imposable prison term, such that accused-appellant shall suffer the indeterminate penalty
of 4 years and 2 months of prision correccional, as minimum, to 8 years of prision mayor, as
maximum, plus 1 year for each additional ₱10,000.00, or a total of 7 years. The rest of the
decision stands.

SO ORDERED.

Petitioner, after the CA denied his motion for reconsideration, filed with this Court the present
petition stating the following grounds:

A. THE HONORABLE COURT OF APPEALS ERRED IN CONFIRMING THE ADMISSION

AND APPRECIATION BY THE LOWER COURT OF PROSECUTION EVIDENCE,
INCLUDING ITS EXHIBITS, WHICH ARE MERE MACHINE COPIES, AS THIS VIOLATES
THE BEST EVIDENCE RULE;

B. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER

COURT'S FINDING THAT THE CRIMINAL INFORMATION FOR ESTAFA WAS NOT
FATALLY DEFECTIVE ALTHOUGH THE SAME DID NOT CHARGE THE OFFENSE
UNDER ARTICLE 315 (1) (B) OF THE REVISED PENAL CODE IN THAT -

1. THE INFORMATION DID NOT FIX A PERIOD WITHIN WHICH THE

SUBJECT [PIECES OF] JEWELRY SHOULD BE RETURNED, IF UNSOLD,
OR THE MONEY TO BE REMITTED, IF SOLD;

2. THE DATE OF THE OCCURRENCE OF THE CRIME ALLEGED IN THE

INFORMATION AS OF 05 JULY 1991 WAS MATERIALLY DIFFERENT FROM
THE ONE TESTIFIED TO BY THE PRIVATE COMPLAINANT WHICH WAS 02
MAY 1991;

C. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER

COURT'S FINDING THAT DEMAND TO RETURN THE SUBJECT [PIECES OF] JEWELRY,
IF UNSOLD, OR REMIT THE PROCEEDS, IF SOLD – AN ELEMENT OF THE OFFENSE –
WAS PROVED;

D. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE LOWER

COURT'S FINDING THAT THE PROSECUTION'S CASE WAS PROVEN BEYOND
REASONABLE DOUBT ALTHOUGH -

1. THE PRIVATE COMPLAINANT TESTIFIED ON TWO (2) VERSIONS OF

THE INCIDENT;

2. THE VERSION OF THE PETITIONER – ACCUSED IS MORE

STRAIGHTFORWARD AND LOGICAL, CONSISTENT WITH HUMAN
EXPERIENCE;

3. THE EQUIPOISE RULE WAS NOT APPRECIATED IN AND APPLIED TO

THIS CASE;

4. PENAL STATUTES ARE STRICTLY CONSTRUED AGAINST THE STATE.

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In its Comment dated May 5, 2008, the Office of the Solicitor General (OSG) stated the
following counter-arguments:

The exhibits were properly admitted inasmuch as petitioner failed to object to their
admissibility.

The information was not defective inasmuch as it sufficiently established the designation of
the offense and the acts complained of.

The prosecution sufficiently established all the elements of the crime charged.

This Court finds the present petition devoid of any merit.

The factual findings of the appellate court generally are conclusive, and carry even more
weight when said court affirms the findings of the trial court, absent any showing that the
findings are totally devoid of support in the records, or that they are so glaringly erroneous as
to constitute grave abuse of discretion.4 Petitioner is of the opinion that the CA erred in
affirming the factual findings of the trial court. He now comes to this Court raising both
procedural and substantive issues.

According to petitioner, the CA erred in affirming the ruling of the trial court, admitting in
evidence a receipt dated May 2, 1991 marked as Exhibit "A" and its submarkings, although
the same was merely a photocopy, thus, violating the best evidence rule. However, the
records show that petitioner never objected to the admissibility of the said evidence at the
time it was identified, marked and testified upon in court by private complainant. The CA also
correctly pointed out that petitioner also failed to raise an objection in his Comment to the
prosecution's formal offer of evidence and even admitted having signed the said receipt. The
established doctrine is that when a party failed to interpose a timely objection to evidence at
the time they were offered in evidence, such objection shall be considered as waived. 5

Another procedural issue raised is, as claimed by petitioner, the formally defective
Information filed against him. He contends that the Information does not contain the period
when the pieces of jewelry were supposed to be returned and that the date when the crime
occurred was different from the one testified to by private complainant. This argument is
untenable. The CA did not err in finding that the Information was substantially complete and
in reiterating that objections as to the matters of form and substance in the Information
cannot be made for the first time on appeal. It is true that the gravamen of the crime of estafa
under Article 315, paragraph 1, subparagraph (b) of the RPC is the appropriation or
conversion of money or property received to the prejudice of the owner 6 and that the time of
occurrence is not a material ingredient of the crime, hence, the exclusion of the period and
the wrong date of the occurrence of the crime, as reflected in the Information, do not make
the latter fatally defective. The CA ruled:

x x x An information is legally viable as long as it distinctly states the statutory designation of

the offense and the acts or omissions constitutive thereof. Then Section 6, Rule 110 of the
Rules of Court provides that a complaint or information is sufficient if it states the name of the
accused;

the designation of the offense by the statute; the acts or omissions complained of as
constituting the offense; the name of the offended party; the approximate time of the
commission of the offense, and the place wherein the offense was committed. In the case at
bar, a reading of the subject Information shows compliance with the foregoing rule. That the
130
time of the commission of the offense was stated as " on or about the fifth (5th) day of July,
1991" is not likewise fatal to the prosecution's cause considering that Section 11 of the same
Rule requires a statement of the precise time only when the same is a material ingredient of
the offense. The gravamen of the crime of estafa under Article 315, paragraph 1 (b) of the
Revised Penal Code (RPC) is the appropriation or conversion of money or property received
to the prejudice of the offender. Thus, aside from the fact that the date of the commission
thereof is not an essential element of the crime herein charged, the failure of the prosecution
to specify the exact date does not render the Information ipso facto defective. Moreover, the
said date is also near the due date within which accused-appellant should have delivered the
proceeds or returned the said [pieces of jewelry] as testified upon by Tangkoy, hence, there
was sufficient compliance with the rules. Accused-appellant, therefore, cannot now be
allowed to claim that he was not properly apprised of the charges proferred against him. 7

It must be remembered that petitioner was convicted of the crime of Estafa under Article 315,
paragraph 1 (b) of the RPC, which reads:

ART. 315. Swindling (estafa). – Any person who shall defraud another by any of the means
mentioned hereinbelow.

1. With unfaithfulness or abuse of confidence, namely:

xxxx

(b) By misappropriating or converting, to the prejudice of another, money, goods, or any

other personal property received by the offender in trust or on commission, or for
administration, or under any other obligation involving the duty to make delivery of or to
return the same, even though such obligation be totally or partially guaranteed by a bond; or
by denying having received such money, goods, or other property; x x x

The elements of estafa with abuse of confidence are as follows: (a) that money, goods or
other personal property is received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make delivery of, or to
return the same; (b) that there be misappropriation or conversion of such money or property
by the offender or denial on his part of such receipt; (c) that such misappropriation or
conversion or denial is to the prejudice of another; and (d) that there is a demand made by
the offended party on the offender.8

Petitioner argues that the last element, which is, that there is a demand by the offended party
on the offender, was not proved. This Court disagrees. In his testimony, private complainant
narrated how he was able to locate petitioner after almost two (2) months from the time he
gave the pieces of jewelry and asked petitioner about the same items with the latter
promising to pay them. Thus:

PROS. MARTINEZ

q Now, Mr. Witness, this was executed on 2 May 1991, and this transaction could have been
finished on 5 July 1991, the question is what happens (sic) when the deadline came?

a I went looking for him, sir.

q For whom?

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a Lito Corpuz, sir.

q Were you able to look (sic) for him?

a I looked for him for a week, sir.

q Did you know his residence?

a Yes, sir.

q Did you go there?

a Yes, sir.

q Did you find him?

a No, sir.

q Were you able to talk to him since 5 July 1991?

a I talked to him, sir.

q How many times?

a Two times, sir.

q What did you talk (sic) to him?

a About the items I gave to (sic) him, sir.

q Referring to Exhibit A-2?

a Yes, sir, and according to him he will take his obligation and I asked him where the items
are and he promised me that he will pay these amount, sir.

q Up to this time that you were here, were you able to collect from him partially or full?

a No, sir.9

No specific type of proof is required to show that there was demand. 10 Demand need not
even be formal; it may be verbal.11 The specific word "demand" need not even be used to
show that it has indeed been made upon the person charged, since even a mere query as to
the whereabouts of the money [in this case, property], would be tantamount to a
demand.12 As expounded in Asejo v. People:13

With regard to the necessity of demand, we agree with the CA that demand under this kind of
estafa need not be formal or written. The appellate court observed that the law is silent with
regard to the form of demand in estafa under Art. 315 1(b), thus:

When the law does not qualify, We should not qualify. Should a written demand be
necessary, the law would have stated so. Otherwise, the word "demand" should be

132
interpreted in its general meaning as to include both written and oral demand. Thus, the
failure of the prosecution to present a written demand as evidence is not fatal.

In Tubb v. People, where the complainant merely verbally inquired about the money
entrusted to the accused, we held that the query was tantamount to a demand, thus:

x x x [T]he law does not require a demand as a condition precedent to the existence of the
crime of embezzlement. It so happens only that failure to account, upon demand for funds or
property held in trust, is circumstantial evidence of misappropriation. The same way,
however, be established by other proof, such as that introduced in the case at bar. 14

In view of the foregoing and based on the records, the prosecution was able to prove the
existence of all the elements of the crime. Private complainant gave petitioner the pieces of
jewelry in trust, or on commission basis, as shown in the receipt dated May 2, 1991 with an
obligation to sell or return the same within sixty (60) days, if unsold. There was
misappropriation when petitioner failed to remit the proceeds of those pieces of jewelry sold,
or if no sale took place, failed to return the same pieces of jewelry within or after the agreed
period despite demand from the private complainant, to the prejudice of the latter.

Anent the credibility of the prosecution's sole witness, which is questioned by petitioner, the
same is unmeritorious. Settled is the rule that in assessing the credibility of witnesses, this
Court gives great respect to the evaluation of the trial court for it had the unique opportunity
to observe the demeanor of witnesses and their deportment on the witness stand, an
opportunity denied the appellate courts, which merely rely on the records of the case. 15 The
assessment by the trial court is even conclusive and binding if not tainted with arbitrariness
or oversight of some fact or circumstance of weight and influence, especially when such
finding is affirmed by the CA.16 Truth is established not by the number of witnesses, but by
the quality of their testimonies, for in determining the value and credibility of evidence, the
witnesses are to be weighed not numbered.17

As regards the penalty, while this Court's Third Division was deliberating on this case, the
question of the continued validity of imposing on persons convicted of crimes involving
property came up. The legislature apparently pegged these penalties to the value of the
money and property in 1930 when it enacted the Revised Penal Code. Since the members of
the division reached no unanimity on this question and since the issues are of first
impression, they decided to refer the case to the Court en banc for consideration and
resolution. Thus, several amici curiae were invited at the behest of the Court to give their
academic opinions on the matter. Among those that graciously complied were Dean Jose
Manuel Diokno, Dean Sedfrey M. Candelaria, Professor Alfredo F. Tadiar, the Senate
President, and the Speaker of the House of Representatives. The parties were later heard on
oral arguments before the Court en banc, with Atty. Mario L. Bautista appearing as counsel
de oficio of the petitioner.

After a thorough consideration of the arguments presented on the matter, this Court finds the
following:

There seems to be a perceived injustice brought about by the range of penalties that the
courts continue to impose on crimes against property committed today, based on the amount
of damage measured by the value of money eighty years ago in 1932. However, this Court
cannot modify the said range of penalties because that would constitute judicial legislation.
What the legislature's perceived failure in amending the penalties provided for in the said
crimes cannot be remedied through this Court's decisions, as that would be encroaching
133
upon the power of another branch of the government. This, however, does not render the
whole situation without any remedy. It can be appropriately presumed that the framers of the
Revised Penal Code (RPC) had anticipated this matter by including Article 5, which reads:

ART. 5. Duty of the court in connection with acts which should be repressed but which are
not covered by the law, and in cases of excessive penalties. - Whenever a court has
knowledge of any act which it may deem proper to repress and which is not punishable by
law, it shall render the proper decision, and shall report to the Chief Executive, through the
Department of Justice, the reasons which induce the court to believe that said act should be
made the subject of penal legislation.

In the same way, the court shall submit to the Chief Executive, through the Department of
Justice, such statement as may be deemed proper, without suspending the execution of the
sentence, when a strict enforcement of the provisions of this Code would result in the
imposition of a clearly excessive penalty, taking into consideration the degree of malice and
the injury caused by the offense.18

The first paragraph of the above provision clearly states that for acts bourne out of a case
which is not punishable by law and the court finds it proper to repress, the remedy is to
render the proper decision and thereafter, report to the Chief Executive, through the
Department of Justice, the reasons why the same act should be the subject of penal
legislation. The premise here is that a deplorable act is present but is not the subject of any
penal legislation, thus, the court is tasked to inform the Chief Executive of the need to make
that act punishable by law through legislation. The second paragraph is similar to the first
except for the situation wherein the act is already punishable by law but the corresponding
penalty is deemed by the court as excessive. The remedy therefore, as in the first paragraph
is not to suspend the execution of the sentence but to submit to the Chief Executive the
reasons why the court considers the said penalty to be non-commensurate with the act
committed. Again, the court is tasked to inform the Chief Executive, this time, of the need for
a legislation to provide the proper penalty.

In his book, Commentaries on the Revised Penal Code, 19 Guillermo B. Guevara opined that
in Article 5, the duty of the court is merely to report to the Chief Executive, with a
recommendation for an amendment or modification of the legal provisions which it believes
to be harsh. Thus:

This provision is based under the legal maxim "nullum crimen, nulla poena sige lege," that is,
that there can exist no punishable act except those previously and specifically provided for
by penal statute.

No matter how reprehensible an act is, if the law-making body does not deem it necessary to
prohibit its perpetration with penal sanction, the Court of justice will be entirely powerless to
punish such act.

Under the provisions of this article the Court cannot suspend the execution of a sentence on
the ground that the strict enforcement of the provisions of this Code would cause excessive
or harsh penalty. All that the Court could do in such eventuality is to report the matter to the
Chief Executive with a recommendation for an amendment or modification of the legal
provisions which it believes to be harsh.20

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Anent the non-suspension of the execution of the sentence, retired Chief Justice Ramon C.
Aquino and retired Associate Justice Carolina C. Griño-Aquino, in their book, The Revised
Penal Code,21 echoed the above-cited commentary, thus:

The second paragraph of Art. 5 is an application of the humanitarian principle that justice
must be tempered with mercy. Generally, the courts have nothing to do with the wisdom or
justness of the penalties fixed by law. "Whether or not the penalties prescribed by law upon
conviction of violations of particular statutes are too severe or are not severe enough, are
questions as to which commentators on the law may fairly differ; but it is the duty of the
courts to enforce the will of the legislator in all cases unless it clearly appears that a given
penalty falls within the prohibited class of excessive fines or cruel and unusual punishment."
A petition for clemency should be addressed to the Chief Executive. 22

There is an opinion that the penalties provided for in crimes against property be based on the
current inflation rate or at the ratio of ₱1.00 is equal to ₱100.00 . However, it would be
dangerous as this would result in uncertainties, as opposed to the definite imposition of the
penalties. It must be remembered that the economy fluctuates and if the proposed imposition
of the penalties in crimes against property be adopted, the penalties will not cease to
change, thus, making the RPC, a self-amending law. Had the framers of the RPC intended
that to be so, it should have provided the same, instead, it included the earlier cited Article 5
as a remedy. It is also improper to presume why the present legislature has not made any
moves to amend the subject penalties in order to conform with the present times. For all we
know, the legislature intends to retain the same penalties in order to deter the further
commission of those punishable acts which have increased tremendously through the years.
In fact, in recent moves of the legislature, it is apparent that it aims to broaden the coverage
of those who violate penal laws. In the crime of Plunder, from its original minimum amount of
₱100,000,000.00 plundered, the legislature lowered it to ₱50,000,000.00. In the same way,
the legislature lowered the threshold amount upon which the Anti-Money Laundering Act may
apply, from ₱1,000,000.00 to ₱500,000.00.

It is also worth noting that in the crimes of Theft and Estafa, the present penalties do not
seem to be excessive compared to the proposed imposition of their corresponding penalties.
In Theft, the provisions state that:

Art. 309. Penalties. — Any person guilty of theft shall be punished by:

1. The penalty of prision mayor in its minimum and medium periods, if the value of the
thing stolen is more than 12,000 pesos but does not exceed 22,000 pesos, but if the
value of the thing stolen exceeds the latter amount the penalty shall be the maximum
period of the one prescribed in this paragraph, and one year for each additional ten
thousand pesos, but the total of the penalty which may be imposed shall not exceed
twenty years. In such cases, and in connection with the accessory penalties which
may be imposed and for the purpose of the other provisions of this Code, the penalty
shall be termed prision mayor or reclusion temporal, as the case may be.

2. The penalty of prision correccional in its medium and maximum periods, if the value
of the thing stolen is more than 6,000 pesos but does not exceed 12,000 pesos.

3. The penalty of prision correccional in its minimum and medium periods, if the value
of the property stolen is more than 200 pesos but does not exceed 6,000 pesos.

135
 4. Arresto mayor in its medium period to prision correccional in its minimum period, if
the value of the property stolen is over 50 pesos but does not exceed 200 pesos.

5. Arresto mayor to its full extent, if such value is over 5 pesos but does not exceed 50
pesos.

6. Arresto mayor in its minimum and medium periods, if such value does not exceed 5
pesos.

7. Arresto menor or a fine not exceeding 200 pesos, if the theft is committed under the
circumstances enumerated in paragraph 3 of the next preceding article and the value
of the thing stolen does not exceed 5 pesos. If such value exceeds said amount, the
provision of any of the five preceding subdivisions shall be made applicable.

8. Arresto menor in its minimum period or a fine not exceeding 50 pesos, when the
value of the thing stolen is not over 5 pesos, and the offender shall have acted under
the impulse of hunger, poverty, or the difficulty of earning a livelihood for the support
of himself or his family.

In a case wherein the value of the thing stolen is ₱6,000.00, the above-provision states that
the penalty is prision correccional in its minimum and medium periods (6 months and 1 day
to 4 years and 2 months). Applying the proposal, if the value of the thing stolen is ₱6,000.00,
the penalty is imprisonment of arresto mayor in its medium period to prision correccional
minimum period (2 months and 1 day to 2 years and 4 months). It would seem that under the
present law, the penalty imposed is almost the same as the penalty proposed. In fact, after
the application of the Indeterminate Sentence Law under the existing law, the minimum
penalty is still lowered by one degree; hence, the minimum penalty is arresto mayor in its
medium period to maximum period (2 months and 1 day to 6 months), making the offender
qualified for pardon or parole after serving the said minimum period and may even apply for
probation. Moreover, under the proposal, the minimum penalty after applying the
Indeterminate Sentence Law is arresto menor in its maximum period to arresto mayor in its
minimum period (21 days to 2 months) is not too far from the minimum period under the
existing law. Thus, it would seem that the present penalty imposed under the law is not at all
excessive. The same is also true in the crime of Estafa. 23

Moreover, if we apply the ratio of 1:100, as suggested to the value of the thing stolen in the
crime of Theft and the damage caused in the crime of Estafa, the gap between the minimum
and the maximum amounts, which is the basis of determining the proper penalty to be
imposed, would be too wide and the penalty imposable would no longer be commensurate to
the act committed and the value of the thing stolen or the damage caused:

I. Article 309, or the penalties for the crime of Theft, the value would be modified but the
penalties are not changed:

1. ₱12,000.00 to ₱22,000.00 will become ₱1,200,000.00 to ₱2,200,000.00, punished

by prision mayor minimum to prision mayor medium (6 years and 1 day to 10 years).

2. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to ₱1,200,000.00, punished by

prision correccional medium and to prision correccional maximum (2 years, 4 months
and 1 day to 6 years).24

136
 3. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00, punishable by
prision correccional minimum to prision correccional medium (6 months and 1 day to 4
years and 2 months).

4. ₱50.00 to ₱200.00 will become ₱5,000.00 to ₱20,000.00, punishable by arresto

mayor medium to prision correccional minimum (2 months and 1 day to 2 years and 4
months).

5. ₱5.00 to ₱50.00 will become ₱500.00 to ₱5,000.00, punishable by arresto mayor (1

month and 1 day to 6 months).

6. ₱5.00 will become ₱500.00, punishable by arresto mayor minimum to arresto

mayor medium.

x x x x.

II. Article 315, or the penalties for the crime of Estafa, the value would also be modified but
the penalties are not changed, as follows:

1st. ₱12,000.00 to ₱22,000.00, will become ₱1,200,000.00 to ₱2,200,000.00,

punishable by prision correccional maximum to prision mayor minimum (4 years, 2
months and 1 day to 8 years).25

2nd. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to ₱1,200,000.00, punishable

by prision correccional minimum to prision correccional medium (6 months and 1 day
to 4 years and 2 months).26

3rd. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00, punishable by

arresto mayor maximum to prision correccional minimum (4 months and 1 day to 2
years and 4 months).

4th. ₱200.00 will become ₱20,000.00, punishable by arresto mayor maximum (4

months and 1 day to 6 months).

An argument raised by Dean Jose Manuel I. Diokno, one of our esteemed amici curiae, is
that the incremental penalty provided under Article 315 of the RPC violates the Equal
Protection Clause.

The equal protection clause requires equality among equals, which is determined according
to a valid classification. The test developed by jurisprudence here and yonder is that of
reasonableness,27 which has four requisites:

(1) The classification rests on substantial distinctions;

(2) It is germane to the purposes of the law;

(3) It is not limited to existing conditions only; and

(4) It applies equally to all members of the same class. 28

According to Dean Diokno, the Incremental Penalty Rule (IPR) does not rest on substantial
distinctions as ₱10,000.00 may have been substantial in the past, but it is not so today,
137
which violates the first requisite; the IPR was devised so that those who commit estafa
involving higher amounts would receive heavier penalties; however, this is no longer
achieved, because a person who steals ₱142,000.00 would receive the same penalty as
someone who steals hundreds of millions, which violates the second requisite; and, the IPR
violates requisite no. 3, considering that the IPR is limited to existing conditions at the time
the law was promulgated, conditions that no longer exist today.

Assuming that the Court submits to the argument of Dean Diokno and declares the
incremental penalty in Article 315 unconstitutional for violating the equal protection clause,
what then is the penalty that should be applied in case the amount of the thing subject matter
of the crime exceeds ₱22,000.00? It seems that the proposition poses more questions than
answers, which leads us even more to conclude that the appropriate remedy is to refer these
matters to Congress for them to exercise their inherent power to legislate laws.

Even Dean Diokno was of the opinion that if the Court declares the IPR unconstitutional, the
remedy is to go to Congress. Thus:

xxxx

JUSTICE PERALTA:

Now, your position is to declare that the incremental penalty should be struck down as
unconstitutional because it is absurd.

DEAN DIOKNO:

Absurd, it violates equal protection, Your Honor, and cruel and unusual punishment.

JUSTICE PERALTA:

Then what will be the penalty that we are going to impose if the amount is more than Twenty-
Two Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:

Well, that would be for Congress to ... if this Court will declare the incremental penalty rule
unconstitutional, then that would ... the void should be filled by Congress.

JUSTICE PERALTA:

But in your presentation, you were fixing the amount at One Hundred Thousand
(₱100,000.00) Pesos ...

DEAN DIOKNO:

Well, my presen ... (interrupted)

JUSTICE PERALTA:

For every One Hundred Thousand (₱100,000.00) Pesos in excess of Twenty-Two Thousand
(₱22,000.00) Pesos you were suggesting an additional penalty of one (1) year, did I get you
right?
138
DEAN DIOKNO:

Yes, Your Honor, that is, if the court will take the route of statutory interpretation.

JUSTICE PERALTA:

Ah ...

DEAN DIOKNO:

If the Court will say that they can go beyond the literal wording of the law...

JUSTICE PERALTA:

But if we de ... (interrupted)

DEAN DIOKNO:

....then....

JUSTICE PERALTA:

Ah, yeah. But if we declare the incremental penalty as unsconstitutional, the court cannot fix
the amount ...

DEAN DIOKNO:

No, Your Honor.

JUSTICE PERALTA:

... as the equivalent of one, as an incremental penalty in excess of Twenty-Two Thousand

(₱22,000.00) Pesos.

DEAN DIOKNO:

No, Your Honor.

JUSTICE PERALTA:

The Court cannot do that.

DEAN DIOKNO:

Could not be.

JUSTICE PERALTA:

The only remedy is to go to Congress...

DEAN DIOKNO:

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Yes, Your Honor.

JUSTICE PERALTA:

... and determine the value or the amount.

DEAN DIOKNO:

Yes, Your Honor.

JUSTICE PERALTA:

That will be equivalent to the incremental penalty of one (1) year in excess of Twenty-Two
Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:

Yes, Your Honor.

JUSTICE PERALTA:

The amount in excess of Twenty-Two Thousand (₱22,000.00) Pesos.

Thank you, Dean.

DEAN DIOKNO:

Thank you.

x x x x29

Dean Diokno also contends that Article 315 of the Revised Penal Code constitutes cruel and
unusual punishment. Citing Solem v. Helm,30 Dean Diokno avers that the United States
Federal Supreme Court has expanded the application of a similar Constitutional provision
prohibiting cruel and unusual punishment, to the duration of the penalty, and not just its form.
The court therein ruled that three things must be done to decide whether a sentence is
proportional to a specific crime, viz.; (1) Compare the nature and gravity of the offense, and
the harshness of the penalty; (2) Compare the sentences imposed on other criminals in the
same jurisdiction, i.e., whether more serious crimes are subject to the same penalty or to
less serious penalties; and (3) Compare the sentences imposed for commission of the same
crime in other jurisdictions.

However, the case of Solem v. Helm cannot be applied in the present case, because in
Solem what respondent therein deemed cruel was the penalty imposed by the state court of
South Dakota after it took into account the latter’s recidivist statute and not the original
penalty for uttering a "no account" check. Normally, the maximum punishment for the crime
would have been five years imprisonment and a $5,000.00 fine. Nonetheless, respondent
was sentenced to life imprisonment without the possibility of parole under South Dakota’s
recidivist statute because of his six prior felony convictions. Surely, the factual antecedents
of Solem are different from the present controversy.

140
With respect to the crime of Qualified Theft, however, it is true that the imposable penalty for
the offense is high. Nevertheless, the rationale for the imposition of a higher penalty against
a domestic servant is the fact that in the commission of the crime, the helper will essentially
gravely abuse the trust and confidence reposed upon her by her employer. After accepting
and allowing the helper to be a member of the household, thus entrusting upon such person
the protection and safekeeping of the employer’s loved ones and properties, a subsequent
betrayal of that trust is so repulsive as to warrant the necessity of imposing a higher penalty
to deter the commission of such wrongful acts.

There are other crimes where the penalty of fine and/or imprisonment are dependent on the
subject matter of the crime and which, by adopting the proposal, may create serious
implications. For example, in the crime of Malversation, the penalty imposed depends on the
amount of the money malversed by the public official, thus:

Art. 217. Malversation of public funds or property; Presumption of malversation. — Any

public officer who, by reason of the duties of his office, is accountable for public funds or
property, shall appropriate the same or shall take or misappropriate or shall consent, through
abandonment or negligence, shall permit any other person to take such public funds, or
property, wholly or partially, or shall otherwise be guilty of the misappropriation or
malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum periods, if the
amount involved in the misappropriation or malversation does not exceed two hundred
pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount
involved is more than two hundred pesos but does not exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its
minimum period, if the amount involved is more than six thousand pesos but is less
than twelve thousand pesos.

4. The penalty of reclusion temporal, in its medium and maximum periods, if the
amount involved is more than twelve thousand pesos but is less than twenty-two
thousand pesos. If the amount exceeds the latter, the penalty shall be reclusion
temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total
value of the property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with
which he is chargeable, upon demand by any duly authorized officer, shall be prima facie
evidence that he has put such missing funds or property to personal use.

The above-provisions contemplate a situation wherein the Government loses money due to
the unlawful acts of the offender. Thus, following the proposal, if the amount malversed is
₱200.00 (under the existing law), the amount now becomes ₱20,000.00 and the penalty is
prision correccional in its medium and maximum periods (2 years 4 months and 1 day to 6
years). The penalty may not be commensurate to the act of embezzlement of ₱20,000.00
compared to the acts committed by public officials punishable by a special law, i.e., Republic
Act No. 3019 or the Anti-Graft and Corrupt Practices Act, specifically Section 3, 31 wherein the
141
injury caused to the government is not generally defined by any monetary amount, the
penalty (6 years and 1 month to 15 years)32 under the Anti-Graft Law will now become
higher. This should not be the case, because in the crime of malversation, the public official
takes advantage of his public position to embezzle the fund or property of the government
entrusted to him.

The said inequity is also apparent in the crime of Robbery with force upon things (inhabited
or uninhabited) where the value of the thing unlawfully taken and the act of unlawful entry are
the bases of the penalty imposable, and also, in Malicious Mischief, where the penalty of
imprisonment or fine is dependent on the cost of the damage caused.

In Robbery with force upon things (inhabited or uninhabited), if we increase the value of the
thing unlawfully taken, as proposed in the ponencia, the sole basis of the penalty will now be
the value of the thing unlawfully taken and no longer the element of force employed in
entering the premises. It may likewise cause an inequity between the crime of Qualified
Trespass to Dwelling under Article 280, and this kind of robbery because the former is
punishable by prision correccional in its medium and maximum periods (2 years, 4 months
and 1 day to 6 years) and a fine not exceeding ₱1,000.00 (₱100,000.00 now if the ratio is
1:100) where entrance to the premises is with violence or intimidation, which is the main
justification of the penalty. Whereas in the crime of Robbery with force upon things, it is
punished with a penalty of prision mayor (6 years and 1 day to 12 years) if the intruder is
unarmed without the penalty of Fine despite the fact that it is not merely the illegal entry that
is the basis of the penalty but likewise the unlawful taking.

Furthermore, in the crime of Other Mischiefs under Article 329, the highest penalty that can
be imposed is arresto mayor in its medium and maximum periods (2 months and 1 day to 6
months) if the value of the damage caused exceeds ₱1,000.00, but under the proposal, the
value of the damage will now become ₱100,000.00 (1:100), and still punishable by arresto
mayor (1 month and 1 day to 6 months). And, if the value of the damaged property does not
exceed ₱200.00, the penalty is arresto menor or a fine of not less than the value of the
damage caused and not more than ₱200.00, if the amount involved does not exceed
₱200.00 or cannot be estimated. Under the proposal, ₱200.00 will now become ₱20,000.00,
which simply means that the fine of ₱200.00 under the existing law will now become
₱20,000.00. The amount of Fine under this situation will now become excessive and afflictive
in nature despite the fact that the offense is categorized as a light felony penalized with a
light penalty under Article 26 of the RPC.33 Unless we also amend Article 26 of the RPC,
there will be grave implications on the penalty of Fine, but changing the same through Court
decision, either expressly or impliedly, may not be legally and constitutionally feasible.

There are other crimes against property and swindling in the RPC that may also be affected
by the proposal, such as those that impose imprisonment and/or Fine as a penalty based on
the value of the damage caused, to wit: Article 311 (Theft of the property of the National
Library and National Museum), Article 312 (Occupation of real property or usurpation of real
rights in property), Article 313 (Altering boundaries or landmarks), Article 316 (Other forms of
swindling), Article 317 (Swindling a minor), Article 318 (Other deceits), Article 328 (Special
cases of malicious mischief) and Article 331 (Destroying or damaging statues, public
monuments or paintings). Other crimes that impose Fine as a penalty will also be affected,
such as: Article 213 (Frauds against the public treasury and similar offenses), Article 215
(Prohibited Transactions),

142
Article 216 (Possession of prohibited interest by a public officer), Article 218 (Failure of
accountable officer to render accounts), Article 219 (Failure of a responsible public officer to
render accounts before leaving the country).

In addition, the proposal will not only affect crimes under the RPC. It will also affect crimes
which are punishable by special penal laws, such as Illegal Logging or Violation of Section
68 of Presidential Decree No. 705, as amended. 34 The law treats cutting, gathering,
collecting and possessing timber or other forest products without license as an offense as
grave as and equivalent to the felony of qualified theft. 35 Under the law, the offender shall be
punished with the penalties imposed under Articles 309 and 310 36 of the Revised Penal
Code, which means that the penalty imposable for the offense is, again, based on the value
of the timber or forest products involved in the offense. Now, if we accept the said proposal in
the crime of Theft, will this particular crime of Illegal Logging be amended also in so far as
the penalty is concerned because the penalty is dependent on Articles 309 and 310 of the
RPC? The answer is in the negative because the soundness of this particular law is not in
question.

With the numerous crimes defined and penalized under the Revised Penal Code and Special
Laws, and other related provisions of these laws affected by the proposal, a thorough study
is needed to determine its effectivity and necessity. There may be some provisions of the law
that should be amended; nevertheless, this Court is in no position to conclude as to the
intentions of the framers of the Revised Penal Code by merely making a study of the
applicability of the penalties imposable in the present times. Such is not within the
competence of the Court but of the Legislature which is empowered to conduct public
hearings on the matter, consult legal luminaries and who, after due proceedings, can decide
whether or not to amend or to revise the questioned law or other laws, or even create a new
legislation which will adopt to the times.

Admittedly, Congress is aware that there is an urgent need to amend the Revised Penal
Code. During the oral arguments, counsel for the Senate informed the Court that at present,
fifty-six (56) bills are now pending in the Senate seeking to amend the Revised Penal
Code,37 each one proposing much needed change and updates to archaic laws that were
promulgated decades ago when the political, socio-economic, and cultural settings were far
different from today’s conditions.

Verily, the primordial duty of the Court is merely to apply the law in such a way that it shall
not usurp legislative powers by judicial legislation and that in the course of such application
or construction, it should not make or supervise legislation, or under the guise of
interpretation, modify, revise, amend, distort, remodel, or rewrite the law, or give the law a
construction which is repugnant to its terms.38 The Court should apply the law in a manner
that would give effect to their letter and spirit, especially when the law is clear as to its intent
and purpose. Succinctly put, the Court should shy away from encroaching upon the primary
function of a co-equal branch of the Government; otherwise, this would lead to an
inexcusable breach of the doctrine of separation of powers by means of judicial legislation.

Moreover, it is to be noted that civil indemnity is, technically, not a penalty or a Fine; hence, it
can be increased by the Court when appropriate. Article 2206 of the Civil Code provides:

Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been mitigating circumstances. In
addition:

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 (1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every
case be assessed and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had no earning capacity at
the time of his death;

(2) If the deceased was obliged to give support according to the provisions of Article
291, the recipient who is not an heir called to the decedent's inheritance by the law of
testate or intestate succession, may demand support from the person causing the
death, for a period not exceeding five years, the exact duration to be fixed by the
court;

(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of
the deceased.

In our jurisdiction, civil indemnity is awarded to the offended party as a kind of monetary
restitution or compensation to the victim for the damage or infraction that was done to the
latter by the accused, which in a sense only covers the civil aspect. Precisely, it is civil
indemnity. Thus, in a crime where a person dies, in addition to the penalty of imprisonment
imposed to the offender, the accused is also ordered to pay the victim a sum of money as
restitution. Clearly, this award of civil indemnity due to the death of the victim could not be
contemplated as akin to the value of a thing that is unlawfully taken which is the basis in the
imposition of the proper penalty in certain crimes. Thus, the reasoning in increasing the value
of civil indemnity awarded in some offense cannot be the same reasoning that would sustain
the adoption of the suggested ratio. Also, it is apparent from Article 2206 that the law only
imposes a minimum amount for awards of civil indemnity, which is ₱3,000.00. The law did
not provide for a ceiling. Thus, although the minimum amount for the award cannot be
changed, increasing the amount awarded as civil indemnity can be validly modified and
increased when the present circumstance warrants it. Corollarily, moral damages under
Article 222039 of the Civil Code also does not fix the amount of damages that can be
awarded. It is discretionary upon the court, depending on the mental anguish or the suffering
of the private offended party. The amount of moral damages can, in relation to civil
indemnity, be adjusted so long as it does not exceed the award of civil indemnity.

In addition, some may view the penalty provided by law for the offense committed as
tantamount to cruel punishment. However, all penalties are generally harsh, being punitive in
nature. Whether or not they are excessive or amount to cruel punishment is a matter that
should be left to lawmakers. It is the prerogative of the courts to apply the law, especially
when they are clear and not subject to any other interpretation than that which is plainly
written.

Similar to the argument of Dean Diokno, one of Justice Antonio Carpio’s opinions is that the
incremental penalty provision should be declared unconstitutional and that the courts should
only impose the penalty corresponding to the amount of ₱22,000.00, regardless if the actual
amount involved exceeds ₱22,000.00. As suggested, however, from now until the law is
properly amended by Congress, all crimes of Estafa will no longer be punished by the
appropriate penalty. A conundrum in the regular course of criminal justice would occur when
every accused convicted of the crime of estafa will be meted penalties different from the
proper penalty that should be imposed. Such drastic twist in the application of the law has no
legal basis and directly runs counter to what the law provides.

144
It should be noted that the death penalty was reintroduced in the dispensation of criminal
justice by the Ramos Administration by virtue of Republic Act No. 7659 40 in December 1993.
The said law has been questioned before this Court. There is, arguably, no punishment more
cruel than that of death. Yet still, from the time the death penalty was re-imposed until its
lifting in June 2006 by Republic Act No. 9346, 41 the Court did not impede the imposition of
the death penalty on the ground that it is a "cruel punishment" within the purview of Section
19 (1),42 Article III of the Constitution. Ultimately, it was through an act of Congress
suspending the imposition of the death penalty that led to its non-imposition and not via the
intervention of the Court.

Even if the imposable penalty amounts to cruel punishment, the Court cannot declare the
provision of the law from which the proper penalty emanates unconstitutional in the present
action. Not only is it violative of due process, considering that the State and the concerned
parties were not given the opportunity to comment on the subject matter, it is settled that the
constitutionality of a statute cannot be attacked collaterally because constitutionality issues
must be pleaded directly and not collaterally, 43 more so in the present controversy wherein
the issues never touched upon the constitutionality of any of the provisions of the Revised
Penal Code.

Besides, it has long been held that the prohibition of cruel and unusual punishments is
generally aimed at the form or character of the punishment rather than its severity in respect
of duration or amount, and applies to punishments which public sentiment has regarded as
cruel or obsolete, for instance, those inflicted at the whipping post, or in the pillory, burning at
the stake, breaking on the wheel, disemboweling, and the like. Fine and imprisonment would
not thus be within the prohibition.44

It takes more than merely being harsh, excessive, out of proportion, or severe for a penalty to
be obnoxious to the Constitution. The fact that the punishment authorized by the statute is
severe does not make it cruel and unusual. Expressed in other terms, it has been held that to
come under the ban, the punishment must be "flagrantly and plainly oppressive," "wholly
disproportionate to the nature of the offense as to shock the moral sense of the
community."45

Cruel as it may be, as discussed above, it is for the Congress to amend the law and adapt it
to our modern time.

The solution to the present controversy could not be solved by merely adjusting the
questioned monetary values to the present value of money based only on the current
inflation rate. There are other factors and variables that need to be taken into consideration,
researched, and deliberated upon before the said values could be accurately and properly
adjusted. The effects on the society, the injured party, the accused, its socio-economic
impact, and the likes must be painstakingly evaluated and weighed upon in order to arrive at
a wholistic change that all of us believe should be made to our existing law. Dejectedly, the
Court is ill-equipped, has no resources, and lacks sufficient personnel to conduct public
hearings and sponsor studies and surveys to validly effect these changes in our Revised
Penal Code. This function clearly and appropriately belongs to Congress. Even Professor
Tadiar concedes to this conclusion, to wit:

xxxx

JUSTICE PERALTA:

145
Yeah, Just one question. You are suggesting that in order to determine the value of Peso
you have to take into consideration several factors.

PROFESSOR TADIAR:

Yes.

JUSTICE PERALTA:

Per capita income.

PROFESSOR TADIAR:

Per capita income.

JUSTICE PERALTA:

Consumer price index.

PROFESSOR TADIAR:

Yeah.

JUSTICE PERALTA:

Inflation ...

PROFESSOR TADIAR:

Yes.

JUSTICE PERALTA:

... and so on. Is the Supreme Court equipped to determine those factors?

PROFESSOR TADIAR:

There are many ways by which the value of the Philippine Peso can be determined utilizing
all of those economic terms.

JUSTICE PERALTA:

Yeah, but ...

PROFESSOR TADIAR:

And I don’t think it is within the power of the Supreme Court to pass upon and peg the value
to One Hundred (₱100.00) Pesos to ...

JUSTICE PERALTA:

Yeah.
146
PROFESSOR TADIAR:

... One (₱1.00.00) Peso in 1930.

JUSTICE PERALTA:

That is legislative in nature.

PROFESSOR TADIAR:

That is my position that the Supreme Court ...

JUSTICE PERALTA:

Yeah, okay.

PROFESSOR TADIAR:

... has no power to utilize the power of judicial review to in order to adjust, to make the
adjustment that is a power that belongs to the legislature.

JUSTICE PERALTA:

Thank you, Professor.

PROFESSOR TADIAR:

Thank you.46

Finally, the opinion advanced by Chief Justice Maria Lourdes P. A. Sereno echoes the view
that the role of the Court is not merely to dispense justice, but also the active duty to prevent
injustice. Thus, in order to prevent injustice in the present controversy, the Court should not
impose an obsolete penalty pegged eighty three years ago, but consider the proposed ratio
of 1:100 as simply compensating for inflation. Furthermore, the Court has in the past taken
into consideration "changed conditions" or "significant changes in circumstances" in its
decisions.

Similarly, the Chief Justice is of the view that the Court is not delving into the validity of the
substance of a statute. The issue is no different from the Court’s adjustment of indemnity in
crimes against persons, which the Court had previously adjusted in light of current times, like
in the case of People v. Pantoja.47 Besides, Article 10 of the Civil Code mandates a
presumption that the lawmaking body intended right and justice to prevail.

With due respect to the opinions and proposals advanced by the Chief Justice and my
Colleagues, all the proposals ultimately lead to prohibited judicial legislation. Short of being
repetitious and as extensively discussed above, it is truly beyond the powers of the Court to
legislate laws, such immense power belongs to Congress and the Court should refrain from
crossing this clear-cut divide. With regard to civil indemnity, as elucidated before, this refers
to civil liability which is awarded to the offended party as a kind of monetary restitution. It is
truly based on the value of money. The same cannot be said on penalties because, as earlier
stated, penalties are not only based on the value of money, but on several other factors.
Further, since the law is silent as to the maximum amount that can be awarded and only
147
pegged the minimum sum, increasing the amount granted as civil indemnity is not
proscribed. Thus, it can be adjusted in light of current conditions.

Now, with regard to the penalty imposed in the present case, the CA modified the ruling of
the RTC. The RTC imposed the indeterminate penalty of four (4) years and two (2) months of
prision correccional in its medium period, as minimum, to fourteen (14) years and eight (8)
months of reclusion temporal in its minimum period, as maximum. However, the CA imposed
the indeterminate penalty of four (4) years and two (2) months of prision correccional, as
minimum, to eight (8) years of prision mayor, as maximum, plus one (1) year for each
additional ₱10,000.00, or a total of seven (7) years.

In computing the penalty for this type of estafa, this Court's ruling in Cosme, Jr. v. People 48 is
highly instructive, thus:

With respect to the imposable penalty, Article 315 of the Revised Penal Code provides:

ART. 315 Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum
period, if the amount of the fraud is over 12,000 but does not exceed 22,000 pesos, and if
such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed
in its maximum period, adding one year for each additional 10,000 pesos; but the total
penalty which may be imposed shall not exceed twenty years. In such case, and in
connection with the accessory penalties which may be imposed and for the purpose of the
other provisions of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

The penalty prescribed by Article 315 is composed of only two, not three, periods, in which
case, Article 65 of the same Code requires the division of the time included in the penalty
into three equal portions of time included in the penalty prescribed, forming one period of
each of the three portions. Applying the latter provisions, the maximum, medium and
minimum periods of the penalty prescribed are:

Maximum - 6 years, 8 months, 21 days to 8 years

Medium - 5 years, 5 months, 11 days to 6 years, 8 months, 20 days

Minimum - 4 years, 2 months, 1 day to 5 years, 5 months, 10 days 49

To compute the maximum period of the prescribed penalty, prisión correccional maximum to
prisión mayor minimum should be divided into three equal portions of time each of which
portion shall be deemed to form one period in accordance with Article 65 50 of the RPC.51 In
the present case, the amount involved is ₱98,000.00, which exceeds ₱22,000.00, thus, the
maximum penalty imposable should be within the maximum period of 6 years, 8 months and
21 days to 8 years of prision mayor. Article 315 also states that a period of one year shall be
added to the penalty for every additional ₱10,000.00 defrauded in excess of ₱22,000.00, but
in no case shall the total penalty which may be imposed exceed 20 years.

Considering that the amount of ₱98,000.00 is ₱76,000.00 more than the ₱22,000.00 ceiling
set by law, then, adding one year for each additional ₱10,000.00, the maximum period of 6
years, 8 months and 21 days to 8 years of prision mayor minimum would be increased by 7
148
years. Taking the maximum of the prescribed penalty, which is 8 years, plus an additional 7
years, the maximum of the indeterminate penalty is 15 years.

Applying the Indeterminate Sentence Law, since the penalty prescribed by law for the estafa
charge against petitioner is prision correccional maximum to prision mayor minimum, the
penalty next lower would then be prision correccional in its minimum and medium periods.

Thus, the minimum term of the indeterminate sentence should be anywhere from 6 months
and 1 day to 4 years and 2 months.

One final note, the Court should give Congress a chance to perform its primordial duty of
lawmaking. The Court should not pre-empt Congress and usurp its inherent powers of
making and enacting laws. While it may be the most expeditious approach, a short cut by
judicial fiat is a dangerous proposition, lest the Court dare trespass on prohibited judicial
legislation.

WHEREFORE, the Petition for Review on Certiorari dated November 5, 2007 of petitioner
Lito Corpuz is hereby DENIED. Consequently, the Decision dated March 22, 2007 and
Resolution dated September 5, 2007 of the Court of Appeals, which affirmed with
modification the Decision dated July 30, 2004 of the Regional Trial Court, Branch 46, San
Fernando City, finding petitioner guilty beyond reasonable doubt of the crime of Estafa under
Article 315, paragraph (1), sub-paragraph (b) of the Revised Penal Code, are hereby
AFFIRMED with MODIFICATION that the penalty imposed is the indeterminate penalty of
imprisonment ranging from THREE (3) YEARS, TWO (2) MONTHS and ELEVEN DAYS of
prision correccional, as minimum, to FIFTEEN (15) YEARS of reclusion temporal as
maximum.

Pursuant to Article 5 of the Revised Penal Code, let a Copy of this Decision be furnished the
President of the Republic of the Philippines, through the Department of Justice.

Also, let a copy of this Decision be furnished the President of the Senate and the Speaker of
the House of Representatives.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

See Concurring and Dissenting Opinion

MARIA LOURDES P.A. SERENO
Chief Justice

See Dissenting Opinion

PRESBITERO J. VELASCO, JR.
ANTONIO T. CARPIO
Associate Justice
Associate Justice

TERESITA J. LEONARDO-DE See: Concurring Opinion

CASTRO ARTURO D. BRION
Associate Justice Associate Justice

149
 I take no part due to prior action in the
I join the Dissent of J. Abad
CA
MARIANO C. DEL CASTILLO
LUCAS P. BERSAMIN*
Associate Justice
Associate Justice

See Dissenting Opinion

MARTIN S. VILLARAMA, JR.
ROBERTO A. ABAD
Associate Justice
Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

No Part
BVIENVENIDO L. REYES
ESTELA M. PERLAS-BERNABE*
Associate Justice
Associate Justice

MARVIC MARIO VICTOR F. LEONEN

Associate Justice

CERTIFICATION

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

MARIA LOURDES P. A. SERENO

Chief Justice

150