Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 186269               February 15, 2012

SPOUSES ROMAN A. PASCUAL and MERCEDITA R. PASCUAL, FRANCISCO A. PASCUAL, MARGARITA

CORAZON D. MARIANO, EDWIN D. MARIANO and DANNY R. MARIANO Petitioners,
vs.
SPOUSES ANTONIO BALLESTEROS and LORENZA MELCHOR-BALLESTEROS, Respondents.

RESOLUTION

REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by the spouses Roman A. Pascual
and Mercedita R. Pascual (Spouses Pascual), Francisco A. Pascual (Francisco), Margarita Corazon D. Mariano
(Margarita), Edwin D. Mariano and Danny R. Mariano (petitioners) assailing the Decision dated July 29, 2008 and
1 

Resolution dated January 30, 2009 issued by the Court of Appeals (CA) in CA-G.R. CV No. 89111.
2 

The instant case involves a 1,539 square meter parcel of land (subject property) situated in Barangay Sta. Maria,
Laoag City and covered by Transfer Certificate of Title (TCT) No. T-30375 of the Laoag City registry. The subject
3 

property is owned by the following persons, with the extent of their respective shares over the same: (1) the spouses
Albino and Margarita Corazon Mariano, 330 square meters; (2) Angela Melchor (Angela), 466.5 square meters; and
(3) the spouses Melecio and Victoria Melchor (Spouses Melchor), 796.5 square meters.

Upon the death of the Spouses Melchor, their share in the subject property was inherited by their daughter Lorenza
Melchor Ballesteros (Lorenza). Subsequently, Lorenza and her husband Antonio Ballesteros (respondents) acquired
the share of Angela in the subject property by virtue of an Affidavit of Extrajudicial Settlement with Absolute
Sale dated October 1, 1986.
4 

On August 11, 2000, Margarita, then already widowed, together with her children, sold their share in the subject
property to Spouses Pascual and Francisco. Subsequently, Spouses Pascual and Francisco caused the
5 

cancellation of TCT No. 30375 and, thus, TCT No. T-32522 was then issued in their names together with Angela
6 

and Spouses Melchor.

Consequently, the respondents, claiming that they did not receive any written notice of the said sale in favor of
Spouses Pascual and Francisco, filed with the Regional Trial Court (RTC) of Laoag City a Complaint for legal
7 

redemption against the petitioners. The respondents claimed that they are entitled to redeem the portion of the
subject property sold to Spouses Pascual and Francisco being co-owners of the same.

For their part, the petitioners claimed that there was no co-ownership over the subject property considering that the
shares of the registered owners thereof had been particularized, specified and subdivided and, hence, the
respondents has no right to redeem the portion of the subject property that was sold to them. 8

On January 31, 2007, the RTC rendered a decision dismissing the complaint for legal redemption filed by the
9 

respondents. In disposing of the said complaint, the RTC summed up the issues raised therein as follows: (1)
whether the respondents herein and the predecessors-in-interest of the petitioners are co-owners of the subject
property who have the right of redemption under Article 1620 of the Civil Code; and (2) if so, whether that right was
seasonably exercised by the respondents within the 30-day redemption period under Article 1623 of the Civil Code.

On the first issue, the RTC held that the respondents and the predecessors-in-interest of the petitioners are co-
owners of the subject property considering that the petitioners failed to adduce any evidence showing that the
respective shares of each of the registered owners thereof were indeed particularized, specified and subdivided.
On the second issue, the RTC ruled that the respondents failed to seasonably exercise their right of redemption
within the 30-day period pursuant to Article 1623 of the Civil Code. Notwithstanding the lack of a written notice of the
sale of a portion of the subject property to Spouses Pascual and Francisco, the RTC asserted that the respondents
had actual notice of the said sale. Failing to exercise their right of redemption within 30 days from actual notice of
the said sale, the RTC opined that the respondents can no longer seek for the redemption of the property as against
the petitioners.

Thereupon, the respondents appealed from the January 31, 2007 decision of the RTC of Laoag City with the CA.
On July 29, 2008, the CA rendered the herein assailed Decision the decretal portion of which reads:
10 

WHEREFORE, the appeal is GRANTED and the appealed January 31, 2007 Decision is, accordingly, REVERSED
and SET ASIDE. In lieu thereof, another is entered approving [respondents’] legal redemption of the portion in
litigation. The rest of their monetary claims are, however, DENIED for lack of factual and/or legal bases.

SO ORDERED. 11

In allowing the respondents to exercise their right of redemption, the CA held that the 30-day period within which to
exercise the said right had not yet lapsed considering the absence of a written notice of the said sale. Thus, the CA
stated that "[t]he mandatory nature of the ‘written notice requirement’ is such that, notwithstanding the actual
knowledge of the sale, written notice from the seller is still necessary in order to remove all uncertainties about the
sale, its terms and conditions, as well as its efficacy and status."
12

The petitioners sought for a reconsideration of the said July 29, 2008 Decision, but it was denied by the CA in its
Resolution dated January 30, 2009.
13 

Undaunted, the petitioners instituted the instant petition for review on certiorari before this Court essentially
asserting the following arguments: (1) their predecessors-in-interest and the respondents are not co-owners of the
subject property since their respective shares therein had already been particularized, specified and subdivided; and
(2) even if such co-ownership exists, the respondents could no longer exercise their right of redemption having
failed to exercise the same within 30 days from actual knowledge of the said sale.

The petition is denied.

Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall raise only
questions of law, which must be distinctly set forth. A question of law arises when there is doubt as to what the law
is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the
alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of
the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact. 14

The first issue raised by the petitioners is a factual question as it entails a determination of whether the subject
property was indeed co-owned by the respondents and the predecessors-in-interest of the petitioners. Such
determination would inevitably necessitate a review of the probative value of the evidence adduced in the case
below.

In any case, it ought to be stressed that both the RTC and the CA found that the subject property was indeed co-
owned by the respondents and the predecessors-in-interest of the petitioners. Thus, in the absence of any
exceptional circumstances to warrant the contrary, this Court must abide by the prevailing rule that findings of fact of
the trial court, more so when affirmed by the CA, are binding and conclusive upon it. 15

Anent the second issue asserted by the petitioners, we find no reversible error on the part of the CA in ruling that
the 30-day period given to the respondents within which to exercise their right of redemption has not commenced in
view of the absence of a written notice. Verily, despite the respondents’ actual knowledge of the sale to the
respondents, a written notice is still mandatory and indispensable for purposes of the commencement of the 30-day
period within which to exercise the right of redemption.
Article 1623 of the Civil Code succinctly provides that:

Article 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the
notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be
recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners. (emphasis supplied)

The indispensability of the "written notice requirement" for purposes of the exercise of the right of redemption was
explained by this Court in Barcellano v. Bañas, thus:
16 

Nothing in the records and pleadings submitted by the parties shows that there was a written notice sent to the
respondents. Without a written notice, the period of thirty days within which the right of legal pre-emption may be
exercised, does not start.

The indispensability of a written notice had long been discussed in the early case of Conejero v. Court of
Appeals, penned by Justice J.B.L. Reyes:

With regard to the written notice, we agree with petitioners that such notice is indispensable, and that, in view of the
terms in which Article of the Philippine Civil Code is couched, mere knowledge of the sale, acquired in some other
manner by the redemptioner, does not satisfy the statute. The written notice was obviously exacted by the Code to
remove all uncertainty as to the sale, its terms and its validity, and to quiet any doubts that the alienation is not
definitive. The statute not having provided for any alternative, the method of notification prescribed remains
exclusive.

This is the same ruling in Verdad v. Court of Appeals:

The written notice of sale is mandatory. This Court has long established the rule that notwithstanding actual
knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in order to remove all
uncertainties about the sale, its terms and conditions, as well as its efficacy and status.

Lately, in Gosiengfiao Guillen v. The Court of Appeals, this Court again emphasized the mandatory character of a
written notice in legal redemption:

From these premises, we ruled that "[P]etitioner-heirs have not lost their right to redeem, for in the absence of a
written notification of the sale by the vendors, the 30-day period has not even begun to run." These premises and
conclusion leave no doubt about the thrust of Mariano: The right of the petitioner-heirs to exercise their right of
legal redemption exists, and the running of the period for its exercise has not even been triggered because
they have not been notified in writing of the fact of sale.

xxxx

Justice Edgardo Paras, referring to the origins of the requirement, would explain in his commentaries on the New
Civil Code that despite actual knowledge, the person having the right to redeem is STILL entitled to the written
notice. Both the letter and the spirit of the New Civil Code argue against any attempt to widen the scope of the
"written notice" by including therein any other kind of notice such as an oral one, or by registration. If the intent of the
law has been to include verbal notice or any other means of information as sufficient to give the effect of this notice,
there would have been no necessity or reason to specify in the article that said notice be in writing, for under the old
law, a verbal notice or mere information was already deemed sufficient.

Time and time again, it has been repeatedly declared by this Court that where the law speaks in clear and
categorical language, there is no room for interpretation. There is only room for application. Where the language of
a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation should be
resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice. x x x
(citations omitted)1avvphi1
Here, it is undisputed that the respondents did not receive a written notice of the sale in favor of the petitioners.
Accordingly, the 30-day period stated under Article 1623 of the Civil Code within which to exercise their right of
redemption has not begun to run. Consequently, the respondents may still redeem from the petitioners the portion of
the subject property that was sold to the latter.

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The assailed Decision dated
July 29, 2008 and Resolution dated January 30, 2009 issued by the Court of Appeals in CA-G.R. CV No. 89111 are
AFFIRMED.

SO ORDERED.

BIENVENIDO L. REYES
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
MARTIN S. VILLARAMA, JR.* JOSE PORTUGAL PEREZ
Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out
to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side.  As 1

eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire
in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy
and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject
the rich simply because they are rich, for justice must always be served, for poor and rich alike,
according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and
Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP
No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private
respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby

GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar

as it provides for the opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not merely "earmark",

"reserve" or "deposit in trust" — with an accessible bank designated by respondent
DAR in the names of the following petitioners the following amounts in cash and in
government financial instruments — within the parameters of Sec. 18 (1) of RA 6657:
 P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdraw the

above-deposited amounts without prejudice to the final determination of just
compensation by the proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary administrative

proceedings to determine the just compensation for the lands of the petitioners giving
the petitioners 15 days from notice within which to submit evidence and to 2) decide
the cases within 30 days after they are submitted for decision.
4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995,  denying their motion for
5

reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer
schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a
Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents
questioned the validity of DAR Administrative Order No. 6, Series of 1992  and DAR Administrative Order
6

No. 9, Series of 1990,  and sought to compel the DAR to expedite the pending summary administrative
7

proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in
cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for
private respondents, and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent
Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the
names of farmer beneficiaries collectively, based on the request of the DAR together with a
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked
for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283,
respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the
requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds
in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of
a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT
No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F.
Santiago; that in November and December 1990, without notice to the petitioners, the Landbank
required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay
rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest;
that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay
the landowner directly or through the establishment of a trust fund in the amount of P135,482.12,
that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F.
Santiago. (ANNEX "E"; Rollo,
 p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual
Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent Landbank claims
1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of
Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU,
did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges
— with respect to its properties located in San Francisco, Quezon — that the properties of
AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an
area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189
hectares; that a summary administrative proceeding to determine compensation of the property
covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the
landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the
compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at
P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the
name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision
was established by adding P1,986,489.73 to the first trust account established on 19 December
1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged
that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of
Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued
covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action
was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust
account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices
of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due
notice to it (Rollo, p. 100). 8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with
grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in
cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and
the titles are cancelled as provided under Section 16(e) of RA 6657.  Private respondents also assail the fact that
9

the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names
as landowners despite the clear mandate that before taking possession of the property, the compensation must be
deposited in cash or in bonds.  10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power
pursuant to Section 49 of RA 6657.  Moreover, the DAR maintained that the issuance of the "Certificate of Deposit"
11

by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case
of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No.
78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with
Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also
used.13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents.  Petitioners filed a motion for reconsideration but respondent court denied the same.
14 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the
appeal has no merit and is merely intended to delay the finality of the appealed decision.  The Court, however,
16

denied the motion and instead required the respondents to file their comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9,
Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2)
in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the
amounts deposited in trust pending the final resolution of the cases it has filed for just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit.
Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular
No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to
promulgate rules and regulations in implementing the declared policies of RA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear
nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or at least, qualifying words
ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no
ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be
disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment.  In this regard, it must be stressed that the function of promulgating rules and regulations may be
18

legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that
administrative regulations cannot extend
the law and amend a legislative enactment,  for settled is the rule that administrative regulations must be in
19

harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails.20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued
Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner
as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that
the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular
Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law.
Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and
void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts
deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of
RA 6657 and payment of final compensation as provided under Section 18  of the same law. According to
21

petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final
valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference
to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because
the latter amount is only provisional and intended merely to secure possession of the property pending final
valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association
of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well-accepted principle of
eminent domain.

xxx xxx xxx

The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with
the landowner. No outright change of ownership is contemplated either.

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found
that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led
the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not
always required to be made fully in money" — even as the Supreme Court admits in the same case
"that the traditional medium for the payment of just compensation is money and no other" — the
Supreme Court in said case did not abandon the "recognized rule . . . that title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation."   (Emphasis supplied)
23

We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the
extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the
traditional mode of payment of compensation and recognized payment other than in cash. It did not, however,
dispense with the settled rule that there must be full payment of just compensation before the title to the
expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation for their properties simply because they
rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use
of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that
which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association"
case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must
rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The
immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property
for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means
not only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to suffer the
 consequence of being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss.   (Emphasis supplied)
24

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of
the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer.  But despite
25

this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be
stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally
important because social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.
26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed
decision is AFFIRMED in toto.

SO ORDERED.

Regalado, Puno and Mendoza, JJ., concur.

Narvasa, C.J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 180462               February 9, 2011

SOUTH PACIFIC SUGAR CORPORATION and SOUTH EAST ASIA SUGAR MILL CORPORATION, Petitioners,
vs.
COURT OF APPEALS and SUGAR REGULATORY ADMINISTRATION, Respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review on certiorari1 of the 6 November 2007 Decision2 of the Court of Appeals in CA-G.R. SP
No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders 3 as well as the 6
September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial
Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236.

The Facts

In 1999, the government projected a shortage of some 500,000 metric tons of sugar due to the effects of El Niño
and La Niña phenomena. To fill the expected shortage and to ensure stable sugar prices, then President Joseph
Ejercito Estrada issued Executive Order No. 87, Series of 1999 (EO 87), 4 facilitating sugar importation by the private
sector.

Section 2 of EO 87 created a Committee on Sugar Conversion/Auction to determine procedures for sugar

importation as well as for collection and remittance of conversion fee.

Under Section 3 of EO 87, sugar conversion is by auction and is subject to conversion fee to be remitted by
respondent Sugar Regulatory Administration (SRA) to the Bureau of Treasury.

On 3 May 1999, the Committee on Sugar Conversion/Auction issued the Bidding Rules providing guidelines for
sugar importation. Under the Bidding Rules, the importer pays 25% of the conversion fee within three working days
from receipt of notice of the bid award and the 75% balance upon arrival of the imported sugar.

The Bidding Rules also provide that if the importer fails to make the importation or if the imported sugar fails to
arrive on or before the set arrival date, 25% of the conversion fee is forfeited in favor of the SRA, to wit:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the
Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in
favor of the SRA and the imported sugar shall not be classified as "B" (domestic sugar) unless, upon application
with the SRA and without objection of the Committee, the SRA allows such conversion after payment by the
importer of 100% of the Conversion Fee applicable to the shipment. 5 (Emphasis supplied)

The SRA forthwith authorized the importation of 300,000 metric tons of sugar, to be made in three tranches, as
follows:
Tranche Volume Arrival Date
 1st 100,000MT 15 May-15 June 1999
2nd 100,000MT 15 June-July 15 1999
3rd 100,000MT 15 July-15 August 19996

The Committee on Sugar Conversion/Auction caused the publication of the invitation to bid. Several sugar importers
submitted sealed bid tenders. Petitioners Southeast Asia Sugar Mill Corporation (Sugar Mill) and South Pacific
Sugar Corporation (Pacific Sugar) emerged as winning bidders for the 1st, 2nd, and 3rd tranches.

For the 3rd tranche, Sugar Mill submitted the winning bid of ₱286.80 per 50 kilogram for 10,000 metric tons of
sugar, while Pacific Sugar submitted the winning bid of ₱285.99 per 50 kilogram for 20,000 metric tons of sugar, for
a combined total volume of 30,000 metric tons of sugar.

Pursuant to the Bidding Rules, Sugar Mill paid 25% of the conversion fee amounting to ₱14,340,000.00, while
Pacific Sugar paid 25% of the conversion fee amounting to ₱28,599,000.00.

As it turned out, Sugar Mill and Pacific Sugar (sugar corporations) delivered only 10% of their sugar import
allocation, or a total of only 3,000 metric tons of sugar. They requested the SRA to cancel the remaining 27,000
metric tons of sugar import allocation blaming sharp decline in sugar prices. The sugar corporations sought
immediate reimbursement of the corresponding 25% of the conversion fee amounting to ₱38,637,000.00.

The SRA informed the sugar corporations that the conversion fee would be forfeited pursuant to paragraph G.1 of
the Bidding Rules. The SRA also notified the sugar corporations that the authority to reconsider their request for
reimbursement was vested with the Committee on Sugar Conversion/Auction.

On 26 February 2002, the sugar corporations filed a complaint for breach of contract and damages in the Regional
Trial Court (Branch 77) of Quezon City, docketed as Civil Case No. Q-02-46236.

In its notice of appearance,7 the Office of the Solicitor General (OSG) deputized Atty. Raul Labay of the SRA’s legal
department to assist the OSG in this case, thus:

Please be informed that Atty. Raul M. Labay has been authorized to appear in this case, and therefore, should also
be furnished with notices of hearings, orders, resolutions, decisions, and other processes. However, as the Solicitor
General retains supervision and control of the representation in this case and has to approve withdrawal of the
case, non-appeal, or other actions which appear to compromise the interests of the Government, only notices of
orders, resolutions, and decisions served on him will bind the party represented. 8

The Ruling of the RTC

The RTC held that paragraph G.1 of the Bidding Rules contemplated delay in the arrival of imported sugar, not
cancellation of sugar importation. It concluded that the forfeiture provision did not apply to the sugar corporations
which merely cancelled the sugar importation. In its 19 December 2006 Decision, 9 the RTC ruled, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, ORDERING the
defendant Sugar Regulatory Administration to pay plaintiffs the amount of ₱38,637,000.00 as reimbursement of
25% of the conversion fee they paid in 1999. The claim for legal interests, compensatory damages, exemplary
damages, and attorney’s fees is hereby DENIED.

SO ORDERED.10

On 5 January 2007, the OSG received its copy of the RTC Decision. 11 On 24 January 2007, the deputized SRA
counsel, Atty. Raul Labay, received his own copy of the Decision and filed a notice of appeal on 7 February 2007. 12

The sugar corporations moved to expunge the notice of appeal on the ground that only the OSG, as the principal
counsel, can decide whether an appeal should be made. The sugar corporations stressed that a lawyer deputized
by the OSG has no authority to decide whether an appeal should be made.
The OSG filed its opposition13 to the motion to expunge the notice of appeal. The OSG pointed out that in its notice
of appearance,14 it authorized SRA counsel Atty. Labay to assist the OSG in this case.

In its 26 June 2007 Order, the RTC granted the motion to expunge the notice of appeal. The OSG moved for
reconsideration stressing that the OSG ratified Atty. Labay’s filing of a notice of appeal. The RTC, in its 6 August
2007 Order, denied the OSG’s motion for reconsideration.

In its 31 August 2007 Order, the RTC granted the sugar corporations’ motion for execution, to wit:

WHEREFORE, premises considered, the plaintiffs’ motion for execution is hereby granted. Accordingly, issue a writ
of execution for the enforcement of the decision rendered in this case.

SO ORDERED.15

Accordingly, the RTC issued on 6 September 2007 a Writ of Execution and on 12 September 2007 an Amended
Writ of Execution.

Aggrieved, the SRA filed in the Court of Appeals a petition for certiorari under Rule 65 seeking to set aside the
RTC’s 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of
Execution and the 12 September 2007 Amended Writ of Execution.

The Ruling of the Court of Appeals

The Court of Appeals held that the deputized SRA counsel had authority to file a notice of appeal. The appellate
court thus directed the RTC to give due course to the appeal that Atty. Labay timely filed. The decretal part of its 6
November 2007 Decision reads:

WHEREFORE, premises considered, the present petition is hereby GIVEN DUE COURSE and the writ prayed for
accordingly GRANTED. The Orders dated June 26, 2007, August 6, 2007, and August 31, 2007, as well as the Writ
of Execution dated September 6, 2007 and Amended Writ of Execution dated September 12, 2007 issued in Civil
Case No. Q-02-46236 of the Regional Trial Court of Quezon City, Branch 77 are hereby all ANNULLED and SET
ASIDE. Said court is hereby DIRECTED to GIVE DUE COURSE to the Notice of Appeal dated February 7, 2007
filed by Atty. Raul M. Labay in behalf of petitioner Sugar Regulatory Administration.

No pronouncement as to costs.

SO ORDERED.16

Dissatisfied with the decision of the Court of Appeals, the sugar corporations filed in this Court a petition for review
on certiorari.

The Issues

The issues are (1) whether a deputized SRA counsel may file a notice of appeal and (2) whether the sugar
corporations are entitled to reimbursement of ₱38,637,000.00 in conversion fee.

The Court’s Ruling

The petition lacks merit.

The sugar corporations contend that the deputized SRA counsel, Atty. Labay, was not authorized to file a notice of
appeal; that the OSG, as the principal counsel, had the sole authority to file a notice of appeal; that certiorari may
not be interposed as a substitute for the lost remedy of appeal; and that the subject conversion fee amounting to
₱38,637,000.00 remained as private funds in view of its summary forfeiture and as such, it could not be deemed
part of public funds.
The OSG counters that assuming Atty. Labay had no authority to file the notice of appeal, the defect was cured
when the OSG subsequently filed its opposition to the sugar corporations’ motion to expunge the notice of appeal.
The OSG claims that if the denial of the appeal is sustained, the SRA would no longer have a remedy to assail the
RTC decision adjudging it liable to reimburse the sugar corporations ₱38,637,000.00 in conversion fee despite the
admitted failure of the sugar corporations to comply with their contractual undertaking to import sugar.

The deputized SRA counsel may file a notice of appeal.

Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987 17 authorizes the OSG to represent the
SRA, a government agency established pursuant to Executive Order No. 18, Series of 1986, 18 in any litigation,
proceeding, investigation, or matter requiring the services of lawyers. It provides:

SEC. 35. Powers and Functions. – The Office of the Solicitor General shall represent the Government of the
Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding,
investigation, or matter requiring the services of lawyers. When authorized by the President or head of the
office concerned, it shall also represent government owned or controlled corporations. The Office of the Solicitor
General shall constitute the law office of the Government and, as such, shall discharge duties requiring the services
of lawyers. (Emphasis supplied)

The OSG is empowered to deputize legal officers of government departments, bureaus, agencies, and offices in
cases involving their respective offices. Paragraph 8 of the same section reads:

(8) Deputize legal officers of government departments, bureaus, agencies, and offices to assist the Solicitor
General and appear or represent the Government in cases involving their respective offices, brought before
the courts and exercise supervision and control over such legal officers with respect to such cases. (Emphasis
supplied)

In National Power Corporation v. Vine Development Corporation,19 this Court ruled that the deputization by the OSG
of NAPOCOR counsels in cases involving the NAPOCOR included the authority to file a notice of appeal. The Court
explained that the OSG could have withdrawn the appeal if it believed that the appeal would not advance the
government’s cause. The Court held that even if the deputized NAPOCOR counsel had no authority to file a notice
of appeal, the defect was cured by the OSG’s subsequent manifestation that the deputized NAPOCOR counsel had
authority to file a notice of appeal.

The sugar corporations’ reliance on another NAPOCOR case, National Power Corporation v. NLRC,20 is misplaced.
There, service of the decision was never made on the OSG, the principal counsel for NAPOCOR. Only the
deputized NAPOCOR counsel was served a copy of the decision. Hence, the Court held that the period to appeal
the decision did not commence to run. The Court explained that service of the decision on the deputized NAPOCOR
counsel was insufficient and not binding on the OSG. This was why the Court stated in that case that the deputized
NAPOCOR counsel had no authority to decide whether an appeal should be made.

Noteworthy, in National Power Corporation v. Vine Development Corporation, both the OSG and the deputized
NAPOCOR counsel were served copies of the decision subject of the appeal. In National Power Corporation v.
NLRC, only the deputized NAPOCOR counsel was furnished a copy of the appealed decision. Hence, the differing
rulings by this Court.

In the present case, records show that both the OSG and the deputized SRA counsel were served copies of the
RTC decision subject of the appeal. Thus, what applies is National Power Corporation v. Vine Development
Corporation. Applying here the doctrine laid down in the said case, deputized SRA counsel Atty. Labay is, without a
doubt, authorized to file a notice of appeal.

Assuming Atty. Labay had no authority to file a notice of appeal, such defect was cured when the OSG
subsequently filed its opposition to the motion to expunge the notice of appeal. As the OSG explained, its
reservation21 to "approve the withdrawal of the case, the non-appeal, or other actions which appear to compromise
the interest of the government" was meant to protect the interest of the government in case the deputized SRA
counsel acted in any manner prejudicial to government. Obviously, what required the approval of the OSG was the
non-appeal, not the appeal, of a decision adverse to government.
We hold that the RTC should have given due course to the notice of appeal that Atty. Labay timely filed. Thus, the
19 December 2006 Decision of the RTC in Civil Case No. Q-02-46236 cannot be deemed to have attained finality.

The next logical step is to remand the case to the RTC. However, a remand would only delay the resolution of this
case and frustrate the ends of justice. As a rule, remand is avoided in the following instances: (a) where the ends of
justice would not be served; (b) where public interest demands an early disposition of the case; or (c) where the trial
court already received all the evidence presented by both parties, and the Supreme Court is in a position, based
upon said evidence, to decide the case on its merits. 22 All three conditions are present here.

The sugar corporations are not entitled to reimbursement

of 25% of the conversion fee amounting to ₱38,637,000.00.

Section 2 of EO 87 granted the Committee on Sugar Conversion/Auction power to promulgate rules governing
sugar importation by the private sector. It provides:

SEC. 2. Committee on Sugar Conversion/Auction. – There is hereby created a Committee on Sugar

Conversion/Auction which shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and a
representative each from the sugar planters’ group and the sugar millers’ group. The Committee is hereby
authorized to determine the parameters and procedures on the importation of sugar by the private sector,
and the collection and remittance of the fee for the conversion of sugar from "C" (reserve sugar) to "B" (domestic
sugar). (Emphasis supplied)

Pursuant to this authority, the Committee issued the Bidding Rules subject of the controversy, paragraph G.1 of
which provides that if the importer fails to make the importation, 25% of the conversion fee shall be
forfeited in favor of the SRA, thus:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the
Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor
of the SRA and the imported sugar shall not be classified as "B" (domestic sugar) unless, upon application with the
SRA and without objection of the Committee, the SRA allows such conversion after payment by the importer of
100% of the Conversion Fee applicable to the shipment. 23 (Emphasis supplied)

In joining the bid for sugar importation, the sugar corporations are deemed to have assented to the Bidding Rules,
including the forfeiture provision under paragraph G.1. The Bidding Rules bind the sugar corporations. The latter
cannot rely on the lame excuse that they are not aware of the forfeiture provision.

At the trial, Teresita Tan testified that the Bidding Rules were duly published in a newspaper of general
circulation.24 Vicente Cenzon, a sugar importer who participated in the bidding for the 3rd tranche, testified that he
attended the pre-bid conference where the Bidding Rules were discussed and copies of the same were distributed
to all the bidders.25

On the other hand, all that the sugar corporations managed to come up with was the self-serving testimony of its
witness, Daniel Fajardo, that the sugar corporations were not informed of the forfeiture provision in the Bidding
Rules.26

The Bidding Rules passed through a consultative process actively participated by various government agencies and
their counterpart in the private sector: the Department of Agriculture, the National Economic Development Authority,
the Department of Trade and Industry, the Department of Finance, the Sugar Regulatory Administration, and a
representative each from the sugar planters’ group and the sugar millers’ group. 27

We find nothing in the forfeiture provision of the Bidding Rules that is contrary to law, morals, good customs, public
order, or public policy. On the contrary, the forfeiture provision fully supports government efforts to aid the country’s
ailing sugar industry. Conversion fees, including those that are forfeited under paragraph G.1 of the Bidding Rules,
are automatically remitted to the Bureau of Treasury and go directly to the Agricultural Competitiveness
Enhancement Fund.28

It is unrefuted that the sugar corporations failed in their contractual undertaking to import the remaining 27,000
metric tons of sugar specified in their sugar import allocation. Applying paragraph G.1 of the Bidding Rules, such
failure is subject to forfeiture of the 25% of the conversion fee the sugar corporations paid as part of their contractual
undertaking. 1avvphi1

The RTC gravely erred in ordering the SRA to return the forfeited conversion fee to the sugar corporations. Its
strained interpretation that paragraph G.1 of the Bidding Rules contemplates cases of delay in the arrival of
imported sugar but not cases of cancellation of sugar importation defies logic and the express provision of
paragraph G.1. If delay in the arrival of imported sugar is subject to forfeiture of 25% of the conversion fee, with
more reason is outright failure to import sugar, by cancelling the sugar importation altogether, subject to forfeiture of
the 25% of the conversion fee.

Plainly and expressly, paragraph G.1 identifies two situations which would bring about the forfeiture of 25% of the
conversion fee: (1) when the importer fails to make the importation or (2) when the imported sugar fails to arrive
in the Philippines on or before the set arrival date. It is wrong for the RTC to interpret the forfeiture provision in a
way departing from its plain and express language.

Where the language of a rule is clear, it is the duty of the court to enforce it according to the plain meaning of the
word. There is no occasion to resort to other means of interpretation. 29

WHEREFORE, we DENY the petition. We AFFIRM the 6 November 2007 Decision of the Court of Appeals in CA-
G.R. SP No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the
6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial
Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236. Further, the 19 December 2006 Decision of the
Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236 is SET ASIDE.

Costs against petitioners.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

ANTONIO EDUARDO B. NACHURA

Associate Justice
DIOSDADO M. PERALTA ROBERTO A. ABAD
Associate Justice Associate Justice

JOSE C. MENDOZA
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 120363 September 5, 1997

CECILLEVILLE REALTY and SERVICE CORPORATION, petitioner,

vs.
THE COURT OF APPEALS and HERMINIGILDO PASCUAL, respondents.

FRANCISCO, J.:

In synthesis, these are the antecedent facts:

Petitioner Cecilleville Realty and Service Corporation is the owner of a parcel of land in Catmon, Sta. Maria,
Bulacan. covered by T.C.T. No. 86.494 (M). Private respondent Herminigildo Pascual occupies a portion
thereof. Despite repeated demands, private respondent refused to vacate and insisted that he is entitled to
occupy the land since he is helping his mother Ana Pascual, petitioner's tenant, to cultivate the land in
question. Thenceforth, petitioner instituted an ejectment suit against private respondent before the
Municipal Trial Court of Sta. Maria, Bulacan. Finding no tenancy relationship between petitioner and private
respondent, the Municipal Trial Court on September 17, 1992, ordered private respondent to vacate the land
and to pay "the sum of P10,000.00 as attorney's fees" and "another sum of P500.00 monthly from the filing
of [the] complaint."  Private respondent appealed to the Regional Trial Court which, on April 4, 1994, set
1

aside the Municipal Trial Court's decision and remanded the case to the DARAB for further adjudication.
Thus:

There is no question that Ana Pascual may seek the assistance of her immediate farm
household in the cultivation of the land. The law protects her in this regard. If the tenant Ana
Pascual will be deprived of such right by ejecting her son Herminigildo Pascual from the
land, it is tantamount to circumventing the law as Ana Pascual will be deprived of the helping
hands of her son. What could not be done directly cannot be done indirectly. The issue of
tenancy relationship between the plaintiff corporation and Ana Pascual cannot be avoided in
this ejectment case.

WHEREFORE, in the light of the foregoing, this Court hereby orders that the instant case be
REMANDED to the DARAB for further adjudication and the decision of the Court a quo is
hereby SET ASIDE . . . 2

Petitioner moved for reconsideration but to no avail; hence, it appealed to respondent Court of Appeals. In
its assailed decision  , respondent court  dismissed petitioner's appeal. The entire ruling of respondent court
3 4

in point states:

We find this petition devoid of merit.

There is a clear tenancy relationship between the plaintiff and the defendant, such that the
defendant cannot be ejected from the premises like a common squatter.

The tenancy relationship dated back to 1976 when the defendant's father, Sotero Pascual, became
the tenant of Jose A. Resurreccion, the President of the Cecilleville Realty and Service Corporation.
This tenancy continued until 1991 when Sotero Pascual died and was succeeded by his wife Ann
Pascual by operation of law. That Ana Pascual is entitled to the security of tenure was upheld by the
DARAB in its Decision of November 8, 1993 which ordered the plaintiff to respect and maintain the
 peaceful possession and cultivation of the property by the defendant Ana Pascual and ordered the
execution of a agricultural leasehold contract between the parties.

The defendant Herminigildo Pascual is occupying and working on the land holding to help his
mother, a bona-fide tenant. He is an immediate member of the family and is entitled to work on the
land. As the lower court held.

Under Republic Act No. 1199, as amended by RA 2263, entitled An Act to Govern the Relations
Between Landholders and Tenants of Agricultural Lands (Leasehold and Share Tenancy), Section
5(a) defines the term tenant, to wit:

Sec. 5.

(a) A tenant shall mean a person who, himself and with the aid available from within his immediate
farm household, cultivates the land belonging to, or possessed by, another, with the latter's consent
for purposes of production, sharing the produce with the landholder under the share tenancy system,
or paying to the landholder a price certain or ascertainable in produce or in money or both, under the
leasehold tenancy system.

Similarly, the term "immediate farm household" is defined in the same section as follows:

(o) Immediate farm household includes the members of the family of the tenant, and such other
persons, whether related to the tenant or not, who are dependent upon him for support and who
usually help him operate the farm enterprise.

The defendant, although not the tenant himself, is afforded the protection provided by law as his
mother is already old and infirm and is allowed to avail of the labor of her immediate household. He
is entitled to the security of tenure accorded his mother. His having a house of his own on the
property is merely incidental to the tenancy.

WHEREFORE, the Decision appealed from is AFFIRMED with costs against the
petitioner.  (Emphasis supplied.)
5

Dissatisfied, petitioner filed the instant petition for review on certiorari anchored on a lone assignment of
error, to wit:

Petitioner respectfully contends that the Honorable Court of Appeals erred in not finding that while
the private respondent is entitled to work on the agricultural land of petitioner in his capacity as
member of the family of tenant Ana Pascual, nonetheless he can not occupy a substantial portion
thereof and utilize the same for residential purposes. 6

On August 19, 1996, the Court gave due course to the petition and required the parties to submit their respective
memoranda. Thereafter, the Court deliberated on the arguments set out in their pleadings.

The petition is impressed with merit.

At the outset, the Court notes that petitioner does not dispute respondent court's finding that Ana Pascual, private
respondent's mother, is its bona-fide tenant. Neither does petitioner question "the right of Ana Pascual, the tenant,
to be assisted by a member of her household, who in this case is respondent Herminigildo Pascual."  What 7

petitioner impugns as erroneous is respondent court's gratuitous pronouncement which effectively granted private
respondent not only a home lot, but also the right to maintain his own house in petitioner's small parcel of
land  despite the fact that Ana Pascual, the adjudged bona-fide tenant, has previously been given a home lot and
8

has an existing house thereon. Private respondent Herminigildo Pascual, for his part, insists that he is entitled by
law, "(Section 22, (3) of Rep. Act No. l199, as amended by Rep. Act No. 2263),"  to a home lot and the right to
9

maintain another house different from that of his mother. To bolster his contention, private respondent adopts
respondent court's ruling finding him as a member of Ana Pascual's immediate farm household. Private respondent
holds, quoting extensively from the assailed decision, that "although not the tenant himself, [he] is afforded the
protection provided by law as his mother is already old and infirm and is allowed to avail of the labor of her
immediate household. . . . [And] [h]is having a house of his own on the property is merely incidental to the
tenancy." 10

As the Court sees it, the issue lies on the interpretation of Section 22, paragraph 3, of Rep. Act No. 1199, as
amended by Rep. Act No. 2263. This section provides in full as follows:

Sec. 22

xxx xxx xxx

(3) The tenant shall have the right to demand for a home lot suitable for dwelling with an area of not
more than 3 per cent of the area of his landholding provided that it does not exceed one thousand
square meters and that it shall be located at a convenient and suitable place within the land of the
landholder to be designated by the latter where the tenant shall construct his dwelling and may raise
vegetables, poultry, pigs and other animals and engage in minor industries, the products of which
shall accrue to the tenant exclusively. The tenant's dwelling shall not be removed from the lot
already assigned to him by the landholder, except as provided in section twenty-six unless there is a
severance of the tenancy relationship between them as provided under section nine, or unless
the tenant is ejected for cause, and only after the expiration of forty-five days following such
severance of relationship or dismissal for cause. (Emphasis supplied)

The law is unambiguous and clear. Consequently, it must be applied according to its plain and obvious
meaning, according to its express terms. Verba legis non est recedendum, or from the words of a statute
there should be no departure.   As clearly provided, only a tenant is granted the right to have a home lot and
11

the right to construct or maintain a house thereon. And here, private respondent does not dispute that he is
not petitioner's tenant. In fact, he admits that he is a mere member of Ana Pascual's immediate farm
household. Under the law, therefore, we find private respondent not entitled to a home lot. Neither is he
entitled to construct a house of his own or to continue maintaining the same within the very small
landholding of petitioner. To rule otherwise is to make a mockery of the purpose of the tenancy relations
between a bona-fide tenant and the landholder as envisioned by the very law, i.e., Rep. Act No. 1199, as
amended, upon which private respondent relies, to wit:

Sec. 2. Purpose. — It is the purpose of this Act to establish agricultural tenancy relations between
landholders and tenants upon the principle of social justice; to afford adequate protection to the
rights of both tenants and landholders; to insure the equitable division of the produce and income
derived from the land; to provide tenant-farmers with incentives to greater and more efficient
agricultural production; to bolster their economic position and to encourage their participation in the
development of peaceful, vigorous and democratic rural communities. (Emphasis supplied )

Thus, if the Court were to follow private respondent's argument and allow all the members of the tenant's immediate
farm household to construct and maintain their houses and to be entitled to not more than one thousand (1,000)
square meters each of home lot, as what private respondent wanted this Court to dole-out, then farms will be
virtually converted into rows, if not colonies, of houses. How then can there be "equitable division of the produce
and income derived from the land" and "more efficient agricultural production" if the land's productivity and use for
growing crops is lessened or, more appropriately, obliterated by its unceremonious conversion into residential use?
It is a fundamental principle that once the policy or purpose of the law has been ascertained, effect should be given
to it by the judiciary.   This Court should not deviate therefrom.
12

Further, it is undisputed that Ana Pascual, the tenant and private respondent's mother, has an existing home lot and
a house on the subject property in which private respondent may take refuge while attending to his work. Curiously,
despite its availability private respondent chose to construct, without petitioner's permission, a concrete house of his
own thereby saving him the trouble of paying appropriate rents. If the Court were to abide by the respondent court's
inordinate pronouncement that private respondent is entitled to maintain his own house then we will be condoning
the deprivation of a landholder's property without even a fraction of compensation. It taxes the credulity of the Court,
therefore, to insist that private respondent's "having a house of his own on the property is merely incidental to the
tenancy" and to afford him the convenience of attending to the cultivation of the land for, in the first place, he is not
the tenant as he himself admits. Besides, the "incidental" use of his own house can very well be provided by the
existing house of his mother, who with her "old and infirm" condition, surely needs the attention and care of her
children, one of whom is herein private respondent. Be it emphasized that like the tenant the landholder is also
entitled to the protection of the law as one of the purposes of the "Act" is "to afford adequate protection to the rights
of BOTH tenants and landholders".   The policy of social justice, we reiterate, is not intended to countenance
13

wrongdoing simply because it is committed by the underprivileged. "Compassion for the poor", as we said
in Galay, et. al. v. Court of Appeals, et. al.   "is an imperative of every humane society but only when the recipient is
14

not a rascal claiming an undeserved privilege."

WHEREFORE, the petition is GRANTED. The part of the decision appealed from which is inconsistent herewith is
REVERSED and SET ASIDE. The decision of the Municipal Trial Court directing the private respondent
Herminigildo Pascual to vacate the portion of the landholding he occupies and to pay the petitioner attorney's fees in
the amount of P10,000.00 and another sum of P500.00 monthly from the filing of complaint is hereby REINSTATED.

Costs against private respondent.

SO ORDERED.
Narvasa, C.J., Davide, Jr., Melo and Panganiban, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

A.M. No. RTJ-96-1347 June 14, 1996

PROS. LEO C. TABAO, complainant,

vs.
JUDGE PEDRO S. ESPINA, respondent,

A.M. No. RTJ-96-1348 June 14, 1996

REGIONAL STATE PROS. FRANCISCO Q. AURILLO, JR., complainant,

vs.
JUDGE PEDRO S. ESPINA, respondent.

PER CURIAM:p

In a sworn complaint dated 4 July 1995, First Assistant City Prosecutor for Tacloban City, Leo C. Tabao, accused Judge Pedro S. Espina then presiding judge,
Regional Trial Court, Branch 7, Tacloban City of: (a) Gross Irregularity, (b) Abuse of Authority and (c) Bias in favor of the accused, in handling and deciding
Criminal Case No. 93-04-197 entitled "People of the Philippines v. Salvador Padernal" a case for violation of Republic Act No. 6425 (Drug Pushing).

In another sworn complaint dated 21 July 1995, Regional State Prosecutor Francisco Q. Aurillo, Jr. manifested his
desire to be a co- complainant against Judge Espina for his handling of the above-mentioned criminal case.

Prosecutor Leo C. Tabao narrated Judge Espina's acts which allegedly merit disciplinary sanction, as follows:

1. On 19 April 1995, when accused Salvador Padernal finished testifying as the third and last witness for the
defense in said Criminal Case No. 93-04-197, defense counsel Atty. Lauro G. Noel made a reservation to submit
within five (5) days, documentary evidence consisting of the accused's alleged business licenses and permits and
the defense's formal offer of exhibits, after which the defense would rest its case.  1

2. On 22 June 1995, the prosecution received a notice of promulgation of judgment in the said criminal case which
was set on 27 June 1995;

3. On the same day, 22 June 1995, the prosecution filed an urgent manifestation seeking to postpone promulgation
of judgment since the defense had not submitted its documentary evidence, formal offer of exhibits and rested its
case. The prosecution also manifested its intention of adducing rebuttal evidence to the documentary exhibits to be
submitted.  ; 2

4. On 23 June 1995, Judge Espina nonetheless issued an order reiterating the notice setting the date of
promulgation of judgment on 27 June 1995.   ; 3

5 On 27 June 1995, Judge Espina promulgated a judgment in the said Criminal Case No. 93-04-197 entitled
"People v. Salvador Padernal" acquitting the accused. The decision was dated 1 June 1995.

Prosecutor Aurillo, aside from reiterating the grounds relied upon by Prosecutor Tabao for holding Judge Espina
administratively liable, adds that he (Aurillo) had earlier assailed before the Court of Appeals an Order, dated 22
April 1993, issued by respondent judge granting bail to the accused in the same above-mentioned criminal case
without giving the prosecution a chance to present evidence to oppose the grant of bail   The Court of Appeals in a 4
decision dated 30 August 1994 annulled Judge Espina's orders granting bail to the accused and denying the
prosecution's motion for reconsideration of the order which granted bail. The dispositive part of the Court of Appeals
decision which became final and executory on 19 September 1994   reads: 5

WHEREFORE, for having been issued with grave abuse of discretion, and for lack of or in excess of
jurisdiction, the Orders dated April 22, 1993 and June 23, 1993 issued in Criminal Case No. 93-04-
197, are declared null and void and set aside. Consequently, the bail bond posted by accused-
private respondent is ordered cancelled and respondent court is ordered to issue a warrant of arrest
for the accused..

We leave to the sound discretion of respondent Judge, the herein petitioner's prayer for inhibition as
he has not been given the opportunity to rule on said motion.

SO ORDERED.  6

On 22 September 1995, respondent Judge Pedro S. Espina filed comment on the first complaint, arguing that:

1. He proceeded to decide the case without the documentary evidence of the defense since such documents were
not submitted within the period allowed;

2. He is of the opinion that the documentary evidence, consisting of business licenses and permits, even if offered to
show that accused is gainfully employed, is immaterial to the innocence or guilt of the accused;

3. Respondent judge invokes Sections 3 and 4 of Rule 128 on the admissibility only of evidence relevant to the
issue;

4. Finally, respondent judge invokes Section 3(m) of Rule 131 (not Sec. 5(m) of Rule 128 as erroneously referred to
in the comment) that presumes that official duty was regularly performed unless the contrary is shown.

On 19 December 1995, respondent Judge Espina filed a pleading entitled "Consolidated Comments" alleging:

1. He granted bail to the accused (Padernal) after the prosecuting fiscal in Criminal Case No. 93-04-197 agreed to
submit the issue of bail for resolution after the prosecution filed an opposition to the petition for bail;

2. He granted bail in the amount of P200,000.00 a day after the prosecution filed said opposition;

3. He denied the prosecution's motion for reconsideration of the order granting bail on the ground that the order had
become final;

4. The enactment into law of Republic Act No. 7659 on 31 December 1993 and the ruling of the Supreme Court
in People v. Simon (G.R. No. 93028, 29 July 1994, 234 SCRA 555), giving the law (R.A. 7659) retroactive effect
insofar as it is beneficial to the accused, now entitles the accused in the subject criminal case to bail as a matter of
right;

5. It is an undue interference with the prerogative of the trial court to argue that the decision in the subject criminal
case should not have been rendered (the way and form it was rendered);

6. It is the sole prerogative of the trial court, in the exercise of its authority to appreciate the evidence, to decide the
relevance or irrelevance of evidence.

On 6 February 1996, the Office of the Court Administrator submitted to the Court a recommendation to absolve
respondent Judge Espina from any administrative liability, based on the opinion that respondent's acts constitute an
exercise of judicial prerogative.

We are not persuaded by the recommendation.

The Court has repeatedly stressed the ruling in People v. Dacudao   that a hearing is absolutely
7

indispensable before a judge can properly determine whether the prosecution's evidence is weak or strong on the
issue of whether or not to grant bail to an accused charged with a heinous crime where the imposable penalty is
death, reclusion perpetua or life imprisonment. Hence, a denial of the prosecution's request to adduce evidence,
deprives it of procedural due process, a right to which it is entitled equally as the defense. A hearing is required to
afford the judge a basis for determining the existence of those factors set forth under Rule 114, Sec. 6, Rules of
Court in granting or rejecting a plea for bail. The hearing for bail though summary in nature is necessary to afford
both the prosecution and the defense an opportunity to prove their respective contentions on the matter of bail for
the accused.

The Court has never hesitated to impose sanctions on judges who had granted bail to an accused charged with a
heinous crime punishable with death, reclusion perpetua or life imprisonment, without the required hearing.
In Santos v. Ofilada   the Court expressing almost exasperation over repeated violations by judges in this regard
8

stated that, "It is indeed lamentable that despite the series of its pronouncements on the same administrative
offense, this Court still has to contend with the same problem all over again and to impose once more the same
sanction."

In the present case, respondent Judge Espina's failure to comment on this aspect of the complaint against him
aggravates his situation It will be recalled, in this connection, that respondent Judge Espina was also required in
another administrative case to comment on the grant of bail to the accused without hearing the evidence of the
prosecution.   In that case, as in the present case, respondent judge did not comment on the averment that he had
9

granted bail to the accused without hearing the prosecution's evidence. The reason for respondent judge's failure to
comment on accusations reflecting on his competence and integrity can only be surmised, but it is apparent that
respondent either ignored this Court's resolution ordering him to comment on all the charges in the complaints or
respondent judge does not realize the gravity of the accusation that he had granted bail without the required
hearing. In the former case, it is gross misconduct, even outright disrespect for the Court, for respondent judge to
exhibit indifference to the resolution requiring him to comment on the accusations in the complaints thoroughly and
substantially, while in the latter case, not realizing the importance and indispensability of a bail hearing is, to be
sure, gross ignorance of the law. In either case, respondent judge should be sanctioned accordingly.

Respondent cannot rely on the ruling in People v. Simon   since the issue in the present complaints is having
10

granted bail to an accused charged with an offense then punishable with life imprisonment, without giving the
prosecution the opportunity to show that evidence of guilt is strong and that as a consequence, the accused is not
entitled to bail. Under the Rules of Court, a hearing for bail is mandatory to afford the State its right to oppose the
grant of bail. The ruling in Simon did not alter much less set aside the State's right to a hearing to oppose bail.
Neither did the ruling in Simon cure the defect of lack of a bail hearing in this case.

On the issue regarding the manner of promulgation of the decision in Criminal Case No. 93-04-197, it is evident that
respondent judge digressed from the regular course and procedure of rendering judgment, which must be done only
after both the prosecution and the defense have rested their respective cases. In the subject criminal case, the
defense had yet to rest its case when respondent judge rendered the judgment of acquittal. It is not difficult to
imagine the grave injustice which would have resulted had respondent judge convicted the accused before the
defense had rested its case. Of course, respondent judge acquitted the accused. But the questions now are: why
the deliberate haste to acquit the accused, the same accused to whom bail had been granted by respondent judge
without hearing the prosecution's evidence? And why was the prosecution denied the right to present rebuttal
evidence when it had manifested its intention to present rebuttal evidence when informed of the promulgation of
judgment?

Judges should be reminded that each step in the trial process serves a specific purpose. In the trial of criminal
cases, the constitutional presumption of innocence in favor of an accused requires that an accused be given
sufficient opportunity to present his defense. So, with the prosecution as to its evidence.

Hence, any deviation from the regular course of trial should always take into consideration the rights of all the
parties to the case, whether in the prosecution or defense. In the exercise of their discretion, judges are sworn not
only to uphold the law but also to do what is fair and just. The judicial gavel should not be wielded by one who has
an unsound and distorted sense of justice and fairness. Respondent judge's conduct in the disposition of the
criminal case subject of the present complaints leaves much to be desired. He miserably failed to exhibit the
objectivity required of members of the bench which is necessary, even indispensable, to maintain the public's trust
and confidence in the courts.

In sum, respondent judge should be penalized for gross ignorance of the law in granting bail to the accused in
Criminal Case No. 93-04-197, where the then imposable penalty was life imprisonment, without hearing. He should
also be accordingly sanctioned for having promulgated the decision in the same criminal case before the defense
had rested and without according the prosecution an opportunity to present rebuttal evidence.

For these two (2) acts constituting grave misconduct, ignorance of the law and gross incompetence, respondent
Judge Pedro S. Espina, now Acting Presiding Judge of the Regional Trial Court, Branch 19, Malolos, Bulacan is
hereby DISMISSED from the service, with forfeiture of all retirement benefits and accrued leave credits and with
prejudice to re-employment in any branch or instrumentality of the government, including government-owned or
controlled corporations. Let copies of this decision be furnished all trial courts in the country with a warning that
further violations of the requirement of hearing prior to the grant of bail in cases where the imposable penalty is
death, reclusion perpetua, or life imprisonment, will merit the same sanctions imposed in this case. This decision is
immediately executory.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Hermosisima, Jr., Panganiban and
Torres, Jr., JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

SPECIAL SECOND DIVISION

G.R. No. 187919               February 20, 2013

RAFAEL H. GALVEZ, and KATHERINE L. GUY, Petitioners,

vs.
HON. COURT OF APPEALS AND ASIA UNITED BANK, Respondents.

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

G.R. No. 187979

ASIA UNITED BANK, Petitioner,

vs.
GILBERT G. GUY, PHILIP LEUNG, KATHERINE L. GUY, RAFAEL H. GALVEZ and EUGENIO H.
GALVEZ, .JR., Respondents.

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

G.R. No. 188030

GILBERT G. GUY, PHILIP LEUNG, and EUGENIO H. GALVEZ, JR., Petitioners,

vs.
ASIA UNITED BANK, Respondents.

RESOLUTION

PEREZ, J.:

We resolve the Motion for Reconsideration filed by petitioner-movants, Rafael H. Galvez and Katherine L. Guy in
G.R. No. 187919,1 and Gilbert G. Guy, Philip Leung and Eugenio H. Galvez, Jr. in G.R. No. 188030 2 addressed to
our consilidated Decision dated 25 April 2012 3 finding probable cause to charge petitioners of the crime of
SYNDICATED ESTAFA under Article 315 (2)(a) in relation to Presidential Decree No. 1689.

Our consilidated decision read:

WHEREFORE, the Decision of the Court of Appeals dated 27 June 2008 in CA-G.R. SP No. 97160 is hereby
AFFIRMED with MODIFICATION that Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy and
Eugenio H. Galvez, Jr. be charged for SYNDICATED ESTAFA under Article 315 (2) (a) of the Revised Penal Code
in relation to Section 1 of Presidential Decree No. 1689. 4

The Motion for Reconsideration

In the main, petitioners submit the following arguments in support of their motion for reconsideration:

First, the petitioners cannot be charged for estafa whether simple or syndicated for the element of deceit was
absent in the transactions that transpired between the petitioners and respondent. This is a case of collection of
sum of money, hence, civil in nature.

Second, the petitioners cannot be charged for syndicated estafa defined in Presidential Decree No. 1689 because
they did not solicit funds from the general public, an indispensable element for syndicated estafa to prosper.5
In our 25 April 2012 Decision, we have more than amply discussed the petitioners’ arguments, specifically, as to the
first issue whether deceit was present in the transaction as to warrant prosecution for the crime of estafa. If only to
emphatically write finis to this aspect of the case, we examine again the petitioners’ arguments vis-à-vis this Court’s
ruling.

The facts

In 1999, Radio Marine Network Inc. (RMSI) claiming to do business under the name Smartnet Philippines 6 and/or
Smartnet Philippines, Inc. (SPI),7 applied for an Omnibus Credit Line for various credit facilities with Asia United
Bank (AUB). To induce AUB to extend the Omnibus Credit Line, RMSI, through its directors and officers, presented
its Articles of Incorporation with its 400-peso million capitalization and its congressional telecom franchise. RMSI
was represented by the following officers and directors occupying the following positions:

Gilbert Guy - Exec. V-Pres./Director

Philip Leung - Managing Director
Katherine Guy - Treasurer
Rafael Galvez - Executive Officer
Eugenio Galvez, Jr. - Chief Financial
Officer/Comptroller

Satisfied with the credit worthiness of RMSI, AUB granted it a ₱250 Million Omnibus Credit Line, under the name of
Smartnet Philippines, RMSI’s Division. On 1 February 2000, the credit line was increased to ₱452 Million pesos
after a third-party real estate mortgage by Goodland Company, Inc., an affiliate of Guy Group of Companies, in favor
of Smartnet Philippines, was offered to the bank. Simultaneous to the increase of the Omnibus Credit Line, RMSI
submitted a proof of authority to open the Omnibus Credit Line and peso and dollar accounts in the name of
Smartnet Philippines, Inc., which Gilbert Guy, et al., represented as a division of RMSI, as evidenced by the
letterhead used in its formal correspondences with the bank and the financial audit made by SGV & Co., an
independent accounting firm. Attached to this authority was the Amended Articles of Incorporation of RMSI, doing
business under the name of Smartnet Philippines, and the Secretary’s Certificate of SPI authorizing its directors,
Gilbert Guy and Philip Leung to transact with AUB. 8 Prior to this major transaction, however, and, unknown to AUB,
while RMSI was doing business under the name of Smartnet Philippines, and that there was a division under the
name Smartnet Philippines, Gilbert Guy, et al. formed a subsidiary corporation, the SPI with a paid-up capital of only
₱62,500.00.

Believing that SPI is the same as Smartnet Philippines - the division of RMSI - AUB granted to it, among others,
Irrevocable Letter of Credit No. 990361 in the total sum of $29,300.00 in favor of Rohde & Schwarz Support Centre
Asia Ptd. Ltd., which is the subject of these consolidated petitions. To cover the liability of this Irrevocable Letter of
Credit, Gilbert Guy executed Promissory Note No. 010445 in behalf of SPI in favor of AUB. This promissory note
was renewed twice, once, in the name of SPI (Promissory Note No. 011686), and last, in the name of Smartnet
Philippines under Promissory Note No. 136131, bolstering AUB’s belief that RMSI’s directors and officers
consistently treated this letter of credit, among others, as obligations of RMSI.

When RMSI’s obligations remained unpaid, AUB sent letters demanding payments. RMSI denied liability contending
that the transaction was incurred solely by SPI, a corporation which belongs to the Guy Group of Companies, but
which has a separate and distinct personality from RMSI. RMSI further claimed that while Smartnet Philippines is an
RMSI division, SPI, is a subsidiary of RMSI, and hence, is a separate entity.

Aggrieved, AUB filed a case of syndicated estafa under Article 315 (2)(a) of the Revised Penal Code in relation to
Section 1 of Presidential Decree No. 1689 against the interlocking directors of RMSI and SPI, namely, Gilbert G.
Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr., before the Office of the City
Prosecutor of Pasig City.

AUB alleged that the directors of RMSI deceived it into believing that SPI was a division of RMSI, only to insist on its
separate juridical personality later on to escape from its liabilities with AUB. AUB contended that had it not been for
the fraudulent scheme employed by Gilbert Guy, et al., AUB would not have parted with its money, which, including
the controversy subject of this petition, amounted to hundreds of millions of pesos.

Our Ruling

We already emphasized in the 25 April 2012 Decision that "this controversy could have been just a simple case for
collection of sum of money had it not been for the sophisticated fraudulent scheme which Gilbert Guy, et
al., employed in inducing AUB to part with its money." 9 Our Decision meticulously discussed how we found probable
cause, a finding affirming that of the prosecutor and the Court of Appeals, to indict petitioners for the crime
of estafa under Article 315 (2)(a) of the Revised Penal Code. 10 We noted there and we now reiterate that it was
neither the petitioners’ act of borrowing money and not paying it, nor their denial thereof, but their very act of
deceiving AUB in order for the latter to part with its money that is sought to be penalized. Thus:

x x x As early as the Penal Code of Spain, which was enforced in the Philippines as early as 1887 until it was
replaced by the Revised Penal Code in 1932, the act of fraud through false pretenses or similar deceit was already
being punished. Article 335 of the Penal code of Spain punished a person who defrauded another ‘by falsely
pretending to possess any power, influence, qualification, property, credit, agency or business, or by means of
similar deceit.’11

Under Article 315 (2)(a) of the Revised Penal Code, estafa is committed by any person who shall defraud another
by, among others, false pretenses or fraudulent acts executed prior to or simultaneous with the commission of
fraud, i.e., by using a fictitious name, falsely pretending to possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions; or by means of other similar deceits.

Underscoring the aforesaid discussion, we found that:

First, Gilbert Guy, Philip Leung, Katherine Guy, Rafael Galvez and Eugene Galvez, Jr., interlocking directors of
RMSI and SPI, represented to AUB in their transactions that Smartnet Philippines and SPI were one and the same
entity. While Eugene Galvez, Jr. was not a director of SPI, he actively dealt with AUB in his capacity as RMSI’s
Chief Financial Officer/Comptroller by falsely representing that SPI and RMSI were the same entity. Gilbert Guy,
Philip Leung, Katherine Guy, Rafael Galvez, and Eugene Galvez, Jr. used the business names Smartnet
Philippines, RMSI, and SPI interchangeably and without any distinction. They successfully did this by using the
confusing similarity of RMSI’s business name, i.e., Smartnet Philippines – its division, and, Smartnet Philippines,
Inc. – the subsidiary corporation. Further, they were able to hide the identity of SPI, by having almost the same
directors as that of RMSI. In order to let it appear that SPI is the same as that of Smartnet Philippines, they
submitted in their application documents of RMSI, including its Amended Articles of Incorporation, third-party real
estate mortgage of Goodland Company in favor of Smartnet Philippines, and audited annual financial statement of
SGV & Co. Gilbert Guy, et al. also used RMSI letterhead in their official communications with the bank and the
contents of these official communications conclusively pointed to RMSI as the one which transacted with the bank.

These circumstances are all indicia of deceit. Deceit is the false representation of a matter of fact whether by
words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed
which deceives or is intended to deceive another so that he shall act upon it to his legal injury. [Citation omitted]

Second, the intent to deceive AUB was manifest from the start. Gilbert Guy et al.[,] laid down first all the necessary
materials they need for this deception before defrauding the bank by first establishing Smartnet Philippines as a
division of Radio Marine under which Radio Marine Network Inc. operated its business. Then it organized a
subsidiary corporation, the SPI, with a capital of only ₱62,000.00. Later, it changed the corporate name of Radio
Marine Network Inc. into RMSI.

Undoubtedly, deceit here was conceived in relation to Gilbert Guy, et al.’s transaction with AUB. There was a plan,
documented in corporation’s papers, that led to the defraudation of the bank. The circumstances of the directors’
and officers’ acts in inserting in Radio Marine the name of Smartnet; the creation of its division – Smartnet
Philippines; and its registration as business name as Smartnet Philippines with the Department of Trade and
Industry, together with the incorporation of its subsidiary, the SPI, are indicia of a pre-conceived scheme to create
this elaborate fraud, victimizing a banking institution, which perhaps, is the first of a kind in Philippine business.
 xxxx

Third, AUB would not have granted the Irrevocable Letter of Credit No. 990361, among others, had it known that
SPI which had only ₱62,500.00 paid-up capital and no assets, is a separate entity and not the division or business
name of RMSI. x x x.

xxxx

It is true that ordinarily, in a letter of credit transaction, the bank merely substitutes its own promise to pay for the
promise to pay of one of its customers, who in turn promises to pay the bank the amount of funds mentioned in the
letters of credit plus credit or commitments fees mutually agreed upon. Once the issuing bank shall have paid the
beneficiary after the latter’s compliance with the terms of the letter of credit, the issuing bank is entitled to
reimbursement for the amount it paid under the letter of credit. [Citation omitted]

In the present case, however, no reimbursement was made outright, precisely because the letter of credit was
secured by a promissory note executed by SPI. The bank would have not agreed to this transaction had it not been
deceived by Gilbert Guy, et al. into believing the RMSI and SPI were one and the same entity. Guy and his cohorts’
acts in (1) securing the letter of credit guaranteed by a promissory note in behalf of SPI; and, (2) their act of
representing SPI as RMSI’s Division, were indicia of fraudulent acts because they fully well know, even before
transacting with the bank, that: (a) SPI was a separate entity from Smartnet Philippines, the RMSI’s Division, which
has the Omnibus Credit Line; and (b) despite this knowledge, they misrepresented to the bank that SPI is RMSI’s
division. Had it not [been] for this false representation, AUB would [not] have granted SPI’s letter of credit to be
secured with a promissory note because SPI as a corporation has no credit line with AUB and SPI by its own, has
no credit standing.

Fourth, it is not in dispute that the bank suffered damage, which, including this controversy, amounted to hundreds
of millions of pesos.12 (Emphasis supplied)

We revisit, however, our ruling as to the second issue, i.e., whether or not the petitioners may be charged and tried
for syndicated estafa under Presidential Decree No. 1689.

While this case is all about finding probable cause to hold the petitioners for trial for syndicated estafa, and, while,
without doubt, a commercial bank is covered by Presidential Decree No. 1689, as deduced from our
pronouncements in People v. Balasa,13 People v. Romero,14 and People v. Menil, Jr.,15 cases where the accused
used the legitimacy of the entities/corporations to perpetrate their unlawful and illegal acts, a careful re-evaluation of
the issues indicate that while we had ample reason to look into whether funds from commercial bank may be subject
of syndicated estafa, the issue of who may commit the crime should likewise be considered.

Section 1 of Presidential Decree No. 1689 provides:

Section 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Article 315 and
316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling
(estafa) is committed by a syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of
moneys contributed by stockholders, or members of rural banks, cooperative, "samahang nayon(s)", or farmers’
associations, or of funds solicited by corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall be reclusion temporal
to reclusion perpetua if the amount of the fraud exceeds 100,000 pesos.

Thus, the elements of syndicated estafa are: (a) estafa or other forms of swindling as defined in Article 315 and 316
of the Revised Penal Code is committed; (b) the estafa or swindling is committed by a syndicate of five or more
persons; and (c) defraudation results in the misappropriation of moneys contributed by stockholders, or members of
rural banks, cooperatives, "samahang nayon(s)," or farmers’ associations or of funds solicited by
corporations/associations from the general public.
On review of the cases applying the law, we note that the swindling syndicate used the association that they
manage to defraud the general public of funds contributed to the association. Indeed, Section 1 of Presidential
Decree No. 1689 speaks of a syndicate formed with the intention of carrying out the unlawful scheme for the
misappropriation of the money contributed by the members of the association. In other words, only those who
formed and manage associations that receive contributions from the general public who misappropriated the
contributions can commit syndicated estafa.

Gilbert Guy, et al., however, are not in any way related either by employment or ownership to AUB. They are
outsiders who, by their cunning moves were able to defraud an association, which is the AUB. Theirs would have
been a different story, had they been managers or owners of AUB who used the bank to defraud the public
depositors.

This brings to fore the difference between the case of Gilbert Guy et al., and that of People v. Balasa, People v.
Romero, and People v. Menil, Jr.

In People v. Balasa, the accused formed the Panata Foundation of the Philippines, Inc., a non-stock/non-profit

corporation and the accused managed its affairs, solicited deposits from the public and misappropriated the same
funds.

We clarified in Balasa that although, the entity involved, the Panata Foundation, was not a rural bank,
cooperative, samahang nayon or farmers’ association, it being a corporation, does not take the case out of the
coverage of Presidential Decree No. 1689. Presidential Decree No. 1689’s third "whereas clause" states that it also
applies to other "corporations/associations operating on funds solicited from the general public." It is this
pronouncement about the coverage of "corporations/associations" that led us to the ruling in our 25 April 2012
Decision that a commercial bank falls within the coverage of Presidential Decree No. 1689. We have to note though,
as we do now, that the Balasa case, differs from the present petition because while in Balasa, the offenders were
insiders, i.e., owners and employees who used their position to defraud the public, in the present petition, the
offenders were not at all related to the bank. In other words, while in Balasa the offenders used the corporation as
the means to defraud the public, in the present case, the corporation or the bank is the very victim of the offenders.

Balasa has been reiterated in People v. Romero, where the accused Martin Romero and Ernesto Rodriguez were
the General Manager and Operation Manager, respectively, of Surigao San Andres Industrial Development
Corporation, a corporation engaged in marketing which later engaged in soliciting funds and investments from the
public.
1âwphi1

A similar reiteration was by People v. Menil, Jr., where the accused Vicente Menil, Jr. and his wife were proprietors
of a business operating under the name ABM Appliance and Upholstery. Through ushers and sales executives, the
accused solicited investments from the general public and thereafter, misappropriated the same.

The rulings in Romero and Menil, Jr. further guide us in the present case. Notably, Romero and Menil, Jr. applied
the second paragraph of Section 1 of Presidential Decree No. 1689 because the number of the accused was below
five, the minimum needed to form the syndicate.

The second paragraph, Section 1 of Presidential Decree No. 1689 states:

When not committed by a syndicate as above defined, the penalty imposable shall be reclusion
temporal to reclusion perpetua if the amount of fraud exceeds 100,000 pesos. 1âwphi1

Effectively, Romero and Menil, Jr. read as written the phrase "when not committed by a syndicate as above
defined," such that, for the second paragraph of Section 1 to apply the definition of swindling in the first paragraph
must be satisfied: the offenders should have used the association they formed, own or manage to misappropriate
the funds solicited from the public.

In sum and substance and by precedential guidelines, we hold that, first, Presidential Decree No. 1689 also covers
commercial banks; second, to be within the ambit of the Decree, the swindling must be committed through the
association, the bank in this case, which operate on funds solicited from the general public; third, when the number
of the accused are five or more, the crime is syndicated estafa under paragraph 1 of the Decree; fourth, if the
number of accused is less than five but the defininf element of the crime under the Decree is present, the second
paragraph of the Decree applies (People v. Romero, People v. Balasa); fifth, the Decree does not apply regardless
of the number of the accused, when (a) the entity soliciting funds from the general public is the victim and not the
means through which the estafa is committed, or (b) the offenders are not owners or employees who used the
association to perpetrate the crime, in which case, Article 315 (2)(a) of the Revised Penal Code applies.

The present petition involves an estafa case filed by a commercial bank as the offended party against the accused
who, as clients, defrauded the bank.

WHEREFORE, we MODIFY our 25 April 2012 Decision and RULE that Gilbert G. Guy, Rafael H. Galvez, Philip
Leung, Katherine L. Guy and Eugenio H. Galvez, Jr., be charged for SIMPLE ESTAFA under Article 315 (2)(a) of
the Revised Penal Code.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice
Acting Chairperson

MARIA LOURDES P.A. SERENO MARIANO C. DEL CASTILLO*

Chief Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

ARTURO D. BRION
Associate Justice
Acting Chairperson, Special Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-42050-66 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA, BRANCH VII, and
PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON BUNDALIAN, JR., JOSEPH C. MAISO,
EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO, MARIANO COTIA,
JR., ARMANDO L. DIZON, ROGELIO B. PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A.
BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA, respondents.

G.R. No. L-46229-32 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and REYNALDO
LAQUI Y AQUINO, ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO VERSOZA, respondents.

G.R. No. L-46313-16 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and JUANITO DE
LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN CASTILLO Y
UBALDO, respondents.

G.R. No. L-46997 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and PANCHITO
REFUNCION, respondents.

Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of the City of Fiscal of Manila and the Office of
Provincial Fiscal of Samar for petitioners.

Norberto Parto for respondents Candelosas, Baes and Garcia.

Amado C. de la Marced for respondents Simeon Bundalian Jr., et al.

Manuel F. de Jesus for all the respondents in L-46229-32 and L-46313-16.

Norberto L. Apostol for respondent Panchito Refuncion.

Hon. Amante P. Purisima for and in his own behalf.

MUÑOZ PALMA, J.:

These twenty-six (26) Petitions for Review filed by the People of the Philippines represented, respectively, by the
Office of the City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and joined by the Solicitor General,
are consolidated in this one Decision as they involve one basic question of law.

These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of Manila,
Branch VII, presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of Manila, Branch XVIII,
presided by Hon. Maximo A. Maceren (8 Petitions) and, the Court of First Instance of Samar, with Hon. Wenceslao
M. Polo, presiding, (1 Petition).

Before those courts, Informations were filed charging the respective accused with "illegal possession of deadly
weapon" in violation of Presidential Decree No. 9. On a motion to quash filed by the accused, the three Judges
mentioned above issued in the respective cases filed before them — the details of which will be recounted below —
an Order quashing or dismissing the Informations, on a common ground, viz, that the Information did not allege facts
which constitute the offense penalized by Presidential Decree No. 9 because it failed to state one essential element
of the crime.

Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense of "illegal
possession of deadly weapon" penalized under Presidential Decree (PD for short) No. 9? This is the central issue
which we shall resolve and dispose of, all other corollary matters not being indispensable for the moment.

A — The Information filed by the People —

1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y DURAN,

accused.

Crim. Case No. 19639

VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081

INFORMATION

The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of paragraph 3,

Presidential Decree No. 9 of Proclamation 1081, committed as follows:

That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the said
accused did then and there wilfully, unlawfully, feloniously and knowingly have in his possession and
under his custody and control one (1) carving knife with a blade of 6-½ inches and a wooden handle
of 5-1/4 inches, or an overall length of 11-¾ inches, which the said accused carried outside of his
residence, the said weapon not being used as a tool or implement necessary to earn his livelihood
nor being used in connection therewith.

Contrary to law. (p. 32, rollo of L-42050-66)

The other Informations are similarly worded except for the name of the accused, the date and place of the
commission of the crime, and the kind of weapon involved.

2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO, accused.

CRIM. CASE NO.

29677
 VIOL. OF PAR. 3,

PD 9 IN REL. TO LOI

No. 266 of the Chief

Executive dated April

1, 1975

INFORMATION

The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF PARAGRAPH 3,

PRESIDENTIAL DECREE NO. 9 in relation to Letter of Instruction No. 266 of the Chief Executive
dated April 1, 1975, committed as follows:

That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the said accused
did then and there wilfully, unlawfully and knowingly carry outside of his residence a bladed and
pointed weapon, to wit: an ice pick with an overall length of about 8½ inches, the same not being
used as a necessary tool or implement to earn his livelihood nor being used in connection therewith.

Contrary to law. (p. 14, rollo of L-46229-32)

The other Informations are likewise similarly worded except for the name of the accused, the date and place of the
commission of the crime, and the kind of weapon involved.

3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder:

PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION, accused.

CRIM. CASE NO. 933

For:

ILLEGAL
POSSESSION OF

DEADLY WEAPON

(VIOLATION OF PD
NO. 9)

INFORMATION

The undersigned First Assistant Provincial Fiscal of Samar, accuses PANCHITO REFUNCION of
the crime of ILLEGAL POSSESSION OF DEADLY WEAPON or VIOLATION OF PD NO. 9 issued
by the President of the Philippines on Oct. 2, 1972, pursuant to Proclamation No. 1081 dated Sept.
21 and 23, 1972, committed as follows:

That on or about the 6th day of October, 1976, in the evening at Barangay Barruz, Municipality of
Matuginao, Province of Samar Philippines, and within the jurisdiction of this Honorabe Court, the
abovenamed accused, knowingly, wilfully, unlawfully and feloniously carried with him outside of his
residence a deadly weapon called socyatan, an instrument which from its very nature is no such as
could be used as a necessary tool or instrument to earn a livelihood, which act committed by the
accused is a Violation of Presidential Decree No. 9.

CONTRARY TO LAW. (p. 8, rollo of L-46997)

B. — The Orders of dismissal —

In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense that one
essential element of the offense charged is missing from the Information, viz: that the carrying outside of the
accused's residence of a bladed, pointed or blunt weapon is in furtherance or on the occasion of, connected with or
related to subversion, insurrection, or rebellion, organized lawlessness or public disorder.

1. Judge Purisima reasoned out, inter alia, in this manner:

... the Court is of the opinion that in order that possession of bladed weapon or the like outside
residence may be prosecuted and tried under P.D. No. 9, the information must specifically allege
that the possession of bladed weapon charged was for the purpose of abetting, or in furtherance of
the conditions of rampant criminality, organized lawlessness, public disorder, etc. as are
contemplated and recited in Proclamation No. 1081, as justification therefor. Devoid of this specific
allegation, not necessarily in the same words, the information is not complete, as it does not allege
sufficient facts to constitute the offense contemplated in P.D. No. 9. The information in these cases
under consideration suffer from this defect.

xxx xxx xxx

And while there is no proof of it before the Court, it is not difficult to believe the murmurings of
detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No.
9, that more than ever before, policemen - of course not all can be so heartless — now have in their
hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being
sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which
only God knows where it came from. Whereas before martial law an extortion-minded peace officer
had to have a stock of the cheapest paltik, and even that could only convey the coercive message of
one year in jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik.

For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its necessity can
never be assailed. But it seems it is back-firing, because it is too hot in the hands of policemen who
are inclined to backsliding.

The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal and the
conscience of the Court, and hence this resolution, let alone technical legal basis, is prompted by
the desire of this Court to apply said checkvalves. (pp. 55-57, rollo of L-42050-66)

2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:

xxx xxx xxx

As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is the
maintenance of law and order throughout the Philippines and the prevention and suppression of all
forms of lawless violence as well as any act of insurrection or rebellion. It is therefore reasonable to
conclude from the foregoing premises that the carrying of bladed, pointed or blunt weapons outside
of one's residence which is made unlawful and punishable by said par. 3 of P.D. No. 9 is one
that abets subversion, insurrection or rebellion, lawless violence, criminality, chaos and public
disorder or is intended to bring about these conditions. This conclusion is further strengthened by
the fact that all previously existing laws that also made the carrying of similar weapons punishable
have not been repealed, whether expressly or impliedly. It is noteworthy that Presidential Decree
No. 9 does not contain any repealing clause or provisions.

xxx xxx xxx

 The mere carrying outside of one's residence of these deadly weapons if not concealed in one's
person and if not carried in any of the aforesaid specified places, would appear to be not unlawful
and punishable by law.

With the promulgation of Presidential Decree No. 9, however, the prosecution, through Assistant
Fiscal Hilario H. Laqui, contends in his opposition to the motion to quash, that this act is now made
unlawful and punishable, particularly by paragraph 3 thereof, regardless of the intention of the
person carrying such weapon because the law makes it "mala prohibita". If the contention of the
prosecution is correct, then if a person happens to be caught while on his way home by law
enforcement officers carrying a kitchen knife that said person had just bought from a store in order
that the same may be used by one's cook for preparing the meals in one's home, such person will
be liable for punishment with such a severe penalty as imprisonment from five to ten years under the
decree. Such person cannot claim that said knife is going to be used by him to earn a livelihood
because he intended it merely for use by his cook in preparing his meals.

This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted and applied
in the manner that that the prosecution wants it to be done. The good intentions of the President in
promulgating this decree may thus be perverted by some unscrupulous law enforcement officers. It
may be used as a tool of oppression and tyranny or of extortion.

xxx xxx xxx

It is therefore the considered and humble view of this Court that the act which the President
intended to make unlawful and punishable by Presidential Decree No. 9, particularly by paragraph 3
thereof, is one that abets or is intended to abet subversion, rebellion, insurrection, lawless violence,
criminality, chaos and public disorder. (pp. 28-30, rollo of L-46229-32)

3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information filed before
him, thus:

... We believe that to constitute an offense under the aforcited Presidential decree, the same should
be or there should be an allegation that a felony was committed in connection or in furtherance of
subversion, rebellion, insurrection, lawless violence and public disorder. Precisely Proclamation No.
1081 declaring a state of martial law throughout the country was issued because of wanton
destruction to lives and properties widespread lawlessness and anarchy. And in order to restore the
tranquility and stability of the country and to secure the people from violence anti loss of lives in the
quickest possible manner and time, carrying firearms, explosives and deadly weapons without a
permit unless the same would fall under the exception is prohibited. This conclusion becomes more
compelling when we consider the penalty imposable, which is from five years to ten years. A strict
enforcement of the provision of the said law would mean the imposition of the Draconian penalty
upon the accused.

xxx xxx xxx

It is public knowledge that in rural areas, even before and during martial law, as a matter of status
symbol, carrying deadly weapons is very common, not necessarily for committing a crime nor as
their farm implement but for self-preservation or self-defense if necessity would arise specially in
going to and from their farm. (pp. 18-19, rollo of L-46997)

In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In the criminal
case before the Court of (First Instance of Samar the accused was arraigned but at the same time moved to quash
the Information. In all the cases where the accused were under arrest, the three Judges ordered their immediate
release unless held on other charges.

C. — The law under which the Informations in question were filed by the People.
As seen from the Informations quoted above, the accused are charged with illegal possession of deadly weapon in
violation of Presidential Decree No. 9, Paragraph 3.

We quote in full Presidential Decree No. 9, to wit:

PRESIDENTIAL DECREE NO. 9

DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22,
1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE UNLAWFUL AND PROVIDING
PENALTIES THEREFORE.

WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the Philippines has
been placed under a state of martial law;

WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated September 22,
1972 and General Order No. 7 dated September 23, 1972, have been promulgated by me;

WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and public
disorder mentioned in the aforesaid Proclamation No. 1081 are committed and abetted by the use of
firearms, explosives and other deadly weapons;

NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of

the Philippines, in older to attain the desired result of the aforesaid Proclamation No. 1081 and
General Orders Nos. 6 and 7, do hereby order and decree that:

1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator shall, upon
conviction suffer:

(a) The mandatory penalty of death by a firing squad or electrocution as a Military,

Court/Tribunal/Commission may direct, it the firearm involved in the violation is unlicensed and is
attended by assault upon, or resistance to persons in authority or their agents in the performance of
their official functions resulting in death to said persons in authority or their agent; or if such
unlicensed firearm is used in the commission of crimes against persons, property or chastity causing
the death of the victim used in violation of any other General Orders and/or Letters of Instructions
promulgated under said Proclamation No. 1081:

(b) The penalty of imprisonment ranging from twenty years to life imprisonment as a Military
Court/Tribunal/commission may direct, when the violation is not attended by any of the
circumstances enumerated under the preceding paragraph;

(c) The penalty provided for in the preceding paragraphs shall be imposed upon the owner,
president, manager, members of the board of directors or other responsible officers of any public or
private firms, companies, corporations or entities who shall willfully or knowingly allow any of the
firearms owned by such firm, company, corporation or entity concerned to be used in violation of
said General Orders Nos. 6 and 7.

2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and other
explosives, including, but not limited to, "pill box bombs," "molotov cocktail bombs," "fire bombs," or
other incendiary device consisting of any chemical, chemical compound, or detonating agents
containing combustible units or other ingredients in such proportion, quantity, packing, or bottling
that ignites by fire, by friction, by concussion, by percussion, or by detonation of all or part of the
compound or mixture which may cause such a sudden generation of highly heated gases that the
resultant gaseous pressures are capable of producing destructive effects on continguous objects or
of causing injury or death of a person; and any person convicted thereof shall be punished by
imprisonment ranging from ten to fifteen years as a Military Court/Tribunal/Commission may direct.
 3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such as "fan
knife," "spear," "dagger," "bolo," "balisong," "barong," "kris," or club, except where such articles are
being used as necessary tools or implements to earn a livelihood and while being used in
connection therewith; and any person found guilty thereof shall suffer the penalty of imprisonment
ranging from five to ten years as a Military Court/Tribunal/Commission may direct.

4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during the
commission of or for the purpose of committing, any other crime, the penalty shall be imposed upon
the offender in its maximum extent, in addition to the penalty provided for the particular offenses
committed or intended to be committed.

Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen hundred and
seventy-two.

(SGD) FERDINAND E. MARCOS

President

Republic of the Philippines

D. — The arguments of the People —

In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal of Manila and
the Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of dismissal, the main argument
advanced on the issue now under consideration is that a perusal of paragraph 3 of P.D. 9 'shows that the prohibited
acts need not be related to subversive activities; that the act proscribed is essentially a malum prohibitum penalized
for reasons of public policy.
1

The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused who commits
the act is immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that P.D. 9 provides and
condemns not only the carrying of said weapon in connection with the commission of the crime of subversion or the
like, but also that of criminality in general, that is, to eradicate lawless violence which characterized pre-martial law
days. It is also argued that the real nature of the criminal charge is determined not from the caption or preamble of
the information nor from the specification of the provision of law alleged to have been violated but by the actual
recital of facts in the complaint or information.
2

E. — Our Ruling on the matter —

1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed of the nature
and cause of the accusation against him. 3

Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint or
information to be sufficient it must, inter alia state the designation of the offense by the statute, and the acts or
omissions complained of as constituting the offense. This is essential to avoid surprise on the accused and to afford
him the opportunity to prepare his defense accordingly.  4

To comply with these fundamental requirements of the Constitution and the Rules on Criminal Procedure, it is
imperative for the specific statute violated to be designated or mentioned 4 in the charge. In fact, another compelling
reason exists why a specification of the statute violated is essential in these cases. As stated in the order of
respondent Judge Maceren the carrying of so-called "deadly weapons" is the subject of another penal statute and a
Manila city ordinance. Thus, Section 26 of Act No. 1780 provides:

Section 26. It should be unlawful for any person to carry concealed about his person any bowie
knife, dirk dagger, kris, or other deadly weapon: ... Any person violating the provisions of this section
shall, upon conviction in a court of competent jurisdiction, be punished by a fine not exceeding five
hundred pesos, or by imprisonment for a period not exceeding six months, or both such fine and
imprisonment, in the discretion of the court.
Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on December 4,
1957, in turn penalizes with a fine of not more than P200.00 or imprisonment for not more than one months, or both,
at the discretion of the court, anyone who shall carry concealed in his person in any manner that would disguise its
deadly character any kind of firearm, bowie knife, or other deadly weapon ... in any public place. Consequently, it is
necessary that the particular law violated be specified as there exists a substantial difference between the statute
and city ordinance on the one hand and P.D. 9 (3) on the other regarding the circumstances of the commission of
the crime and the penalty imposed for the offense.

We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed repealed by
P.D. 9 (3).   P. D. 9(3) does not contain any repealing clause or provision, and repeal by implication is not
5

favored.   This principle holds true with greater force with regards to penal statutes which as a rule are to be
6

construed strictly against the state and liberally in favor of the accused.   In fact, Article 7 of the New Civil Code
7

provides that laws are repealed only by subsequent ones and their violation or non- observance shall not be
excused by disuse, or custom or practice to the contrary.

Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a police officer
or a prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree. That being the case, the
right becomes more compelling for an accused to be confronted with the facts constituting the essential elements of
the offense charged against him, if he is not to become an easy pawn of oppression and harassment, or of
negligent or misguided official action — a fear understandably shared by respondent Judges who by the nature of
their judicial functions are daily exposed to such dangers.

2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the body of the
Information with a violation of paragraph 3, P.D. 9. What then are the elements of the offense treated in the
presidential decree in question?

We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed, blunt, or
pointed weapon, etc. not used as a necessary tool or implement for a livelihood; and second, that the act of carrying
the weapon was either in furtherance of, or to abet, or in connection with subversion, rebellion, insurrection, lawless
violence, criminality, chaos, or public disorder.

It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of the scope of
the statute or the city ordinance mentioned above. In other words, a simple act of carrying any of the weapons
described in the presidential decree is not a criminal offense in itself. What makes the act criminal or punishable
under the decree is the motivation behind it. Without that motivation, the act falls within the purview of the city
ordinance or some statute when the circumstances so warrant.

Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction given to P.D.
9(3).

3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries outside his
residence any of the weapons mentioned or described in the decree irrespective of motivation, intent, or purpose,
converts these cases into one of "statutory construction." That there is ambiguity in the presidential decree is
manifest from the conflicting views which arise from its implementation. When ambiguity exists, it becomes a
judicial task to construe and interpret the true meaning and scope of the measure, guided by the basic principle that
penal statutes are to be construed and applied liberally in favor of the accused and strictly against the state.

4. In the construction or interpretation of a legislative measure — a presidential decree in these cases — the
primary rule is to search for and determine the intent and spirit of the law. Legislative intent is the controlling factor,
for in the words of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee, whatever is within the spirit
of a statute is within the statute, and this has to be so if strict adherence to the letter would result in absurdity,
injustice and contradictions. 8

There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3).

First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are clearly spelled
out in the "Whereas" clauses of the presidential decree, thus: (1) the state of martial law in the country pursuant to
Proclamation 1081 dated September 21, 1972; (2) the desired result of Proclamation 1081 as well as General
Orders Nos. 6 and 7 which are particularly mentioned in P.D. 9; and (3) the alleged fact that subversion, rebellion,
insurrection, lawless violence, criminality, chaos, aid public disorder mentioned in Proclamation 1081 are committed
and abetted by the use of firearms and explosives and other deadly weapons.

The Solicitor General however contends that a preamble of a statute usually introduced by the word "whereas", is
not an essential part of an act and cannot enlarge or confer powers, or cure inherent defects in the statute (p. 120,
rollo of L-42050-66); that the explanatory note or enacting clause of the decree, if it indeed limits the violation of the
decree, cannot prevail over the text itself inasmuch as such explanatory note merely states or explains the reason
which prompted the issuance of the decree. (pp. 114-115, rollo of 46997)

We disagree with these contentions. Because of the problem of determining what acts fall within the purview of P.D.
9, it becomes necessary to inquire into the intent and spirit of the decree and this can be found among others in the
preamble or, whereas" clauses which enumerate the facts or events which justify the promulgation of the decree
and the stiff sanctions stated therein.

A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs which
are to be remedied, and objects which are to be accomplished, by the provisions of the statute."
(West Norman Timber v. State, 224 P. 2d 635, 639, cited in Words and Phrases, "Preamble";
emphasis supplied)

While the preamble of a statute is not strictly a part thereof, it may, when the statute is in itself
ambiguous and difficult of interpretation, be resorted to, but not to create a doubt or uncertainty
which otherwise does not exist." (James v. Du Bois, 16 N.J.L. (1 Har.) 285, 294, cited in Words and
Phrases, "Preamble")

In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that '(L)egislative
intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular
provision alone. This is a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might
easily convey a meaning quite different from the one actually intended and evident when the word or phrase is
considered with those with which it is associated. Thus, an apparently general provision may have a limited
application if read together with other provisions. 9

Second, the result or effects of the presidential decree must be within its reason or intent.

In the paragraph immediately following the last "Whereas" clause, the presidential decree states:

NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the Armed Forces of

the Philippines, in order to attain the desired result of the aforesaid Proclamation No. 1081 and
General Orders Nos. 6 and 7, do hereby order and decree that:

xxx xxx xxx

From the above it is clear that the acts penalized in P.D. 9 are those related to the desired result of
Proclamation 1081 and General Orders Nos. 6 and 7. General Orders Nos. 6 and 7 refer to firearms
and therefore have no relevance to P.D. 9(3) which refers to blunt or bladed weapons. With respect
to Proclamation 1081 some of the underlying reasons for its issuance are quoted hereunder:

WHEREAS, these lawless elements having taken up arms against our duly constituted government
and against our people, and having committed and are still committing acts of armed insurrection
and rebellion consisting of armed raids, forays, sorties, ambushes, wanton acts of murders,
spoilage, plunder, looting, arsons, destruction of public and private buildings, and attacks against
innocent and defenseless civilian lives and property, all of which activities have seriously
endangered and continue to endanger public order and safety and the security of the nation, ...

xxx xxx xxx

 WHEREAS, it is evident that there is throughout the land a state of anarchy and lawlessness, chaos
and disorder, turmoil and destruction of a magnitude equivalent to an actual war between the forces
of our duly constituted government and the New People's Army and their satellite organizations
because of the unmitigated forays, raids, ambuscades, assaults, violence, murders, assassinations,
acts of terror, deceits, coercions, threats, intimidations, treachery, machinations, arsons, plunders
and depredations committed and being committed by the aforesaid lawless elements who have
pledged to the whole nation that they will not stop their dastardly effort and scheme until and unless
they have fully attained their primary and ultimate purpose of forcibly seizing political and state
power in this country by overthrowing our present duly constituted government, ... (See Book I, Vital
Documents on the Declaration of Martial Law in the Philippines by the Supreme Court of the
Philippines, pp. 13-39)

It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with or related to
the afore-quoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3), and nothing else.

Statutes are to be construed in the light of purposes to be achieved and the evils sought to be

remedied. (U.S. v. American Tracking Association, 310 U.S. 534, cited in LVN Pictures v. Philippine
Musicians Guild, 110 Phil. 725, 731; emphasis supplied)

When construing a statute, the reason for its enactment should be kept in mind, and the statute
should be construed with reference to its intended scope and purpose. (Statutory Construction by
E.T. Crawford, pp. 604-605, cited in Commissioner of Internal Revenue v. Filipinas Compania de
Seguros, 107 Phil. 1055, 1060; emphasis supplied)

5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure if a strict
adherence to the letter of the paragraph is followed.

It is a salutary principle in statutory construction that there exists a valid presumption that undesirable
consequences were never intended by a legislative measure, and that a construction of which the statute is fairly
susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful, evil, and injurious
consequences. -a9

It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no intent to work
a hardship or an oppressive result, a possible abuse of authority or act of oppression, arming one person with a
weapon to impose hardship on another, and so on. 10

At this instance We quote from the order of Judge Purisima the following:

And while there is no proof of it before the Court, it is not difficult to believe the murmurings of
detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No.
9, that more than ever before, policemen - of course not all can be so heartless — now have in their
hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being
sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which
only God knows where it came from. Whereas before martial law an extortion-minded peace officer
had to have a stock of the cheapest paltik, and even that could only convey the coercive message of
one year in jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik. (pp. 72-73, rollo L-42050-66)

And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in absurdity at times.
To his example We may add a situation where a law-abiding citizen, a lawyer by profession, after gardening in his
house remembers to return the bolo used by him to his neighbor who lives about 30 meters or so away and while
crossing the street meets a policeman. The latter upon seeing the bolo being carried by that citizen places him
under arrest and books him for a violation of P.D. 9(3). Could the presidential decree have been conceived to
produce such absurd, unreasonable, and insensible results?

6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused.
American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights of
individuals; the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion
of the court limited."   The purpose is not to enable a guilty person to escape punishment through a technicality
11

but to provide a precise definition of forbidden acts.12

Our own decisions have set down the same guidelines in this manner, viz:

Criminal statutes are to be construed strictly. No person should be brought within their terms who is
not clearly within them, nor should any act be pronounced criminal which is not made clearly so by
the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246)

The rule that penal statutes are given a strict construction is not the only factor controlling the
interpretation of such laws, instead, the rule merely serves as an additional, single factor to be
considered as an aid in determining the meaning of penal laws. (People v. Manantan, 5 SCRA 684,
692)

F. The Informations filed by petitioner are fatally defective.

The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that the latter may
constitute a sufficiently valid charged. The sufficiency of an Information is determined solely by the facts alleged
therein.  Where the facts are incomplete and do not convey the elements of the crime, the quashing of the
13

accusation is in order.

Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the complaint or
information when the facts charged do not constitute an offense.

In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an unjust
judgment under Article 204 of the Revised Penal Code, failure to allege in the Information that the judgment was
rendered knowing it to be unjust, is fatal. 14

In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief Justice of the
Court affirmed an order of the trial court which quashed an Information wherein the facts recited did not constitute a
public offense as defined in Section 1, Republic Act 145.  15

G. The filing of these Petitions was unnecessary because the People could have availed itself of other available
remedies below.

Pertinent provisions of the Rules of Court follow:

Rule 117, Section 7. Effect of sustaining the motion to quash. — If the motion to quash is sustained
the court may order that another information be filed. If such order is made the defendant, if in
custody, shall remain so unless he shall be admitted to bail. If such order is not made or if having
been made another information is not filed withuntime to be specified in the order, or within such
further time as the court may allow for good cause shown, the defendant, if in custody, shall be
discharged therefrom, unless he is in custody on some other charge.

Rule 110, Section 13. Amendment. — The information or complaint may be amended, in substance
or form, without leave of court, at any time before the defendant pleads; and thereafter and during
the trial as to all matters of form, by leave and at the discretion of the court, when the same can be
done without prejudice to the rights of the defendant.

xxx xxx xxx

Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz:

First, if the evidence on hand so warranted, the People could have filed an amended Information to include the
second element of the offense as defined in the disputed orders of respondent Judges. We have ruled that if the
facts alleged in the Information do not constitute a punishable offense, the case should not be dismissed but the
prosecution should be given an opportunity to amend the Information. 16

Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act No. 1780,
quoted earlier, or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928, especially since in most if
not all of the cases, the dismissal was made prior to arraignment of the accused and on a motion to quash.

Section 8. Rule 117 states that:

An order sustaining the motion to quash is not a bar to another prosecution for the same offense
unless the motion was based on the grounds specified in section 2, subsections (f) and (h) of this
rule.

Under the foregoing, the filing of another complaint or Information is barred only when the criminal action or liability
had been extinguished (Section 2[f]) or when the motion to quash was granted for reasons of double jeopardy.
(ibid., [h])

As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these cases
should new complaints be filed against them, is a matter We need not resolve for the present.

H. — We conclude with high expectations that police authorities and the prosecuting arm of the government true to
the oath of office they have taken will exercise utmost circumspection and good faith in evaluating the particular
circumstances of a case so as to reach a fair and just conclusion if a situation falls within the purview of P.D. 9(3)
and the prosecution under said decree is warranted and justified. This obligation becomes a sacred duty in the face
of the severe penalty imposed for the offense.

On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal of Manila on
October 15, 1975, written for the Secretary, now Minister of Justice, where he stated the following:

In any case, please study well each and every case of this nature so that persons accused of
carrying bladed weapons, specially those whose purpose is not to subvert the duly constituted
authorities, may not be unduly indicted for the serious offenses falling under P.D. No. 9.17

Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however a judicial
task and prerogative to determine if official action is within the spirit and letter of the law and if basic fundamental
rights of an individual guaranteed by the Constitution are not violated in the process of its implementation. We have
to face the fact that it is an unwise and unjust application of a law, necessary and justified under prevailing
circumstances, which renders the measure an instrument of oppression and evil and leads the citizenry to lose their
faith in their government.

WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent Judges
dismissing or quashing the Information concerned, subject however to Our observations made in the preceding
pages 23 to 25 of this Decision regarding the right of the State or Petitioner herein to file either an amended
Information under Presidential Decree No. 9, paragraph 3, or a new one under other existing statute or city
ordinance as the facts may warrant.

Without costs.

SO ORDERED.

Fernando, Teehankee, Santos, Fernandez and Guerrero, JJ., concur.

Castro, C.J. and Antonio, J, concur in the result.

Aquino, J, took no part.

 

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending
the information, for violation of other laws or ordinances on concealment of deadly weapons.

Makasiar, J, concurs.

CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the
Philippine Commission or of the ordinance.

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending
the information, for violation of other laws or ordinances on concealment of deadly weapons.

Makasiar, J, concurs.

CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the
Philippine Commission or of the ordinance.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

[G.R. No. 8848. November 21, 1913. ]

THE UNITED STATES, Plaintiff-Appellee, v. WILLIAM C. HART, C.J. MILLER, and SERVILLANO

NATIVIDAD, Defendants-Appellants.

Pedro Abad Santos for appellants Hart and Natividad.

W.H. Booram for appellant Miller.

Solicitor-General Harvey for Appellee.

SYLLABUS

1. VAGRANCY; LOITERING ABOUT SALOONS, DRAM SHOPS, OR GAMBLING HOUSES;

VISIBLE MEANS OF SUPPORT. — A person is not guilty of vagrancy under the second paragraph of
section 1 of the Vagrancy Act for frequenting saloons, dram shops, or gambling houses, unless it be
shown that he is without visible means of support.

2. STATUTORY CONSTRUCTION; PUNCTUATION EMPLOYED. — If the punctuation of a statute

gives it a meaning which is reasonable and in apparent accord with the legislative will, it may be used
as an additional argument for adopting the literal meaning of the words of a statute as thus
punctuated. But an argument based upon punctuation alone is not conclusive, and the courts will not
hesitate change the punctuation when necessary, to give to the Act the effect intended by the
Legislature, disregarding superfluous or incorrect punctuation marks, and inserting others where
necessary.

DECISION

TRENT, J. :

The appellants, Hart, Miller, and Natividad, were arraigned in the Court of First Instance of Pampanga on a charge
of vagrancy under the provision of Act No. 519, found guilty, and were each sentenced to six months’ imprisonment.
Hart and Miller were further sentenced to a fine of P200, and Natividad to a fine of P100. All appealed.

The evidence of the prosecution as to the defendant Hart shows that he pleaded guilty and was convicted on a
gambling charge about two or three weeks before his arrest on the vagrancy charge; that he had been conducting
two gambling games, one in his saloon and the other in another house, for a considerable length of time, the games
running every night. The defense showed that Hart and one Dunn operated a hotel and saloon at Angeles which did
a business, according to the bookkeeper, of P96,000 during the nineteen months preceding the trial; that Hart was
also the sole proprietor of a saloon in the barrio of Tacondo; that he raised imparted hogs which he sold to the Army
garrison at Camp Stotsenberg, which business netted him during the preceding year about P4,000; that he was
authorized to sell several hundred hectares of land owned by one Carrillo in Tacondo; that he administered, under
power of attorney, the same property; and that he furnished a building for and paid the teacher of the first public
school in Tacondo, said school being under Government supervision. The evidence of the prosecution as to Miller
was that he had the reputation of being a gambler; that he pleaded guilty and was fined for participating in a
gambling game about two weeks before his arrest on the present charge of vagrancy; and that he was seen in
houses of prostitution and in a public dance hall in Tacondo on various occasions. The defense showed without
contradiction that Miller had been discharged from the Army about the year previously; that during his term of
enlistment he had been made sergeant; that he received rating as "excellent" on being discharged; that since his
discharge he had been engaged in tailoring business near Camp Stotsenberg under articles of partnership with one
Buckerd, Miller having contributed P1,000 to the partnership; that the business netted each partner about P300 per
month; that Miller attended to business in an efficient manner every day; and that his work was first class.

The evidence of the prosecution as to Natividad was that he had gambled nearly every night for a considerable time
prior to his arrest on the charge of vagrancy, in the saloon of one Raymundo, as well as in Hart’s saloon; that
Natividad sometimes acted as banker; and that he had pleaded guilty to a charge of gambling and had been
sentenced to pay a fine therefor about two weeks before his arrest on the vagrancy charge. The defense showed
that Natividad was a tailor, married, and had a house of his own; that he made good clothes, and earned from P80
to P100 per month, which was sufficient to support his family.

From his evidence it will be noted that each of the defendants was earning a living at a lawful trade or business,
quite sufficient to support himself in comfort, and that the evidence which the prosecution must rely upon for a
conviction consists of their having spent their evenings in regularly licensed saloons, participating in gambling
games which are expressly made unlawful by the Gambling Act, No. 1757, and that Miller frequented a dance hall
and houses of prostitution.

Section 1 of Act No. 519 is divided into seven clauses, separated by semicolons. Each clause enumerates a certain
calls of person who, within the meaning of this statute, are to be considered as vagrants. For the purpose of this
discussion, we quote this section below, and number each of these seven clauses.

"(1) Every person having no apparent means of subsistence, who had the physical ability to work, and who neglects
to apply himself or herself to some lawful calling; (2) every person found loitering about saloons or dram shops or
gambling housed, or tramping or straying through the country without visible means of support; (3) every person
known to be a pickpocket, thief, burglar, ladrone, either by his own confession or by his having been convicted of
either said offenses, and having no visible or lawful means of support when found loitering about any gambling
house, cockpit, or in any outlying barrio of a pueblo; (4) every idle or dissolute person of associate of known thieves
or ladrones who wanders about the country at unusual hours of the night; (5) every idle person who lodges in any
barn, shed, outhouse, vessel, or place other than such as is kept for lodging purposed, without the permission of the
owner or a person entitled to the possession thereof; (6) every lewd or dissolute person who lives in and about
houses of ill fame; every common prostitute and common drunkard, is a vagrant." cralaw virtua1aw library

It is insisted by the Attorney-General that as visible means of support would not be a bar to a conviction under any
one of the last four clauses of this act, it was not the intention of the Legislature to limit the crime of vagrancy to
those having no visible means of support. Relying upon the second clause to sustain the guilt of the defendant, the
Attorney-General then proceeds to argue that "visible means of support" as used in that clause does not apply to
"every person found loitering about saloons or dram shops on gambling houses," but is confined entirely to "or
tramping or straying through the country." It is insisted that had it been intended for "without visible means of
support" to qualify the first part of the clause, either the comma after gambling house would have been omitted, or
else a comma after country would have been inserted.

When the meaning of legislative enactment is in question, it is the duty of the courts to ascertain, if possible, the true
legislative intention, and adopt that the construction of the statute of the statute which will give it effect. The
construction finally adopted should be based upon something more substantial than the mere punctuation found in
the printed Act. If the punctuation of the statute gives it a meaning which is reasonable and in apparent accord with
the legislative will, it may be used as an additional argument for adopting the literal meaning of the words of the
statute as thus punctuated. But an argument based upon punctuation alone is not conclusive, and the courts will not
hesitate to a change the punctuation when necessary, to give to the Act the effect intended by the Legislature,
disregarding superfluous or incorrect punctuation marks, and inserting others where necessary.

The Attorney-General has based his argument upon the proposition that neither visible means of support not a
lawful calling is a sufficient defense under the last four paragraphs of the section; hence, not being universally a
defense to a charge of vagrancy, they should not be allowed except where the Legislature has so provided. He then
proceeds to show, by a "mere grammatical criticism: of the second paragraph, that the Legislature did not intend to
allow visible means of support or a lawful calling to block a prosecution for vagrancy founded on the charge that the
defendant was found loitering around saloons, dram shops, and gambling houses.

A most important step in this reasoning, necessary to make it sound, is to ascertain the consequences flowing from
such a construction of the law. What is loitering? The dictionaries say it is idling or wasting one’s time. The time
spent in saloons, dram shops, and gambling houses is seldom anything but that. So that under the proposed
construction, practically all who frequent such places commit a crime in so doing, for which they are liable to
punishment under the Vagrancy Law. We cannot believe that it was the intention of the Legislature to penalize what,
in the case of saloons and dram shops, is under the law’s protection. If it be urged that what is true of saloons and
dram shops is not true of gambling houses in this respect, we encounter the wording of the law, which makes no
distinction whatever between loitering around saloon and dram shops, and loitering around gambling houses.

The offense of vagrancy and defined in Act No. 519 is the Anglo-Saxon method of dealing with the habitually idle
and harmful parasites society. While the statutes of the various States of the American Union differ greatly as to the
classification of such persons, their scope is substantially the same. Of those statutes we have had an opportunity to
examine, but two or three contain a provision similar to the second paragraph of Act No. 519. (Mo. Ann. Stat., sec.
2228; sec 1314.) That the absence of visible means of support or a lawful calling is necessary under these statutes
to a conviction for loitering around saloons, dram shops, and gambling houses is not even negatived by the
punctuation employed. In the State of Tennessee, however, we find an exact counterpart for paragraph 2 of section
1 of our own Act (Code of Tenn., sec 3023), with the same punctuation: jgc:chanrobles.com.ph

". . . or for any person to be found loitering about saloons or dram shops, gambling houses, or houses of ill fame, or
tramping or strolling through the country without any visible means of support." cralaw virtua1aw library

A further thought suggests itself on connection with the punctuation of the paragraph in question. The section, as
stated above, is divided into seven clauses, separated by semicolons. To say that two classes of vagrants are
defined in paragraph 2, as to one of which visible means of support or a lawful calling is not a good defense, and as
to the other which such a defense is sufficient, would imply a lack of logical classification on the part of the
legislature of the various classes of vagrants. this we are not inclined to do.

In the case at bar, all three of the defendants were earning a living by legitimate methods in a degree of comfort
higher than the average. Their sole offense was gambling, which the legislature deemed advisable to make the
subject of a penal law. the games in which they participated were apparently played openly, in a licenses public
saloon, where the officers of the law could have entered as easily as did the patrons. It is believed that Act No. 1757
is adequate, if enforced, to suppress the gambling proclivities of any person making a good living ar a lawful trade of
business.

For these reasons, the defendants are acquitted, with the costs de oficio.

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

Johnson and Moreland, JJ., concur the result.