1B- STATUTORY CONSTRUCTION

MODULE 4
Alfredo M. de Leon v. Hon. Benjamin B. Esguerra, G.R. No. 78059, August 31, 1987

The Constitution shall take effect immediately upon its ratification by a

majority of the votes cast in a plebiscite held for the purpose and shall
supersede all previous Constitutions. The 1987 Constitution was ratified in a
plebiscite on February 2, 1987.

Tanada v. Tuvera, G.R. No. 63915, 29 December 1986

ALL STATUTES OF LOCAL APPLICATION AND PRIVATE LAWS SHALL BE

PUBLISHED EITHER IN OFFICIAL GAZETTE OR IN A NEWSPAPER OF
GENERAL CIRCULATION IN THE PHILIPPINES FOR IT TO BE
EFFECTIVE.

Philippine Veterans Bank v. Vega, G.R. No. 105364, 28 June 2001

The legislature intended to make the law effective immediately upon its
approval. The completion of their publication in the Official Gazette or in a
newspaper of general circulation in the Philippines, the legislature has the
authority to provide for exceptions, as indicated in the clause "unless
otherwise provided."

Tanada vs. Tuvera, G.R. No. L-63915 April 24, 1985

Publication is an indispensable requirement for the validity and enforceability

of a legislation for its purpose is to give notice, even if it is a constructive
one, of the contents of a legislation that is binding on the persons affected by
it.

Commissioner of Customs v. Hypermix Feeds Corporation, G.R. No. 179579, 1

February 2012

When the administrative rule goes beyond merely providing for the means
that can facilitate or render least cumbersome the implementation of the law
but substantially increases the burden of those governed, it behooves the
agency to accord at least to those directly affected a chance to be heard,
and thereafter to be duly informed, before that new issuance is given the
force and effect of law.

Commissioner of Internal Revenue v. Michel J. Lhuillier Pawnshop, Inc., G.R. No.

150947, 15 July 2003

Administrative issuances must be consistent with the Law sought to be applied.

Municipality Of Paranaque v. V.M. Realty Corporation, G.R. No. 127820, 20 July 1998

A Local Government Unit (LGU) may exercise the power to expropriate

private property only when authorized by Congress and subject to the latter’s
control and restraints, imposed through the law conferring the power or in
other legislations. The power of eminent domain is lodged in the legislative
branch of government, which may delegate the exercise thereof to LGUs,
other public entities and public utilities. An LGU may therefore exercise the
power to expropriate private property only when authorized by Congress and
subject to the latter’s control and restraints, imposed “through the law
conferring the power or in other legislations.”
Thus, the following essential requisites must concur before an LGU can
exercise the power of eminent domain:

1. An ordinance is enacted by the local legislative council authorizing the

local chief executive, in behalf of the LGU, to exercise the power of eminent
domain or pursue expropriation proceedings over a particular private
property.

2.The power of eminent domain is exercised for public use, purpose or

welfare, or for the benefit of the poor and the landless.

3. There is payment of just compensation, as required under Section 9,

Article III of the Constitution, and other pertinent laws.

4. A valid and definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not accepted.

Bagatsing v. Ramirez, G.R. No. 41631, 17 December 1976

Where a special statute refers to a subject in general, which the general

statute treats in particular, the provision of the latter, in case of conflict, will
prevail.

National Marketing Corp. v. Tecson, G.R. No. 29131, 27 August 1969

The provision of the Civil Code, specifically Article 13 thereof, explicitly limits
the connotation of each “year”, as the term used in our laws, to 365 days.
Civil Code of the Philippines (Republic Act 386) explicitly ordains that “it shall
be understood that years are three hundred sixty-five days.”

Commissioner of Internal Revenue v. Primetown Property Group, Inc., G.R. No.

162155, August 28, 2007
 Recovery of Taxes Erroneously or Illegally Collected. - No such suit or
proceeding shall be filed after the expiration of two (2) years from the date of
payment of the tax or penalty regardless of any supervening cause that may
arise after payment: Provided, however, That the Commissioner may, even
without a written claim therefor, refund or credit any tax, where on the face of
the return upon which payment was made, such payment appears clearly to
have been erroneously paid.

When the law speaks of years, months, days or nights, it shall be understood
that years are of three hundred sixty-five days each; months, of thirty days;
days, of twenty-four hours, and nights from sunset to sunrise.

"Year" shall be understood to be twelve calendar months; "month" of thirty

days, unless it refers to a specific calendar month in which case it shall be
computed according to the number of days the specific month contains;
"day", to a day of twenty-four hours and; "night" from sunrise to sunset.

PNB v. Court of Appeals, 222 SCRA 134 (1993)

It must be conceded that Article 13 is completely silent as to the definition of

what is a "week". In Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno,
Philippine Law Dictionary, Second Ed., 1972, p. 660), this term was
interpreted to mean as a period of time consisting of seven consecutive days
a definition which dovetails with the ruling in E.M. Derby and Co. vs. City of
Modesto, et al. (38 Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the
Philippines Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino, Commentaries
and Jurisprudence on the Civil Code, 1990, p. 46).

Yapdiangco v. Buencamino, G.R. No. 28841, 24 July 1983

Pretermission of holiday - where the day, or the last day, for doing any act
required or permitted by law falls on a holiday, the act may be done on the
next succeeding business day.

Co Kim Chan v. Valdez Tan Keh, G.R. No. L-5, 17 September 1945
 CONTINUITY OF LAW.—It is a legal maxim that, excepting that of a political
nature, "Law once established continues until changed by some competent
legislative power. It is not changed merely by change of sovereignty." (Joseph
H. Beale, Cases on Conflict of Laws, III, Summary section 9, citing
Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his
Treatise 011 the Conflict of Laws (Cambridge, 1916, section 131): "There can
be no break or interregnum in law. From the time the law comes into
existence with the first-felt corporateness of a primitive people it must last
until the final disappearance of human society. Once created, it persists until
a change takes place, and when changed it continues in such changed
condition until the next change, and so forever. Conquest or colonization is
impotent to bring law to amend; in spite of change of constitution, the law
continues unchanged until the new sovereign by legislative act creates a
change." As courts are creatures of statutes and their existence depends
upon that of the laws which create and confer upon them their jurisdiction, it
is evident that such laws, not being of a political nature, are not abrogated by
a change of sovereignty, and continue in force "ex proprio vigore" unless and
until repealed by legislative acts. A proclamation that said laws and courts
are expressly continued is not necessary in order that they may continue in
force. Such proclamation, if made, is but a declaration of the intention of
respecting and not repealing those laws. As a consequence, enabling laws
or acts providing that proceedings pending in one court be continued by or
transferred to another court are not required by the mere change of
government or sovereignty. They are necessary only in case the "former
courts are abolished or their jurisdiction so changed that they can no longer
continue taking cognizance of the cases and proceedings commenced
therein, in order that the new courts or the courts having jurisdiction over said
cases may continue the proceedings.

William F. Peralta v. The Director of Prisons, G.R. No. L-49, 12 November 1945

The government established over an enemy’s territory during the military

occupation may exercise all the powers given by the laws of war to the
conqueror over the conquered, and is subject to all restrictions which that
code imposes. It is of little consequence whether such government be called
a military or civil government. Its character is the same and the source of its
authority the same. In either case it is a government imposed by the laws of
war and so far, as it concerns the inhabitants of such territory or the rest of
the world those laws alone determine the legality or illegality of its acts.

Anastacio Laurel v. Eriberto Misa, G.R. No. L-409, 30 January 1947

1. Citizen or subject owes an absolute and permanent allegiance, which

consists in the obligation of fidelity and obedience to his government or
sovereign.
 2. Sovereignty of the government or sovereign de jure is not transferred to
the occupier (Hague Convention of 1907).

3. Exercise of rights may be destroyed, or severed and transferred to another,

but sovereignty cannot be suspended because the existence of
sovereignty cannot be suspended without putting it out of existence or
divesting the possessor thereof at least during the so-called period of
suspension.

4. “Temporarily allegiance” pertains to the relations borne by the inhabitants

of the territory occupied by the enemy toward the military government
established over them.

5. Political laws which prescribe the reciprocal rights, duties and obligation of
government and citizens, are suspended or in abeyance during military
occupation. Examples are crimes against national security (treason and
espionage; inciting to war, correspondence with hostile country, flight to
enemy's country) and against public order (rebellion, sedition, and
disloyalty, illegal possession of firearms).

6. If an inhabitant of the occupied territory were compelled illegally by the

military occupant, through force, threat or intimidation, to give him aid and
comfort, the former may lawfully resist and die if necessary, as a hero, or
submit thereto without becoming a traitor.

CASE TITLE ALFREDO M. DE LEON,et al. vs. G.R NO. 78059

HON. BENJAMIN B. ESGUERRA

PONENTE MELENCIO-HERRERA DATE: Aug. 31, 1987

DOCTRINE The Constitution shall take effect immediately upon its ratification by
a majority of the votes cast in a plebiscite held for the purpose and
shall supersede all previous Constitutions. The 1987 Constitution
was ratified in a plebiscite on February 2, 1987.
FACTS On May 17, 1982, petitioner Alfredo M. De Leon was elected
Barangay Captain and the other petitioners Angel S. Salamat,
Mario C. Sta. Ana, Jose C. Tolentino, Rogelio J. de la Rosa and
Jose M. Resurreccion, as Barangay Councilmen of Barangay
Dolores, Taytay, Rizal under Batas Pambansa Blg. 222, otherwise
known as the Barangay Election Act of 1982.

On February 9, 1987, petitioner Alfredo M. de Leon received a

Memorandum antedated December 1, 1986 but signed by
respondent OIC Governor Benjamin Esguerra on February 8, 1987
designating respondent Florentino G. Magno as Barangay Captain
of Barangay Dolores, Taytay, Rizal. The designation made by the
OIC Governor was "by authority of the Minister of Local
Government”.

Petitioners pray that the subject Memoranda of February 8, 1987 be

declared null and void and that respondents be prohibited from
taking over their positions of Barangay Captain and Barangay
Councilmen, respectively. Petitioners maintain that pursuant to
Section 3 of the Barangay Election Act of 1982 (BP Blg. 222), their
terms of office "shall be six (6) years which shall commence on
June 7, 1982 and shall
continue until their successors shall have elected and shall have
qualified," or up to June 7, 1988. It is also their position that with the
ratification of the 1987 Constitution, respondent OIC Governor no
longer has the authority to replace them and to designate their
successors.

ISSUE/S Whether the Memoranda of February 8, 1987 is null and void and
that respondents be prohibited from taking over the positions

RULING/S Section 2, Article III of the Provisional Constitution, promulgated on

March 25, 1986, which provided:

"SECTION 2.All elective and appointive officials and employees

under the 1973 Constitution shall continue in office until otherwise
provided by proclamation or executive order or upon the
designation or appointment and qualification of their successors, if
such appointment is made within a period of one year from
February 25, 1986."
 However, since the new Constitution was ratified on Feb. 2, 1987,
the Provisional Constitution must be deemed to have been
overtaken by Section 27, Article XVIII of the 1987 Constitution
reading:

"Sec 27.This Constitution shall take effect immediately upon its

ratification by a majority of the votes cast in a plebiscite held for the
purpose and shall supersede all previous Constitutions."

By that date, therefore, the Provisional Constitution must be

deemed to have been superseded. Having become inoperative,
respondent OIC Governor could no longer rely on Section 2, Article
III.

The Memoranda issued by respondent OIC Governor on February

8, 1987 designating respondents as the Barangay Captain and
Barangay Councilmen, respectively, of Barangay Dolores, Taytay,
Rizal, are both declared to be of no legal force and effect.

CASE TITLE TANADA VS TUVERA G.R NO. L-63915

PONENTE CRUZ, J DATE: DEC. 29, 1986

DOCTRINE ALL STATUTES OF LOCAL APPLICATION AND PRIVATE LAWS

SHALL BE PUBLISHED EITHER IN OFFICIAL GAZETTE OR IN A
NEWSPAPER OF GENERAL CIRCULATION IN THE PHILIPPINES
FOR IT TO BE EFFECTIVE.
FACTS Invoking the people's right to be informed on matters of public
concern, as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise
effectively promulgated, petitioners seek a writ of mandamus to
compel respondent public officials to publish, and/or cause the
publication in the Official Gazette of various presidential decrees,
letters of instructions, general orders, proclamations, executive
orders, letter of implementation and administrative orders.

In defense, the government argued that while publication was

necessary as a rule, it was not so when it was "otherwise provided,"
as when the decrees themselves declared that they were to
become effective immediately upon their approval.

In the decision of the Supreme Court in this case in April 1985, it

affirmed the necessity for the publication of some of these decrees
which are of general application. It ordered the respondents to
publish the said issuances in the Official Gazette.

The petitioners now then filed for reconsideration/clarification of that

decision wherein they argued the phrase “otherwise provided”,
which means that publication is not imperative.

ISSUE/S Whether or not publication is an indispensable requirement for the

effectivity of the presidential decrees

RULING/S Yes. As provided in Art. 2 of the Civil Code, “law shall take effect
Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise
provided. This code shall take effect one year after such
publication”

The Supreme Court stated that publication is indispensable in every

case, but the legislature may in its discretion provide that the usual
fifteen-day period shall be shortened or extended. An example, as
pointed out by the former Chief Justice in his separate concurrence
in the original decision, is the Civil Code which did not become
effective after fifteen days from its publication in the Official Gazette
but "one year after such publication." The general rule did not apply
because it
 was "otherwise provided. The term “otherwise provided” only refers
to the date of the effectivity and not to the requirement of
publication.

The Supreme Court also stated that all statutes, including those of
local application and private laws, shall be published as a condition
for their effectivity, which shall begin fifteen days after publication
unless a different effectivity date is fixed by the legislature.

Therefore, presidential decrees and executive orders promulgated

by the President in the exercise of legislative powers whenever the
same are validly delegated by the legislature or, at present, directly
conferred by the Constitution. administrative rules and regulations
must also be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation. Only those
interpretative regulations and those merely internal in nature, that
is, regulating only the personnel of the administrative agency and
not the public, need not be published. Neither is publication
required of the so-called letters of instructions issued by
administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.

CASE TITLE PHILIPPINE VETERANS G.R NO. 105364

BANK Vs
HONORABLE BENJAMIN VEGA

PONENTE KAPUNAN, J.: DATE: June 28, 2001

DOCTRINE The legislature intended to make the law effective immediately upon
its approval. The completion of their publication in the Official
Gazette or in a newspaper of general circulation in the Philippines,
the legislature has the authority to provide for exceptions, as
indicated in the clause "unless otherwise provided."
FACTS Sometime in 1985, the Central Bank of the Philippines (Central
Bank, for brevity) filed with Branch 39 of the Regional Trial Court of
Manila a Petition for Assistance in the Liquidation of the Philippine
Veterans Bank, the same docketed as Case No. SP-32311.
Thereafter, the Philippine Veterans Bank Employees
Union-N.U.B.E., herein petitioner, represented by petitioner
Perfecto V. Fernandez, filed claims for accrued and unpaid
employee wages and benefits with said court in SP-32311

On March 8, 1991, petitioners moved to disqualify the respondent

judge from hearing the above case on grounds of bias and hostility
towards petitioners.

On January 2, 1992, the Congress enacted Republic Act No. 7169

providing for the rehabilitation of the Philippine Veterans Bank.

Despite the legislative mandate for rehabilitation and reopening of

PVB, respondent judge continued with the liquidation proceedings of
the bank. Moreover, petitioners learned that respondents were set to
order the payment and release of employee benefits upon motion of
another lawyer, while petitioners’ claims have been frozen to their
prejudice.

Petitioners argue that with the passage of R.A. 7169, the liquidation
court became functus officio, and no longer had the authority to
continue with liquidation proceedings.

ISSUE/S Whether or not the court continue with the liquidation proceedings of
the PVB when Congress had mandated its rehabilitation and
reopening?

RULING/S No. Supreme Court in Favor of the Petitioner.

Republic Act No. 7169 entitled "An Act To Rehabilitate The

Philippine Veterans Bank Created Under Republic Act No. 3518,
Providing The Mechanisms Therefor, And For Other Purposes",
which was signed into law by President Corazon C. Aquino on
January 2, 1992 and which
 was published in the Official Gazette on February 24, 1992,
provides in part for the reopening of the Philippine Veterans Bank
together with all its branches within the period of three (3) years
from the date of the reopening of the head office.7 The law likewise
provides for the creation of a rehabilitation committee in order to
facilitate the implementation of the provisions of the same.

Pursuant to said R.A. No. 7169, the Rehabilitation Committee

submitted the proposed Rehabilitation Plan of the PVB to the
Monetary Board for its approval. Meanwhile, PVB filed a Motion to
Terminate Liquidation of Philippine Veterans Bank dated March 13,
1992 with the respondent judge praying that the liquidation
proceedings be immediately terminated in view of the passage of
R.A. No. 7169. The Monetary Board issued Monetary Board
Resolution No. 348 which approved the Rehabilitation Plan
submitted by the Rehabilitation Committee. Thereafter, the
Monetary Board issued a Certificate of Authority allowing PVB to
reopen.

On June 3, 1992, the liquidator filed A Motion for the Termination of

the Liquidation Proceedings of the Philippine Veterans Bank with the
respondent judge. As stated above, the Court, in a Resolution dated
June 8, 1992, issued a temporary restraining order in the instant
case restraining respondent judge from further proceeding with the
liquidation of PVB. On August 3, 1992, the Philippine Veterans Bank
opened its doors to the public and started regular banking
operations.

CASE TITLE Tanada vs. Tuvera G.R NO. L-63915

PONENTE Escolin, J DATE: April 24, 1985

DOCTRINE Publication is an indispensable requirement for the validity and

enforceability of a legislation for its purpose is to give notice, even if
it is a constructive one, of the contents of a legislation that is
binding on the persons affected.
FACTS Invoking the people’s right to be informed on matters of public
concern, petitioners seek a writ of mandamus to compel the
respondents to publish and/or cause the publication of the
presidential issuances.

Respondents wants to dismiss the case on the ground that

petitioners have no legal standing to bring the instant petition to the
court for the reason that petitioners are not personally and directly
affected by the non-publication of the issuances. The petitioners
however, maintain their argument that since the subject of the
petition concerns a public right, and its object is to compel the
performance of a public duty they need not show any specific
interest for their petition to be given due course.

The respondents further contend that the necessity to publish laws

for it to be effective does not apply to the presidential issuances
stated because it already contains provisions as to its effectivity.

ISSUE/S Whether or not the publication in the Official Gazette of laws,

including presidential issuances, is indispensable for it to become
valid and enforceable.

RULING/S The Supreme Court held that the interpretation given by the
respondents are in line with the construction of Article 2 of the Civil
Code of the Philippines as it has long been ruled that publication in
the Official Gazette is necessary in cases where the legislation
does not provide for its effectivity date but not when the law
provides for itself. However, Article 2 of the Civil Code does not
preclude the requirement of publication, even if the law itself
provides for the date of its effectivity.

The purpose of publication is to give the general public adequate

notice of the various laws which would govern their actions and
conducts as citizens and that without such notice and publication,
there would be no basis for the application of the maxim “ignoratia
legis non excusat. It would be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law which he
had no notice whatsoever, not even a constructive one.

Section 1 of the Commonwealth Act 638 provides that: there shall

be published in the Official Gazette...”, that the word “shall”
imposes an imperative duty that must be enforced especially if it
will violate the constitutional right to be informed, thus,
non-publication of the
 presidential issuances which is of public in nature or of general
applicability would deny the public knowledge of the laws that is
supposed to govern as well as its right to due process. It is a rule of
law that before a person may be bound by law, he must be officially
and specifically informed of its contents.

The Supreme Court declared that presidential issuances of general

application which have not been published have no force and effect.

CASE TITLE Commissioner of Customs v. G.R NO. 179579

Hypermix Feeds Corporation,

PONENTE SERENO, J. DATE: 1 February 2012

DOCTRINE When the administrative rule goes beyond merely providing for the
means that can facilitate or render least cumbersome the
implementation of the law but substantially increases the burden of
those governed, it behooves the agency to accord at least to those
directly affected a chance to be heard, and thereafter to be duly
informed, before that new issuance is given the force and effect of
law.
FACTS On 7 November 2003, petitioner Commissioner of Customs issued
CMO 27-2003. Under the Memorandum, for tariff purposes, wheat
was classified according to the following: (1) importer or consignee;
(2) country of origin; and (3) port of discharge. The regulation
provided an exclusive list of corporations, ports of discharge,
commodity descriptions and countries of origin. Depending on
these factors, wheat would be classified either as food grade or
feed grade. The corresponding tariff for food grade wheat was 3%,
for feed grade, 7%. It further provided for the proper procedure for
protest or Valuation and Classification Review Committee (VCRC)
cases. Under this procedure, the release of the articles that were
the subject of protest required the importer to post a cash bond to
cover the tariff differential.

A month after the issuance of CMO 27-2003, on 19 December

2003, respondent filed a Petition for Declaratory Relief with the
Regional Trial Court (RTC) of Las Piñas City. Respondent
contended that CMO 27- 2003 was issued without following the
mandate of the Revised Administrative Code on public
participation, prior notice, and publication or registration with the
University of the Philippines Law Center.

On 10 March 2005, the RTC rendered its Decision, granting the

petition and the subject Customs Memorandum Order 27-2003 is
declared INVALID and OF NO FORCE AND EFFECT. The trial
court found that petitioners had not followed the basic requirements
of hearing and publication in the issuance of CMO 27-2003.

Dissatisfied with the Decision of the lower court, petitioners

appealed to the CA, raising the same allegations in defense of
CMO 27-2003. The appellate court, however, dismissed the appeal.
It held that, since the regulation affected substantial rights of
petitioners and other importers, petitioners should have observed
the requirements of notice, hearing and publication.
Hence, this Petition.

ISSUE/S Whether or not Court of Appeals’ memorandum, CMO 27-2003 is in

violation of right to due process and substantive rights when it was
issued.
RULING/S YES. The Petition has no merit. Considering that the questioned
regulation would affect the substantive rights of respondent as
explained above, it therefore follows that petitioners should have
applied the pertinent provisions of Book VII, Chapter 2 of the
Revised Administrative Code, to wit:

Section 3. Filing. – (1) Every agency shall file with the University of
the Philippines Law Center three (3) certified copies of every rule
adopted by it. Rules in force on the date of effectivity of this Code
which are not filed within three (3) months from that date shall not
thereafter be the bases of any sanction against any party of
persons.

Section 9. Public Participation. - (1) If not otherwise required by

law, an agency shall, as far as practicable, publish or circulate
notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless
the proposed rates shall have been published in a newspaper of
general circulation at least two (2) weeks before the first hearing
thereon.

(3) In case of opposition, the rules on contested cases shall be

observed.

When an administrative rule is merely interpretative in nature, its

applicability needs nothing further than its bare issuance, for it gives
no real consequence more than what the law itself has already
prescribed. When, on the other hand, the administrative rule goes
beyond merely providing for the means that can facilitate or render
least cumbersome the implementation of the law but substantially
increases the burden of those governed, it behooves the agency to
accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the
force and effect of law. Because petitioners failed to follow the
requirements enumerated by the Revised Administrative Code, the
assailed regulation must be struck down.

Therefore, petitioners violated respondent’s right to due process in

the issuance of CMO 27-2003 when they failed to observe the
requirements under the Revised Administrative Code.
WHEREFORE, in view of the foregoing, the Petition is DENIED.
CASE TITLE Commissioner of Internal Revenue G.R NO. 150947
vs Michael J. Lhullier Pawnshop
Inc.

PONENTE Chief Justice Davide Jr. DATE: July 15, 2003

DOCTRINE Administrative issuances must be consistent with the Law sought to

be applied

FACTS On 11 March 1991, CIR Jose U. Ong issued Revenue

Memorandum Order (RMO) No. 15-91 imposing a 5% lending
investor's tax on pawnshops.

On 11 September 1997, pursuant to these issuances, the Bureau of

Internal Revenue (BIR) issued an assessment notice against
Lhuillier demanding payment of deficiency percentage tax in the
sum of P3,360,335.11 for 1994 inclusive of interest and surcharges.

On 3 October 1997, Lhuillier filed an administrative protest with the

Office of the Revenue Regional Director

Its protest having been unacted upon, Lhuillier, filed a Notice and
Memorandum on Appeal with he Court of Tax Appeals invoking
Section 228 of R.A. No. 8424, otherwise known as the Tax Reform
Act of 1997.

Upon due consideration of the issues presented by the parties in

their respective memoranda, the Court of Appeals affirmed the CTA
decision on 20 November 2001.

Lhuillier likewise asserts that RMO No. 15-91 and RMC No. 43-91
are not implementing rules but are new and additional tax
measures, which only Congress is empowered to enact. Besides,
they are invalid because they have never been published in the
Official Gazette or any newspaper of general circulation.

ISSUE/S Whether or not RMO No. 15-91 and RMC No. 43-91 is valid.
RULING/S We rule in the negative.

Let us first distinguish between two kinds of administrative

issuances: the legislative rule and the interpretative rule. A
legislative rule is in the nature of subordinate legislation, designed
to implement a primary legislation by providing the details thereof.
An interpretative rule, on the other hand, is designed to provide
guidelines to the law which the administrative agency is in charge
of enforcing.

When an administrative rule is merely interpretative in nature,

its applicability needs nothing further than its bare issuance, for it
gives no real consequence more than what the law itself has
already prescribed. When, on the other hand, the administrative
rule goes

beyond merely providing for the means that can facilitate or render
least cumbersome the implementation of the law but substantially
increases the burden of those governed, it behooves the agency to
accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the
force and effect of
law.

RMO No. 15-91 and RMC No. 43-91 cannot be viewed simply as
implementing rules or corrective measures revoking in the process
the previous rulings of past Commissioners. Specifically, they would
have been amendatory provisions applicable to pawnshops.
Without these disputed CIR issuances, pawnshops would not be
liable to pay the 5% percentage tax, considering that they were not
specifically included in Section 116 of the NIRC of 1977, as
amended. In so doing, the CIR did not simply interpret the law. The
due observance of the requirements of notice, hearing, and
publication should not have been ignored.

CASE TITLE Municipality of Parañaque vs. V.M. G.R NO. G.R. No. 127820
Realty Corporation

PONENTE PANGANIBAN, J. DATE: July 20, 1998

DOCTRINE A Local Government Unit (LGU) may exercise the power to
expropriate private property only when authorized by Congress and
subject to the latter’s control and restraints, imposed through the
law conferring the power or in other legislations. The power of
eminent domain is lodged in the legislative branch of government,
which may delegate the exercise thereof to LGUs, other public
entities and public utilities. An LGU may therefore exercise the
power to expropriate private property only when authorized by
Congress and subject to the latter’s control and restraints, imposed
“through the law conferring the power or in other legislations.”
Thus, the following essential requisites must concur before an LGU
can exercise the power of eminent domain:
1. An ordinance is enacted by the local legislative council
authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.
2.The power of eminent domain is exercised for public use, purpose
or welfare, or for the benefit of the poor and the landless. 3. There
is payment of just compensation, as required under Section 9,
Article III of the Constitution, and other pertinent laws. 4. A valid
and definite offer has been previously made to the owner of the
property sought to be expropriated, but said offer was not accepted.

FACTS Pursuant to Sangguniang Bayan Resolution No. 93-95,Series of

1993, the Municipality of Parañaque filed a Complaint for
expropriation against Private Respondent V.M. Realty Corporation
over two parcels of land located at Wakas, San Dionisio,
Parañaque. Allegedly the complaint was filed "for the purpose of...
alleviating the living conditions of the underprivileged by providing
homes for the homeless through a socialized housing project."
Acting on petitioner's motion, said court issued an Order
authorizing petitioner to take possession of the subject property
upon deposit with its clerk of court of an amount equivalent to 15
percent of its fair market value based on its current tax declaration.
The private respondent filed its answer containing affirmative
defenses and a counterclaim the trial court then issued its August
9, 1994 Resolution which nullifies its February 4, 1994 order and
dismissing the case.

The petitioner then filed a motion for reconsideration and transfer of

venue which was denied by the trial court

The Court of Appeals also affirmed to the trial court's decision and
denied petitioner's Motion for Reconsideration for lack of merit.
ISSUE/S Whether or not a resolution approved by the municipal council has
the same force and effect of an ordinance and will not deprive an
expropriation case of a valid cause of action.

Whether or not the principle of res judicata as a ground for dismissal

of case is not applicable when public interest is primarily involved.
RULING/S Petitioner contends that a resolution approved by the municipal
council for the purpose of initiating an expropriation case
“substantially complies with the requirements of the law” because
the terms "ordinance" and "resolution" are synonymous for "the
purpose of bestowing authority [on] the local government unit
through its chief executive to initiate the expropriation proceedings
in court in the exercise of the power of eminent domain.". The Court
disagrees. The power of eminent domain is lodged in the legislative
branch of government, which may delegate the exercise thereof to
LGUs, other public entities and public utilities. An LGU may
therefore exercise the power to expropriate private property only
when authorized by Congress and subject to the latter's control and
restraints, imposed "through the law conferring the power or in
other legislations."

In the case at bar, the local chief executive sought to exercise the
power of eminent domain pursuant to a resolution of the municipal
council. Thus, there was no compliance with the first requisite that
the mayor be authorized through an ordinance.

The court was not convinced by petitioner's insistence that the terms
"resolution" and "ordinance" are synonymous. A municipal
ordinance is different from a resolution. An ordinance is a law, but a
resolution is merely a declaration of the sentiment or opinion of a
lawmaking body on a specific matter.

If Congress intended to allow LGUs to exercise eminent domain

through a mere resolution, it would have simply adopted the
language of the previous Local Government Code.

Moreover, the power of eminent domain necessarily involves a

derogation of a fundamental or private right of the people.
Accordingly, the manifest change in the legislative language from
"resolution" under BP 337 to "ordinance" under RA 7160 demands
a strict construction.

Eminent Domain is not Barred by Res Judicata. Court holds that the
principle of res judicata, which finds application in generally all
cases and proceedings cannot bar the right of the State or its agent
to expropriate private property.
 The very nature of eminent domain, as an inherent power of the
State, dictates that the right to exercise the power be absolute and
unfettered even by a prior judgment or res judicata.Thus, the State
or its authorized agent cannot be forever barred from exercising
said right by reason alone of previous non-compliance with any
legal requirement.

Petition is hereby DENIED

CASE TITLE BAGATSING vs. G.R NO. L-41631

RAMIREZ

PONENTE MARTIN, J. DATE: DECEMBER 17,

1976

DOCTRINE Where a special statute refers to a subject in general, which the

general statute treats in particular, the provision of the latter, in case
of conflict, will prevail.
FACTS On June 12, 1974, the Municipal Board of Manila enacted
Ordinance No. 7522, “AN ORDINANCE REGULATING THE
OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES
FOR THE RENTALS OF STALLS AND PROVIDING PENALTIES
FOR VIOLATION THEREOF AND FOR OTHER PURPOSES.” The
petitioner City Mayor, Ramon D. Bagatsing, approved the ordinance
on June 15, 1974.

On February 17, 1975, respondent Federation of Manila Market

Vendors, Inc. commenced a Civil Case seeking the declaration of
nullity of Ordinance No. 7522 before the Court of First Instance of
Manila for the reason that (a) the publication requirement under the
Revised Charter of the City of Manila has not been complied with;
(b) the Market Committee was not given any participation in the
enactment of the ordinance, as envisioned by Republic Act 6039;
(c) Section 3 (e) of the Anti-Graft and Corrupt Practices Act has
been violated; and (d) the ordinance would violate Presidential
Decree No. 7 of September 30, 1972 prescribing the collection of
fees and charges on livestock and animal products. After due
hearing on the merits, respondent Judge rendered its decision on
August 29, 1975, declaring Ordinance No. 7522 of the City of
Manila invalid, and therefore, null and void, on the primary ground
of non-compliance with the requirement of publication under the
Revised City Charter. The ordinance in question was not published
at all in two daily newspapers of general circulation in the City of
Manila before its enactment. Neither was it published in the same
manner after approval, although it was posted in the legislative hall
and in all city public markets and city public libraries.

Petitioners moved for reconsideration of the adverse decision,

stressing that (a) only a post-publication is required by the Local Tax
Code; and (b) private respondent failed to exhaust all administrative
remedies before instituting an action in court.

On September 26, 1975, respondent Judge denied the motion

which prompted the petitioners to present petition for review on
certiorari.

ISSUE/S ∙ Whether it is the Revised Charter of the City of Manila or the Local
Tax Code that should govern the publication of the tax ordinance. ∙
Whether or not the ordinance in question is intra vires.
RULING/S Yes. Ordinance No. 7522 of the City of Manila, dated June 15, 1975,
has been validly enacted by following the guidelines for publication
provided by the Local Tax Code.

There's an apparent conflict between the Revised Charter of the

City of Manila and the Local Tax Code on the manner of publishing
a tax ordinance enacted by the Municipal Board of Manila. The
Revised Charter of the City of Manila requires publication before
the enactment of the ordinance and after the approval thereof in
two daily newspapers of general circulation in the city, while the
Local Tax Code only prescribes for publication after the approval of
"ordinances levying or imposing taxes, fees or other charges" either
in a newspaper or publication widely circulated within the
jurisdiction of the local government or by posting the ordinance in
the local legislative hall or premises and in two other conspicuous
places within the territorial jurisdiction of the local government.

Where a special statute refers to a subject in general, which the

general statute treats in particular, the provision of the latter, in case
of conflict, will prevail.

The fact that one is special and the other general creates a
presumption that the special is to be considered as remaining an
exception to the general, one as a general law of the land, the other
as the law of a particular case. However, the rule readily yields to a
situation where the special statute refers to a subject in general,
which the general statute treats in particular. That exactly is the
circumstance obtaining in the case at bar.

Section 17 of the Revised Charter of the City of Manila speaks of

“ordinance” in general, i.e., irrespective of the nature and scope
thereof, whereas, Section 43 of the Local Tax Code relates to
“ordinances levying or imposing taxes, fees or other charges” in
particular.

In regard, therefore, to ordinances in general, the Revised Charter

of the City of Manila is doubtless dominant, but, that dominant force
loses its continuity when it approaches the realm of “ordinances
levying or imposing taxes, fees or other charges” in particular.
There, the Local Tax Code controls. Here as always, a general
provision must give way to a particular provision. Special provision
governs. This is especially true where the law containing the
particular provision was enacted later than the one containing the
general provision. The City Charter of Manila was promulgated on
 June 18, 1949 as against the Local Tax Code which was decreed
on June 1, 1973.

CASE TITLE NATIONAL MARKETING CORP v. G.R NO. 28841

TECSON

PONENTE CONCEPCION, C.J. DATE: August 27, 1969

DOCTRINE The provision of the Civil Code, specifically Article 13 thereof,

explicitly limits the connotation of each “year”, as the term used in
our laws, to 365 days. Civil Code of the Philippines (Republic Act
386) explicitly ordains that “it shall be understood that years are
three hundred sixty
five days.”
FACTS On November 14, 1955, the Court of First Instance of Manila (CFI
Manila) rendered a decision in a civil case wherein it ordered herein
respondents Miguel Tecson (Tecson) and Alto Surety and Insurance
Co., Inc. (Alto) to pay jointly and severally therein plaintiff Price
Stabilization Corporation (PRATRA) the sum of money with
interests, attorney’s fees and costs. Copy of the decision was
served upon Tecson and Alto on November 21, 1955.

Ten years after, on December 21, 1965, herein petitioner National

Marketing Corporation (NMC), as successor to all of PRATRA’s
properties, assets, rights, and choses in action, filed with CFI Manila
another civil complaint against respondents Tecson and Alto for the
revival of the judgment earlier rendered. Tecson moved for the
dismissal of the same on the ground of lack of jurisdiction and
prescription of action. CFI ruled in favor of Tecson and dismissed the
same stating that decision became file on December 21, 1955 and the
revival case was filed exactly on December 21, 1965, thus, pursuant to
Article 13 of the Civil Code which provides that a year is a period of 365
days, more than 10 years have passed. NMC forgot that 1960 and 1964
are both leap years, hence, when the revival case was filed, it was 2 days
too late.

Pursuant to Article 1144(3) of the Civil Code, an action upon a

judgment must be brought within 10 years from the time the aright of
action accrues, which in the language of Article 1152 of the same
Code “commences from the time the judgment sought to be revived
has become final.” In the case, the decision became final on
December 21, 1955 or 30 days from the notice of judgement as
after it was received by Tecson and Alto, no appeals took place.
The issue is thus confined to the date which 10 years from
December 21, 1955 expired.

On appeal, NMC alleged that it was on December 21, 1965

because “a year means a calendar year” and since what is being
computed is the number of years, a calendar year should be used
as the basis of computation. NMC furthered stating that when it is
not a leap year, December 21 to December 21 of the following year
is one year; and the contention that the extra year in a leap year is
not a day of the year only because it is the 366th day is erroneous
as it must belong to the year it falls, thus, on a leap year, 366 days
constitute 1 year.
 Meanwhile, holding to the decision of the CFI, Tecson contests the
contrary maintaining that when the law speaks of years, Article 13
provides that “years are of 365 days each”. Applying the same,
1960 and 1964 being leap years with February having 29 days in
both years, 10 years of 365 days each or a total of 3,650 days from
December 21, 1955 expired on December 19, 1955.

NMC appealed the CFI ruling to the Court of Appeals, which,

certified the same to the Supreme Court on the ground that the only
question raised on the appeal is one of law.

ISSUE/S Whether or not in interpreting Article 13 of the Civil Code, a year is

limited to 365 days?

RULING/S YES. The provision of the Civil Code, specifically Article 13

thereof, explicitly limits the connotation of each “year”, as the
term used in our laws, to 365 days. “When the laws speak of
years, months…, it shall be understood that years are of three
hundred sixty-five days each;…”

Prior to the enactment of the Republic Act 386, the controlling rule is
that of Section 13 of the Revised Administrative Code which
provides “month shall be understood to refer to a calendar month.”
However, as ruled by the Supreme Court in the case of People v.
Del Rosario, “with the approval of the Civil Code of the Philippines
(Republic Act 386)…, we reverted to the provisions of the Spanish
Civil Code in accordance with which, a month is to be considered
as the regular 30- day month… and NOT the solar or civil month,”
with the particularity that, whereas the Spanish Code merely
mentioned “months, days or nights, “ours (Philippine Civil Code)
has added thereto the term “years” and explicitly ordains that
“it shall be understood that years are three hundred sixty-five
days.” Thus, Article 7 of the Civil Code effectively repealed Section
13 of the Revised Administrative Code.

For the court to rule otherwise is to nullify act of Congress and to

revive the repealed provision which in effect is a judicial legislation. If
some members of the Court are inclined to think that that this
legislation is not realistic for failure to conform with ordinary
experience or practice and if public interest demands a reversion to
the policy of the Revised Administrative Code, the same may be
done through legislative process, not by judicial decree.
CASE TITLE COMMISSIONER OF INTERNAL G.R NO. 162155,
REVENUE and ARTURO V.
PARCERO in his official capacity as
Revenue District Officer or Revenue
District No. 049 (Makati) vs.
PRIMETOWN PROPERTY GROUP,
INC.

PONENTE CORONA, J. DATE: August 28, 2007

DOCTRINE Recovery of Taxes Erroneously or Illegally Collected. - No such suit

or proceeding shall be filed after the expiration of two (2) years from
the date of payment of the tax or penalty regardless of any
supervening cause that may arise after payment: Provided,
however, That the Commissioner may, even without a written claim
therefor, refund or credit any tax, where on the face of the return
upon which payment was made, such payment appears clearly to
have been erroneously paid.

When the law speaks of years, months, days or nights, it shall be

understood that years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four hours, and nights from
sunset to sunrise.

"Year" shall be understood to be twelve calendar months; "month" of

thirty days, unless it refers to a specific calendar month in which
case it shall be computed according to the number of days the
specific month contains; "day", to a day of twenty-four hours and;
"night" from sunrise to sunset.
FACTS A petition on certiorari for review seeks to set aside the decision of
the Court of Appeals in CA-G.R. SP No. 64782 and resolution
denying reconsideration.

Gilbert Yap, vice chair of Primetown Property Group, Inc., on March

11, 1999 applied for a refund or credit on the income tax paid in
1997. He explained that the real estate industry slowed down due
to increase in labor cost, materials, difficulty in obtaining financing
for projects and collecting receivables. According to Yap’s claims,
the company suffered a loss of ₱71,879,228 that year with that it
should not be liable for income taxes but nonetheless paid
₱26,318,398.32. The revenue officer required the respondent to
submit additional documents to support the claim which respondent
complied with but the claim was not acted upon.

On April 14, 2000, petition for review was filed with the Court of Tax
Appeals (CTA). However, the Court ruled that it was beyond the two
year prescriptive period for filing a judicial claim for tax refund or tax
credit based of Section 229 of the NIRC, the right to claim such
started on April 14, 1998. The tax court also applied Article 13 of
the Civil Code stating that the two-year prescriptive period was
equivalent to 730 days but respondent’s petition was filed 731 days
after the final adjusted

return was filed which is beyond the reglementary period.

On August 1, 2003, the CA reversed and set aside the decision of

the CTA with the reason that the rule of a year is 365 days even if
that particular year is a leap year. April 15, 1998 to April 14, 2000
should be counted as 730 days. Petitioner claimed that tax refunds
should be strictly construed against claimants since in nature it is
an exemption.

ISSUE/S Whether April 13, 2000 or April 14, 2000 marks the two-year or 730-
day prescriptive period considering that April 14, 1998 was the date
on when the respondent filed the final adjusted return and that the
year 2000 was a leap year.

Whether or not Article 13 of the New Civil Code was repealed by EO

292’s Section 31, Chapter VIII, Book I or the Administrative Code of
the 1987.
RULING/S The Supreme Court ruled that when a subsequent law impliedly
repeals a prior law, the new law shall apply, thus the petition was
denied. With this case, Article 13 of the Civil Code states that that
years are of three hundred sixty-five days each which was repealed
by EO 292’s Section 31, Chapter VIII, Book I or the Administrative
Code of the 1987 stated that a year shall be understood to be
twelve calendar months disregarding the number of days in a
month. Hence, the court decided that April 14, 2000 is when the
two-year prescriptive period ends and that the final adjusted return
was filed within the reglementary period.

CASE TITLE PHILIPPINE NATIONAL BANK, vs. G.R NO. G.R. No. 98382
THE COURT OF APPEALS

PONENTE MELO, J DATE: May 17, 1993

DOCTRINE It must be conceded that Article 13 is completely silent as to the

definition of what is a "week". In Concepcion vs. Zandueta (36 O.G.
3139 [1938]; Moreno, Philippine Law Dictionary, Second Ed., 1972,
p. 660), this term was interpreted to mean as a period of time
consisting of seven consecutive days a definition which dovetails
with the ruling in E.M. Derby and Co. vs. City of Modesto, et al. (38
Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the Philippines
Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino, Commentaries
and Jurisprudence on the Civil Code, 1990, p. 46).

FACTS There were two lots located In Bunlo, Bocaue, Bulacan which was
under the names of Dela Cruz siblings Epifanio. Delfin and Maria.
The said lots was mortgaged to Philippine National Bank by
Ephifanio which was guaranteed by three different promissory
notes. The first two promissory notes were not paid hence, it is
legal and proper to foreclose the lots in questioned due to their
failure to pay the said promissory notes.
On September 6, 1961, Atty. Ramon de los Reyes of the bank
(PNB) presented under Act No. 3135 a foreclosure petition of the
two mortgaged lots before the Sheriff's Office at Malolos, Bulacan;
accordingly, the two lots were sold or auctioned off on October 20,
1961 with the PNB as the highest bidder for P28,908.46.Final Deed
of Sale was executed and issued a Certificate of Sale in favor PNB,
which was registered in the Bulacan Registry of Deeds.
Epifanio Dela Cruz did not volunteer to buy back from the PNB the
two lots, thus, PNB sold the lots to spouses Conrado de Vera and
Marina de Vera in a Deed of Conditional Sale.
ISSUE/S Whether Philippine National Bank complied with the requirements of
weekly publication of notice of extrajudicial foreclosure of
mortgages?

RULING/S NO. The Notices of Sale of appellant's foreclosed properties were

published on March 28, April 11 and April 12, 1969 issues of the
newspaper "Daily Record" (Amended Record on Appeal, p. 108).
The date March 28, 1969 falls on a Friday while the dates April 11
and 12, 1969 are on a Friday and Saturday, respectively. Section 3
of Act No. 3135 requires that the notice of auction sale shall be
"published once a week for at least three consecutive weeks".
Evidently, defendant-appellee bank failed to comply with this legal
requirement. The Supreme Court has held that:
"The rule is that statutory provisions governing
publication of notice of mortgage foreclosure sales must
be strictly complied with, and that even slight deviations
therefrom will invalidate the notice and render the sale at
least voidable (Jalandoni vs. Ledesma, 64 Phil. 1058, G.R.
No. 42589, August 31, 1937 and October 29, 1937).
Interpreting Sec. 457 of the
 Code of Civil Procedure (reproduced in Sec. 18(c) of Rules of
Court and in Sec. 3 of Act No. 3135) in Campomanes vs.
Bartolome and German & Co. (38 Phil. 808, G.R. No. 1309,
October 18, 1918), this Court held that if a sheriff sells
without the notice prescribed by the Code of Civil
Procedure induced thereto by the judgment creditor, the
sale is absolutely void and no title passes. This is
regarded as the settled doctrine in this jurisdiction whatever
the rule may be elsewhere (Borja vs. Addison, 14 Phil. 895,
G.R. No. 18010, June 21, 1922).
. . . . It has been held that failure to advertise a mortgage
foreclosure sale in compliance with statutory
requirements constitutes a jurisdictional defect
invalidating the sale and that a substantial error or
omission in a notice of sale (59 C.J.S. 1314)." (Tambunting
vs. Court of Appeals, L-48278,
November 8, 1988; 167 SCRA 16, 23-24).
It must be conceded that Article 13 is completely silent as to the
definition of what is a "week". In Concepcion vs. Zandueta (36
O.G. 3139 [1938]; Moreno, Philippine Law Dictionary, Second Ed.,
1972, p. 660), this term was interpreted to mean as a period of
time consisting of seven consecutive days—a definition which
dovetails with the ruling in E.M. Derby and Co. vs. City of Modesto,
et al. (38 Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the
Philippines Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino,
Commentaries and Jurisprudence on the Civil Code, 1990, p. 46).
Following the interpretation in Derby as to the publication of an
ordinance for "at last two weeks" in some newspaper that:
. . . here there is no date or event suggesting the exclusion of
the first day's publication from the computation, and the cases
above cited take this case out of the rule stated in Section 12,
Code Civ. Proc. which excludes the first day and includes the
last;
the publication effected on April 11, 1969 cannot be construed as
sufficient advertisement for the second week because the period for
the first week should be reckoned from March 28, 1969 until April 3,
1969 while the second week should be counted from April 4, 1969
until April 10, 1969. It is clear that the announcement on April 11,
1969 was both theoretically and physically accomplished during the
first day
of the third week and cannot thus be equated with compliance in
law. Indeed, where the word is used simply as a measure of
duration of time and without reference to the calendar, it means a
period of seven consecutive days without regard to the day of the
 week on which it begins (1 Tolentino, supra at p. 467 citing Derby).

CASE TITLE RAFAEL YAPDIANGCO G.R NO. L-28841

vs.
THE HON. CONCEPCION B.
BUENCAMINO and HON.
JUSTINIANO CORTEZ

PONENTE GUTIERREZ, JR., J. DATE: June 24, 1983

DOCTRINE Pretermission of holiday - where the day, or the last day, for doing
any act required or permitted by law falls on a holiday, the act may
be done on the next succeeding business day.

FACTS On February 1, 1965, the City Fiscal of Quezon City filed before the
City Court an information for slight physical injuries allegedly
committed by Yapdiangco on December 2, 1964 against Mr. Ang
Cho Ching.

On September 10, 1965, Yapdiangco moved to quash (annul or set

aside) the criminal prosecution on the ground that the information
having been filed on the sixty first day following the commission of
the offense, the sixty days prescriptive period had lapsed.

On September 14, 1965, the City Court of Quezon City denied the
motion to quash stating that the 60th day fell on a Sunday and
considering the rule that when the last day for the filing of a pleading
falls on a Sunday, the same may be filed on the next succeeding
business day, the action had not prescribed.

After a motion for reconsideration was denied by the City Court,

Yapdiangco filed a petition for certiorari and mandamus with
preliminary injunction before the Court of First Instance of Rizal.

ISSUE/S Whether or not a Sunday or a legal holiday is a legal efficient cause

which interrupts the prescription of an offense.
RULING/S No. The rules contained in Section 31 of the Revised Administrative
Code and Section 1, Rule 28 of the Old Rules of Court deal with the
computation of time allowed to do a particular act, such as, the filing
of tax returns on or before a definite date, filing an answer to a
complaint, taking an appeal, etc.

They do not apply to lengthen the period fixed by the State for it to
prosecute those who committed a crime against it. The waiver or
loss of the right to prosecute such offenders is automatic and by
operation of law.

Where the sixtieth and last day to file an information falls on a

Sunday or legal holiday, the sixty-day period cannot be extended
up to the next working day. Prescription has automatically set in.

The remedy is for the fiscal or prosecution to file the information on

the last working day before the criminal offense prescribes.

The petition for certiorari and mandamus is granted.

The questioned order of the respondent court is SET ASIDE. The
motion to quash is GRANTED and the information before the city
court is DISMISSED.

CASE TITLE CO KIM CHAM v. EUSEBIO G.R NO. L-5

VALDEZ TAN KEH

PONENTE FERIA, J DATE: September 17,

1945
DOCTRINE CONTINUITY OF LAW.—It is a legal maxim that, excepting that of a
political nature, "Law once established continues until changed by
some competent legislative power. It is not changed merely by
change of sovereignty." (Joseph H. Beale, Cases on Conflict of
Laws, III, Summary section 9, citing Commonwealth vs. Chapman,
13 Met., 68.) As the same author says, in his Treatise 011 the
Conflict of Laws (Cambridge, 1916, section 131): "There can be no
break or interregnum in law. From the time the law comes into
existence with the first-felt corporateness of a primitive people it
must last until the final disappearance of human society. Once
created, it persists until a change takes place, and when changed it
continues in such changed condition until the next change, and so
forever. Conquest or colonization is impotent to bring law to amend;
in spite of change of constitution, the law continues unchanged until
the new sovereign by legislative act creates a change." As courts
are creatures of statutes and their existence depends upon that of
the laws which create and confer upon them their jurisdiction, it is
evident that such laws, not being of a political nature, are not
abrogated by a change of sovereignty, and continue in force "ex
proprio vigore" unless and until repealed by legislative acts. A
proclamation that said laws and courts are expressly continued is
not necessary in order that they may continue in force. Such
proclamation, if made, is but a declaration of the intention of
respecting and not repealing those laws. As a consequence,
enabling laws or acts providing that proceedings pending in one
court be continued by or transferred to another court are not
required by the mere change of government or sovereignty. They
are necessary only in case the "former courts are abolished or their
jurisdiction so changed that they can no longer continue taking
cognizance of the cases and proceedings commenced therein, in
order that the new courts or the courts having jurisdiction over said
cases may continue the proceedings.

FACTS The petition for mandamus in which petitioner prays that the
respondent judge of the lower court be ordered to continue the
proceedings in civil case No. 3012 of said court, which were initiated
under the regime of the so-called Republic of the Philippines
established during the Japanese military occupation of these
Islands.
The respondent judge refused to take cognizance of and continue
the proceedings in said case on the ground that the proclamation
issued on October 23, 1944, by General Douglas MacArthur had
the effect of invalidating and nullifying all judicial proceedings and
judgements of the court of the Philippines under the Philippine
 Executive Commission and the Republic of the Philippines
established during the Japanese

military occupation, and that, furthermore, the lower courts have no

jurisdiction to take cognizance of and continue judicial proceedings
pending in the courts of the defunct Republic of the Philippines in
the absence of an enabling law granting such authority. And the
same respondent, in his answer and memorandum filed in this
Court, contends that the government established in the Philippines
during the Japanese occupation were no de facto governments.
On January 2, 1942, the Imperial Japanese Forces occupied the
City of Manila, and on the next day their Commander in Chief
proclaimed "the Military Administration under law over the districts
occupied by the Army." In said proclamation, it was also provided
that "so far as the Military Administration permits, all the laws now
in force in the Commonwealth, as well as executive and judicial
institutions, shall continue to be effective for the time being as in the
past," and "all public officials shall remain in their present posts and
carry on faithfully their duties as before."

ISSUE/S (1) Whether the judicial acts and proceedings of the court under the
Philippine Executive Commission and the Republic of the
Philippines were good and valid even after the liberation or
reoccupation of the Philippines by the United States and Filipino
forces;
(2)Whether the proclamation issued on October 23, 1944, by
General Douglas MacArthur, in which he declared "that all laws,
regulations and processes of any of the government in the
Philippines than that of the said Commonwealth are null and void
and without legal effect in areas of the Philippines free of enemy
occupation and control," has invalidated all judgements and judicial
acts and proceedings of the said courts; and
(3) If the said judicial acts and proceedings have not been
invalidated by said proclamation, whether the present courts of the
Commonwealth, which were the same court existing prior to, and
continued during, the Japanese military occupation of the
Philippines, may continue those proceedings pending in said courts
at the time the Philippines were reoccupied and liberated by the
United States and Filipino forces, and the Commonwealth of the
Philippines were reestablished in the Islands.
RULING/S 1. Yes. It is a legal truism in political and international law that all
acts and proceedings of the legislative, executive, and judicial
departments of a de facto government are good and valid.
The question to be determined is whether or not the
governments established in these Islands under the names
of the Philippine Executive Commission and Republic of the
Philippines during the Japanese military occupation or
regime were de facto
 governments. If they were, the judicial acts and proceedings
of those governments remain good and valid even after the
liberation or reoccupation of the Philippines by the American
and Filipino forces.
2. No. The second question hinges upon the interpretation of the
phrase "processes of any other government" as used in the
above-quoted proclamation of General Douglas MacArthur of
October 23, 1944 — that is, whether it was the intention of
the Commander in Chief of the American Forces to annul
and void thereby all judgments and judicial proceedings of
the courts established in the Philippines during the Japanese
military occupation.
3. Yes. The third and last question is whether or not the courts of
the Commonwealth, which are the same as those existing
prior to, and continued during, the Japanese military
occupation by the Philippine Executive Commission and by
the so-called Republic of the Philippines, have jurisdiction to
continue now the proceedings in actions pending in said
courts at the time the Philippine Islands were reoccupied or
liberated by the American and Filipino forces, and the
Commonwealth Government was restored.

As courts are creatures of statutes and their existence defends upon

that of the laws which create and confer upon them their jurisdiction,
it is evident that such laws, not being a political nature, are not
abrogated by a change of sovereignty, and continue in force "ex
proprio vigore" unless and until repealed by legislative acts. A
proclamation that said laws and courts are expressly continued is
not necessary in order that they may continue in force. Such
proclamation, if made, is but a declaration of the intention of
respecting and not repealing those laws. Unless and until they are
abolished or the laws creating and conferring jurisdiction upon them
are repealed by the said government. As a consequence, enabling
laws or acts providing that proceedings pending in one court be
continued by or transferred to another court, are not required by the
mere change of government or sovereignty. They are necessary
only in case the former courts are abolished or their jurisdiction so
change that they can no longer continue taking cognizance of the
cases and proceedings commenced therein, in order that the new
courts or the courts having jurisdiction over said cases may
continue the proceedings.
It is, therefore, obvious that the present courts have jurisdiction to
continue, to final judgment, the proceedings in cases, not of political
complexion, pending therein at the time of the restoration of the
 Commonwealth Government.
In view of all the foregoing it is adjudged and decreed that a writ of
mandamus issue, directed to the respondent judge of the Court of
First

Instance of Manila, ordering him to take cognizance of and continue

to final judgment the proceedings in civil case No. 3012 of said
court. No pronouncement as to costs. So ordered.

CASE TITLE William F. Peralta vs. The Director of G.R NO. G.R. No. L-49
Prisons

PONENTE Feria, J. DATE: 12 November

12, 1945

DOCTRINE The government established over an enemy’s territory during the

military occupation may exercise all the powers given by the laws of
war to the conqueror over the conquered, and is subject to all
restrictions which that code imposes. It is of little consequence
whether such government be called a military or civil government.
Its character is the same and the source of its authority the same.
In either case it is a government imposed by the laws of war and so
far, as it concerns the inhabitants of such territory or the rest of the
world those laws alone determine the legality or illegality of its acts.
FACTS Peralta, a member of the Metropolitan Constabulary of Manila
charged with the supervision and control of the production,
procurement and distribution of goods and other necessaries as
defined in Section 1 of Act No. 9 of the National Assembly of the
so-called Republic of the Philippines, was prosecuted for the crime
of robbery as defined and penalized by section 2(a) of Act No. 65 of
the same Assembly. He was found guilty and sentenced to life
imprisonment, which he commenced to served on August 21, 1944,
by the Court of Special and Exclusive Criminal Jurisdiction, created
in section 1 of Ordinance No. 7 promulgated of the President of the
so-called Republic of the Philippines, pursuant to the authority
conferred upon him by the Constitution and laws of the said
Republic.

The petitioner filed a petition for habeas corpus on the ground that
the Court of Special and Executive Criminal jurisdiction created by
Ordinance No. 7 “was a political instrumentality of the military forces
of the Japanese Imperial Army, the aims and purposes of which are
repugnant to those aims and political purposes of the
Commonwealth of the Philippines, as well as those of the United
States of America, and therefore, null and void ab initio,” that the
provisions of said Ordinance No. 7 are violative of the fundamental
laws of the Commonwealth of the Philippines and “the petitioner
has been deprived of his constitutional rights”; that the petitioner is
being punished by a law created to serve the political purpose of
the Japanese Imperial Army in the Philippines, and “ that the
penalties provided for are much (more) severe than the penalties
provided by the Revised Penal Code.”

ISSUE/S 1. Whether or not the creation of the Court of Special and

Exclusive Criminal Jurisdiction and the summary procedure
adopted is valid. 2. Whether or not the sentence of imprisonment
during the Japanese military occupation is valid. If valid, what is
the effect of the punitive sentence of the reoccupation of the
Philippines and the restoration therein of the Commonwealth
government.
RULING/S 1. It is well established in International Law that “The criminal
jurisdiction established by the invader in the occupied territory
finds its source neither in the laws of the conquering or
conquered state. The authority thus derived can be asserted
either through special tribunals, whose authority and procedure
are defined in the military code of the conquering state, or
through the ordinary courts and authorities of the occupied
district.” The so-called Republic of the Philippines, being a
governmental instrumentality of the belligerent occupation, had
therefore the power or was competent to create the Court of
Special and Executive Criminal Jurisdiction. No question may
arise as to whether or not the court is political complexion, for it
is mere a governmental agency charged with the duty of
applying the law to cases falling under its jurisdiction. Its
judgments and sentences may be of political complexion, or not
depending upon the nature or character of the law so applied.

With respect to the Summary procedure adopted by Ordinance

No. 7, and followed in the trial of the case which resulted in the
conviction of the herein petitioner, there is also no question as
to the power or competence of the belligerent occupant to
promulgate the law providing for such procedure. No objection
can be set up to the legality of its provisions in the light of the
precepts of our Commonwealth Constitution relating to the
rights of accused under the Constitution, because the latter
was not in force during the period of the Japanese military
occupation.

2. It was within the power and competence of the belligerent

occupant to promulgate, through the National Assembly of the
so called Republic of the Philippines, Act No. 65 of the said
Assembly, which penalizes the crimes of robbery and other
offenses by imprisonment ranging from the maximum period of
the imprisonment prescribed by the laws and ordinances
promulgated by the President of the so-called Republic as
minimum, to life imprisonment or death as maximum. Although
these crimes are defined in the Revised Penal Code, they were
altered and penalized by said Act No. 65 with different and
heavier penalties, as new crimes and offenses demanded
military necessity, incident to a state of war, and necessary for
the control of the country by the belligerent occupant, the
protection and safety of the army of occupation, its support and
efficiency, and the success of its operations.
 It is, therefore, evident that the sentence rendered by the Court
of Special and Exclusive Criminal Jurisdiction against the
petitioner,

imposing upon him the penalty of life imprisonment, was good

and valid, since it was within the admitted power or
competence of the belligerent occupant to promulgate the law
penalizing the crime of which the petitioner was convicted.

3. All judgment of political complexion of the courts during the

Japanese regime, ceased to be valid upon reoccupation of the
islands by virtue of the principle or right of postliminium.
Applying that doctrine, the sentence which convicted the
petitioner of a rime of a political complexion must be
considered as having ceased to be valid ipso facto upon the
reoccupation or liberation of the Philippines by General
Douglas McArthur.

It may not be amiss to say in his connection that it is not

necessary and proper to invoke the proclamation of Gen.
McArthur declaring null and void all laws, among them Act No.
65, of the so-called Republic of the Philippines under which the
petitioner was convicted, in order to give retroactive effect to
the nullification of said penal act and invalidate sentence
rendered against petitioner under said law, a sentence which,
before the proclamation, had already become null and of no
effect.

It is, therefore, held that the punitive sentence under

consideration, although good and valid during the military
occupation of the Philippines by the Japanese forces, ceased
to be good and valid ipso facto upon the reoccupation of the
Island and the restoration of the Commonwealth Government.

CASE TITLE LAUREL VS MISA. G.R NO. L-409

PONENTE - DATE: January 30,

1947
DOCTRINE 1. Citizen or subject owes an absolute and permanent
allegiance, which consists in the obligation of fidelity and
obedience to his government or sovereign.

2. Sovereignty of the government or sovereign de jure is not

transferred to the occupier (Hague Convention of 1907).

3. Exercise of rights may be destroyed, or severed and

transferred to another, but sovereignty cannot be
suspended because the existence of sovereignty cannot be
suspended without putting it out of existence or divesting the
possessor thereof at least during the so-called period of
suspension.

4. “Temporarily allegiance” pertains to the relations borne by

the inhabitants of the territory occupied by the enemy toward
the military government established over them.

5. Political laws which prescribe the reciprocal rights, duties

and obligation of government and citizens, are suspended
or in abeyance during military occupation. Examples are
crimes against national security (treason and espionage;
inciting to war, correspondence with hostile country, flight to
enemy's country) and against public order (rebellion,
sedition, and disloyalty, illegal possession of firearms).

6. If an inhabitant of the occupied territory were compelled

illegally by the military occupant, through force, threat or
intimidation, to give him aid and comfort, the former may
lawfully resist and die if necessary, as a hero, or submit
thereto without becoming a traitor.

FACTS Petition for habeas corpus was filed by Anastacio Laurel and based
on a theory that a Filipino citizen who adhered to the enemy giving
the latter aid and comfort during the Japanese occupation cannot
be prosecuted for the crime of treason defined and penalized by
article 114 of the Revised Penal Code.

He stated the following reasons:

1. The sovereignty of the legitimate government in the
Philippines and, consequently, the correlative allegiance of
Filipino citizens thereto was then suspended
 2. There was a change of sovereignty over these Islands upon
the proclamation of the Philippine Republic.

ISSUE/S 1. Is the absolute allegiance of the citizens suspended during

military occupation?
2. Is the petitioner subject to Article 114 of the Revised Penal
Code?

RULING/S The Court denied his petition for habeas corpus.

The absolute and permanent allegiance of the inhabitants of a

territory occupied by the enemy of their legitimate government on
sovereign is not abrogated or severed by the enemy occupation
because the sovereignty of the government or sovereign de jure is
not transferred to the occupier. There is no such thing as
suspended allegiance.

The petitioner is subject to the Revised Penal Code for the change
of form of government does not affect the prosecution of those
charged with the crime of treason because it is an offense to the
same government and same sovereign people.
De Leon vs Esguerra (1987)

Summary Cases:

● De Leon vs Esguerra 152 scra 602

Subject: Ratification of 1987 Constitution effectively superseded the Provisional Constitution; Until the
term of office of barangay officials has been determined by law, the term of office of 6 years provided for
in the Barangay Election Act of 1982 should still govern; Barangay Election Act of 1982 remains
operative under the 1987 Constitution

Facts:

In the Barangay elections held on May 17, 1982, petitioner Alfredo De Leon was elected Barangay
Captain and the other petitioners as Barangay Councilmen of Barangay Dolores, Taytay, Rizal under
Batas Pambansa Blg. 222, otherwise known as the Barangay Election Act of 1982 (BP 222).

On February 9, 1987, petitioner Alfredo de Leon received a Memorandum antedated December 1, 1986
but signed by respondent OIC Governor Benjamin Esguerra on February 8, 1987 designating Florentino
G. Magno as Barangay Captain of Barangay Dolores, Taytay, Rizal. The designation made by the OIC
Governor was "by authority of the Minister of Local Government." A separate Memorandum, also
antedated December 1, 1986, designated respondents as members of the Barangay Council of the
same Barangay and Municipality.

Petitioners filed the present action for Prohibition to enjoin respondents from replacing them from their
respective barangay positions. Petitioners pray that the Memoranda be declared null and void.
Petitioners maintain that pursuant to Section 3 of BP 222, their terms of office "shall be six (6) years
which shall commence on June 7, 1982 and shall continue until their successors shall have elected and
shall have qualified," or up to June 7, 1988. It is also their position that with the ratification of the 1987
Constitution, respondent OIC Governor no longer has the authority to replace them and to designate
their successors.

On the other hand, respondents rely on Section 2, Article III of the Provisional Constitution, promulgated
on March 25, 1986, which provided:

"SECTION 2. All elective and appointive officials and employees under the 1973 Constitution shall
continue in office until otherwise provided by proclamation or executive order or upon the designation or
appointment and qualification of their successors, if such appointment is made within a period of one
year from February 25, 1986."

By reason of the foregoing provision, respondents contend that the terms of office of elective and
appointive officials were abolished; and that the provision in the Barangay Election Act fixing the term of
office of Barangay officials to six (6) years must be deemed to have been repealed for being inconsistent
with the aforequoted provision of the Provisional Constitution.

Held:

Ratification of 1987 Constitution effectively superseded the Provisional Constitution

1. Petitioners, as elective officials under the 1973 Constitution, may continue in office but should vacate
their positions upon the occurrence of any of the events mentioned. Since the promulgation of the
Provisional Constitution, there has been no proclamation or executive order terminating the term of
| Page 1 of 2
elective Barangay officials. Thus, the issue for resolution is whether or not the designation of
respondents to replace petitioners was validly made during the one-year period which ended on
February 25, 1987.

2. Considering the candid Affidavit of respondent OIC Governor, we hold that February 8, 1987, should
be considered as the effective date of replacement and not December 1, 1986 to which it was antedated,
in keeping with the dictates of justice.

3. But while February 8, 1987 is ostensibly still within the one year deadline, the aforequoted provision in
the Provisional Constitution must be deemed to have been overtaken by Section 27, Article XVIII of the
1987 Constitution reading:

"Sec 27. This Constitution shall take effect immediately upon its ratification by a majority of the
votes cast in a plebiscite held for the purpose and shall supersede all previous Constitutions."

4. The 1987 Constitution was ratified in a plebiscite on February 2, 1987. By that date, therefore, the
Provisional Constitution must be deemed to have been superseded. Having become inoperative,
respondent OIC Governor could no longer rely on Section 2, Article III, thereof to designate respondents
to the elective positions occupied by petitioners.

Until the term of office of barangay officials has been determined by law, the term of office of 6
years provided for in the Barangay Election Act of 1982 should still govern

5. Petitioners must now be held to have acquired security of tenure specially considering that the
Barangay Election Act of 1982 declares it "a policy of the State to guarantee and promote the autonomy
of the barangays to ensure their fullest development as self-reliant communities." Similarly, the 1987
Constitution ensures the autonomy of local governments and of political subdivisions of which the
barangays form a part, and limits the President's power to "general supervision" over local governments.

6. Relevantly, Section 8, Article X of the same 1987 Constutution further provides in part: “Sec. 8. The
term of office of elective local officials, except barangay officials, which shall be determined by law, shall
be three years . . . "

7. Until the term of office of barangay officials has been determined by law, therefore, the term of office
of six (6) years provided for in the Barangay Election Act of 1982 should still govern.

Barangay Election Act of 1982 remains operative under the 1987 Constitution

8. We find nothing inconsistent between the term of six (6) years for elective Barangay officials and the
1987 Constitution, and the same should, therefore, be considered as still operative, pursuant to Section
3, Article XVIII of the 1987 Constitution, reading:

"Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and
other executive issuances not inconsistent, with this Constitution shall remain operative until
amended, repealed or revoked."

| Page 2 of 2
Tanada v. Tuvera (Resolution)

Summary Cases:

● Tañada vs. Tuvera [RESOLUTION]

Subject: Due Process, Publication requirement

Facts:
Petitioners demand the disclosure of a number of presidential decrees which they claimed had not been
published as required by law. The government argued that while publication was necessary as a rule, it
was not so when it was "otherwise provided," as when the decrees themselves declared that they were
to become “effective immediately upon their approval”.
In an earlier decision, the Court affirmed the necessity for the publication of “presidential issuances
which are of general application.”
Petitioners suggest that there should be no distinction between laws of general applicability and those
which are not; that publication means complete publication; and that the publication must be made
forthwith in the Official Gazette.
Held:
Publication requirement
1. Article 2 of the Civil Code provides:
"ART.2. Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette, unless it is otherwise provided xxx."
2. The clause "unless it is otherwise provided" refers to the date of effectivity and not to the requirement
of publication itself, which cannot in any event be omitted.
3. Publication is indispensable in every case, but the legislature may in its discretion provide that the
usual fifteen-day period shall be shortened or extended.
4. The term "laws" should refer to all laws and not only to those of general application.
4.1. All statutes, including those of local application and private laws, shall be published as a
condition for their effectivity, which shall begin fifteen days after publication unless a different
effectivity date is fixed by the legislature.
4.2. Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by the
legislature or, at present, directly conferred by the Constitution.
4.3. Administrative rules and regulations must also be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation.
4.4. The charter of a city must be published notwithstanding that it applies to only a portion of the
national territory and directly affects only the inhabitants of that place.
4.5. All presidential decrees must be published, including even,say, those naming a public place
after a favored individual or exempting him from certain prohibitions or requirements.
4.6. The circulars issued by the Monetary Board must be published if they are meant not merely to
interpret but to "fill in the details" of the Central Bank Act which that body is supposed to enforce
4.7. Municipal ordinances must also be published although they are not covered by this rule but by
the Local Government Code.
5. Examples of issuances that need NOT be published
5.1. Interpretative regulations and those merely internal in nature, that is,regulating only the
personnel of the administrative agency and not the public.
5.2. Letters of instructions issued by administrative superiors concerning the rules or guidelines to
be followed by their subordinates in the performance of their duties.
5.3. Instructions issued by the Minister of Social Welfare on the case studies to be made in
petitions for adoption
5.4. Rules laid down by the head of a government agency on the assignments or workload of his
personnel or the wearing of office uniforms
| Page 1 of 2
6. Publication must be in full or it is no publication at all since its purpose is to inform the public of the
contents of the laws.
6.1. The mere mention of the number of the presidential decree, the title of such decree, its
whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere
supplement of the Official Gazette cannot satisfy the publication requirement. This is not even
substantial compliance
7. Under Article 2 of the Civil Code, the publication of laws must be made in the Official Gazette, and not
elsewhere (i.e. newspaper of general circulation), as a requirement for their effectivity.
Due Process
8. Omission of the publication requirement would offend due process insofar as it would deny the public
of knowledge of the laws that are supposed to govern it. The conclusive presumption that every person
knows the law presupposes that the law has been published if the presumption is to have any legal
justification at all.

| Page 2 of 2
Tanada vs Tuvera (1985)

Summary Cases:

● Lorenzo M. Tañada vs. Juan C. Tuvera 136 SCRA 27

Subject: Legal Standing; Publication Requirement; Operative Fact

Facts:

Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6,
Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners
seek a writ of mandamus to compel respondent public officials to publish, and or cause the publication in
the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations,
executive orders, letter of implementation and administrative orders.

The Solicitor General would have this case dismissed on the ground that petitioners have no legal
personality or standing to bring this mandamus proceeding in the absence of any showing that
petitioners are personally and directly affected or prejudiced by the non-publication of the presidential
issuances in question, hence, they are not "aggrieved parties" within the meaning of Section 3, Rule 65
of the Rules of Court.

Held:

Legal Standing

1. While the general rule is that "a writ of mandamus would be granted to a private individual only in
those cases where he has some private or particular interest to be subserved, or some particular right to
be protected, independent of that which he holds with the public at large," and "it is for the public officers
exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen],"
nevertheless, "when the question is one of public right and the object of the mandamus is to
procure the enforcement of a public duty, the people are regarded as the real party in interest and
the relator at whose instigation the proceedings are instituted need not show that he has any legal or
special interest in the result, it being sufficient to show that he is a citizen and as such interested in
the execution of the laws.

2. The right sought to be enforced by petitioners herein is a public right recognized by no less than the
fundamental law of the land.

Publication Requirement

3. Article 2 of the Civil Code does not preclude the requirement of publication in the Official Gazette,
even if the law itself provides for the date of its effectivity.

4. The clear object is to give the general public adequate notice of the various laws which are to regulate
their actions and conduct as citizens. Without such notice and publication, there would be no basis for
the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish
or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not
even a constructive one.

5. While the people are kept abreast by the mass media of the debates and deliberations in the Batasan
| Page 1 of 2
Pambansa - and for the diligent ones, ready access to the legislative records - no such publicity
accompanies the law-making process of the President. Thus, without publication, the people have no
means of knowing what presidential decrees have actually been promulgated, much less a definite way
of informing themselves of the specific contents and texts of such decrees.

6. The publication of all presidential issuances "of a public nature" or "of general applicability" is
mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their
violation or otherwise impose a burden on the people, such as tax and revenue measures, fall within this
category. Other presidential issuances which apply only to particular persons or class of persons
such as administrative and executive orders need not be published on the assumption that they
have been circularized to all concerned.

7. The publication of presidential issuances "of a public nature" or "of general applicability" is a
requirement of due process. It is a rule of law that before a person may be bound by law, he must first be
officially and specifically informed of its contents.

8. The very first clause of Section 1 of Commonwealth Act 638 reads: "There shall be published in the
Official Gazette . . ." The word "shall" used therein imposes upon respondent officials an imperative duty.
That duty must be enforced if the Constitutional right of the people to be informed on matters of public
concern is to be given substance and reality.

9. Presidential issuances of general application, which have not been published, shall have no
force and effect.

Operative Fact

10. The implementation/enforcement of presidential decrees prior to their publication in the Official
Gazette is "an operative fact which may have consequences which cannot be justly ignored.

11. The actual existence of a statute, prior to a determination [of it invalidity], is an operative fact and
may have consequences which cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in
various aspects - with respect to particular conduct, private and official. Questions of rights claimed to
have become vested, of status, of prior determinations deemed to have finality and acted upon
accordingly, of public policy in the light of the nature both of the statute and of its previous application,
demand examination.

| Page 2 of 2
PHILIPPINE VETERANS BANK EMPLOYEES UNION-N.U.B.E. and PERFECTO V.
FERNANDEZ, petitioners, vs. HONORABLE BENJAMIN VEGA, Presiding Judge of
Branch 39 of the REGIONAL TRIAL COURT of Manila, the CENTRAL BANK OF THE
PHILIPPINES and THE LIQUIDATOR OF THE PHILIPPINE VETERANS BANK,
respondents

2001-06-28 | G.R. No. 105364

DECISION
KAPUNAN, J.:
May a liquidation court continue with liquidation proceedings of the Philippine Veterans Bank (PVB)
when Congress had mandated its rehabilitation and reopening?
This is the sole issue raised in the instant Petition for Prohibition with Petition for Preliminary Injunction
and application for Ex Parte Temporary Restraining Order.
The antecedent facts of the case are as follows:
Sometime in 1985, the Central Bank of the Philippines (Central Bank, for brevity) filed with Branch 39 of
the Regional Trial Court of Manila a Petition for Assistance in the Liquidation of the Philippine Veterans
Bank, the same docketed as Case No. SP-32311. Thereafter, the Philipppine Veterans Bank Employees
Union-N.U.B.E., herein petitioner, represented by petitioner Perfecto V. Fernandez, filed claims for
accrued and unpaid employee wages and benefits with said court in SP-32311.[1]
After lengthy proceedings, partial payment of the sums due to the employees were made. However, due
to the piecemeal hearings on the benefits, many remain unpaid.[2]
On March 8, 1991, petitioners moved to disqualify the respondent judge from hearing the above case on
grounds of bias and hostility towards petitioners.[3]
On January 2, 1992, the Congress enacted Republic Act No. 7169 providing for the rehabilitation of the
Philippine Veterans Bank.[4]
Thereafter, petitioners filed with the labor tribunals their residual claims for benefits and for reinstatement
upon reopening of the bank.[5]
Sometime in May 1992, the Central Bank issued a certificate of authority allowing the PVB to reopen.[6]
Despite the legislative mandate for rehabilitation and reopening of PVB, respondent judge continued with
the liquidation proceedings of the bank. Moreover, petitioners learned that respondents were set to order
the payment and release of employee benefits upon motion of another lawyer, while petitioners' claims
have been frozen to their prejudice.
Hence, the instant petition.
Petitioners argue that with the passage of R.A. 7169, the liquidation court became functus officio, and no
longer had the authority to continue with liquidation proceedings.
In a Resolution, dated June 8, 1992, the Supreme Court resolved to issue a Temporary Restraining
Order enjoining the trial court from further proceeding with the case.
On June 22, 1992, VOP Security & Detective Agency (VOPSDA) and its 162 security guards filed a
Motion for Intervention with prayer that they be excluded from the operation of the Temporary
Restraining Order issued by the Court. They alleged that they had filed a motion before Branch 39 of the
RTC of Manila, in SP-No. 32311, praying that said court order PVB to pay their backwages and salary
differentials by authority of R.A. No 6727, Wage Orders No. NCR-01 and NCR-01-Ad and Wage Orders
No. NCR-02 and NCR-02-A; and, that said court, in an Order dated June 5, 1992, approved therein
movants' case and directed the bank liquidator or PVB itself to pay the backwages and differentials in
accordance with the computation incorporated in the order. Said intervenors likewise manifested that
there was an error in the computation of the monetary benefits due them.
On August 18, 1992, petitioners, pursuant to the Resolution of this Court, dated July 6, 1992, filed their
Comment opposing the Motion for Leave to File Intervention and for exclusion from the operation of the
T.R.O. on the grounds that the movants have no legal interest in the subject matter of the pending action;

| Page 1 of 3
that allowing intervention would only cause delay in the proceedings; and that the motion to exclude the
movants from the T.R.O. is without legal basis and would render moot the relief sought in the petition.
On September 3, 1992, the PVB filed a Petition-In-Intervention praying for the issuance of the writs of
certiorari and prohibition under Rule 65 of the Rules of Court in connection with the issuance by
respondent judge of several orders involving acts of liquidation of PVB even after the effectivity of R.A.
No. 7169. PVB further alleges that respondent judge clearly acted in excess of or without jurisdiction
when he issued the questioned orders.
We find for the petitioners.
Republic Act No. 7169 entitled "An Act To Rehabilitate The Philippine Veterans Bank Created Under
Republic Act No. 3518, Providing The Mechanisms Therefor, And For Other Purposes", which was
signed into law by President Corazon C. Aquino on January 2, 1992 and which was published in the
Official Gazette on February 24, 1992, provides in part for the reopening of the Philippine Veterans Bank
together with all its branches within the period of three (3) years from the date of the reopening of the
head office.[7] The law likewise provides for the creation of a rehabilitation committee in order to facilitate
the implementation of the provisions of the same.[8]
Pursuant to said R.A. No. 7169, the Rehabilitation Committee submitted the proposed Rehabilitation
Plan of the PVB to the Monetary Board for its approval. Meanwhile, PVB filed a Motion to Terminate
Liquidation of Philippine Veterans Bank dated March 13, 1992 with the respondent judge praying that the
liquidation proceedings be immediately terminated in view of the passage of R.A. No. 7169.
On April 10, 1992, the Monetary Board issued Monetary Board Resolution No. 348 which approved the
Rehabilitation Plan submitted by the Rehabilitaion Committee.
Thereafter, the Monetary Board issued a Certificate of Authority allowing PVB to reopen.
On June 3, 1992, the liquidator filed A Motion for the Termination of the Liquidation Proceedings of the
Philippine Veterans Bank with the respondent judge.
As stated above, the Court, in a Resolution dated June 8, 1992, issued a temporary restraining order in
the instant case restraining respondent judge from further proceeding with the liquidation of PVB.
On August 3, 1992, the Philippine Veterans Bank opened its doors to the public and started regular
banking operations.
Clearly, the enactment of Republic Act No. 7169, as well as the subsequent developments has rendered
the liquidation court functus officio. Consequently, respondent judge has been stripped of the authority to
issue orders involving acts of liquidation.
Liquidation, in corporation law, connotes a winding up or settling with creditors and debtors.[9] It is the
winding up of a corporation so that assets are distributed to those entitled to receive them. It is the
process of reducing assets to cash, discharging liabilities and dividing surplus or loss.
On the opposite end of the spectrum is rehabilitation which connotes a reopening or reorganization.
Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and
reinstate the corporation to its former position of successful operation and solvency.[10]
It is crystal clear that the concept of liquidation is diametrically opposed or contrary to the concept of
rehabilitation, such that both cannot be undertaken at the same time. To allow the liquidation
proceedings to continue would seriously hinder the rehabilitation of the subject bank.
Anent the claim of respondents Central Bank and Liquidator of PVB that R.A. No. 7169 became effective
only on March 10, 1992 or fifteen (15) days after its publication in the Official Gazette; and, the
contention of intervenors VOP Security, et. al. that the effectivity of said law is conditioned on the
approval of a rehabilitation plan by the Monetary Board, among others, the Court is of the view that both
contentions are bereft of merit.
While as a rule, laws take effect after fifteen (15) days following the completion of their publication in the
Official Gazette or in a newspaper of general circulation in the Philippines, the legislature has the
authority to provide for exceptions, as indicated in the clause "unless otherwise provided."
In the case at bar, Section 10 of R.A. No. 7169 provides:
Sec. 10. Effectivity. - This Act shall take effect upon its approval.

| Page 2 of 3
Hence, it is clear that the legislature intended to make the law effective immediately upon its approval. It
is undisputed that R.A. No. 7169 was signed into law by President Corazon C. Aquino on January 2,
1992. Therefore, said law became effective on said date.
Assuming for the sake of argument that publication is necessary for the effectivity of R.A. No. 7169, then
it became legally effective on February 24, 1992, the date when the same was published in the Official
Gazette, and not on March 10, 1992, as erroneously claimed by respondents Central Bank and
Liquidator.
WHEREFORE, in view of the foregoing, the instant petition is hereby GIVEN DUE COURSE and
GRANTED. Respondent Judge is hereby PERMANENTLY ENJOINED from further proceeding with
Civil Case No. SP- 32311.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
* This case was transferred to the ponente pursuant to the resolution in AM No. 00-9-03-SC. Re:
Creation of Special Committee on Case Backlog dated February 27, 2001.
[1] Rollo, p. 5.
[2] Ibid.
[3] Id.
[4] Id., at 6.
[5] Id.
[6] Id.
[7] Sec. 5, Republic Act No. 7169, Official Gazette, February 24, 1992, p. 963.
[8] Sec. 7, Ibid.
[9] Wilson vs. Superior Court in and for Santa Clara County, 2 Cal.2d 632, 43 P.2d 286, 288.
[10] Ruby Industrial Corporation vs. Court of Appeals, 284 SCRA 445 (1998).

| Page 3 of 3
COMMISSIONER OF CUSTOMS AND THE DISTRICT COLLECTOR OF THE PORT
OF SUBIC, PETITIONERS, VS. HYPERMIX FEEDS CORPORATION, RESPONDENT.

2012-02-01 | G.R. No. 179579

SECOND DIVISION
DECISION

SERENO, J.:

Before us is a Petition for Review under Rule 45,[1] assailing the Decision[2] and the Resolution[3] of the
Court of Appeals (CA), which nullified the Customs Memorandum Order (CMO) No. 27-2003[4] on the tariff
classification of wheat issued by petitioner Commissioner of Customs.

The antecedent facts are as follows:

On 7 November 2003, petitioner Commissioner of Customs issued CMO 27-2003. Under the Memorandum,
for tariff purposes, wheat was classified according to the following: (1) importer or consignee; (2) country of
origin; and (3) port of discharge.[5] The regulation provided an exclusive list of corporations, ports of
discharge, commodity descriptions and countries of origin. Depending on these factors, wheat would be
classified either as food grade or feed grade. The corresponding tariff for food grade wheat was 3%, for feed
grade, 7%.

CMO 27-2003 further provided for the proper procedure for protest or Valuation and Classification Review
Committee (VCRC) cases. Under this procedure, the release of the articles that were the subject of protest
required the importer to post a cash bond to cover the tariff differential.[6]

A month after the issuance of CMO 27-2003, on 19 December 2003, respondent filed a Petition for
Declaratory Relief[7] with the Regional Trial Court (RTC) of Las Piñas City. It anticipated the implementation
of the regulation on its imported and perishable Chinese milling wheat in transit from China.[8] Respondent
contended that CMO 27-2003 was issued without following the mandate of the Revised Administrative Code
on public participation, prior notice, and publication or registration with the University of the Philippines Law
Center.

Respondent also alleged that the regulation summarily adjudged it to be a feed grade supplier without the
benefit of prior assessment and examination; thus, despite having imported food grade wheat, it would be
subjected to the 7% tariff upon the arrival of the shipment, forcing them to pay 133% more than was proper.

Furthermore, respondent claimed that the equal protection clause of the Constitution was violated when the
regulation treated non-flour millers differently from flour millers for no reason at all.

Lastly, respondent asserted that the retroactive application of the regulation was confiscatory in nature.

On 19 January 2004, the RTC issued a Temporary Restraining Order (TRO) effective for twenty (20) days
from notice.[9]

Petitioners thereafter filed a Motion to Dismiss.[10] They alleged that: (1) the RTC did not have jurisdiction
over the subject matter of the case, because respondent was asking for a judicial determination of the
classification of wheat; (2) an action for declaratory relief was improper; (3) CMO 27-2003 was an internal
administrative rule and not legislative in nature; and (4) the claims of respondent were speculative and
premature, because the Bureau of Customs (BOC) had yet to examine respondent’s products. They likewise
opposed the application for a writ of preliminary injunction on the ground that they had not inflicted any injury

| Page 1 of 8
through the issuance of the regulation; and that the action would be contrary to the rule that administrative
issuances are assumed valid until declared otherwise.

On 28 February 2005, the parties agreed that the matters raised in the application for preliminary injunction
and the Motion to Dismiss would just be resolved together in the main case. Thus, on 10 March 2005, the
RTC rendered its Decision[11] without having to resolve the application for preliminary injunction and the
Motion to Dismiss.

The trial court ruled in favor of respondent, to wit:

WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject Customs Memorandum
Order 27-2003 is declared INVALID and OF NO FORCE AND EFFECT. Respondents Commissioner of
Customs, the District Collector of Subic or anyone acting in their behalf are to immediately cease and desist
from enforcing the said Customs Memorandum Order 27-2003.

SO ORDERED.[12]

The RTC held that it had jurisdiction over the subject matter, given that the issue raised by respondent
concerned the quasi-legislative powers of petitioners. It likewise stated that a petition for declaratory relief was
the proper remedy, and that respondent was the proper party to file it. The court considered that respondent
was a regular importer, and that the latter would be subjected to the application of the regulation in future
transactions.

With regard to the validity of the regulation, the trial court found that petitioners had not followed the basic
requirements of hearing and publication in the issuance of CMO 27-2003. It likewise held that petitioners had
“substituted the quasi-judicial determination of the commodity by a quasi-legislative predetermination.”[13]
The lower court pointed out that a classification based on importers and ports of discharge were violative of
the due process rights of respondent.

Dissatisfied with the Decision of the lower court, petitioners appealed to the CA, raising the same allegations
in defense of CMO 27-2003.[14] The appellate court, however, dismissed the appeal. It held that, since the
regulation affected substantial rights of petitioners and other importers, petitioners should have observed the
requirements of notice, hearing and publication.

Hence, this Petition.

Petitioners raise the following issues for the consideration of this Court:

I. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE WHICH IS NOT IN ACCORD WITH
THE LAW AND PREVAILING JURISPRUDENCE.

| Page 2 of 8
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE TRIAL COURT HAS
JURISDICTION OVER THE CASE.

The Petition has no merit.

We shall first discuss the propriety of an action for declaratory relief.

Rule 63, Section 1 provides:

Who may file petition. – Any person interested under a deed, will, contract or other written instrument, or
whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental
regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to
determine any question of construction or validity arising, and for a declaration of his rights or duties,
thereunder.

The requirements of an action for declaratory relief are as follows: (1) there must be a justiciable controversy;
(2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial
determination.[15] We find that the Petition filed by respondent before the lower court meets these
requirements.

First, the subject of the controversy is the constitutionality of CMO 27-2003 issued by petitioner Commissioner
of Customs. In Smart Communications v. NTC,[16] we held:

The determination of whether a specific rule or set of rules issued by an administrative agency contravenes
the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the
power of judicial review or the power to declare a law, treaty, international or executive agreement,
presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional
trial courts. This is within the scope of judicial power, which includes the authority of the courts to
determine in an appropriate action the validity of the acts of the political departments. Judicial power
includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
(Emphasis supplied)

Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary,[17] we
said:

xxx [A] legislative rule is in the nature of subordinate legislation, designed to implement a primary
legislation by providing the details thereof. xxx
In addition such rule must be published. On the other hand, interpretative rules are designed to provide
guidelines to the law which the administrative agency is in charge of enforcing.
Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether
the rule is within the delegated authority of the administrative agency; (ii) whether it is
| Page 3 of 8
 reasonable; and (iii) whether it was issued pursuant to proper procedure. But the court is not free
to substitute its judgment as to the desirability or wisdom of the rule for the legislative body, by its
delegation of administrative judgment, has committed those questions to administrative judgments and
not to judicial judgments. In the case of an interpretative rule, the inquiry is not into the validity but into
the correctness or propriety of the rule. As a matter of power a court, when confronted with an
interpretative rule, is free to (i) give the force of law to the rule; (ii) go to the opposite extreme and
substitute its judgment; or (iii) give some intermediate degree of authoritative weight to the
interpretative rule. (Emphasis supplied)

Second, the controversy is between two parties that have adverse interests. Petitioners are summarily
imposing a tariff rate that respondent is refusing to pay.

Third, it is clear that respondent has a legal and substantive interest in the implementation of CMO 27-2003.
Respondent has adequately shown that, as a regular importer of wheat, on 14 August 2003, it has actually
made shipments of wheat from China to Subic. The shipment was set to arrive in December 2003. Upon its
arrival, it would be subjected to the conditions of CMO 27-2003. The regulation calls for the imposition of
different tariff rates, depending on the factors enumerated therein. Thus, respondent alleged that it would be
made to pay the 7% tariff applied to feed grade wheat, instead of the 3% tariff on food grade wheat. In
addition, respondent would have to go through the procedure under CMO 27-2003, which would undoubtedly
toll its time and resources. The lower court correctly pointed out as follows:
xxx As noted above, the fact that petitioner is precisely into the business of importing wheat, each and
every importation will be subjected to constant disputes which will result into (sic) delays in the
delivery, setting aside of funds as cash bond required in the CMO as well as the resulting
expenses thereof. It is easy to see that business uncertainty will be a constant occurrence for
petitioner. That the sums involved are not minimal is shown by the discussions during the
hearings conducted as well as in the pleadings filed. It may be that the petitioner can later on get a
refund but such has been foreclosed because the Collector of Customs and the Commissioner of
Customs are bound by their own CMO. Petitioner cannot get its refund with the said agency. We
believe and so find that Petitioner has presented such a stake in the outcome of this controversy as to
vest it with standing to file this petition.[18] (Emphasis supplied)

Finally, the issue raised by respondent is ripe for judicial determination, because litigation is inevitable[19] for
the simple and uncontroverted reason that respondent is not included in the enumeration of flour millers
classified as food grade wheat importers. Thus, as the trial court stated, it would have to file a protest case
each time it imports food grade wheat and be subjected to the 7% tariff.

It is therefore clear that a petition for declaratory relief is the right remedy given the circumstances of the case.

Considering that the questioned regulation would affect the substantive rights of respondent as explained
above, it therefore follows that petitioners should have applied the pertinent provisions of Book VII, Chapter 2
of the Revised Administrative Code, to wit:

Section 3. Filing. – (1) Every agency shall file with the University of the Philippines Law Center three (3)
certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which
are not filed within three (3) months from that date shall not thereafter be the bases of any sanction
against any party of persons.
xxx xxx xxx
Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity
to submit their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been
published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.
| Page 4 of 8
When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its
bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When,
on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or
render least cumbersome the implementation of the law but substantially increases the burden of those
governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the force and effect of law.[20]

Likewise, in Tañada v. Tuvera,[21] we held:

The clear object of the above-quoted provision is to give the general public adequate notice of
the various laws which are to regulate their actions and conduct as citizens. Without such notice
and publication, there would be no basis for the application of the maxim “ignorantia legis non excusat.”
It would be the height of injustice to punish or otherwise burden a citizen for the transgression
of a law of which he had no notice whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken
so vital significance that at this time when the people have bestowed upon the President a power
heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of
the debates and deliberations in the Batasan Pambansa – and for the diligent ones, ready access to
the legislative records – no such publicity accompanies the law-making process of the President. Thus,
without publication, the people have no means of knowing what presidential decrees have
actually been promulgated, much less a definite way of informing themselves of the specific
contents and texts of such decrees. (Emphasis supplied)

Because petitioners failed to follow the requirements enumerated by the Revised Administrative Code, the
assailed regulation must be struck down.

Going now to the content of CMO 27-3003, we likewise hold that it is unconstitutional for being violative of the
equal protection clause of the Constitution.

The equal protection clause means that no person or class of persons shall be deprived of the same
protection of laws enjoyed by other persons or other classes in the same place in like circumstances. Thus,
the guarantee of the equal protection of laws is not violated if there is a reasonable classification. For a
classification to be reasonable, it must be shown that (1) it rests on substantial distinctions; (2) it is germane
to the purpose of the law; (3) it is not limited to existing conditions only; and (4) it applies equally to all
members of the same class.[22]

Unfortunately, CMO 27-2003 does not meet these requirements. We do not see how the quality of wheat is
affected by who imports it, where it is discharged, or which country it came from.

Thus, on the one hand, even if other millers excluded from CMO 27-2003 have imported food grade wheat,
the product would still be declared as feed grade wheat, a classification subjecting them to 7% tariff. On the
other hand, even if the importers listed under CMO 27-2003 have imported feed grade wheat, they would only
be made to pay 3% tariff, thus depriving the state of the taxes due. The regulation, therefore, does not
become disadvantageous to respondent only, but even to the state.

It is also not clear how the regulation intends to “monitor more closely wheat importations and thus prevent
their misclassification.” A careful study of CMO 27-2003 shows that it not only fails to achieve this end, but
results in the opposite. The application of the regulation forecloses the possibility that other corporations that
are excluded from the list import food grade wheat; at the same time, it creates an assumption that those who
meet the criteria do not import feed grade wheat. In the first case, importers are unnecessarily burdened to
prove the classification of their wheat imports; while in the second, the state carries that burden.

Petitioner Commissioner of Customs also went beyond his powers when the regulation limited the customs
| Page 5 of 8
officer’s duties mandated by Section 1403 of the Tariff and Customs Law, as amended. The law provides:

Section 1403. – Duties of Customs Officer Tasked to Examine, Classify, and Appraise Imported
Articles. – The customs officer tasked to examine, classify, and appraise imported articles shall
determine whether the packages designated for examination and their contents are in
accordance with the declaration in the entry, invoice and other pertinent documents and shall
make return in such a manner as to indicate whether the articles have been truly and correctly
declared in the entry as regard their quantity, measurement, weight, and tariff classification and
not imported contrary to law. He shall submit samples to the laboratory for analysis when feasible to
do so and when such analysis is necessary for the proper classification, appraisal, and/or admission
into the Philippines of imported articles.

Likewise, the customs officer shall determine the unit of quantity in which they are usually
bought and sold, and appraise the imported articles in accordance with Section 201 of this
Code.
Failure on the part of the customs officer to comply with his duties shall subject him to the penalties
prescribed under Section 3604 of this Code.

The provision mandates that the customs officer must first assess and determine the classification of the
imported article before tariff may be imposed. Unfortunately, CMO 23-2007 has already classified the article
even before the customs officer had the chance to examine it. In effect, petitioner Commissioner of Customs
diminished the powers granted by the Tariff and Customs Code with regard to wheat importation when it no
longer required the customs officer’s prior examination and assessment of the proper classification of the
wheat.

It is well-settled that rules and regulations, which are the product of a delegated power to create new and
additional legal provisions that have the effect of law, should be within the scope of the statutory authority
granted by the legislature to the administrative agency. It is required that the regulation be germane to the
objects and purposes of the law; and that it be not in contradiction to, but in conformity with, the standards
prescribed by law.[23]

In summary, petitioners violated respondent’s right to due process in the issuance of CMO 27-2003 when
they failed to observe the requirements under the Revised Administrative Code. Petitioners likewise violated
respondent’s right to equal protection of laws when they provided for an unreasonable classification in the
application of the regulation. Finally, petitioner Commissioner of Customs went beyond his powers of
delegated authority when the regulation limited the powers of the customs officer to examine and assess
imported articles.

WHEREFORE, in view of the foregoing, the Petition is DENIED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice

JOSE PORTUGAL PEREZ

| Page 6 of 8
Associate Justice
BIENVENIDO L. REYES
Associate Justice

ATTESTATION

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

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

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

Footnotes:

[1] Rollo, pp. 124-142.

[2] Id. at 33-46.

[3] Id. at 47.

[4] Records, pp. 16-18.

[5] SUBJECT: Tariff Classification of Wheat

In order to monitor more closely wheat importations and thus prevent their misclassification, the following are
hereby prescribed:
1. For tariff purposes, wheat shall be classified as follows:
1.1 Under HS 1001.9090 (Food Grade) when all the following elements are present:
1.1.1 the importer/consignee of the imported wheat is a flour miller as per attached list (Annex ‘A’), which shall
form as integral part of this Order
1.1.2 the wheat importation consists of any of those listed in Annex ‘A’ according to the country of origin
indicated therein
1.1.3 the wheat importation is entered/unloaded in the Port of Discharge indicated opposite the name of the
flour miller, as per Annex ‘A’
1.2 Under HS 1001.9010 (Feed Grade)
1.2.1 When any or all of the elements prescribed under 1.1 above is not present.
1.2.2 All other wheat importations by non-flour millers, i.e., importers/consignees NOT listed in Annex ‘A’

[6] SUBJECT: Tariff Classification of Wheat

xxx xxx xxx
2. Any issue arising from this Order shall be resolved in an appropriate protest or VCRC case.
3. In case of a VCRC case, the following applies:
3.1 The shipment may qualify for Tentative Release upon payment of the taxes and duties as per declaration
| Page 7 of 8
and the posting of cash bond to cover the tariff differential.
3.2 The Tentative Release granted by the VCRC shall, prior to the release of the shipment from Customs
custody, be subject to representative. For this purpose, the District/Port Collector concerned shall forward to
the Office of the Commissioner the Tentative Release papers, together with all pertinent shipping and
supporting documents, including, but not limited to, contract of sale, phytosanitary certificate and certificate of
quality.
In the case of Outports, the required documents shall be faxed to the Office of the Commissioner of Customs
to any of these numbers: 527-1953/527-4573.
3.3 In resolving the classification issue, the VCRC shall consider the import/consignee, type/source of wheat
and port of discharge of the wheat importation, as indicated in Annex ‘A’, and require the proofs/evidences
(sic), including, but not limited to, proofs of sale or consumption of said wheat importation, certificate of quality
issued by manufacturing country and contract of sale.
3.4 Any VCRC decision adverse to the government shall be subject to automatic review by the Commissioner
of Customs.

[7] Rollo¸ pp. 158-168.

[8] Records, p. 12.

[9] Rollo, pp. 58-59.

[10] Id. at 60-78.

[11] Id. at 108-114; penned by Judge Romeo C. De Leon.

[12] Id. at 114.

[13] Id. at 112.

[14] Id. at 117-122.

[15] Tolentino v. Board of Accountancy, 90 Phil. 83 (1951).

[16] 456 Phil. 145 (2003).

[17] G.R. No. 108524, 10 November 1994, 238 SCRA 63, 69-70.

[18] Rollo, p. 112.

[19] Office of the Ombudsman v. Ibay, 416 Phil. 659 (2001).

[20] CIR v. Michel J. Lhuiller Pawnshop Inc., 453 Phil. 1043 (2003).

[21] 220 Phil. 422 (1985).

[22] Philippine Rural Electric Cooperatives Association, Inc. v. DILG, 451 Phil. 683 (2003).

[23] Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles v. Home Development Mutual Fund, 389 Phil.
296 (2000).

| Page 8 of 8
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. MICHEL J. LHUILLIER
PAWNSHOP, INC., respondent.

2003-07-15 | G.R. No. 150947

DECISION

DAVIDE, JR., C.J.:

Are pawnshops included in the term lending investors for the purpose of imposing the 5% percentage tax
under then Section 116 of the National Internal Revenue Code (NIRC) of 1977, as amended by
Executive Order No. 273?

Petitioner Commissioner of Internal Revenue (CIR) filed the instant petition for review to set aside the
decision[1] of 20 November 2001 of the Court of Appeals in CA G.R. SP No. 62463, which affirmed the
decision of 13 December 2000 of the Court of Tax Appeals (CTA) in CTA Case No. 5690 cancelling the
assessment issued against respondent Michel J. Lhuillier Pawnshop, Inc. (hereafter Lhuillier) in the
amount of P3,360,335.11 as deficiency percentage tax for 1994, inclusive of interest and surcharges.

The facts are as follows:

On 11 March 1991, CIR Jose U. Ong issued Revenue Memorandum Order (RMO) No. 15-91 imposing a
5% lending investor's tax on pawnshops; thus:

A restudy of P.D. [No.] 114 shows that the principal activity of pawnshops is lending money at interest
and incidentally accepting a "pawn" of personal property delivered by the pawner to the pawnee as
security for the loan.(Sec. 3, Ibid). Clearly, this makes pawnshop business akin to lending investor's
business activity which is broad enough to encompass the business of lending money at interest by any
person whether natural or juridical. Such being the case, pawnshops shall be subject to the 5% lending
investor's tax based on their gross income pursuant to Section 116 of the Tax Code, as amended.

This RMO was clarified by Revenue Memorandum Circular (RMC) No. 43-91 on 27 May 1991, which
reads:

1. RM[O] 15-91 dated March 11, 1991.

This Circular subjects to the 5% lending investor's tax the gross income of pawnshops pursuant to
Section 116 of the Tax Code, and it thus revokes BIR Ruling No[]. 6-90, and VAT Ruling Nos. 22-90 and
67-90. In order to have a uniform cut-off date, avoid unfairness on the part of tax- payers if they are
required to pay the tax on past transactions, and so as to give meaning to the express provisions of
Section 246 of the Tax Code, pawnshop owners or operators shall become liable to the lending
investor's tax on their gross income beginning January 1, 1991. Since the deadline for the filing of
percentage tax return (BIR Form No. 2529A-0) and the payment of the tax on lending investors covering
the first calendar quarter of 1991 has already lapsed, taxpayers are given up to June 30, 1991 within
which to pay the said tax without penalty. If the tax is paid after June 30, 1991, the corresponding
penalties shall be assessed and computed from April 21, 1991.

Since pawnshops are considered as lending investors effective January 1, 1991, they also become
subject to documentary stamp taxes prescribed in Title VII of the Tax Code. BIR Ruling No. 325-88
dated July 13, 1988 is hereby revoked.

| Page 1 of 8
On 11 September 1997, pursuant to these issuances, the Bureau of Internal Revenue (BIR) issued
Assessment Notice No. 81-PT-13-94-97-9-118 against Lhuillier demanding payment of deficiency
percentage tax in the sum of P3,360,335.11 for 1994 inclusive of interest and surcharges.

On 3 October 1997, Lhuillier filed an administrative protest with the Office of the Revenue Regional
Director contending that (1) neither the Tax Code nor the VAT Law expressly imposes 5% percentage
tax on the gross income of pawnshops; (2) pawnshops are different from lending investors, which are
subject to the 5% percentage tax under the specific provision of the Tax Code; (3) RMO No. 15-91 is not
implementing any provision of the Internal Revenue laws but is a new and additional tax measure on
pawnshops, which only Congress could enact; (4) RMO No. 15-91 impliedly amends the Tax Code and
is therefore taxation by implication, which is proscribed by law; and (5) RMO No. 15-91 is a "class
legislation" because it singles out pawnshops among other lending and financial operations.

On 12 October 1998, Deputy BIR Commissioner Romeo S. Panganiban issued Warrant of Distraint
and/or Levy No. 81-043-98 against Lhuillier's property for the enforcement and payment of the assessed
percentage tax.

Its protest having been unacted upon, Lhuillier, in a letter dated 3 March 1998, elevated the matter to the
CIR. Still, the protest was not acted upon by the CIR. Thus, on 11 November 1998, Lhuillier filed a
"Notice and Memorandum on Appeal" with the Court of Tax Appeals invoking Section 228 of Republic
Act No. 8424, otherwise known as the Tax Reform Act of 1997, which provides:

Section 228. Protesting of Assessment.

If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the
Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one
hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable.

The case was docketed as CTA Case No. 5690.

On 19 November 1998, the CIR filed with the CTA a motion to dismiss Lhuillier's petition on the ground
that it did not state a cause of action, as there was no action yet on the protest.

Lhuillier opposed the motion to dismiss and moved for the issuance of a writ of preliminary injunction
praying that the BIR be enjoined from enforcing the warrant of distraint and levy.

For Lhuillier's failure to appear on the scheduled date of hearing, the CTA denied the motion for the
issuance of a writ of preliminary injunction. However, on Lhuillier's motion for reconsideration, said denial
was set aside and a hearing on the motion for the issuance of a writ of preliminary injunction was set.

On 30 June 1999, after due hearing, the CTA denied the CIR's motion to dismiss and granted Lhuillier's
motion for the issuance of a writ of preliminary injunction.

On 13 December 2000, the CTA rendered a decision declaring (1) RMO No. 15-91 and RMC No. 43-91
null and void insofar as they classify pawnshops as lending investors subject to 5% percentage tax; and
(2) Assessment Notice No. 81-PT-13-94-97-9-118 as cancelled, withdrawn, and with no force and
effect.[2]

Dissatisfied, the CIR filed a petition for review with the Court of Appeals praying that the aforesaid
decision be reversed and set aside and another one be rendered ordering Lhuillier to pay the 5% lending
| Page 2 of 8
investor's tax for 1994 with interests and surcharges.

Upon due consideration of the issues presented by the parties in their respective memoranda, the Court
of Appeals affirmed the CTA decision on 20 November 2001.

The CIR is now before this Court via this petition for review on certiorari, alleging that the Court of
Appeals erred in holding that pawnshops are not subject to the 5% lending investor's tax. He invokes
then Section 116 of the Tax Code, which imposed a 5% percentage tax on lending investors. He argues
that the legal definition of lending investors provided in Section 157 (u) of the Tax Code is broad enough
to include pawnshop operators. Section 3 of Presidential Decree No. 114 states that the principal
business activity of a pawnshop is lending money; thus, a pawnshop easily falls under the legal definition
of lending investors. RMO No. 15-91 and RMC No. 43-91, which subject pawnshops to the 5% lending
investor's tax based on their gross income, are valid. Being mere interpretations of the NIRC, they need
not be published. Lastly, the CIR invokes the case of Commissioner of Internal Revenue vs. Agencia
Exquisite of Bohol, Inc.,[3] where the Court of Appeals' Special Fourteenth Division ruled that a
pawnshop is subject to the 5% lending investor's tax.[4]

Lhuillier, on the other hand, maintains that before and after the amendment of the Tax Code by E.O. No.
273, which took effect on 1 January 1988, pawnshops and lending investors were subjected to different
tax treatments. Pawnshops were required to pay an annual fixed tax of only P1,000, while lending
investors were subject to a 5% percentage tax on their gross income in addition to their fixed annual
taxes. Accordingly, during the period from April 1982 up to December 1990, the CIR consistently ruled
that a pawnshop is not a lending investor and should not therefore be required to pay percentage tax on
its gross income.

Lhuillier likewise asserts that RMO No. 15-91 and RMC No. 43-91 are not implementing rules but are
new and additional tax measures, which only Congress is empowered to enact. Besides, they are invalid
because they have never been published in the Official Gazette or any newspaper of general circulation.

Lhuillier further points out that pawnshops are strictly regulated by the Central Bank pursuant to P.D. No.
114, otherwise known as The Pawnshop Regulation Act. On the other hand, there is no special law
governing lending investors. Due to the wide differences between the two, pawnshops had never been
considered as lending investors for tax purposes. In fact, in 1994, Congress passed House Bill No.
11197,[5] which attempted to amend Section 116 of the NIRC, as amended, to include owners of
pawnshops as among those subject to percentage tax. However, the Senate Bill and the subsequent
Bicameral Committee version, which eventually became the E-VAT Law, did not incorporate such
proposed amendment.

Lastly, Lhuillier argues that following the maxim in statutory construction "expressio unius est exclusio
alterius," it was not the intention of the Legislature to impose percentage taxes on pawnshops because if
it were so, pawnshops would have been included as among the businesses subject to the said tax.
Inasmuch as revenue laws impose special burdens upon taxpayers, the enforcement of such laws
should not be extended by implication beyond the clear import of the language used.

We are therefore called upon to resolve the issue of whether pawnshops are subject to the 5% lending
investor's tax. Corollary to this issue are the following questions: (1) Are RMO No. 15-91 and RMC No.
43-91 valid? (2) Were they issued to implement Section 116 of the NIRC of 1977, as amended? (3) Are
pawnshops considered "lending investors" for the purpose of the imposition of the lending investor's tax?
(4) Is publication necessary for the validity of RMO No. 15-91 and RMC No. 43-91.

RMO No. 15-91 and RMC No. 43-91 were issued in accordance with the power of the CIR to make
| Page 3 of 8
rulings and opinions in connection with the implementation of internal revenue laws, which was
bestowed by then Section 245 of the NIRC of 1977, as amended by E.O. No. 273.[6] Such power of the
CIR cannot be controverted. However, the CIR cannot, in the exercise of such power, issue
administrative rulings or circulars not consistent with the law sought to be applied. Indeed, administrative
issuances must not override, supplant or modify the law, but must remain consistent with the law they
intend to carry out. Only Congress can repeal or amend the law.[7]

The CIR argues that both issuances are mere rules and regulations implementing then Section 116 of
the NIRC, as amended, which provided:

SEC. 116. Percentage tax on dealers in securities; lending investors. - Dealers in securities and lending
investors shall pay a tax equivalent to six (6) per centum of their gross income. Lending investors shall
pay a tax equivalent to five (5%) percent of their gross income.

It is clear from the aforequoted provision that pawnshops are not specifically included. Thus, the
question is whether pawnshops are considered lending investors for the purpose of imposing percentage
tax.

We rule in the negative.

Incidentally, we observe that both parties, as well as the Court of Tax Appeals and the Court of Appeals,
refer to the National Internal Revenue Code as the Tax Code. They did not specify whether the
provisions they cited were taken from the NIRC of 1977, as amended, or the NIRC of 1986, as amended.
For clarity, it must be pointed out that the NIRC of 1977 as renumbered and rearranged by E.O. No. 273
is a later law than the NIRC of 1986, as amended by P.D. Nos. 1991, 1994, 2006 and 2031. The citation
of the specific Code is important for us to determine the intent of the law.

Under Section 157(u) of the NIRC of 1986, as amended, the term lending investor includes "all persons
who make a practice of lending money for themselves or others at interest." A pawnshop, on the other
hand, is defined under Section 3 of P.D. No. 114 as "a person or entity engaged in the business of
lending money on personal property delivered as security for loans and shall be synonymous, and may
be used interchangeably, with pawnbroker or pawn brokerage."

While it is true that pawnshops are engaged in the business of lending money, they are not considered
"lending investors" for the purpose of imposing the 5% percentage taxes for the following reasons:

First. Under Section 192, paragraph 3, sub-paragraphs (dd) and (ff), of the NIRC of 1977, prior to its
amendment by E.O. No. 273, as well as Section 161, paragraph 2, sub-paragraphs (dd) and (ff), of the
NIRC of 1986, pawnshops and lending investors were subjected to different tax treatments; thus:

(3) Other Fixed Taxes. - The following fixed taxes shall be collected as follows, the amount stated being
for the whole year, when not otherwise specified:

(dd) Lending investors

1. In chartered cities and first class municipalities, one thousand pesos;

2. In second and third class municipalities, five hundred pesos;

| Page 4 of 8
3. In fourth and fifth class municipalities and municipal districts, two hundred fifty pesos: Provided, That
lending investors who do business as such in more than one province shall pay a tax of one thousand
pesos.

(ff) Pawnshops, one thousand pesos (underscoring ours)

Second. Congress never intended pawnshops to be treated in the same way as lending investors.
Section 116 of the NIRC of 1977, as renumbered and rearranged by E.O. No. 273, was basically lifted
from Section 175[8] of the NIRC of 1986, which treated both tax subjects differently. Section 175 of the
latter Code read as follows:

Sec. 175. Percentage tax on dealers in securities, lending investors. -- Dealers in securities shall pay a
tax equivalent to six (6%) percent of their gross income. Lending investors shall pay a tax equivalent to
five (5%) percent of their gross income. (As amended by P.D. No. 1739, P.D. No. 1959 and P.D. No.
1994).

We note that the definition of lending investors found in Section 157 (u) of the NIRC of 1986 is not found
in the NIRC of 1977, as amended by E.O. No. 273, where Section 116 invoked by the CIR is found.
However, as emphasized earlier, both the NIRC of 1986 and the NIRC of 1977 dealt with pawnshops
and lending investors differently. Verily then, it was the intent of Congress to deal with both subjects
differently. Hence, we must likewise interpret the statute to conform with such legislative intent.

Third. Section 116 of the NIRC of 1977, as amended by E.O. No. 273, subjects to percentage tax
dealers in securities and lending investors only. There is no mention of pawnshops. Under the maxim
expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not
mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must
necessarily and by implication be excluded from its operation and effect.[9] This rule, as a guide to
probable legislative intent, is based upon the rules of logic and natural workings of the human mind.[10]

Fourth. The BIR had ruled several times prior to the issuance of RMO No. 15-91 and RMC 43-91 that
pawnshops were not subject to the 5% percentage tax imposed by Section 116 of the NIRC of 1977, as
amended by E.O. No. 273. This was even admitted by the CIR in RMO No. 15-91 itself. Considering that
Section 116 of the NIRC of 1977, as amended, was practically lifted from Section 175 of the NIRC of
1986, as amended, and there being no change in the law, the interpretation thereof should not have
been altered.

It may not be amiss to state that, as pointed out by the respondent, pawnshops was sought to be
included as among those subject to 5% percentage tax by House Bill No. 11197 in 1994. Section 13
thereof reads:

Section 13. Section 116 of the National Internal Revenue Code, as amended, is hereby further amended
to read as follows:

"SEC. 116. Percentage tax on dealers in securities; lending investors; OWNERS OF PAWNSHOPS;
FOREIGN CURRENCY DEALERS AND/OR MONEY CHANGERS. - Dealers in securities shall pay a tax
equivalent to Six (6%) per centum of their gross income. Lending investors, OWNERS OF
PAWNSHOPS AND FOREIGN CURRENCY DEALERS AND/OR MONEY CHANGERS shall pay a tax
equivalent to Five (5%) percent of their gross income."

| Page 5 of 8
If pawnshops were covered within the term lending investor, there would have been no need to introduce
such amendment to include owners of pawnshops. At any rate, such proposed amendment was not
adopted. Instead, the approved bill which became R.A. No. 7716[11] repealed Section 116 of NIRC of
1977, as amended, which was the basis of RMO No. 15-91 and RMC No. 43-91; thus:

SEC. 20. Repealing Clauses. -- The provisions of any special law relative to the rate of franchise taxes
are hereby expressly repealed. Sections 113, 114 and 116 of the National Internal Revenue Code are
hereby repealed.

Section 21 of the same law provides that the law shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in at least two (2) national newspapers of general circulation
whichever comes earlier. R.A. No. 7716 was published in the Official Gazette on 1 August 1994[12]; in
the Journal and Malaya newspapers, on 12 May 1994; and in the Manila Bulletin, on 5 June 1994. Thus,
R.A. No. 7716 is deemed effective on 27 May 1994.

Since Section 116 of the NIRC of 1977, which breathed life on the questioned administrative issuances,
had already been repealed, RMO 15-91 and RMC 43-91, which depended upon it, are deemed
automatically repealed. Hence, even granting that pawnshops are included within the term lending
investors, the assessment from 27 May 1994 onward would have no leg to stand on.

Adding to the invalidity of the RMC No. 43-91 and RMO No. 15-91 is the absence of publication. While
the rule-making authority of the CIR is not doubted, like any other government agency, the CIR may not
disregard legal requirements or applicable principles in the exercise of quasi-legislative powers.

Let us first distinguish between two kinds of administrative issuances: the legislative rule and the
interpretative rule. A legislative rule is in the nature of subordinate legislation, designed to implement a
primary legislation by providing the details thereof. An interpretative rule, on the other hand, is designed
to provide guidelines to the law which the administrative agency is in charge of enforcing.[13]

In Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance Secretary,[14] this
Tribunal ruled:

In the same way that laws must have the benefit of public hearing, it is generally required that before a
legislative rule is adopted there must be hearing. In this connection, the Administrative Code of 1987
provides:

Public Participation. - If not otherwise required by law, an agency shall, as far as practicable, publish or
circulate notices of proposed rules and afford interested parties the opportunity to submit their views
prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been
published in a newspaper of general circulation at least two weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

In addition, such rule must be published.

When an administrative rule is merely interpretative in nature, its applicability needs nothing further than
its bare issuance, for it gives no real consequence more than what the law itself has already prescribed.
When, on the other hand, the administrative rule goes beyond merely providing for the means that can
facilitate or render least cumbersome the implementation of the law but substantially increases the
| Page 6 of 8
burden of those governed, it behooves the agency to accord at least to those directly affected a chance
to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of
law.[15]

RMO No. 15-91 and RMC No. 43-91 cannot be viewed simply as implementing rules or corrective
measures revoking in the process the previous rulings of past Commissioners. Specifically, they would
have been amendatory provisions applicable to pawnshops. Without these disputed CIR issuances,
pawnshops would not be liable to pay the 5% percentage tax, considering that they were not specifically
included in Section 116 of the NIRC of 1977, as amended. In so doing, the CIR did not simply interpret
the law. The due observance of the requirements of notice, hearing, and publication should not have
been ignored.

There is no need for us to discuss the ruling in CA-G.R. SP No. 59282 entitled Commissioner of Internal
Revenue v. Agencia Exquisite of Bohol Inc., which upheld the validity of RMO No. 15-91 and RMC No.
43-91. Suffice it to say that the judgment in that case cannot be binding upon the Supreme Court
because it is only a decision of the Court of Appeals. The Supreme Court, by tradition and in our system
of judicial administration, has the last word on what the law is; it is the final arbiter of any justifiable
controversy. There is only one Supreme Court from whose decisions all other courts should take their
bearings.[16]

In view of the foregoing, RMO No. 15-91 and RMC No. 43-91 are hereby declared null and void.
Consequently, Lhuillier is not liable to pay the 5% lending investor's tax.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. The decision of the Court of Appeals
of 20 November 2001 in CA-G.R. SP No. 62463 is AFFIRMED.

SO ORDERED.

Vitug, Ynarez-Santiago, Carpio, and Azcuna, JJ., concur.

[1] Rollo, 18-24. Per Associate Justice Edgardo P. Cruz, with then Presiding Justice (now Supreme
Court Associate Justice) Alicia Austria-Martinez and Associate Justice Hilarion L. Aquino concurring.

[2] Rollo, 25-33. Per Associate Judge Ramon O. de Veyra, with Presiding Judge Ernesto D. Acosta and
Associate Judge Amancio Q. Saga concurring.

[3] CA-G.R. SP No. 59282, 23 March 2001.

[4] Rollo, 35-44.

[5] Entitled An Act Restructuring the Value-Added Tax (VAT) System to Widen its Tax Base and
Enhance its Administration, Amending for These Purposes Sections ... 116 of Title V ... of the National
Internal Revenue Code, as Amended.

[6] Now Sections 244 and 245 of R.A. No. 8424, otherwise known as the Tax Reform Act of 1997.

[7] Commissioner of Internal Revenue v. Court of Appeals, G.R. No. 108358, 20 January 1995, 240
SCRA 368, 372; Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles v. Home Development
Mutual Fund, G.R. No. 131082, 19 June 2000; 333 SCRA 777, 786.

[8] Formerly Section 209 of the NIRC of 1977, as amended by P.D. No. 1739 of 17 September 1980,
| Page 7 of 8
which read:

Section 209. - Percentage tax on dealers in securities, lending investors. - Dealers in securities and
lending investors shall pay a tax equivalent to five per centum on their gross income.

[9] Vera v. Fernandez, L-31364, 30 March 1979; 89 SCRA 199, 203.

[10] Republic v. Estenzo, L-35376, 11 September 1980; 99 SCRA 651, 656.

[11] Entitled An Act Restructuring the Value-added Tax (VAT) System, Widening Its Tax Base and
Enhancing Its Administration, and for These Purposes Amending and Repealing the Relevant Provisions
of the National Internal Revenue Code, as amended, and for Other Purposes.

[12] 90 O.G. 31, 4489.

[13] Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary, G.R. No.
108524, 10 November 1994, 238 SCRA 63, 69.

[14] Supra.

[15] Commissioner of Internal Revenue v. Court of Appeals, 329 Phil. 987, 1007 [1996].

[16] GSIS v. Court of Appeals, 334 Phil. 163, 175 [1997], citing Ang Ping v. RTC of Manila, Br. 40, G.R.
No. L-75860, 17 September 1987, 154 SCRA 77 and Tugade v. Court of Appeals, G.R. L-47772, 31
August 1978, 85 SCRA 226.

| Page 8 of 8
MUNICIPALITY OF PARANAQUE, petitioner, vs. V.M. REALTY CORPORATION,
respondent.

1998-07-20 | G.R. No. 127820

DECISION

PANGANIBAN, J:

A local government unit (LGU), like the Municipality of Parañaque cannot authorize an expropriation of
private property through a mere resolution of its lawmaking body. The Local Government Code expressly
and clearly requires an ordinance or a local law for the purpose. A resolution that merely expresses the
sentiment or opinion of the Municipal Council will not suffice. On the other hand, the principle of res
judicata does not bar subsequent proceedings for the expropriation of the same property when all the
legal requirements for its valid exercise are complied with.

Statement of the Case

These principles are applied by this Court in resolving this petition for review on certiorari of the July 22,
1996 Decision 1 of the Court of Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the Regional
Trial Court's August 9, 1994 Resolution. 4 The trial court dismissed the expropriation suit as follows:

"The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such
right may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the instant case,
there is no such ordinance passed by the Municipal Council of Parañaque enabling the
Municipality, thru its Chief Executive, to exercise the power of eminent domain. The complaint,
therefore, states no cause of action.

Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29,
1987, the plaintiff filed a complaint for expropriation involving the same parcels of land which was
docketed as Civil Case No. 17939 of this Court (page 26, record). Said case was dismissed with
prejudice on May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence, the same
became final. The plaintiff can not be allowed to pursue the present action without violating the principle
of [r]es [j]udicata. While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the
doctrine of res judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive
between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de
Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation as shown by
the 'Deed of Assignment Exchange' executed on June 13, 1990.

WHEREFORE, defendant's motion for reconsideration is hereby granted. The order dated
February 4, 1994 is vacated and set aside.

This case is hereby dismissed. No pronouncement as to costs.

SO ORDERED." 5

Factual Antecedents

Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the Municipality of Parañaque
filed on September 20, 1993, a Complaint for expropriation 7 against Private Respondent V.M. Realty
Corporation, over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a
| Page 1 of 7
combined area of about 10,000 square meters, located at Wakas, San Dionisio, Parañaque, Metro
Manila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed "for the
purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless
through a socialized housing project." 8 Parenthetically, it was also for this stated purpose that petitioner,
pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991, 9 previously made an offer to
enter into a negotiated sale of the property with private respondent, which the latter did not accept. 10

Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch 134,
issued an Order dated January 10, 1994, 11 giving it due course. Acting on petitioner's motion said court
issued an Order dated February 4, 1994, 12 authorizing petitioner to take possession of the subject
property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value
based on its current tax declaration.

On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a
counterclaim, 13 alleging in the main that (a) the complaint failed to state a cause of action because it
was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local
Government Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata.
On private respondent's motion, its Answer was treated as a motion to dismiss. 14 On March 24, 1994,
15 petitioner filed its opposition, stressing that the trial court's Order dated February 4, 1994 was in
accord with Section 19 of RA 7160, and that the principle of res judicata was not applicable.

Thereafter, the trial court issued its August 9, 1994 Resolution 16 nullifying its February 4, 1994
Order and dismissing the case. Petitioner's motions for reconsideration and transfer of venue were
denied by the trial court in a Resolution dated December 2, 1994. 17 Petitioner then appealed to
Respondent Court, raising the following issues:

"1. Whether or not the Resolution of the Parañaque Municipal Council No. 93-95, Series of
1993 is a substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic]
in the exercise of the power of eminent domain by the plaintiff-appellant.

2. Whether or not the complaint in this case states no cause of action.

3. Whether or not the strict adherence to the literal observance to the rule of procedure
resulted in technicality standing in the way of substantial justice.

4. Whether or not the principle of res judicata is applicable to the present case." 18

As previously mentioned, the Court of Appeals affirmed in toto the trial court's Decision. Respondent
Court, in its assailed Resolution promulgated on January 8, 1997, 19 denied petitioner's Motion for
Reconsideration for lack of merit.

Hence, this appeal. 20

The Issues

Before this Court, petitioner posits two issues, viz.:

"1. A resolution duly approved by the municipal council has the same force and effect of an
ordinance and will not deprive an expropriation case of a valid cause of action.

2. The principle of res judicata as a ground for dismissal of case is not applicable when public
| Page 2 of 7
 interest is primarily involved." 21

The Court's Ruling

The petition is not meritorious.

First Issue:

Resolution Different from an Ordinance

Petitioner contends that a resolution approved by the municipal council for the purpose of initiating
an expropriation case "substantially complies with the requirements of the law" 22 because the
terms "ordinance" and "resolution" are synonymous for "the purpose of bestowing authority [on]
the local government unit through its chief executive to initiate the expropriation proceedings in
court in the exercise of the power of eminent domain." 23 Petitioner seeks to bolster this
contention by citing Article 36, Rule VI of the Rules and Regulations Implementing the Local
Government Code, which provides: "If the LGU fails to acquire a private property for public use,
purpose, or welfare through purchase, the LGU may expropriate said property through a resolution
of the Sanggunian authorizing its chief executive to initiate expropriation proceedings." 24

The Court disagrees. The power of eminent domain is lodged in the legislative branch of government,
which may delegate the exercise thereof to LGUs, other public entities and public utilities. 25 An LGU
may therefore exercise the power to expropriate private property only when authorized by Congress and
subject to the latter's control and restraints imposed "through the law conferring the power or in other
legislations." 26 In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent
domain, also lays down the parameters for its exercise. It provides as follows:

"Section 19. Eminent Domain. A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or
welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant
to the provisions of the Constitution and pertinent laws. Provided, however, That the power of
eminent domain may not be exercised unless a valid and definite offer has been previously made
to the owner, and such offer was not accepted: Provided, further, That the local government unit
may immediately take possession of the property upon the filing of the expropriation proceedings
and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market
value of the property based on the current tax declaration of the property to be expropriated:
Provided, finally, That, the amount to be paid for the expropriated .property shall be determined by
the proper court, based on the fair market value at the time of the taking of the property."

Thus, the following essential requisites must concur before an LGU can exercise the power of eminent
domain:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in
behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings
over a particular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit
of the poor and the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the
Constitution, and other pertinent laws.
| Page 3 of 7
 4. A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted. 27

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to
a resolution of the municipal council. Thus, there was no compliance with the first requisite that the
mayor be authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals 28 to
show that a resolution may suffice to support the exercise of eminent domain by an LGU. 29 This case,
however, is not in point because the applicable law at that time was BP 337, 30 the previous Local
Government Code, which had provided that a mere resolution would enable an LGU to exercise eminent
domain. In contrast, RA 7160, 31 the present Local Government Code which was already in force when
the Complaint for expropriation was filed, explicitly required an ordinance for this purpose.

We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are
synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution
is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. 32 An
ordinance possesses a general and permanent character, but a resolution is temporary in nature.
Additionally, the two are enacted differently - a third reading is necessary for an ordinance, but not for a
resolution, unless decided otherwise by a majority of all the Sanggunian members. 33

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have
simply adopted the language of the previous Local Government Code. But Congress did not. In a clear
divergence from the previous Local Government Code, Section 19 of RA 7160 categorically requires that
the local chief executive act pursuant to an ordinance. Indeed, "[l]egislative intent is determined
principally from the language of a statute. Where the language of a statute is clear and unambiguous,
the law is applied according to its express terms, and interpretation would be resorted to only where a
literal interpretation would be either impossible or absurd or would lead to an injustice." 34 In the instant
case, there is no reason to depart from this rule, since the law requiring an ordinance is not at all
impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private
right of the people. 35 Accordingly, the manifest change in the legislative language - from "resolution"
under the BP 337 to "ordinance" under RA 7160 - demands a strict construction. "No species of property
is held by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously,
than the right to the freehold of inhabitants. When the legislature interferes with that right and, for greater
public purposes, appropriates the land of an individual without his consent, the plain meaning of the law
should not be enlarged by doubtful interpretation." 36

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to
authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160,
the law itself, surely prevails over said rule which merely seeks to implement it. 37 It is axiomatic that the
clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its
implementation. Besides, what the discrepancy seems to indicate is a mere oversight in the wording of
the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising the power of
eminent domain, the chief executive of the LGU must act pursuant to an ordinance.

In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the Constitution,
which provides that "territorial and political subdivisions shall enjoy local autonomy." It merely upholds
the law as worded in RA 7160. We stress that an LGU is created by law and all its powers and rights are
sourced therefrom. It has therefore no power to amend or act beyond the authority given and the
limitations imposed on it by law. Strictly speaking, the power of eminent domain delegated to an LGU is
in reality not eminent but "inferior" domain, since it must conform to the limits imposed by the delegation,
| Page 4 of 7
and thus partakes only of a share in eminent domain. 38 Indeed, "the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it." 39

Complaint Does Not

State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sanggunian Bayan passed an
ordinance on October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified all
the acts of its mayor regarding the subject expropriation. 40

This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such an
ordinance, but it did not present any certified true copy thereof. In the second place, petitioner did not
raise this point before this Court. In fact, it was mentioned by private respondent, and only in passing. 41
In any event, this allegation does not cure the inherent defect of petitioner's Complaint for expropriation
filed on September 23, 1993. It is hornbook doctrine that

". . . in a motion to dismiss based on the ground that the complaint fails to state a cause of action,
the question submitted before the court for determination is the sufficiency of the allegations in the
complaint itself. Whether those allegations are true or not is beside the point, for their truth is
hypothetically admitted by the motion. The issue rather is: admitting them to be true, may the court
render a valid judgment in accordance with the prayer of the complaint?" 42

The fact that there is no cause of action is evident from the face of the Complaint for expropriation which
was based on a mere resolution. The absence of an ordinance authorizing the same is equivalent to lack
of cause of action. Consequently, the Court of Appeals committed no reversible error in affirming the trial
court's Decision which dismissed the expropriation suit.

Second Issue:

Eminent Domain Not Barred by Res Judicata

As correctly found by the Court of Appeals 43 and the trial court, 44 all the requisites for the
application of res judicata are present in this case. There is a previous final judgment on the merits
in a prior expropriation case involving identical interests, subject matter and cause of action, which
has been rendered by a court having jurisdiction over it.

Be that as it may, the Court holds that the principle of res judicata, which finds application in
generally all cases and proceedings, 45 cannot bar the right of the State or its agent to expropriate
private property. The very nature of eminent domain, as an inherent power of the State, dictates
that the right to exercise the power be absolute and unfettered even by a prior judgment or res
judicata. The scope of eminent domain is plenary and, like police power, can "reach every form of
property which the State might need for public use." 46 "All separate interests of individuals in
property are held of the government under this tacit agreement or implied reservation.
Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of
property, remains in the government, or in the aggregate body of the people in their sovereign
capacity; and they have the right to resume the possession of the property whenever the public
interest requires it." 47 Thus, the State or its authorized agent cannot be forever barred from
exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it
does apply to specific issues decided in a previous case. For example, a final judgment dismissing an
| Page 5 of 7
expropriation suit on the ground that there was no prior offer precludes another suit raising the same
issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as
prescribed by law, and subsequently exercising its power of eminent domain over the same property. 48
By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domain
through a mere resolution will not bar it from reinstituting similar proceedings, once the said legal
requirement and, for that matter, all others are properly complied with. Parenthetically and by parity of
reasoning, the same is also true of the principle of "law of the case." In Republic vs De Knecht, 49 the
Court ruled that the power of the State or its agent to exercise eminent domain is not diminished by the
mere fact that a prior final judgment over the property to be expropriated has become the law of the case
as to the parties. The State or its authorized agent may still subsequently exercise its right to expropriate
the same property, once all legal requirements are complied with. To rule otherwise will not only
improperly diminish the power of eminent domain, but also clearly defeat social justice.

WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper exercise of its
power of eminent domain over subject property. Costs against petitioner.

SO ORDERED.

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ ., concur.

Footnotes
1. Rollo, pp. 21-25.
2. Special Sixth Division, composed of J. Antonio M. Martinez (now an associate justice of the Supreme
Court), ponente and chairman; and JJ. Ricardo P. Galvez and Hilarion L. Aquino, concurring.
3. See rollo, p. 25.
4. Penned by acting Presiding Judge Paul T. Arcangel.
5. Resolution of the Regional Trial Court, p. 2; rollo, p. 70.
6. Rollo, pp. 41-43.
7. Ibid., pp. 27-32.
8. Petitioner's Memorandum, p. 1; rollo, p. 184.
9. Rollo, pp. 37-38.
10. Complaint, p. 3; rollo, p. 29.
11. Rollo, p. 45.
12. Ibid., p. 47.
13. Ibid., pp. 48-51.
14. Private respondent's Memorandum, pp. 1-2; rollo, pp. 197-198.
15. Rollo, pp. 66-68.
16. Ibid., pp. 69-70.
17. Ibid., pp. 71-72.
18. Ibid., pp. 78-79.
19. Ibid., p. 26.
20. The case was deemed submitted for resolution on March 13, 1998, when the Court received private
respondent's Memorandum.
21. Petitioner's Memorandum, p. 3; rollo, p. 187.
22. Ibid., p. 4; rollo, p. 188.
23. Ibid.
24. Paragraph A.
25.Moday vs. Court of Appeals, 268 SCRA 586, 592, February 20, 1997
26. Province of Camarines Sur vs. Court of Appeals, 222 SCRA 173, 179-180, May 17, 1993, per
Quiason, J.
27. Senator Aquilino Q. Pimentel, Jr., The Local Government Code of 1991: The Key To National
| Page 6 of 7
Development, 1993 ed., p. 110.
28. Supra.
29. Petitioner's Memorandum, p. 6; rollo, p. 189.
30. Approved on February 10, 1983 and published in 79 O.G No. 7. See Moday vs. Court of Appeals,
supra, p. 593. Sec. 9 of BP 337 reads:

"SEC. 9. Eminent Domain. A local government unit may, through its head and acting pursuant to a
resolution of its sanggunian, exercise the right of eminent domain and institute condemnation
proceedings for public use or purpose.

31. Effective January 1, 1992.

32. Mascuñana vs. Provincial Board of Negros Occidental, 79 SCRA 399, 405, October 18, 1977; cited
in private respondent's Memorandum, p. 5.
33. Article 107, pars. a and c, Implementing Rules and Regulations of RA 7160; cited in Pimentel, Jr.,
supra, pp. 163-164.
34. Azarcon vs. Sandiganbayan, 268 SCRA 747, 762, February 26, 1997, per Panganiban, J.; citing
Ramirez vs. Court of Appeals, 248 SCRA 590, 596, September 28, 1995.
35. City of Manila vs. Chinese Community of Manila, 40 Phil 349, 366 (1919), and Arriete vs. Director of
Public Works, 58 Phil 507, 511 (1933). See also Bernas, Joaquin G., The 1987 Constitution of the
Republic of the Philippines: A Commentary, 1996 ed., p. 348.
36. Justice Isagani A. Cruz, Constitutional Law, 1993 ed., p. 59.
37. See Villa vs. Llanes, Jr., 120 SCRA 81, 84, January 21, 1983, and Wise & Co. vs. Meer, 78 Phil 655,
676 (1947). See also Art. 7, Civil Code of the Philippines.
38. Bernas, supra, pp. 348-349.
39. Magtajas vs. Pryce Properties, Corp., Inc., 234 SCRA 255, 272-273, July 20, 1994, per Cruz, J.
40. Rollo, pp. 81-82.
41. See private respondent's Memorandum, pp. 5-6; rollo, pp. 201-202.
42. Travel Wide Associated Sales (Phils.), Inc. vs. Court of Appeals, 199 SCRA 205, 210, July 15, 1991,
per Cruz, J.; citing The Heirs of Juliana Clavano vs. Genato, 80 SCRA 217, 222, October 28, 1977.
43. Decision, p. 5; rollo, p. 25.
44. Resolution of the Regional Trial Court, p. 2; rollo, p. 70.
45. Republic vs. Director of Lands, 99 SCRA 651, 657, September 11, 1980.
46. Bernas, supra, p. 349.
47. Ibid.
48. See National Power Corporation vs. Court of Appeals, 254 SCRA 577, March 11, 1996.
49. 182 SCRA 142, 147-148, February 12, 1990.

| Page 7 of 7
HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G.
GARGANTIEL, as Secretary to the Mayor; THE MARKET ADMINISTRATOR; and
THE MUNICIPAL BOARD OF MANILA, petitioners, vs. HON. PEDRO A. RAMIREZ, in
his capacity as Presiding Judge of the Court o

1976-12-17 | G.R. No. L-41631

DECISION

MARTIN, J:

The chief question to be decided in this case is what law shall govern the publication of a tax ordinance
enacted by the Municipal Board of Manila- the Revised City Charter (R.A. 409, as amended), which requires
publication of the ordinance before its enactment and after its approval, or the Local Tax Code (P.D. No. 231),
which only demands publication after approval.

On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE
REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR THE RENTALS
OF STALLS AND PROVIDING PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES."

The petitioner City Mayor, Ramon D. Bagatsing, approved the ordinance on June 15, 1974.

On February 17, 1975, respondent Federation of Manila Market Vendors, Inc. commenced Civil Case 96787
before the Court of First Instance of Manila, presided over by respondent Judge, seeking the declaration of
nullity of Ordinance No. 7522 for the reason that (a) the publication requirement under the Revised Charter of
the City of Manila has not been complied with; (b) the Market Committee was not given any participation in
the enactment of the ordinance, as envisioned by Republic Act 6039; (c) Section 3 (e) of the Anti-Graft and
Corrupt Practices Act has been violated; and (d) the ordinance would violate Presidential Decree No. 7 of
September 30, 1972 prescribing the collection of fees and charges on livestock and animal products.

Resolving the accompanying prayer for the issuance of a writ of preliminary injunction, respondent Judge
issued an order on March 1, 1975, denying the plea for failure of the respondent Federation of Manila Market
Vendors, Inc. to exhaust the administrative remedies outlined in the Local Tax Code.

After due hearing on the merits, respondent Judge rendered its decision on August 29, 1975, declaring the
nullity of Ordinance No. 7522 of the City of Manila on the primary ground of non-compliance with the
requirement of publication under the Revised City Charter. Respondent Judge ruled:

"There is, therefore, no question that the ordinance in question was not published at all in two daily
newspapers of general circulation in the City of Manila before its enactment. Neither was it published in
the same manner after approval, although it was posted in the legislative hall and in all city public
markets and city public libraries. There being no compliance with the mandatory requirement of
publication before and after approval, the ordinance in question is invalid and, therefore, null and void."

Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a post-publication is
required by the Local Tax Code; and (b) private respondent failed to exhaust all administrative remedies
before instituting an action in court.

On September 26, 1975, respondent Judge denied the motion. Forthwith, petitioners brought the matter to Us
through the present petition for review on certiorari.

We find the petition impressed with merits.

| Page 1 of 5
1. The nexus of the present controversy is the apparent conflict between the Revised Charter of the City of
Manila and the Local Tax Code on the manner of publishing a tax ordinance enacted by the Municipal Board
of Manila. For, while Section 17 of the Revised Charter provides:

"Each proposed ordinance shall be published in two daily newspapers of general circulation in the city,
and shall not be discussed or enacted by the Board until after the third day following such publication. .
. . Each approved ordinance . . . shall be published in two daily newspapers of general circulation in the
city, within ten days after its approval; and shall take effect and be in force on and after the twentieth
day following its publication, if no date is fixed in the ordinance."

Section 43 of the Local Tax Code directs:

"Within ten days after their approval, certified true copies of all provincial, city, municipal and barrio
ordinances levying or imposing taxes, fees or other charges shall be published for three consecutive
days in a newspaper or publication widely circulated within the jurisdiction of the local government, or
posted in the local legislative hall or premises and in two other conspicuous places within the territorial
jurisdiction of the local government. In either case, copies of all provincial, city, municipal and barrio
ordinances shall be furnished the treasurers of the respective component and mother units of a local
government for dissemination."

In other words, while the Revised Charter of the City of Manila requires publication before the enactment of
the ordinance and after the approval thereof in two daily newspapers of general circulation in the city, the
Local Tax Code only prescribes for publication after the approval of "ordinances levying or imposing taxes,
fees or other charges" either in a newspaper or publication widely circulated within the jurisdiction of the local
government or by posting the ordinance in the local legislative hall or premises and in two other conspicuous
places within the territorial jurisdiction of the local government. Petitioners' compliance with the Local Tax
Code rather than with the Revised Charter of the City spawned this litigation.

There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the
City of Manila, whereas the Local Tax Code is a general law because it applies universally to all local
governments. Blackstone defines general law as a universal rule affecting the entire community and special
law as one relating to particular persons or things of a class. 1 And the rule commonly said is that a prior
special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other
general creates a presumption that the special is to be considered as remaining an exception of the general,
one as a general law of the land, the other as the law of a particular case. 2 However, the rule readily yields to
a situation where the special statute refers to a subject in general, which the general statute treats in
particular. The exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of
the City of Manila speaks of "ordinance" in general, i.e., irrespective of the nature and scope thereof, whereas,
Section 43 of the Local Tax Code relates to "ordinances levying or imposing taxes, fees or other charges" in
particular. In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless
dominant, but, that dominant force loses its continuity when it approaches the realm of "ordinances levying or
imposing taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, as always, a
general provision must give way to a particular provision. 3 Special provision governs. 4 This is especially true
where the law containing the particular provision was enacted later than the one containing the general
provision. The City Charter of Manila was promulgated on June 18, 1949 as against the Local Tax Code
which was decreed on June 1, 1973. The law-making power cannot be said to have intended the
establishment of conflicting and hostile systems upon the same subject, or to leave in force provisions of a
prior law by which the new will of the legislating power may be thwarted and overthrown. Such a result would
render legislation a useless and idle ceremony, and subject the law to the reproach of uncertainty and
unintelligibility. 5

The case of City of Manila v. Teotico 6 is opposite. In that case, Teotico sued the City of Manila for damages
arising from the injuries he suffered when he fell inside an uncovered and unlighted catchbasin or manhole on
P. Burgos Avenue. The City of Manila denied liability on the basis of the City Charter (R.A. 409) exempting
| Page 2 of 5
the City of Manila from any liability for damages or injury to persons or property arising from the failure of the
city officers to enforce the provisions of the charter or any other law or ordinance, or from negligence of the
City Mayor, Municipal Board, or other officers while enforcing or attempting to enforce the provisions of the
charter or of any other law or ordinance. Upon the other hand, Article 2189 of the Civil Code makes cities
liable for damages for the death of, or injury suffered by any persons by reason of the defective condition of
roads, streets, bridges, public buildings, and other public works under their control or supervision. On review,
the Court held the Civil Code controlling. It is true that, insofar as its territorial application is concerned, the
Revised City Charter is a special law and the subject matter of the two laws, the Revised City Charter
establishes a general rule of liability arising from negligence in general, regardless of the object thereof,
whereas the Civil Code constitutes a particular prescription for liability due to defective streets in particular. In
the same manner, the Revised Charter of the City prescribes a rule for the publication of "ordinance" in
general, while the Local Tax Code establishes a rule for the publication of "ordinance levying or imposing
taxes fees or other charges in particular.

In fact, there is no rule which prohibits the repeal even by implication of a special or specific act by a general
or broad one. 7 A charter provision may be impliedly modified or superseded by a later statute, and where a
statute is controlling, it must be read into the charter notwithstanding any particular charter provision. 8 A
subsequent general law similarly applicable to all cities prevails over any conflicting charter provision, for the
reason that a charter must not be inconsistent with the general laws and public policy of the state. 9 A
chartered city is not an independent sovereignty. The state remains supreme in all matters not purely local.
Otherwise stated, a charter must yield to the constitution and general laws of the state, it is to have read into it
that general law which governs the municipal corporation and which the corporation cannot set aside but to
which it must yield. When a city adopts a charter, it in effect adopts as part of its charter general law of such
character. 10

2. The principle of exhaustion of administrative remedies is strongly asserted by petitioners as having been
violated by private respondent in bringing a direct suit in court. This is because Section 47 of the Local Tax
Code provides that any question or issue raised against the legality of any tax ordinance, or portion thereof,
shall be referred for opinion to the city fiscal in the case of tax ordinance of a city. The opinion of the city fiscal
is appealable to the Secretary of Justice, whose decision shall be final and executory unless contested before
a competent court within thirty (30) days. But, the petition below plainly shows that the controversy between
the parties is deeply rooted in a pure question of law: whether it is the Revised Charter of the City of Manila or
the Local Tax Code that should govern the publication of the tax ordinance. In other words, the dispute is
sharply focused on the applicability of the Revised City Charter or the Local Tax Code on the point at issue,
and not on the legality of the imposition of the tax. Exhaustion of administrative remedies before resort to
judicial bodies is not an absolute rule. It admits of exceptions. Where the question litigated upon is purely a
legal one, the rule does not apply. 11 The principle may also be disregarded when it does not provide a plain,
speedy and adequate remedy. It may and should be relaxed when its application may cause great and
irreparable damage. 12

3. It is maintained by private respondent that the subject ordinance is not a "tax ordinance," because the
imposition of rentals, permit fees, tolls and other fees is not strictly a taxing power but a revenue-raising
function, so that the procedure for publication under the Local Tax Code finds no application. The pretense
bears its own marks of fallacy. Precisely, the raising of revenues is the principal object of taxation. Under
Section 5, Article XI of the New Constitution, "Each local government unit shall have the power to create its
own sources of revenue and to levy taxes, subject to such provisions as may be provided by law." 13 And one
of those sources of revenue is what the Local Tax Code points to in particular: "Local governments may
collect fees or rentals for the occupancy or use of public markets and premises . . ." 14 They can provide for
and regulate market stands, stalls and privileges, and, also, the sale, lease or occupancy thereof. They can
license, or permit the use of, lease, sell or otherwise dispose of stands, stalls or marketing privileges. 15

It is a feeble attempt to argue that the ordinance violates Presidential Decree No. 7, dated September 30,
1972, insofar as it affects livestock and animal products, because the said decree prescribes the collection of
other fees and charges thereon "with the exception of ante-mortem and post-mortem inspection fees, as well
as the delivery, stockyard and slaughter fees as may be authorized by the Secretary of Agriculture and
| Page 3 of 5
Natural Resources." 16 Clearly, even the exception clause of the decree itself permits the collection of the
proper fees for livestock. And the Local Tax Code (P.D. 231, July 1, 1973) authorizes in its Section 31: "Local
governments may collect fees for the slaughter of animals and the use of corrals . . ."

4. The non-participation of the Market Committee in the enactment of Ordinance No. 7522 supposedly in
accordance with Republic Act No. 6039, an amendment to the City Charter of Manila, providing that "the
market committee shall formulate, recommend and adopt, subject to the ratification of the municipal board,
and approval of the mayor, policies and rules or regulation repealing or maneding existing provisions of the
market code" does not infect the ordinance with any germ of invalidity. 17 The function of the committee is
purely recommendatory as the underscored phrase suggests, its recommendation is without binding effect on
the Municipal Board and the City Mayor. Its prior acquiescence of an intended or proposed city ordinance is
not a condition sine qua non before the Municipal Board could enact such ordinance. The native power of the
Municipal Board to legislate remains undisturbed even in the slightest degree. It can move in its own initiative
and the Market Committee cannot demur. At most, the Market Committee may serve as a legislative aide of
the Municipal Board in the enactment of city ordinances affecting the city markets or, in plain words, in the
gathering of the necessary data, studies and the collection of consensus for the proposal of ordinances
regarding city markets. Much less could it be said that Republic Act 6039 intended to delegate to the Market
Committee the adoption of regulatory measures for the operation and administration of the city markets.
Potestas delegare non delegare potest.

5. Private respondent bewails that the market stall fees imposed in the disputed ordinance are diverted to the
exclusive private use of the Asiatic Integrated Corporation since the collection of said fees had been let by the
City of Manila to the said corporation in a "Management and Operating Contract." The assumption is of
course saddled on erroneous premise. The fees collected do not go direct to the private coffers of the
corporation. Ordinance No. 7522 was not made for the corporation but for the purpose of raising revenues for
the city. That is the object it serves. The entrusting of the collection of the fees does not destroy the public
purpose of the ordinance. So long as the purpose is public, it does not matter whether the agency through
which the money is dispensed is public or private. The right to tax depends upon the ultimate use, purpose
and object for which the fund is raised. It is not dependent on the nature or character of the person or
corporation whose intermediate agency is to be used in applying it. The people may be taxed for a public
purpose, although it be under the direction of an individual or private corporation. 18

Nor can the ordinance be stricken down as violative of Section 3(e) of the Anti-Graft and Corrupt Practices
Act because the increased rates of market stall fees as levied by the ordinance will necessarily inure to the
unwarranted benefit and advantage of the corporation. 19 We are concerned only with the issue whether the
ordinance in question is intra vires. Once determined in the affirmative, the measure may not be invalidated
because of consequences that may arise from its enforcement. 20

ACCORDINGLY, the decision of the court below is hereby reversed and set aside. Ordinance No. 7522 of the
City of Manila, dated June 15, 1975, is hereby held to have been validly enacted. No. costs.

SO ORDERED.

Castro, C.J., Barredo, Makasiar, Antonio, Muñoz Palma, Aquino and Concepcion, Jr., JJ., concur.

Fernando, J., concurs but qualifies his assent as to an ordinance intra vires not being open to question
"because of consequences that may arise from its enforcement."

Teehankee, J., reserves his vote.

Footnotes

1. Cooley, The Law of Taxation, Vol. 2, 4th ed.

2. Butuan Sawmill, Inc. vs. City of Butuan, L-21516, April 29, 1966, 16 SCRA 758, citing State v. Stoll, 17 Wall.
| Page 4 of 5
425.
3. Lichauco & Co. v. Apostol, 44 Phil. 145 (1922).
4. Crawford, Construction of Statutes, 265, citing U.S. v. Jackson, 143 Fed. 783.
5. See Separate Opinion of Justice Johns in Lichauco, fn. 3, citing Lewis' Sutherland Statutory Construction,
at 161.
6. L-23052, January 29, 1968, 22 SCRA 270.
7. See 73 Am Jur 2d 521.
8. McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 223.
9. See Bowyer v. Camden, 11 Atl. 137.
10. McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 229-230.
11. Tapales v. President and Board of Regents of the U.P., L-17523, March 30, 1963, 7 SCRA 553; C.N.
Hodges v. Municipal Board of the City of Iloilo, L-18276, January 12, 1967, 19 SCRA 32-33; Aguilar v.
Valencia, L-30396, July 30, 1971, 40 SCRA 214; Mendoza v. SSC, L-29189, April 11, 1972, 44 SCRA 380.
12. Cipriano v. Marcelino, L-27793, February 28, 1972, 43 SCRA 291; Del Mar v. PVA, L-27299, June 27,
1973, 51 SCRA 346, citing cases.
13. See City of Bacolod v. Enriquez, L-27408, July 25, 1975, Second Division, per Fernando, J., 65 SCRA
384-85.
14. Article 5, Section 30, Chapter II.
15. McQuillin, Municipal Corporations, Vol. 7, 3rd ed., 275.
16. P.D. 7 was amended by P.D. 45 on November 10, 1972, so as to allow local governments to charge the
ordinary fee for the issuance of certificate of ownership and one peso for the issuance of transfer certificate
for livestock.
17. The market committee is composed of the market administrator as chairman, and a representative of
each of the city treasurer, the municipal board, the Chamber of Filipino Retailers, Inc. and the Manila Market
Vendors Association Inc. as members.
18. Cooley, The Law of Taxation, Vol. 1, 394-95.
19. Section 3 (e); causing any undue injury to any party, including the government, or giving any private party
any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial
functions through manifest partiality evident bad faith or gross inexcusable negligence. . . ."
20. Willoughby, The Constitutional Law of the United States, 668 et seq.

| Page 5 of 5
National Marketing Corporation vs. Tecson (1969)

Summary Cases:

● National Marketing Corporation (NAMARCO) vs. Tecson

Subject: A year is counted as 365 days (extra day in leap year not counted); Court cannot engage in
Judicial Legislation

Facts:

On December 21, 1955, the Court of First Instance rendered judgment in a civil case ordering Miguel
Tecson to pay Price Stabilization Corporation. On December 21, 1965, The National Marketing
Corporation, as successor of the Price Stabilization Corporation, filed with the same court a civil case for
the revival of the judgment.

Miguel Tecson moved to dismiss said complaint on the ground of lack of jurisdiction and prescription of
action. The lower court issued an order of dismissal in accordance with Art. 13 of the Civil Code.

National Marketing appealed the decision to the CA but the latter forwarded it to the SC. The National
Marketing insisted that a year meant a calendar year and this should be used as the basis of
computation. The extra day in a leap year must belong to the year where it fell. Therefore, the 366 days
constituted one year.

On the other hand, Tecson maintained that according to Art. 13 of the Civil Code when the laws spoke of
years, it should be understood that those years were of three hundred sixty-five days each. In this case,
since 1960 and 1964 being leap years, the month of February had 29 days, so that ten years of 365
days each, or an aggregate of 3,650 days, from December 21, 1955, expired on December 19, 1965.

Held:

A year is counted as 365 days

1. As stated in Article 1144(3) and Article 1152 of the Civil Code, an action upon a judgment must
be brought within ten years from the time the right of action accrues" which “commences from
the time the judgment sought to be revived has become final.” This took place on December 21,
1955 or thirty (30) days from notice of the judgment, which was received by Tecson on November
21, 1955 and no appeal having been taken.

2. In the instant case, the National Marketing filed the civil case, for the revival of judgment, two
days late. Art. 13 of the Civil Code explicitly limited the connotation of each "year” to 365 days
only.

3. Art. 13 of the Civil Code nullified Section 13 of the Revised Administrative Code which stated
that "month shall be understood to refer to a calendar month." With the approval of the Civil
Code of the Philippines a month is to be considered as the regular 30-day month and not the
solar or civil month and added the term "years" and explicitly ordains that "it shall be understood
that years are of three hundred sixty-five days."

Court cannot engage in judicial legislation

4. Although the legislation is not realistic, for failure to conform with ordinary experience or
| Page 1 of 2
practice, the theory of National Marketing cannot be upheld without ignoring, if not nullifying, Art.
13 of our Civil Code, and reviving Section 13 of the Revised Administrative Code, thereby
engaging in judicial legislation, and, in effect, repealing an act of Congress.

5. If public interest demands a reversion to the policy embodied in the Revised Administrative
Code, this may be done through legislative process and not by judicial decree.

| Page 2 of 2
CIR vs Primetown Property (2007)

Summary Cases:

● Commissioner of Internal Revenue vs. Primetown Property Group Inc. 531 SCRA 436

Subject:

Computation of Period; Implied Repeal

Facts:

On March 11, 1999, Primetown Property Group, Inc., applied for the refund or credit of income tax paid
in 1997. It averred that it suffered losses for that fiscal year and was not liable for income taxes.
Consequently, it was entitled to a tax refund or tax credit of the quarterly corporate income tax and
remitted creditable withholding tax from real estate sales in the total amount of P26,318,398.32

On May 13, 1999, revenue officer Santos required Primetown to submit additional documents. Pimetown
complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for review in the
Court of Tax Appeals (CTA).

The CTA, applying Section 229 of the NIRC, dismissed the petition as it was filed beyond the two-year
prescriptive period for filing a judicial claim for tax refund or tax credit.

The CTA found that Primetown filed its final adjusted return on April 14, 1998. Applying Article 13 of the
Civil Code which provided that a “year” shall be equivalent to “365 days,” the CTA concluded that the 2
year prescriptive period is equivalent to 730 days. Because the year 2000 was a leap year, the petition,
which was filed 731 days after the time it filed the final adjusted return, was filed beyond the
reglementary period.

The CA reversed the decision of the CTA. It ruled that Article 13 of the Civil Code did not distinguish
between a regular year and a leap year.

The CIR appeals the CA decision and contends that tax refunds, being in the nature of an exemption,
should be strictly construed against claimants.

| Page 1 of 3
There is no dispute that the two-year prescriptive period is reckoned from the filing of the final adjusted
return. The issue at present is how should the two-year prescriptive period be computed.

Held:

Computation of a Year

1. Article 13 of the Civil Code provides that when the law speaks of a year, it is understood to be
equivalent to 365 days. It has also been ruled that a year is equivalent to 365 days regardless of
whether it is a regular year or a leap year.

2. However, in 1987, Executive Order No. 292 or the Administrative Code of 1987 was enacted.
Section 31, Chapter VIII, Book I thereof provides that, "Year" shall be understood to be twelve
calendar months. Under the Administrative Code of 1987, the number of days is irrelevant.

3. A calendar month is "a month designated in the calendar without regard to the number of days it may
contain." It is the "period of time running from the beginning of a certain numbered day up to, but not
including, the corresponding numbered day of the next month, and if there is not a sufficient number of
days in the next month, then up to and including the last day of that month." To illustrate, one calendar
month from December 31, 2007 will be from January 1, 2008 to January 31, 2008.

Implied Repeals

4. A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated
by another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled with
the previous one.

5. Section 27 of the Administrative Code of 1987 which states that “All laws, decrees, orders, rules and
regulation, or portions thereof, inconsistent with this Code are hereby repealed or modified accordingly”
is an implied repealing clause

6. Implied repeals are not favored. An implied repeal must have been clearly and unmistakably intended
by the legislature. The test is whether the subsequent law encompasses entirely the subject matter of
| Page 2 of 3
the former law and they cannot be logically or reasonably reconciled

Administrative Code prevails over Civil Code

7. There obviously exists a manifest incompatibility in the manner of computing legal periods under the
Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII,
Book I of the Administrative Code of 1987, being the more recent law, governs the computation of legal
periods. Lex posteriori derogat priori.

8. Applying the said provision to this case, the two-year prescriptive period consisted of 24 calendar
months, reckoned from the time the final adjusted return was filed on April 14, 1998. The petition (filed
on April 14, 2000) was filed on the last day of the 24th calendar month from the day respondent filed its
final adjusted return. Hence, it was filed within the reglementary period.

| Page 3 of 3
PHILIPPINE NATIONAL BANK, petitioner, vs. THE COURT OF APPEALS and
EPIFANIO DE LA CRUZ, respondents.

1993-05-17 | G.R. No. 98382

DECISION

MELO, J.:

The notices of sale under Section 3 of Act No. 3135, as amended by Act No. 4118, on extra-judicial
foreclosure of real estate mortgage are required to be posted for not less than twenty days in at least
three public places of the municipality or city where the property is situated, and if such property is worth
more than four hundred pesos, such notices shall also be published once a week for at least three
consecutive weeks in a newspaper of general circulation in the municipality or city.

Respondent court, through Justice Filemon Mendoza with whom Justices Campos, Jr. and Aldecoa, Jr.
concurred, construed the publication of the notices on March 28, April 11 and 12, 1969 as a fatal
announcement and reversed the judgment appealed from by declaring void, inter alia, the auction sale of
the foreclosed pieces of realty, the final deed of sale, and the consolidation of ownership (p. 27, Rollo).

Hence, the petition at bar, premised on the following backdrop lifted from the text of the challenged
decision:

The facts of the case as related by the trial court are, as follows:

"This is a verified complaint brought by the plaintiff for the reconveyance to him (and resultant damages)
of two (2) parcels of land mortgaged by him to the defendant Philippine National Bank (Manila), which,
the defendant allegedly unlawfully foreclosed. The defendant then consolidated ownership unto itself,
and subsequently sold the parcels to third parties. The amended answer of the defendant states on the
other hand that the extrajudicial foreclosure, consolidation of ownership, and subsequent sale to the third
parties were all valid, the bank therefore counterclaims for damages and other equitable remedies.

xxx xxx xxx

From the evidence and exhibits presented by both parties, the Court is of the opinion that the following
facts have been proved: Two lots, located at Bunlo, Bocaue, Bulacan (the first covered by Torrens
Certificate No. 16743 and possessed of an area of approximately 3,109 square meters: the second
covered by Torrens Certificate No. 5787, possessed of an area of around 610 square meters, and upon
which stood a residential-commercial building were mortgaged to the defendant Philippine National Bank.
The lots were under the common names of the plaintiff (Epifanio dela Cruz), his brother (Delfin) and his
sister (Maria). The mortgage was made possible because of the grant by the latter two to the former of a
special power of attorney to mortgage the lots to the defendant. The lots were mortgaged to guarantee
the following promissory notes:

(1) a promissory note for P12,000.00, dated September 2, 1958, and payable within 69 days (date of
maturity Nov. 10, 1958);

(2) a promissory note for P4,000.00, dated September 22, 1958, and payable within 49 days (date of
maturity Nov. 10, 1958);

| Page 1 of 6
(3) a promissory note for P4,000.00, dated June 30, 1958 1 and payable within 120 days (date of
maturity Nov. 10, 1958) See also Annex C of the complaint itself).

[1 This date of June 30, 1958 is disputed by the plaintiff who claims that the correct date is June 30,
1961, which is the date actually mentioned in the promissory note. It is however difficult to believe the
plaintiff's contention since if it were true and correct, this would mean that nearly three (3) years elapsed
between the second and the third promissory note; that at the time the third note was executed, the first
two had not yet been paid by the plaintiff despite the fact that the first two were supposed to be payable
within 69 and 49 days respectively. This state of affairs would have necessitated the renewal of said two
promissory notes. No such renewal was proved, nor was the renewal ever alleged. Finally, and this is
very significant: the third mentioned promissory note states that the maturity date is Nov. 10, 1958. Now,
then, how could the loan have been contracted on June 30, 1961? It will be observed that in the bank
records, the third mentioned promissory note was really executed on June 30), 1958 (See Exhs. 9 and
9-A). The Court is therefore inclined to believe that the date "June 30, 1961" was a mere clerical error
and that the true and correct date is June 30, 1958. However, even assuming that the true and correct
date is June 30, 1961, the fact still remains that the first two promissory notes had been guaranteed by
the mortgage of the two lots, and therefore, it was legal and proper to foreclose on the lots for failure to
pay said two promissory notes.]

On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB) presented under Act No. 3135 a
foreclosure petition of the two mortgaged lots before the Sheriff's Office at Malolos, Bulacan; accordingly,
the two lots were sold or auctioned off on October 20, 1961 with the defendant PNB as the highest
bidder for P28,908.46. On March 7, 1963, Sheriff Leopoldo Palad executed a Final Deed of Sale, in
response to a letter-request by the Manager of the PNB (Malolos Branch). On January 15, 1963, a
Certificate of Sale in favor of the defendant was executed by Sheriff Palad. The final Deed of Sale was
registered in the Bulacan Registry of Property on March 19, 1963. Inasmuch as the plaintiff did not
volunteer to buy back from the PNB the two lots, the PNB sold on June 4, 1970 the same to spouses
Conrado de Vera and Marina de Vera in a "Deed of Conditional Sale". (Decision, pp. 3-5; Amended
Record on Appeal, pp. 96-98).

After due consideration of the evidence, the CFI on January 22, 1978 rendered its Decision, the
dispositive portion of which reads:

"WHEREFORE, PREMISES CONSIDERED, the instant complaint against the defendant Philippine
National Bank is hereby ordered DISMISSED, with costs against the plaintiff. The counterclaim against
the plaintiff is likewise DISMISSED, for the Court does not believe that the complaint had been made in
bad faith.

SO ORDERED." (Decision, p. 8; Amended Record on Appeal, p. 100)

Not satisfied with the judgment, plaintiff interposed the present appeal assigning as errors the following:

"I
THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE 1 OF ITS DECISION THAT IT IS
THEREFORE INCLINED TO BELIEVE THAT THE DATE "JUNE 30, 1962" WAS A MERE CLERICAL
ERROR AND THAT THE TRUE AND CORRECT DATE IS JUNE 30, 1958. IT ALSO ERRED IN
HOLDING IN THE SAME FOOTNOTE 1 THAT "HOWEVER" EVEN ASSUMING THAT THE TRUE AND
CORRECT DATE IS JUNE 30, 1961, THE FACT STILL REMAINS THAT THE FIRST TWO
PROMISSORY NOTES HAD BEEN GUARANTEED BY THE MORTGAGE OF THE TWO LOTS, AND
THEREFORE, IT WAS LEGAL AND PROPER TO FORECLOSE ON THE LOTS FOR FAILURE TO
PAY SAID TWO PROMISSORY NOTES". (page 115, Amended Record on Appeal)
| Page 2 of 6
II
THE LOWER COURT ERRED IN NOT HOLDING THAT THE PETITION FOR EXTRAJUDICIAL
FORECLOSURE WAS PREMATURELY FILED AND IS A MERE SCRAP OF PAPER BECAUSE IT
MERELY FORECLOSED THE ORIGINAL AND NOT THE AMENDED MORTGAGE.

III
THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THAT THE AUCTION SALE WAS
NOT PREMATURE". (page 117, Amended Record on Appeal)

IV
THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO STATE THAT ACTUALLY THE
POWER OF ATTORNEY GIVEN TO THE PNB WAS EMBODIED IN THE REAL ESTATE MORTGAGE
(EXB. 10) WHICH WAS REGISTERED IN THE REGISTRY OF PROPERTY OF BULACAN AND WAS
ANNOTATED ON THE TWO TORRENS CERTIFICATES INVOLVED" (page 118 Amended Record on
Appeal).

V
THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES REQUIRED UNDER SEC. 3 OF
ACT NO. 3135 WERE ALL COMPLIED WITH" AND "THAT THE DAILY RECORD . . . IS A
NEWSPAPER OF GENERAL CIRCULATION (pages 117-118, Amended Record on Appeal).

VI
THE LOWER COURT ERRED IN NOT DECLARING THE CERTIFICATE OF SALE, FINAL DEED OF
SALE AND AFFIDAVIT OF CONSOLIDATION, NULL AND VOID.

VII
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO RECONVEY TO PLAINTIFF THE
PARCELS OF LAND COVERED BY T.C.T. NOS. 40712 AND 40713 OF BULACAN (page 8, Amended
Record on Appeal)

VIII
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO PAY TO PLAINTIFF
REASONABLE AMOUNTS OF MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES (page
8, Amended Record on Appeal).

IX
THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT AGAINST THE
PHILIPPINE NATIONAL BANK, WITH COSTS AGAINST THE PLAINTIFF. (page 118, Amended Record
on Appeal)." (Brief for Plaintiff-Appellant, pp. 1-4) (pp. 17-21, Rollo)

With reference to the pertinent issue at hand, respondent court opined:

The Notices of Sale of appellant's foreclosed properties were published on March 28, April 11 and April
12, 1969 issues of the newspaper "Daily Record" (Amended Record on Appeal, p. 108). The date March
28, 1969 falls on a Friday while the dates April 11 and 12, 1969 are on a Friday and Saturday,
respectively. Section 3 of Act No. 3135 requires that the notice of auction sale shall be "published once a
week for at least three consecutive weeks". Evidently, defendant-appellee bank failed to comply with this
legal requirement. The Supreme Court has held that:

"The rule is that statutory provisions governing publication of notice of mortgage foreclosure sales must
be strictly complied with, and that even slight deviations therefrom will invalidate the notice and render
| Page 3 of 6
the sale at least voidable (Jalandoni vs. Ledesma, 64 Phil. 1058, G.R. No. 42589, August 31, 1937 and
October 29, 1937). Interpreting Sec. 457 of the Code of Civil Procedure (reproduced in Sec. 18(c) of
Rules of Court and in Sec. 3 of Act No. 3135) in Campomanes vs. Bartolome and German & Co. (38 Phil.
808, G.R. No. 1309, October 18, 1918), this Court held that if a sheriff sells without the notice prescribed
by the Code of Civil Procedure induced thereto by the judgment creditor, the sale is absolutely void and
no title passes. This is regarded as the settled doctrine in this jurisdiction whatever the rule may be
elsewhere (Borja vs. Addison, 14 Phil. 895, G.R. No. 18010, June 21, 1922).

. . . . It has been held that failure to advertise a mortgage foreclosure sale in compliance with statutory
requirements constitutes a jurisdictional defect invalidating the sale and that a substantial error or
omission in a notice of sale (59 C.J.S. 1314)." (Tambunting vs. Court of Appeals, L-48278, November 8,
1988; 167 SCRA 16, 23-24).

In view of the admission of defendant-appellee in its pleading showing that there was no compliance of
the notice prescribed in Section 3 of Act No. 3135, as amended by Act 4118, with respect to the notice of
sale of the foreclosed real properties in this case, we have no choice but to declare the auction sale as
absolutely void in view of the fact that the highest bidder and purchaser in said auction sale was
defendant-appellee bank. Consequently, the Certificate of Sale, the Final Deed of Sale and Affidavit of
Consolidation are likewise of no legal effect. (pp. 24-25, Rollo).

Before we focus our attention on the subject of whether or not there was valid compliance in regard to
the required publication, we shall briefly discuss the other observations of respondent court vis-a-vis
herein private respondent's ascriptions raised with the appellate court when his suit for reconveyance
was dismissed by the court of origin even as private respondent does not impugn the remarks of
respondent court along this line.

Although respondent court acknowledged that there was an ambiguity on the date of execution of the
third promissory note (June 30, 1961) and the date of maturity thereof (October 28, 1958), it was
nonetheless established that the bank introduced sufficient proof to show that the discrepancy was a
mere clerical error pursuant to Section 7, Rule 130 of the Rules of Court. Anent the second disputation
aired by private respondent, the appellate court observed that inasmuch as the original as well as the
subsequent mortgage were foreclosed only after private respondent's default, the procedure pursued by
herein petitioner in foreclosing the collaterals was thus appropriate albeit the petition therefor contained
only a copy of the original mortgage.

It was only on the aspect of publication of the notices of sale under Act No. 3135, as amended, and
attorney's fees where herein private respondent scored points which culminated in the reversal of the
trial court's decision. Respondent court was of the impression that herein petitioner failed to comply with
the legal requirement and the sale effected thereafter must be adjudged invalid following the ruling of this
Court in Tambunting vs. Court of Appeals (167 SCRA 16 [1988]); p. 8, Decision, p. 24, Rollo). In view of
petitioner's so-called indifference to the rules set forth under Act No. 3135, as amended, respondent
court expressly authorized private respondent to recover attorney's fees because he was compelled to
incur expenses to protect his interest.

Immediately upon the submission of a supplemental petition, the spouses Conrado and Marina De Vera
filed a petition in intervention, claiming that the two parcels of land involved herein were sold to them on
June 4, 1970 by petitioner for which transfer certificates of title were issued in their favor (p. 40, Rollo).
On the other, hand, private respondent pressed the idea that the alleged intervenors have no more
interest in the disputed lots in view of the sale effected by them to Teresa Castillo, Aquilino and Antonio
dela Cruz in 1990 (pp. 105-106, Rollo).

| Page 4 of 6
On March 9, 1992, the Court resolved to give due course to the petition and required the parties to
submit their respective memoranda (p. 110, Rollo).

Now, in support of the theory on adherence to the conditions spelled in the preliminary portion of this
discourse, the pronouncement of this Court in Bonnevie vs. Court of Appeals (125 SCRA 122 [1983]: p.
135, Rollo) is sought to be utilized to press the point that the notice need not be published for three full
weeks. According to petitioner, there is no breach of the proviso since after the first publication on March
28, 1969, the second notice was published on April 11, 1969 (the last day of the second week), while the
third publication on April 12, 1969 was announced on the first day of the third week. Petitioner thus
concludes that there was no violation from the mere happenstance that the third publication was made
only a day after the second publication since it is enough that the second publication be made on any
day within the second week, and the third publication, on any day within the third week. Moreover, in its
bid to rectify its admission in judicio, petitioner asseverates that said admission alluded to refers only to
the dates of publications, not that there was noncompliance with the publication requirement.

Private respondent, on the other hand, views the legal question from a different perspective. He believes
that the period between each publication must never be less than seven consecutive days (p. 4,
Memorandum; p. 124, Rollo).

We are not convinced by petitioner's submissions because the disquisition in support thereof rests on the
erroneous impression that the day on which the first publication was made, or on March 28, 1969, should
be excluded pursuant to the third paragraph of Article 13 of the New Civil Code.

It must be conceded that Article 13 is completely silent as to the definition of what is a "week". In
Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno, Philippine Law Dictionary, Second Ed., 1972, p.
660), this term was interpreted to mean as a period of time consisting of seven consecutive days -- a
definition which dovetails with the ruling in E.M. Derby and Co. vs. City of Modesto, et al. (38 Pac. Rep.
900 [1984]; 1 Paras, Civil Code of the Philippines Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino,
Commentaries and Jurisprudence on the Civil Code, 1990, p. 46). Following the interpretation in Derby
as to the publication of an ordinance for "at last two weeks" in some newspaper that:

. . . here there is no date or event suggesting the exclusion of the first day's publication from the
computation, and the cases above cited take this case out of the rule stated in Section 12, Code Civ.
Proc. which excludes the first day and includes the last;

the publication effected on April 11, 1969 cannot be construed as sufficient advertisement for the second
week because the period for the first week should be reckoned from March 28, 1969 until April 3, 1969
while the second week should be counted from April 4, 1969 until April 10, 1969. It is clear that the
announcement on April 11, 1969 was both theoretically and physically accomplished during the first day
of the third week and cannot thus be equated with compliance in law. Indeed, where the word is used
simply as a measure of duration of time and without reference to the calendar, it means a period of
seven consecutive days without regard to the day of the week on which it begins (1 Tolentino, supra at p.
467 citing Derby).

Certainly, it would have been absurd to exclude March 28, 1969 as reckoning point, in line with the third
paragraph of Article 13 of the New Civil Code, for the purpose of counting the first week of publication as
to make the last day thereof fall on April 4, 1969 because this will have the effect of extending the first
week by another day. This incongruous repercussion could not have been the unwritten intention of the
lawmakers when Act No. 3135 was enacted. Verily, inclusion of the first day of publication is in keeping
with the computation in Bonnevie vs. Court of Appeals (125 SCRA 122 [1983]) where this Court had
occasion to pronounce, through Justice Guerrero, that the publication of notice on June 30, July 7 and
| Page 5 of 6
July 14, 1968 satisfied the publication requirement under Act No. 3135. Respondent court cannot,
therefore, be faulted for holding that there was no compliance with the strict requirements of publication
independently of the so-called admission in judicio.

WHEREFORE, the petitions for certiorari and intervention are hereby dismissed and the decision of the
Court of Appeals dated April 17, 1991 is hereby affirmed in toto.

SO ORDERED.

Feliciano (Chairman), Bidin, Davide, Jr. and Romero, JJ., concur.

| Page 6 of 6
RAFAEL YAPDIANGCO, petitioner-appellant, vs. THE HON. CONCEPCION B.
BUENCAMINO and HON. JUSTINIANO CORTEZ, respondents-appellees.

1983-06-24 | G.R. No. L-28841

DECISION

GUTIERREZ, JR., J.:

If the last day in the period of prescription of a felony falls on a Sunday or legal holiday, may the
information be filed on the next working day?

Stated otherwise, the issue in this appeal from a decision of the Court of First Instance of Rizal Branch
IX at Quezon City is whether or not a Sunday or a legal holiday is a legal efficient cause which interrupts
the prescription of an offense.

On February 1, 1965, the City Fiscal of Quezon City filed before the City Court an information for slight
physical injuries allegedly committed by the petitioner-appellant on December 2, 1964 against Mr. Ang
Cho Ching.

On September 10, 1965, the petitioner-appellant moved to quash the criminal prosecution on the ground
that the information having been filed on the sixty first day following the commission of the offense, the
sixty days prescriptive period had lapsed.

On September 14, 1965, the City Court of Quezon City denied the motion to quash stating that the 60th
day fell on a Sunday and considering the rule that when the last day for the filing of a pleading falls on a
Sunday, the same may be filed on the next succeeding business day, the action had not prescribed.

After a motion for reconsideration was denied by the City Court, the petitioner-appellant filed a petition
for certiorari and mandamus with preliminary injunction before the Court of First Instance of Rizal.

On July 11, 1966, the Court of First Instance of Rizal dismissed the petition. A motion for reconsideration
was subsequently denied. Hence, this appeal.

The petitioner-appellant raised the following assignments of errors:

FIRST ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN FINDING THAT SUNDAY IS A LEGAL EFFICIENT CAUSE TO
INTERRUPT PRESCRIPTION OF AN OFFENSE.

SECOND ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN FINDING THAT THE PERIOD FIXED BY LAW WITHIN WHICH TO
COMMENCE CRIMINAL PROSECUTION MAY LEGALLY BE EXTENDED WITH THE INTERVENTION
OF A SUNDAY OR LEGAL HOLIDAY.

THIRD ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN DENYING THE PETITION FOR MANDAMUS AND PRELIMINARY
INJUNCTION.

Under Article 90 of the Revised Penal Code, light offenses prescribe in two months. Article 13 of the Civil
| Page 1 of 5
Code provides that when the law speaks of months, it shall be understood that months are of thirty days
each.

Article 91 of the Revised Penal Code reads:

"ART. 91. Computation of prescription of offenses. - The period of prescription shall commence to run
from the day on which the crime is discovered by the offended party, the authorities or their agents, and
shall be interrupted by the filing of the complaint or information, and shall commence to run again when
such proceedings terminate without the accused being convicted or acquitted or are unjustifiably stopped
for any reason not imputable to him.

"The term of prescription shall not run when the offender is absent from the Philippine Archipelago."

In support of his three assignments of errors which he discusses jointly, the petitioner-appellant argues:

xxx xxx xxx

"b) the fact that the 60th day was a Sunday did not interrupt nor stop the running of the prescriptive
period, for.
i) as a matter of statutory articulation a Sunday or holiday is not recognized as legally efficient cause to
interrupt prescription;
ii) under the principle of inclusio unius exclusio alterius, the single exception of offender's absence
specified in Article 91 of the Revised Penal Code excludes any other cause sufficient to interrupt
prescription;
iii) under the specific and controlling jurisprudence of the cases that the last day of prescriptive period is
a Sunday or a holiday does not interrupt prescription.

"15 AM. Jur., Section 346, page 34:

"'The statute of limitations run from the time the offense is committed until the prosecution is commenced.
. . .'
"Ibid., Section 357, page 37:

"'The running of the statute of limitation can be prevented only by the means or for the reasons specified
therein . . .'
"Ibid., Section 342, page 32:

"'Statutes of limitations in criminal cases-differ from those in civil cases. In civil cases they are statutes of
repose, while in criminal cases they create a bar to the prosecution. . . .'

"22 C.J.S., Section 228 (1), 596 597:

"'As a general rule, exceptions will not be implied to the statutes of limitations of criminal offenses, and
hence, in criminal prosecutions unless the statute of limitations contains an exception or condition that
will toll its operation, the running of the statute is not interrupted, save only by indictment or other
sufficient procedure commencing the prosecution of the offense. After the statute has commenced to run
it will not be interrupted by the happening of any subsequent event or disability . . .'

"45 Century Digest, Time, Section 41:

"'When an action would be barred on Sunday, that day must be excluded from the count and the action
| Page 2 of 5
brought on the Saturday preceding, to save the bar. (Allen vs. Elliot, 67 Ala. 432.)'

"'Where the year in which to begin an action expires on Sunday, the action must be begun on the
preceding day. (William vs. Lane, 87 Wis. 152, 58 NW 77.)'

"iv) under the pervasive criminal law principle of liberal construction of penal statutes in favor of the
accused the conclusion is evident that the exception clause to the prescriptive rule in Article 91 of the
Revised Penal Code should not be unduly stretched and strained to include exceptions not specified nor
as much as intimated in the statute.

"U.S. vs. Abad Santos, 36 Phil. 243:

"'Criminal statutes are to be strictly construed; no persons should be brought within the terms who is not
clearly within them nor should any act be pronounced criminal when it is not made so.'

"v) extinctive or acquisitive prescription is not similar to reglementary periods provided in the Rules of
Court or in any other statutes, hence, may not be extended under the 'next business day theory'. Thus, it
cannot be said under our system that a party has a right to move, and the court the corresponding
authority to grant an extension of a period of prescription "

As against these arguments of the petitioner-appellant, the respondents cite the following provision of
the Revised Administrative Code to sustain their side:

"SEC. 31. Pretermission of holiday. - Where the day, or the last day, for doing any act required or
permitted by law falls on a holiday, the act may be done on the next succeeding business day."

The law requires or permits the filing of the information within two months or sixty days from the date the
crime was discovered by the offended party. Since the 60th day or last day for the filing of the
information in this case fell on a holiday, according to the respondents-appellees the law should allow
the filing of charges to be done on the next succeeding business day.

If we follow the ordinary rule of time computation based on the common law, which, in construing
statutes of limitations excludes the first day and includes the last day unless the last day is dies non in
which event the following day is included, the stand of the respondents-appellees would be correct.

As pointed out by the respondents-appellees, Section 1, Rule 28 of the former Rules of Court provided:

xxx xxx xxx

"'How to compute time. - In computing any period of time prescribed or allowed by these rules, by order
of court, or by any applicable statute, the day of the act, event, or default after which the designated
period of time begins to run is not to be included. The last day of the period so computed is to be
included, unless it is a Sunday or a legal holiday, in which event the time shall run until the end of the
next day which is neither a Sunday nor a holiday.'"

After carefully considering all the foregoing, we find the arguments of the petitioners appellants
meritorious. We are not dealing in this case with a simple rule on when a pleading may be filed.

The case at hand does not involve the simple issue of when to do an act. It deals with the prescription of
a criminal action. Under unquestioned authorities, the question to be resolved is when the State is
deemed to have lost or waived its right to prosecute an act prohibited and punished by law. (People v.
| Page 3 of 5
Moran, 44 Phil. 387, 406-7; People v. Parel, 44 Phil. 437, 445; People v. Montenegro, 68 Phil. 659).
Wharton, in his work on Criminal Pleading and Practice, quoted in People v. Moran has this to say about
the nature of the statute of limitations in criminal actions:

"We should at first observe that a mistake is sometimes made in applying to statutes of limitation in
criminal suits the construction that has been given to statutes of limitation in civil suits. The two classes
of statutes, however, are essentially different. In civil suits the statute is interposed by the legislature as
an impartial arbiter between two contending parties. In the construction of the statute, therefore, there is
no intendment to be made in favor of either party. Neither grants the right to the other; there is therefore
no grantor against whom the ordinary presumptions of construction are to be made. But it is otherwise
when a statute of limitation is granted by the State. Here the State is the grantor, surrendering by act of
grace its rights to prosecute, and declaring the offense to be no longer the subject of prosecution. The
statute is not a statute of process, to be scantily and grudgingly applied, but an amnesty, declaring that
after a certain time oblivion shall be cast over the offense; that the offender shall be at liberty to return to
his country, and resume his immunities as a citizen; and that from henceforth he may cease to preserve
the proofs of his innocence, for the proofs of his guilt are blotted out. Hence it is that statutes of limitation
are to be liberally construed in favor the defendant, not only because such liberality of construction
belongs to all acts of amnesty and grace, but because the very existence of the statute is a recognition
and notification by the legislature of the fact that time, while it gradually wears out proofs and innocence,
has assigned to it fixed and positive periods in which it destroys proofs of guilt. Independently of these
views, it must be remembered that delay in instituting prosecutions is not only productive of expense to
the State, but of peril to public justice in the attenuation and distortion, even by mere natural lapse of
memory, of testimony. It is the policy of the law that prosecutions should be prompt and that statutes
enforcing such promptitude should be vigorously maintained. They are not merely acts of grace, but
checks imposed by the State upon itself, to exact vigilant activity from its subalterns, and to secure for
criminal trials the best evidence that can be obtained." (44 Phil. 405-406).

The rules contained in Section 31 of the Revised Administrative Code and Section 1, Rule 28 of the Old
Rules of Court deal with the computation of time allowed to do a particular act, such as, the filing of tax
returns on or before a definite date, filing an answer to a complaint, taking an appeal, etc. They do not
apply to lengthen the period fixed by the State for it to prosecute those who committed a crime against it.
The waiver or loss of the right to prosecute such offenders is automatic and by operation of law. Where
the sixtieth and last day to file an information falls on a Sunday or legal holiday, the sixth-day period
cannot be extended up to the next working day. Prescription has automatically set in. The remedy is for
the fiscal or prosecution to file the information on the last working day before the criminal offense
prescribes.

WHEREFORE, the petition for certiorari and mandamus is granted. The questioned order of the
respondent court is SET ASIDE. The motion to quash is GRANTED and the information before the city
court is DISMISSED.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Plana and Vasquez, JJ., concur.

Separate Opinions

RELOVA, J., dissenting:

I dissent. Sec. 31 of the Revised Administrative Code provides that "where the day, or the last day, for
doing an act required or permitted by law falls on a holiday, the act may be done on the next succeeding
| Page 4 of 5
day." In the case at bar, since the last day within which to file the complaint or information in court fell on
a Sunday, the filing thereof may be done on the next succeeding business day.

| Page 5 of 5
Co Kim Chan v. Valdez Tan Keh

Summary Cases:

● Co Kim Chan vs. Valdez Tan Keh 75 Phil 113

Subject: De Facto Government; Postliminy in International Law; Belligerent Occupation

Facts:

This involves a petition for mandamus praying that the respondent judge of the lower court be ordered
to continue the proceedings in a civil case before said court. The proceedings were initiated under the
regime of the government (called Republic of the Philippines) established during the Japanese military
occupation.

The respondent judge refused to take cognizance of and continue the proceedings in the said case on
the ground that the proclamation issued by General Douglas MacArthur, upon American re-occupation,
had the effect of invalidating all judicial proceedings and judgements of the court of the Philippines
under the Japanese military occupation, and that, the lower courts have no jurisdiction to take
cognizance of and continue judicial proceedings pending in the courts of the defunct Republic of the
Philippines in the absence of an enabling law granting such authority.

The respondent judge likewise contends that the government established in the Philippines during the
Japanese occupation were not de facto governments.

Held:

De Facto Government

All acts and proceedings of the legislative, executive, and judicial departments of a de facto
government are good and valid.
There are three kinds of de facto governments.
| Page 1 of 3
(a) Government de facto in the proper legal sense-- that government that gets possession and control
of, or usurps, by force or by the voice of the majority, the rightful legal governments and maintains
itself against the will of the latter.

(b) Government of paramount force-- that which is established and maintained by military forces who
invade and occupy a territory of the enemy in the course of war.

(c) That established as an independent government by the inhabitants of a country who rise in
insurrection against the parent state

The Philippine Executive Commission and the Republic of the Philippines, both governments
established during the Japanese military occupation, are de facto governments of the second kind.
The fact that they were a civil and not a military government and was run by Filipinos and not by
Japanese nationals, is of no consequence. The ultimate source of its authority was the same ? the
Japanese military authority and government.

Being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts
of justice of those governments, which are not of a political complexion, were good and valid, and, by
virtue of the well-known principle of postliminy (postliminium) in international law, remained good and
valid after the liberation or reoccupation of the Philippines under the leadership of General Douglas
MacArthur.

Courts are creatures of statutes and such laws, not being a political nature, are not abrogated by a
change of sovereignty, and continue in force "ex proprio vigore" unless and until repealed by
legislative acts. A proclamation that said laws and courts are expressly continued is not necessary.
Principle of Postliminy

According to that principle in international law, the fact that a territory which has been occupied by an
enemy comes again into the power of its legitimate government of sovereignty, does not, except in a
very few cases, wipe out the effects of acts done by an invader, which for one reason or another it is
within his competence to do. Thus judicial acts done under his control, when they are not of a political
complexion, administrative acts so done, to the extent that they take effect during the continuance of
his control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good.

Effects of a belligerent occupation

| Page 2 of 3
According to the precepts of the Hague Conventions, the belligerent occupant:
(i) possesses all the powers of a de facto government;

(ii) can suspend the old laws and promulgate new ones and make such changes in the old as he may
see fit;

(iii) the municipal laws in force in the country must be respected, unless absolutely prevented by the
circumstances prevailing in the occupied territory.

(i.e. affect private rights of person and property and provide for the punishment of crime);

(iv) laws of a political nature or affecting political relations are considered as suspended during the
military occupation

(i.e. right of assembly, the right to bear arms, the freedom of the press, and the right to travel freely in
the territory occupied);

(v) local ordinary tribunals are authorized to continue administering justice; judges and other judicial
officers are kept in their posts if they accept the authority of the belligerent occupant or are required to
continue in their positions under the supervision of the military or civil authorities appointed.

(vi) There is no transfer of sovereignty during a belligerent occupation. The occupation, being
essentially provisional, does not serve to transfer sovereignty over the territory controlled. The de jure
government, during the period of occupancy, is deprived of the power to exercise its rights as such.
(Note: There is no suspension of sovereignty during a belligerent occupation, but merely the
suspension of the exercise of sovereignty by the de jure government)

| Page 3 of 3
WILLIAM F. PERALTA, petitioner, vs. THE DIRECTOR OF PRISONS, respondent.

1945-11-12 | G.R. No. L-49

DECISION

FERIA, J:
Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the supervision and
control of the production, procurement and distribution of goods and other necessaries as defined in section 1
of Act No. 9 of the National Assembly of the so-called Republic of the Philippines, was prosecuted for the
crime of robbery as defined and penalized by section 2 (a) of Act No. 65 of the same Assembly. He was found
guilty and sentenced to life imprisonment, which he commenced to serve on August 21, 1944, by the Court of
Special and Exclusive Criminal Jurisdiction, created in section 1 of Ordinance No. 7 promulgated by the
President of the so-called Republic of the Philippines, pursuant to the authority conferred upon him by the
Constitution and laws of the said Republic. And the procedure followed in the trial was the summary one
established in Chapter II of Executive Commission, made applicable to the trial for violations of said Act No.
65 by section 9 thereof and section 5 of said Ordinance No. 7.

The petition for habeas corpus is based on the ground that the Court of Special and Exclusive Criminal
Jurisdiction created by Ordinance No. 7 "was a political instrumentality of the military forces of the Japanese
Imperial Army, the aims and political purposes of the Commonwealth of the Philippines, as well as those of
the United States of America, and therefore, null and void ab initio," that the provisions of said Ordinance No.
7 are violative of the fundamental laws of the Commonwealth of the Philippines and "the petitioner has been
deprived of his constitutional rights"; that the petitioner herein is being punished by a law created to serve the
political purpose of the Japanese Imperial Army in the Philippines, and "that the penalties provided for are
much (more) severe than the penalties provided for in the Revised Penal Code."

The Solicitor General, in his answer in behalf of the respondent, states that, in his own opinion, for the
reasons expressed in his brief in the case of People of the Philippines, plaintiff- appellant, vs. Benedicto Jose
y Santos, defendant-appellee, G.R. No. L- 22 (p. 612, post), the acts and proceedings taken and had before
the said Court of Special and Exclusive Criminal Jurisdiction which resulted in the conviction and
imprisonment of the herein petitioner, should now be denied force and efficacy, and therefore the petition for
habeas corpus should be granted. The reasons advanced by the Solicitor General in said brief and in his
reply memorandum in support of his contention are, that the Court of Special and Exclusive Criminal
Jurisdiction created, and the summary procedure prescribed therefor, by said Ordinance No. 7 in connection
with Executive Order No. 157 of the Chairman of the Executive Commission, are tinged with political
complexion; that the procedure prescribed in Ordinance No. 7 does not afford a fair trial, violates the
Constitution of the Commonwealth, and impairs the constitutional rights of accused persons under their
legitimate Constitution. And he cites, in support of this last proposition, the decisions of the Supreme Court of
the United States in the cases of Texas vs. White (7 Wall., 700, 743); Horn vs. Lockhart (17 Wall., 570, 581);
United States vs. Home Insurance Co. (22 Wall., 99, 104); Sprott vs. United States (20 Wall., 459).

The City Fiscal of Manila appeared before this Court as amicus curiá¦. In his memorandum he submits that
the petition for habeas corpus be denied on the following grounds: That the Court of Special and Exclusive
Criminal Jurisdiction and the Acts, Ordinances and Executive Orders creating it are not of a political
complexion, for said Court was created, and the crimes and offenses placed under its jurisdiction were
penalized heavily, in response to an urgent necessity, according to the preamble of Ordinance No. 7; that the
right to appeal in a criminal case is not a constitutional right; and that the summary procedure established in
said Ordinance No. 7 is not violative of the provision of Article III, section 1 (18) of the Constitution of the
Commonwealth, to the effect that no person shall be compelled to be a witness against himself, nor of the
provision of section 1 (1) of the same Article that no person shall be deprived of life, liberty, or property
without due process of law.

| Page 1 of 7
The features of the summary procedure adopted by Ordinance No. 7, assailed by the petitioner and the
Solicitor General as impairing the constitutional rights of an accused are; that the court may interrogate the
accused and witnesses before trial in order to clarify the points in dispute; that the refusal of the accused to
answer the questions may be considered unfavorable to him; that if from the facts admitted at the preliminary
interrogatory it appears that the defendant is guilty, he may be immediately convicted; and that the sentence
of the court is not appealable, except in case of the death penalty which cannot be executed unless and until
reviewed and affirmed by a special division of the Supreme Court composed of three Justices.

Before proceeding further, and in order to determine the law applicable to the questions involved in the
present case, it is necessary to bear in mind the nature and status of the government established in these
Islands by the Japanese forces of occupation under the designation of Republic of the Philippines.

In the case of Co Kim Cham vs. Valdez Tan Keh and Dizon (G. R. No. L-5, pp. 113, 127, ante), recently
decided, this Court, speaking through the Justice who pens this decision, held:

"In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized
by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese forces, was a civil
government established by the military forces of occupation and therefore a de facto government of the
second kind. It was not different from the government established by the British in Castine, Maine, or
by the United States in Tampico, Mexico. As Halleck says, `the government established over an
enemy's territory during the military occupation may exercise all the powers given by the laws of war to
the conqueror over the conquered, and is subject to all restrictions which that code imposes. It is of
little consequence whether such government be called a military or civil government. Its character is
the same and the source of its authority the same. In either case it is a government imposed by the
laws of war, and so far as it concerns the inhabitants of such territory or the rest of the world, those
laws alone determine the legality or illegality of its acts.' (Vol. 2, p. 466.) The fact that the Philippine
Executive Commission was a civil and not a military government and was run by Filipinos and not by
Japanese nationals, is of no consequence."

And speaking of the so-called Republic of the Philippines in the same decision, this Court said:
"The so-called Republic of the Philippines, apparently established and organized as a sovereign
state independent from any other government by the Filipino people, was in truth and reality, a
government established by the belligerent occupant or the Japanese forces of occupation. It was
of the same character as the Philippine Executive Commission, and the ultimate source of its
authority was the same - the Japanese military authority and government. As general MacArthur
stated in his proclamation of October 23, 1944, a portion of which has been already quoted, `under
enemy duress, a so-called government styled as the "Republic of the Philippines" was established
on October 14, 1943, based upon neither the free expression of the peoples' will nor the sanction
of the Government of the United States.' Japan had no legal power to grant independence to the
Philippines or transfer the sovereignty of the United States to, or recognize the latent sovereignty
of, the Filipino people, before its military occupation and possession of the Islands had matured
into an absolute and permanent dominion or sovereignty by a treaty of peace or other means
recognized in the law of nations."

As the so-called Republic of the Philippines was a de facto government of the second kind (of paramount
force), as the government established in Castine, Maine, during its occupation by the British forces, and as
that of Tampico, Mexico, occupied during the war with that country by the United States Army, the questions
involved in the present case cannot be decided in the light of the Constitution of the Commonwealth
Government; because the belligerent occupant was totally independent of the constitution of the occupied
territory in carrying out the administration over said territory; and the doctrine laid down by the Supreme Court
of the United States in the cases involving the validity of judicial and legislative acts of the Confederate States,
considered as de facto governments of the third kind, does not apply to the acts of the so-called Republic of

| Page 2 of 7
the Philippines which is a de facto government of paramount force. The Constitution of the so-called Republic
of the Philippines can neither be applied, since the validity of an act of a belligerent occupant cannot be tested
in the light of another act of the same occupant, whose criminal jurisdiction is drawn entirely from the law
martial as defined in the usages of nations.

In the case of United States vs. Rice (4 Wheaton, 246), the Supreme Court of the United States held that, by
the military occupation of Castine, Maine, the sovereignty of the United States in the territory was, of course,
suspended, and the laws of the United States could no longer be rightfully enforced there or be obligatory
upon the inhabitants who remained and submitted to the belligerent occupant. By the surrender the
inhabitants passed under a temporary allegiance to the British government, and were bound by such laws,
and such only, as it chose to recognize and impose. And Oppenheim, in his Treatise on International Law,
says that, in carrying out the administration over the occupied territory and its inhabitants, "the (belligerent)
occupant is totally independent of the constitution and the laws of the territory, since occupation is an aim of
warfare, and the maintenance and safety of his forces, and the purpose of war, stand in the foreground of his
interest and must be promoted under all circumstances or conditions." (Vol. II, Sixth Edition, Revised, 1944, p.
342.)

The doctrine laid down in the decisions of the Supreme Court of the United States (in the cases of Texas vs.
White, 7 Wall., 700; Horn vs. Lockhart, 17 Wall., 570; Williams vs. Bruffy, 96 U.S., 176; United States vs.
Home Insurance Co., 20 Wall., 249; Sprott vs. United States, 20 Wall., 459, and others) that the judicial and
legislative acts of the Confederate States which impaired the rights of the citizens under the Constitution of
the United States or of the States, or were inconflict with those constitutions, were null and void, is not
applicable to the present case. Because that doctrine rests on the propositions that "the concession (of
belligerency) made to the Confederate Government . . . sanctioned no hostile legislation . . . and it impaired in
no respect the rights of loyal citizens as they had existed at the commencement of hostilities" (Williams vs.
Bruffy, supra); that the Union is perpetual and indissoluble, and the obligation of allegiance to the state and
obedience to her laws and state constitution, subject to the Constitution of the United States, remained
unimpaired during the War of Secession (Texas vs. White, supra) and that the Confederate States "in most, if
not in all instances, merely transferred the existing state organizations to the support of a new and different
national head. The same constitutions, the same laws for the protection of property and personal rights
remained and were administered by the same officers." (Sprott vs. United States, supra). In fine, because in
the case of the Confederate States, the constitution of each state and that of the United States or the Union
continued in force in those states during the War of Secession; while the Constitution of the Commonwealth
Government was suspended during the occupation of the Philippines by the Japanese forces or the
belligerent occupant at regular war with the United States.

The questions which we have to resolve in the present case in the light of the law of nations are, first, the
validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction, and of the summary
procedure adopted for that court; secondly, the validity of the sentence which imposes upon the petitioner the
penalty of life imprisonment during the Japanese military occupation; and thirdly, if they were then valid, the
effect on said punitive sentence of the re- occupation of the Philippines and the restoration therein of the
Commonwealth Government.

(1) As to the validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction by Ordinance
No. 7, the only factor to be considered is the authority of the legislative power which promulgated said law or
ordinance. It is well established in International Law that "The criminal jurisdiction established by the invader
in the occupied territory finds its source neither in the laws of the conquering or conquered state, - it is drawn
entirely from the law martial as defined in the usages of nations. The authority thus derived can be asserted
either through special tribunals, whose authority and procedure is defined in the military code of the
conquering state, or through the ordinary courts and authorities of the occupied district." (Taylor, International
Public Law, p. 598.) The so-called Republic of the Philippines, being a governmental instrumentality of the
belligerent occupant, had therefore the power or was competent to create the Court of Special and Exclusive
Criminal Jurisdiction. No question may arise as to whether or not a court is of a political complexion, for it is
| Page 3 of 7
mere governmental agency charged with the duty of applying the law to cases falling within its jurisdiction. Its
judgments and sentences may be of a political complexion or not depending upon the nature or character of
the law so applied. There is no room for doubt, therefore, as to the validity of the creation of the court in
question.

With respect to the summary procedure adopted by Ordinance No. 7, and followed in the trial of the case
which resulted in the conviction of the herein petitioner, there is also no question as to the power or
competence of the belligerent occupant to promulgate the law providing for such procedure. For "the invader
deals freely with the relations of the inhabitants of the occupied territory towards himself . . . for his security
also, he declares certain acts, not forbidden by the ordinary laws of the country, to be punishable; and he so
far suspends the laws which guard personal liberty as is required for the summary punishment of any one
doing such acts." (Hall's International Law, seventh ed., p. 500.) A belligerent "occupant may where
necessary, set up military courts instead of the ordinary courts; and in case, and in so far as, he admits the
administration of justice by the ordinary courts, he may nevertheless, so far as is necessary for military
purposes, or for the maintenance of public order and safety, temporarily alter the laws, especially the Criminal
Law, on the basis of which justice is administered as well as the laws regarding procedure." (Oppenheim's
International Law, Vol. II, sixth edition, 1944, p. 349.)

No objection can be set up to the legality of its provisions in the light of the precepts of our Commonwealth
Constitution relating to the rights of accused under that Constitution, because the latter was not in force
during the period of the Japanese military occupation, as we have already stated. Nor may said Constitution
be applied upon its revival at the time of the re-occupation of the Philippines by virtue of the principle of
postliminium, because "a constitution should operate prospectively only, unless the words employed show a
clear intention that it should have a retrospective effect" (Cooley's Constitutional Limitations, seventh edition,
page 97, and cases quoted and cited in the footnote), especially as regards laws of procedure applied to
cases already terminated completely.

The only restrictions or limitations imposed upon the power of a belligerent occupant to alter the laws or
promulgate new ones, especially the criminal law as well as the laws regarding procedure, so far as it is
necessary for military purposes, that is, for his control of the territory and the safety and protection of his army,
are those imposed by the Hague Regulations, the usages established by civilized nations, the laws of
humanity and the requirements of public conscience. It is obvious that the summary procedure under
consideration does not violate those precepts. It cannot be considered as violating the laws of humanity and
public conscience, for it is less objectionable, even from the point of view of those who are used to the
accusatory system of criminal procedure, than the procedural laws based on the semi-inquisitorial or mixed
system prevailing in France and other countries in continental Europe.

(2) The validity of the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction which
imposes life imprisonment upon the herein petitioner, depends upon the competence or power of the
belligerent occupant to promulgate Act No. 65 which punishes the crime of which said petitioner was
convicted.

Westlake says that Article XLIII, Section III, of the Hague Conventions of 1907 "indicates that the laws to be
enforced by the occupant consist of, first, the territorial law in general, as that which stands to the public order
and social and commercial life of the district in a relation of mutual adaptation, so that any needless
displacement of it would defeat the object which the invader is enjoined to have in view, and secondly, such
variations of the territorial law as may be required by real necessity and are not expressly prohibited by any of
the rules which will come before us. Such variations will naturally be greatest in what concerns the relation of
the communities and individuals within the district to the invading army and its followers, it being necessary
for the protection of the latter, and for the unhindered prosecution of the war by them, that acts committed to
their detriment shall not only lose what jurisdiction the territorial law might give them as committed against
enemies, but shall be repressed more severely than the territorial law would repress acts committed against
fellow subjects. Indeed the entire relation between the invaders and the invaded, so far as it may fall within
| Page 4 of 7
the criminal department whether by the intrinsic nature of the acts done or in consequence of the regulations
made by the invaders, may be considered as taken out of the territorial law and referred to what is called
martial law." (Westlake, International Law, Part II, War, p. 96.)

According to Hyde (International Law, Vol. II, p. 386), the term "martial law," in so far as it is used to describe
any fact in relation to belligerent occupation, does not refer to a particular code or system of law, or to a
special agency entrusted with its administration. The term merely signifies that the body of law actually
applied, having the sanction of military authority, is essentially martial. All law, by whomsoever administered,
in an occupied district is martial law; and it is none the less so when applied by the civil courts in matters
devoid of special interest to the occupant. The words "martial law" are doubtless suggestive of the power of
the occupant to share the law as he sees fit; that is, to determine what shall be deemed lawful or unlawful
acts, to establish tests for ascertaining the guilt of offenders, to fix penalties, and generally to administer
justice through such agencies as are found expedient.

And the United States Rules of Land Warfare provide that the belligerent occupant may promulgate such new
laws and regulations as military necessity demands, and in this class will be included those laws which come
into being as a result of military rule; that is, those which establish new crimes and offenses incident to a state
of war and are necessary for the control of the country and the protection of the army, for the principal object
of the occupant is to provide for the security of the invading army and to contribute to its support and
efficiency and the success of its operations. (Pub. 1940, pp. 76,77.)

From the above it appears clear that it was within the power and competence of the belligerent occupant to
promulgate, through the National Assembly of the so-called Republic of the Philippines, Act No. 65 of the said
Assembly, which penalizes the crimes of robbery and other offenses by imprisonment ranging from the
maximum period of the imprisonment prescribed by the laws and ordinances promulgated by the President of
the so-called Republic as minimum, to life imprisonment or death as maximum. Although these crimes are
defined in the Revised Penal Code, they were altered and penalized by said Act No. 65 with different and
heavier penalties, as new crimes and offenses demanded by military necessity, incident to a state of war, and
necessary for the control of the country by the belligerent occupant, the protection and safety of the army of
occupation, its support and efficiency, and the success of its operations.

They are not the same ordinary offenses penalized by the Revised Penal Code. - The criminal acts penalized
by said Act No. 65 are those committed by persons charged or connected with the supervision and control of
the production, procurement and distribution of foods and other necessaries; and the penalties imposed upon
the violators are different from and much heavier than those provided by the Revised Penal Code for the
same ordinary crimes. The acts penalized by said Act were taken out of the territorial law or Revised Penal
Code, and referred to what is called martial law by international jurists, defined above by Hyde, in order, not
only to prevent food and other necessaries from reaching the "guerrillas" which were harassing the belligerent
occupant from every nook and corner of the country, but also to preserve the food supply and other
necessaries in order that, in case of necessity, the Imperial Japanese forces could easily requisition them, as
they did, and as they had the right to do in accordance with the law of nations for their maintenance and
subsistence (Art. LII, Sec. III, Hague Conventions of 1907). Especially taking into consideration the fact, of
which this court may take judicial notice, that the Imperial Japanese Army had depended mostly for their
supply upon the produce of this country.

The crime penalized by Act No. 65 - as well as the crimes against national security and the law of nations, to
wit: treason, espionage, inciting to war, violation of neutrality, correspondence with hostile country, flight to
enemy's country, piracy; and the crimes against public order, such as rebellion, sedition, and disloyalty, illegal
possession of firearms and other, penalized by Ordinance No. 7 and placed under the jurisdiction of the Court
of Special and Exclusive Criminal Jurisdiction - are all of a political complexion, because the acts constituting
those offenses were punished, as are all political offenses, for public rather than private reasons, and were
acts in aid or favor of the enemy and directed against the welfare, safety and security of the belligerent
occupant. While it is true that these offenses, when committed against the Commonwealth or United States
| Page 5 of 7
Government, are defined and also penalized by the territorial law or Revised Penal Code, they became
inapplicable as crimes against the occupier upon the occupation of the Islands by the Japanese forces. And
they had to be taken out of the territorial law and made punishable by said Ordinance No. 7, for they were not
penalized before under the Revised Penal Code when committed against the belligerent occupant or the
government established by him in these Islands. They are also considered by some writers as war crimes in a
broad sense. In this connection Wheaton observes the following:

"Of 'war crimes' the number is naturally indefinite, depending as they do on the acts from time to time
ordered to be done or forbidden to be done in the martial law proclamation or regulations of the
invading or occupying commander. Thus, in the Anglo-Boer war, the British military authorities
proclaimed the following to be offenses against their martial law; - Being in possession of arms,
ammunition, etc.; traveling without a permit; sending prohibited goods; holding meetings other than
those allowed; using seditious language; spreading alarmist reports; overcharging for goods; wearing
uniforms without due authority; going out of doors between certain hours; injuring military animals or
stores; being in possession, without a permit, of horses, vehicles, cycles, etc.; hindering those in
execution of military orders; trespassing on defense works. Such offenses, together with several others,
were specified in the Japanese regulations made in the Russo-Japanese war." (Wheaton's
International Law, War. seven edition, 1944, p. 242.)

It is therefore, evident that the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction
against the petitioner, imposing upon him the penalty of life imprisonment, was good and valid, since it was
within the admitted power or competence of the belligerent occupant to promulgate the law penalizing the
crime of which petitioner was convicted.

(3) The last question is the legal effect of the reoccupation of the Philippines and restoration of the
Commonwealth Government; that is, whether or not, by the principle of postliminy, the punitive sentence
which petitioner is now serving fell through or ceased to be valid from that time.

In order to resolve this last question, it is not necessary to enter into an elaborate discussion on the matter. It
is sufficient to quote the opinion on the subject of several international jurist and our recent decision in the
case of Co Kim Cham vs. Valdez Tan Keh and Dizon, supra.

Hall, commenting on the effect of the principle of postliminy upon sentences of the tribunals continued or
created by the belligerent occupant, opines "that judicial acts done under his control, when they are not of a
political complexion, administrative acts so done, to the extent that they take effect during the continuance of
his control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good. . . . Political acts on the other hand fall through as of course, whether they
introduce any positive change into the organization of the country, or whether they only suspend the working
of that already in existence. The execution also of punitive sentences ceases as of course when they have
had reference to acts not criminal by the municipal law of the state, such for example as acts directed against
the security or control of the invader." (Hall's International Law, seventh edition, p. 518.)

Westlake, speaking of the duration of the validity of punitive sentences for offenses such as the one in
question, which is within the admitted power or competence of the belligerent occupant to punish, says that:
"To the extent to which the legal power of the occupant is admitted he can make law for the duration of his
occupation. Like any other legislator he is morally subject to the duty of giving sufficient notice of his
enactments or regulations, not indeed so as to be debarred from carrying out his will without notice, when
required by military necessity and so far as practically carrying out his will can be distinguished from
punishment, but always remembering that to punish for breach of a regulation a person who was justifiably
ignorant of it would be outrageous. But the law made by the occupant within his admitted power, whether
morally justifiable or not, will bind any member of the occupied population as against any other member of it,
and will bind as between them all and their national government, so far as it produces an effect during the
occupation. When the occupation comes to an end and the authority of the national government is restored,
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either by the progress of operations during the war or by the conclusion of a peace, no redress can be had for
what has been actually carried out but nothing further can follow from the occupant's legislation. A prisoner
detained under it must be released, and no civil right conferred by it can be further enforced. The enemy's law
depends on him for enforcement as well as for enactment. The invaded state is not subject to the indignity of
being obliged to execute his commands." (Westlake, International Law, Part II, War, pp. 97, 98.)

And Wheaton, who, as above stated, considers as war crimes such offenses as those penalized in Ordinance
No. 7 and Act No. 65, says: "In general, the acts of the occupant possess legal validity, and under
international law should not be abrogated by the subsequent government. But this rule does not necessarily
apply to acts that exceed the occupant's power (e. g., alienation of the domains of the State or the sovereign),
to sentences for 'war treason' and 'war crimes,' to acts of a political character, and to those that operate
beyond the period of occupation. When occupation ceases, no reparation is legally due for what has already
been carried out." (Wheaton's International Law, supra, p. 245.)

We have already held in our recent decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon,
supra, that all judgment of political complexion of the courts during the Japanese regime, ceased to be valid
upon reoccupation of the islands by virtue of the principle or right of postliminium. Applying that doctrine to the
present case, the sentence which convicted the petitioner of a crime of a political complexion must be
considered as having ceased to be valid ipso facto upon the reoccupation or liberation of the Philippines by
General Douglas MacArthur.

It may not be amiss to say in this connection that it is not necessary and proper to invoke the proclamation of
General Douglas MacArthur declaring null and void all, laws, among them Act No. 65, of the so-called
Republic of the Philippines under which petitioner was convicted, in order to give retroactive effect to the
nullification of said penal act and invalidate the punitive sentence rendered against petitioner under said law,
a sentence which, before the proclamation, had already become null and of no effect.

We therefore hold that the punitive sentence under consideration, although good and valid during the military
occupation of the of the Philippines by the Japanese forces, ceased to be good and valid ipso facto upon the
reoccupation of these Islands and the restoration therein of the Commonwealth Government.

In view of all the foregoing, the writ of habeas corpus prayed for is hereby granted and it is ordered that the
petitioner be released forthwith, without pronouncement as to costs. So ordered.

Jaranilla, Pablo and Bengzon, JJ., concur.

Moran, C.J., concur in the result.

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ANASTACIO LAUREL, petitioner, vs. ERIBERTO MISA, respondent.

1947-01-30 | G.R. No. L-409

RESOLUTION

In G. R. No. L-409, Anastacio Laurel vs. Eriberto Misa, etc., the Court, acting on the petition for habeas corpus filed by Anastacio Laurel
and based on the theory that a Filipino citizen who adhered to the enemy giving the latter aid and comfort during the Japanese
occupation cannot be prosecuted for the crime of treason defined and penalized by article 114 of the Revised Penal Code, for the
reason (1) that the sovereignty of the legitimate government in the Philippines and, consequently, the correlative allegiance of Filipino
citizens thereto was then suspended; and (2) that there was a change of sovereignty over these Islands upon the proclamation of the
Philippine Republic:

(1) Considering that a citizen or subject owes, not a qualified and temporary, but an absolute and permanent allegiance, which consists
in the obligation of fidelity and obedience to his government or sovereign; and that this absolute and permanent allegiance should not be
confused with the qualified and temporary allegiance which of foreigner owes to the government or sovereign of the territory wherein he
resides, so long as he remains there, in return for the protection he receives, and which consists in the obedience to the laws of the
government or sovereign. (Carlisle vs. United States, 21 Law. ed., 42g; Secretary of State Webster Report to the President of the United
States in the case of Thraser, 6 Web. Works, 526);

Considering that the absolute and permanent allegiance of the inhabitants of a territory occupied by the enemy to their legitimate
government or sovereign is not abrogated or severed by the enemy occupation, because the sovereignty of the government or
sovereign de jure is not transferred thereby to the occupier, as we have held in the cases of Co Kim Cham v~. Valdez Tan Keh and
Dizon (75 Phil., 113) and of Peralta vs. Director of Prisons (75 Phil., 285), and if it is not transferred to the occupant it must necessarily
remain vested in the legitimate government; that the sovereignty vested in the titular government (which is the supreme power which
governs a body politic or society which constitute the state) must be distinguished from the exercise of the rights inherent thereto, and
may be destroyed, or severed and transferred to another, but it cannot be suspended because the existence of sovereignty cannot be
suspended without putting it out of existence or divesting the possessor thereof at least during the so-called period of suspension; that
what may be suspended is the exercise of the rights of sovereignty with the control and government of the territory occupied by the
enemy passes temporarily to the occupant; that the subsistence of the sovereignty of the legitimate government in a territory occupied
by the military forces of the enemy during the war, 'although the former is in fact prevented from exercising the supremacy over them' is
one of the 'rules of international law of our times'; (II Oppenheim, 6th Lauterpach ed., 1944, p. 482), recognized, by necessary
implication, in articles 23, 44, 45, and 52 of Hague Regulation; and that, as a corollary of the conclusion that the sovereignty itself is not
suspended and subsists during the enemy occupation, the allegiance of the inhabitants to their legitimate government or sovereign
subsists, and therefore there is no such thing as suspended allegiance, the basic theory on which the whole fabric of the petitioner's
contention rests;

Considering that the conclusion that the sovereignty of the United States was suspended in Castine, set forth in the decision in the case
of United States vs. Rice, 4 Wheaton, 246, 253, decided in 1819, and quoted in our decision in the cases of Co Kim Cham vs. Valdez
Tan Keh and Dizon and Peralta vs. Director of Prisons, supra, in connection with the question, not of sovereignty, but of the existence of
a government de facto therein and its power to promulgate rules and laws in the occupied territory, must have been based, either on the
theory adopted subsequently in the Hague Convention of 1907, that the military occupation of an enemy territory does not transfer the
sovereignty, or on the old theory that such occupation transfers the sovereignty to the occupant; that, in the first case, the word
'sovereignty' used therein should be construed to mean the exercise of the rights of sovereignty, because as this remains vested in the
legitimate government and is not transferred to the occupier, it cannot be suspended without putting it out of existence or divesting said
government thereof; and that in the second case, that is, if the said conclusion or doctrine refers to the suspension of the sovereignty
itself, it has become obsolete after the adoption of the Hague Regulations in 1907, and therefore it can not be applied to the present
case;

Considering that even adopting the words 'temporary allegiance,' repudiated by Oppenheim and other publicists, as descriptive of the

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relations borne by the inhabitants of the territory occupied by the enemy toward the military government established over them, such
allegiance may, at most, be considered similar to the temporary allegiance which a foreigner owes to the government or sovereign of
the territory wherein he resides in return for the protection he receives as above described, and does not do away with the absolute and
permanent allegiance which the citizen residing in a foreign country owes to his own government or sovereign; that just as a citizen or
subject of a government or sovereign may be prosecuted for and convicted of treason committed in a foreign country, in the same way
an inhabitant of a territory occupied by the military forces of the enemy may commit treason against his own legitimate government or
sovereign if he adheres to the enemies of the latter by giving them aid comfort; and that if the allegiance of a citizen or subject to his
government or sovereign is nothing more than obedience to its laws in return for the protection he receives, it would necessarily follow
that a citizen who resides in a foreign country or state would, on one hand, ipso facto acquire the citizenship thereof since he has to
obey, with certain exceptions, the laws of that country which enforce public order and regulate the social and commercial life, in return
for the protection he receives, and would, on the other hand, lose his original citizenship, because he would not be bound to obey most
of the laws of his own government or sovereign, and would not receive, while in a foreign country, the protection he is entitled to in his
own;

Considering that, as a corollary of the suspension of the exercise of rights of sovereignty by the legitimate government in the territory
occupied by the enemy military forces, because the authority of the legitimate power to govern has passed into the hands of the
occupant (Article 43, Hague Regulations), the political laws which prescribe the reciprocal rights, duties and obligation of government
and citizens, are suspended or in abeyance during military occupation (Co Kim Cham vs. Valdez Tan Keh and Dizon, supra), for the
only reason that as they exclusively bear relation to the ousted legitimate government, they are inoperative or not applicable to the
government established by the occupant; that the crimes against national security, such as treason and espionage, inciting to war,
correspondence with hostile country, flight to enemy's country, as well as those against public order, such as rebellion, sedition, and
disloyalty, illegal possession of firearms, which are of political complexion because they bear relation to, and are penalized by our
Revised Penal Code as crimes against the legitimate government, are also suspended or become inapplicable as against the occupant,
because they can not be committed against the latter (Peralta 1.S. Director of Prisons, supra); and that, while the offenses against pubic
order to be preserved by the legitimate government were inapplicable as offenses against the invader for the reason above stated,
unless adopted by him, were also ill operative as against the ousted government for the latter was not responsible for the preservation
of the public order in the occupied territory, yet article 114 of the said Revised Penal Code, was applicable to treason committed against
the national security of the legitimate government, because the inhabitants of the occupied territory were still bound by their allegiance
to the latter during the enemy occupation;

Considering that, although the military occupant is enjoined to respect or continue in force, unless absolutely prevented by the
circumstances, those laws that enforce public order and regulate the social and commercial life of the country, he has, nevertheless, all
the powers of a de facto government and may, at his pleasure, either change the existing laws or make new ones when the exigencies
of the military service demand such action, that is, when it is necessary for the occupier to do so for the control of the country and the
protection of his army, subject to the restrictions or limitations imposed by the Hague Regulations, the usages established by civilized
nations, the laws of humanity and the requirements of public conscience ( Peralta vs. Director of Prisons, supra; 1940 United States
Rules of Land Warfare 76, 77); and that, consequently, all acts of the military occupant dictated within these limitations are obligatory
upon the inhabitants of the territory, who are bound to obey them, and the laws of the legitimate government which have not been
adopted, as well and those which, though continued in force, are in conflict with such laws and orders of the occupier, shall be
considered as suspended or not in force and binding upon said inhabitants;

Considering that, since the preservation of the allegiance or the obligation of fidelity and obedience of a citizen or subject to his
government or sovereign does not demand from him a positive action, but only passive attitude or forbearance from adhering to the
enemy by giving the latter aid and comfort, the occupant has no power, as a corollary of the preceding consideration, to repeal or
suspend the operation of the law of treason, essential for the preservation of the allegiance owed by the inhabitants to their legitimate
government, or compel them to adhere and give aid and comfort to him; because it is evident that such action is not demanded by the
exigencies of the military service or not necessary for the control of the inhabitants and the safety and protection of his army, and
because it is tantamount to practically transfer temporarily to the occupant their allegiance to the titular government or sovereign; and
that, therefore, if an inhabitant of the occupied territory were compelled illegally by the military occupant, through force, threat or
intimidation, to give him aid and comfort, the former may lawfully resist and die if necessary as a hero, or submit thereto without
becoming a traitor;

Considering that adoption of the petitioner's theory of suspended allegiance would lead to disastrous consequences for small and weak
nations or states, and would be repugnant to the laws of humanity and requirements of public conscience, for it would allow invaders to

| Page 2 of 3
legally recruit or enlist the Quisling inhabitants of the occupied territory to fight against their own government without the latter incurring
the risk of being prosecuted for treason, and even compel those who are not to aid them in their military operation against the resisting
enemy forces in order to completely subdue and conquer the whole nation, and thus deprive them all of their own independence or
sovereignty - such theory would sanction the action of invaders in forcing the people of a free and sovereign country to be a party i n the
nefarious task of depriving themselves of their own freedom and independence and repressing the exercise by them of their own
sovereignty; in other words, to commit a political suicide;

(2) Considering that the crime of treason against the government of the Philippines defined and penalized in article 114 of the Penal
Code, though originally intended to be a crime against said government as then organized by authority of the sovereign people of the
United States, exercised through their authorized representative, the Congress and the President of the United States, was made, upon
the establishment of the Commonwealth Government in 1935 , a crime against the Government of the Philippines established by
authority of the people of the Philippines, in whom the sovereignty resides according to section 1, Article II, of the Constitution of the
Philippines, by virtue of the provision of section 2, Article XVI thereof, which provides that all laws of the Philippine Islands . . . shall
remain operative, unless inconsistent with this Constitution . . . and all references in such laws to the Government or officials of the
Philippine Islands, shall be construed, in so far as applicable, to refer to the Government and corresponding officials under this
Constitution;'

Considering that the Commonwealth of the Philippines was a sovereign government, though not absolute but subject to certain
limitations imposed in the Independence Act and incorporated as Ordinance appended to our Constitution, was recognized not only by
the Legislative Department or Congress of the United States in approving the Independence Law above quoted and the Constitution of
the Philippines, which contains the declaration that 'Sovereignty resides in the people and all government authority emanates from them'
(section 1, Article II), but also by the Executive Department of the United States; that the late President Roosevelt in one of his
messages to Congress said, among others, 'As I stated on August 12, 1943, the United States in practice regards the Philippines as
having now the status as a government of other independent nations - in fact all the attributes of complete and respected nationhood'
(Congressional Record, Vol. 29, part 6, page 8173); and that it is a principle upheld by the Supreme Court of the United States in many
cases, among them in the case of Jones vs. United States (137 U. S., 202; 34 Law. ed., 691, 696) that the question of sovereignty is 'a
purely political question, the determination of which by the legislative and executive departments of any government conclusively binds
the judges, as well as all other officers, citizens and subjects of the country.'

Considering that section I (1) of the Ordinance appended to the Constitution which provides that pending the final and complete
withdrawal of the sovereignty of the United States 'All citizens of the Philippines shall owe allegiance to the United States', was one of
the few limitations of the sovereignty of the Filipino people retained by the United States, but these limitations do not do away or are not
inconsistent with said sovereignty, in the same way that the people of each State of the Union preserves its own sovereignty although
limited by that of the United States conferred upon the latter by the States; that just as to reason may be committed against the Federal
as well as against the State Government, in the same way treason may have been committed during the Japanese occupation against
the sovereignty of the United States as well as against the sovereignty of the Philippine Commonwealth; and that the change of our form
of government from Commonwealth to Republic does not affect the prosecution of those charged with the crime of treason committed
during the Commonwealth, because it is an offense against the same government and the same sovereign people, for Article XVIII of
our Constitution provides that 'The government established by this Constitution shall be known as the Commonwealth of the Philippines.
Upon the final and complete withdrawal of the sovereignty of the United States and the proclamation of Philippine independence, the
Commonwealth of the Philippines shall thenceforth be known as the Republic of the Philippines';

"This Court resolves, without prejudice to write later on a more extended opinion, to deny the petitioner's petition, as it is hereby denied,
for the reasons above set forth and for others to be stated in the said opinion, without prejudice to concurring opinion therein, if any.
Messrs. Justices Paras and Hontiveros dissent in a separate opinion. Mr. Justice Perfecto concurs in a separate opinion."

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