Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 14129

July 31, 1962

PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
GUILLERMO MANANTAN, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant.
Padilla Law Office for defendant-appellee.
REGALA, J.:
This is an appeal of the Solicitor General from the order of
the Court of First Instance of Pangasinan dismissing the
information against the defendant.
The records show that the statement of the case and the
facts, as recited in the brief of plaintiff-appellant, is
complete and accurate. The same is, consequently, here
adopted, to wit:
In an information filed by the Provincial Fiscal of
Pangasinan in the Court of First Instance of that
Province, defendant Guillermo Manantan was
charged with a violation Section 54 of the Revised
Election
Code.
A
preliminary
investigation
conducted by said court resulted in the finding a
probable cause that the crime charged as
committed by defendant. Thereafter, the trial

started upon defendant's plea of not guilty, the

defense moved to dismiss the information on the
ground that as justice of the peace the defendant is
one of the officers enumerated in Section 54 of the
Revised Election Code. The lower court denied the
motion to dismiss holding that a justice of the peace
is within the purview Section 54. A second motion
was filed by defense counsel who cited in support
thereof the decision of the Court of Appeals in
People vs. Macaraeg, (CA-G.R. No. 15613-R, 54 Off.
Gaz., pp. 1873-76) where it was held that a justice
of the peace is excluded from the prohibition of
Section 54 of the Revised Election Code. Acting on
this second motion to dismiss, the answer of the
prosecution, the reply of the defense, and the
opposition of the prosecution, the lower court
dismissed the information against the accused upon
the authority of the ruling in the case cited by the
defense.
Both parties are submitting this case upon the
determination of this single question of law: Is a justice the
peace included in the prohibition of Section 54 of the
Revised Election Code?
Section 54 of the said Code reads:
No justice, judge, fiscal, treasurer, or assessor of
any province, no officer or employee of the Army,
no member of the national, provincial, city,
municipal or rural police force and no classified civil
service officer or employee shall aid any candidate,
or exert any influence in any manner in a election or

take part therein, except to vote, if entitled thereto,

or to preserve public peace, if he is a peace officer.
Defendant-appellee argues that a justice of the peace is
not comprehended among the officers enumerated in
Section 54 of the Revised Election Code. He submits the
aforecited section was taken from Section 449 of the
Revised Administrative Code, which provided the following:
SEC. 449. Persons prohibited from influencing
elections. No judge of the First Instance, justice of
the peace, or treasurer, fiscal or assessor of any
province and no officer or employee of the
Philippine Constabulary, or any Bureau or employee
of the classified civil service, shall aid any candidate
or exert influence in any manner in any election or
take part therein otherwise than exercising the right
to vote.
When, therefore, section 54 of the Revised Election Code
omitted the words "justice of the peace," the omission
revealed the intention of the Legislature to exclude
justices of the peace from its operation.
The above argument overlooks one fundamental fact. It is
to be noted that under Section 449 of the Revised
Administrative Code, the word "judge" was modified or
qualified by the phrase "of First instance", while under
Section 54 of the Revised Election Code, no such
modification exists. In other words, justices of the peace
were expressly included in Section 449 of the Revised
Administrative Code because the kinds of judges therein
were specified, i.e., judge of the First Instance and justice
of the peace. In Section 54, however, there was no

necessity therefore to include justices of the peace in the

enumeration because the legislature had availed itself of
the more generic and broader term, "judge." It was a term
not modified by any word or phrase and was intended to
comprehend all kinds of judges, like judges of the courts of
First Instance, Judges of the courts of Agrarian Relations,
judges of the courts of Industrial Relations, and justices of
the peace.
It is a well known fact that a justice of the peace is
sometimes addressed as "judge" in this jurisdiction. It is
because a justice of the peace is indeed a judge. A "judge"
is a public officer, who, by virtue of his office, is clothed
with judicial authority (U.S. v. Clark, 25 Fed. Cas. 441,
422). According to Bouvier Law Dictionary, "a judge is a
public officer lawfully appointed to decide litigated
questions according to law. In its most extensive sense the
term includes all officers appointed to decide litigated
questions while acting in that capacity, including justices
of the peace, and even jurors, it is said, who are judges of
facts."
A review of the history of the Revised Election Code will
help to justify and clarify the above conclusion.
The first election law in the Philippines was Act 1582
enacted by the Philippine Commission in 1907, and which
was later amended by Act. Nos. 1669, 1709, 1726 and
1768. (Of these 4 amendments, however, only Act No.
1709 has a relation to the discussion of the instant case as
shall be shown later.) Act No. 1582, with its subsequent 4
amendments were later on incorporated Chapter 18 of the
Administrative Code. Under the Philippine Legislature,
several amendments were made through the passage of

Acts Nos. 2310, 3336 and 3387. (Again, of these last 3

amendments, only Act No. 3587 has pertinent to the case
at bar as shall be seen later.) During the time of the
Commonwealth,
the
National
Assembly
passed
Commonwealth Act No. 23 and later on enacted
Commonwealth Act No. 357, which was the law enforced
until June 1947, when the Revised Election Code was
approved. Included as its basic provisions are the
provisions of Commonwealth Acts Nos. 233, 357, 605, 666,
657. The present Code was further amended by Republic
Acts Nos. 599, 867, 2242 and again, during the session of
Congress in 1960, amended by Rep. Acts Nos. 3036 and
3038. In the history of our election law, the following
should be noted:
Under Act 1582, Section 29, it was provided:
No public officer shall offer himself as a candidate
for elections, nor shall he be eligible during the time
that he holds said public office to election at any
municipal, provincial or Assembly election, except
for reelection to the position which he may be
holding, and no judge of the First Instance, justice
of the peace, provincial fiscal, or officer or
employee of the Philippine Constabulary or of the
Bureau of Education shall aid any candidate or
influence in any manner or take part in any
municipal, provincial, or Assembly election under
the penalty of being deprived of his office and being
disqualified to hold any public office whatsoever for
a term of 5 year: Provide, however, That the
foregoing provisions shall not be construe to
deprive any person otherwise qualified of the right
to vote it any election." (Enacted January 9, 1907;
Took effect on January 15, 1907.)

Then, in Act 1709, Sec. 6, it was likewise provided:

. . . No judge of the First Instance, Justice of the
peace provincial fiscal or officer or employee of the
Bureau of Constabulary or of the Bureau of
Education shall aid any candidate or influence in
any manner to take part in any municipal provincial
or Assembly election. Any person violating the
provisions of this section shall be deprived of his
office or employment and shall be disqualified to
hold any public office or employment whatever for a
term of 5 years, Provided, however, that the
foregoing provisions shall not be construed to
deprive any person otherwise qualified of the right
to vote at any election. (Enacted on August 31,
1907; Took effect on September 15, 1907.)
Again, when the existing election laws were incorporated
in the Administrative Code on March 10, 1917, the
provisions in question read:
SEC. 449. Persons prohibited from influencing
elections. No judge of the First Instance, justice of
the peace, or treasurer, fiscal or assessor of any
province and no officer or employee of the
Philippine Constabulary or any Bureau or employee
of the classified civil service, shall aid any candidate
or exert influence in any manner in any election or
take part therein otherwise than exercising the right
to vote. (Emphasis supplied)
After the Administrative Code, the next
legislation was Act No. 3387. This Act reads:

pertinent

SEC. 2636. Officers and employees meddling with

the election. Any judge of the First Instance,
justice of the peace, treasurer, fiscal or assessor of
any province, any officer or employee of the
Philippine Constabulary or of the police of any
municipality, or any officer or employee of any
Bureau of the classified civil service, who aids any
candidate or violated in any manner the provisions
of this section or takes part in any election
otherwise by exercising the right to vote, shall be
punished by a fine of not less than P100.00 nor
more than P2,000.00, or by imprisonment for not
less than 2 months nor more than 2 years, and in all
cases by disqualification from public office and
deprivation of the right of suffrage for a period of 5
years. (Approved December 3, 1927.) (Emphasis
supplied.)

This last law was the legislation from which Section 54 of

the Revised Election Code was taken.

Subsequently, however, Commonwealth Act No. 357 was

enacted on August 22, 1938. This law provided in Section
48:

The
above-mentioned
pattern
of
congressional
phraseology would seem to justify the conclusion that
when the legislature omitted the words "justice of the
peace" in Rep. Act No. 180, it did not intend to exempt the
said officer from its operation. Rather, it had considered
the said officer as already comprehended in the broader
term "judge".

SEC. 48. Active Interventation of Public Officers and

Employees. No justice, judge, fiscal, treasurer or
assessor of any province, no officer or employee of
the Army, the Constabulary of the national,
provincial, municipal or rural police, and no
classified civil service officer or employee shall aid
any candidate, nor exert influence in any manner in
any election nor take part therein, except to vote, if
entitled thereto, or to preserve public peace, if he is
a peace officer.

It will thus be observed from the foregoing narration of the

legislative development or history of Section 54 of the
Revised Election Code that the first omission of the word
"justice of the peace" was effected in Section 48 of
Commonwealth Act No. 357 and not in the present code as
averred by defendant-appellee. Note carefully, however,
that in the two instances when the words "justice of the
peace" were omitted (in Com. Act No. 357 and Rep. Act No.
180), the word "judge" which preceded in the enumeration
did not carry the qualification "of the First Instance." In
other words, whenever the word "judge" was qualified by
the phrase "of the First Instance", the words "justice of the
peace" would follow; however, if the law simply said
"judge," the words "justice of the peace" were omitted.

It is unfortunate and regrettable that the last World War

had destroyed congressional records which might have
offered some explanation of the discussion of Com. Act No.
357 which legislation, as indicated above, has eliminated
for the first time the words "justice of the peace." Having
been completely destroyed, all efforts to seek deeper and
additional clarifications from these records proved futile.
Nevertheless, the conclusions drawn from the historical

background of Rep. Act No. 180 is sufficiently borne out by

reason hid equity.
Defendant further argues that he cannot possibly be
among the officers enumerated in Section 54 inasmuch as
under that said section, the word "judge" is modified or
qualified by the phrase "of any province." The last
mentioned phrase, defendant submits, cannot then refer
to a justice of the peace since the latter is not an officer of
a province but of a municipality.
Defendant's argument in that respect is too strained. If it is
true that the phrase "of any province" necessarily removes
justices of the peace from the enumeration for the reason
that they are municipal and not provincial officials, then
the same thing may be said of the Justices of the Supreme
Court and of the Court of Appeals. They are national
officials. Yet, can there be any doubt that Justices of the
Supreme Court and of the Court of Appeals are not
included in the prohibition? The more sensible and logical
interpretation of the said phrase is that it qualifies fiscals,
treasurers and assessors who are generally known as
provincial officers.
The rule of "casus omisus pro omisso habendus est" is
likewise invoked by the defendant-appellee. Under the said
rule, a person, object or thing omitted from an
enumeration must be held to have been omitted
intentionally. If that rule is applicable to the present, then
indeed, justices of the peace must be held to have been
intentionally and deliberately exempted from the operation
of Section 54 of the Revised Election Code.

The rule has no applicability to the case at bar. The maxim

"casus omisus" can operate and apply only if and when the
omission has been clearly established. In the case under
consideration, it has already been shown that the
legislature did not exclude or omit justices of the peace
from the enumeration of officers precluded from engaging
in partisan political activities. Rather, they were merely
called by another term. In the new law, or Section 54 of
the Revised Election Code, justices of the peace were just
called "judges."
In insisting on the application of the rule of "casus omisus"
to this case, defendant-appellee cites authorities to the
effect that the said rule, being restrictive in nature, has
more particular application to statutes that should be
strictly construed. It is pointed out that Section 54 must be
strictly construed against the government since
proceedings under it are criminal in nature and the
jurisprudence is settled that penal statutes should be
strictly interpreted against the state.
Amplifying on the above argument regarding strict
interpretation of penal statutes, defendant asserts that the
spirit of fair play and due process demand such strict
construction in order to give "fair warning of what the law
intends to do, if a certain line is passed, in language that
the common world will understand." (Justice Holmes, in
McBoyle v. U.S., 283 U.S. 25, L. Ed. 816).
The application of the rule of "casus omisus" does not
proceed from the mere fact that a case is criminal in
nature, but rather from a reasonable certainty that a
particular person, object or thing has been omitted from a
legislative enumeration. In the present case, and for

reasons already mentioned, there has been no such

omission. There has only been a substitution of terms.

also Ernest Brunchen, Interpretation of the Written Law

(1915) 25 Yale L.J. 129.)

The rule that penal statutes are given a strict construction

is not the only factor controlling the interpretation of such
laws; instead, the rule merely serves as an additional,
single factor to be considered as an aid in determining the
meaning of penal laws. This has been recognized time and
again by decisions of various courts. (3 Sutherland,
Statutory Construction, p. 56.) Thus, cases will frequently
be found enunciating the principle that the intent of the
legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is
to be noted that a strict construction should not be
permitted to defeat the policy and purposes of the statute
(Ash Sheep Co. v. U.S., 252 U.S. 159). The court may
consider the spirit and reason of a statute, as in this
particular instance, where a literal meaning would lead to
absurdity, contradiction, injustice, or would defeat the
clear purpose of the law makers (Crawford, Interpretation
of Laws, Sec. 78, p. 294). A Federal District court in the
U.S. has well said:

Another reason in support of the conclusion reached herein

is the fact that the purpose of the statute is to enlarge the
officers within its purview. Justices of the Supreme Court,
the Court of Appeals, and various judges, such as the
judges of the Court of Industrial Relations, judges of the
Court of Agrarian Relations, etc., who were not included in
the prohibition under the old statute, are now within its
encompass. If such were the evident purpose, can the
legislature intend to eliminate the justice of the peace
within its orbit? Certainly not. This point is fully explained
in the brief of the Solicitor General, to wit:

The strict construction of a criminal statute does not

mean such construction of it as to deprive it of the
meaning intended. Penal statutes must be
construed in the sense which best harmonizes with
their intent and purpose. (U.S. v. Betteridge 43 F.
Supp. 53, 56, cited in 3 Sutherland Statutory
Construction 56.)
As well stated by the Supreme Court of the United States,
the language of criminal statutes, frequently, has been
narrowed where the letter includes situations inconsistent
with the legislative plan (U.S. v. Katz, 271 U.S. 354; See

On the other hand, when the legislature eliminated

the phrases "Judge of First Instance" and justice of
the peace", found in Section 449 of the Revised
Administrative Code, and used "judge" in lieu
thereof, the obvious intention was to include in the
scope of the term not just one class of judges but all
judges, whether of first Instance justices of the
peace or special courts, such as judges of the Court
of Industrial Relations. . . . .
The weakest link in our judicial system is the justice
of the peace court, and to so construe the law as to
allow a judge thereof to engage in partisan political
activities would weaken rather than strengthen the
judiciary. On the other hand, there are cogent
reasons found in the Revised Election Code itself
why justices of the peace should be prohibited from
electioneering. Along with Justices of the appellate
courts and judges of the Court of First Instance,

they are given authority and jurisdiction over

certain election cases (See Secs. 103, 104, 117123). Justices of the peace are authorized to hear
and decided inclusion and exclusion cases, and if
they are permitted to campaign for candidates for
an elective office the impartiality of their decisions
in election cases would be open to serious doubt.
We do not believe that the legislature had, in
Section 54 of the Revised Election Code, intended to
create such an unfortunate situation. (pp. 708,
Appellant's Brief.)
Another factor which fortifies the conclusion reached
herein is the fact that the administrative or executive
department has regarded justices of the peace within the
purview of Section 54 of the Revised Election Code.
In Tranquilino O. Calo, Jr. v. The Executive Secretary, the
Secretary of Justice, etc. (G.R. No. L-12601), this Court did
not give due course to the petition for certiorari and
prohibition with preliminary injunction against the
respondents, for not setting aside, among others,
Administrative Order No. 237, dated March 31, 1957, of
the President of the Philippines, dismissing the petitioner
as justice of the peace of Carmen, Agusan. It is worthy of
note that one of the causes of the separation of the
petitioner was the fact that he was found guilty in
engaging in electioneering, contrary to the provisions of
the Election Code.
Defendant-appellee calls the attention of this Court to
House Bill No. 2676, which was filed on January 25, 1955.
In that proposed legislation, under Section 56, justices of
the peace are already expressly included among the

officers enjoined from active political participation. The

argument is that with the filing of the said House Bill,
Congress impliedly acknowledged that existing laws do not
prohibit justices of the peace from partisan political
activities.
The argument is unacceptable. To begin with, House Bill
No. 2676 was a proposed amendment to Rep. Act No. 180
as a whole and not merely to section 54 of said Rep. Act
No. 180. In other words, House Bill No. 2676 was a
proposed re-codification of the existing election laws at the
time that it was filed. Besides, the proposed amendment,
until it has become a law, cannot be considered to contain
or manifest any legislative intent. If the motives, opinions,
and the reasons expressed by the individual members of
the legislature even in debates, cannot be properly taken
into consideration in ascertaining the meaning of a statute
(Crawford, Statutory Construction, Sec. 213, pp. 375-376),
a fortiori what weight can We give to a mere draft of a bill.
On law reason and public policy, defendant-appellee's
contention that justices of the peace are not covered by
the injunction of Section 54 must be rejected. To accept it
is to render ineffective a policy so clearly and emphatically
laid down by the legislature.
Our law-making body has consistently prohibited justices
of the peace from participating in partisan politics. They
were prohibited under the old Election Law since 1907 (Act
No. 1582 and Act No. 1709). Likewise, they were so
enjoined by the Revised Administrative Code. Another
which expressed the prohibition to them was Act No. 3387,
and later, Com. Act No. 357.

Lastly, it is observed that both the Court of Appeals and

the trial court applied the rule of "expressio unius, est
exclusion alterius" in arriving at the conclusion that
justices of the peace are not covered by Section 54. Said
the Court of Appeals: "Anyway, guided by the rule of
exclusion, otherwise known as expressio unius est
exclusion alterius, it would not be beyond reason to infer
that there was an intention of omitting the term "justice of
the peace from Section 54 of the Revised Election Code. . .
."
The rule has no application. If the legislature had intended
to exclude a justice of the peace from the purview of
Section 54, neither the trial court nor the Court of Appeals
has given the reason for the exclusion. Indeed, there
appears no reason for the alleged change. Hence, the rule
of expressio unius est exclusion alterius has been
erroneously applied. (Appellant's Brief, p. 6.)
Where a statute appears on its face to limit the
operation of its provisions to particular persons or
things by enumerating them, but no reason exists
why other persons or things not so enumerated
should not have been included, and manifest
injustice will follow by not so including them, the
maxim expressio unius est exclusion alterius,
should not be invoked. (Blevins v. Mullally 135 p.
307, 22 Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered
by the trial court should be set aside and this case is
remanded for trial on the merits.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion,

Barrera and Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.

This is another litigation regarding the validity of the much

controverted Original Certificate of Title No. 735 covering
the Santa Mesa and D Estates of the Tuason mayorazgo or
Entail with areas of 877 (879) and 1,625 hectares,
respectively (Barrette vs. Tuason, 50 Phil. 888; Benin
case, infra).
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-33140 October 23, 1978
J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO
A. TUASON, TERESA TUASON, CELSO S. TUASON and
SEVERO A. TUASON, petitioners,
vs.
HON. HERMINIO C. MARIANO, Presiding Judge of the
Court of First Instance of Rizal MANUELA AQUIAL,
MARIA AQUIAL, Spouses JOSE M. CORDOVA and
SATURNINA C. CORDOVA, respondents.
Sison Law Office and Senensio O. Ortile for petitioners.
Hill & Associates Law Office for respondents Aquials.
Antonio E. Pesigan for respondents Cordovas.

AQUINO, J.:

On October 1, 1965, Manuela Aquial and Maria Aquial filed

a complaint in forma pauperis in the Court of First Instance
of Rizal Pasig Branch X, wherein they prayed that they be
declared the owners of a parcel of land located at Balara,
Marikina, Rizal (now Quezon City) and bounded on the
north by Sapang Mapalad, on the south by the land of
Eladio, Tiburcio on the east by Sapang Kolotkolotan, and
on the west by Sapang Kuliat The land, which has an area
of three hundred eighty-three quiones was allegedly
acquired by their father by means of a Spanish title issued
to him on May 10, 1877 (Civil Case No. 8943).
They alleged that sometime in 1960, or after J. M. Tuason
& Co., Inc. had illegally entered upon that land, they
discovered that it had been fraudulently or erroneously
included in OCT No. 735 of the Registry of Deeds of Rizal
and that it was registered in the names of defendants
Mariano, Teresa, Juan, Demetrio and Augusta all surnamed
Tuason pursuant to a decree issued on July 6. 1914 in Case
No. 7681 of the Court of Land Registration.
They further alleged that transfer certificates of title,
derived from OCT No. 735, were issued to defendants J. M.
Tuason & Co., Inc., University of the Philippines and
National Waterworks and Sewerage Authority (Nawasa)
which leased a portion of its land to defendant Capitol Golf
Club.

Plaintiffs Aquial prayed that OCT No. 735 and the titles
derived therefrom be declared void due to certain
irregularities in the land registration proceeding. They
asked for damages.

the proper bond, a writ of preliminary injunction was

issued. Respondents Aquial and Cordova answered the
petition. The parties, except the Aquials, filed memoranda
in lieu of oral argument.

Defendant J.M. Tuason & Co., Inc. filed a motion to dismiss

on the grounds of lack of jurisdiction, improper venue,
prescription, laches and prior judgment. The plaintiffs
opposed that motion. The lower court denied it. The
grounds of the motion to dismiss were pleaded as
affirmative defenses in the answer of defendants Tuason
and J. M. Tuason & Co., Inc. They insisted that a
preliminary hearing be held on those defenses.

The issue is whether OCT No. 735 and the titles derived
therefrom can be questioned at this late hour by
respondents Aquial and Cordova.
The supposed
irregularities in the land registration proceeding, which led
to the issuance of the decree upon which OCT. No. 735 was
based, are the same issues raised in Civil Cases Nos. 3621,
3622 and 3623 of the lower court. The 1965 decision of
Judge Eulogio Mencias in those cases, in validating OCT
No. 735, is annexed to the complaint of the Aquials. It is
cited by them to support their support their action and it
might have encouraged them to ventilate their action in
court.

On January 25, 1967, the spouses Jose M. Cordova and

Saturnina C. Cordova, who had bought eleven hectares of
the disputed land from the plaintiffs, were allowed to
intervene in the case.
On September 5, 1970, the lower court issued an order
requiring the parties the Register of Deeds of Rizal to
produce in court on October 16, 1970 OCT No. 735 and
certain transfer certificates of title derived from that first
or basic title. Later, the court required the production in
court of the plan of the land covered by OCT No. 735
allegedly for the purpose of determining whether the lands
claimed by the plaintiffs and the intervenors are included
therein.
On February 11, 1971, the Tuason and J. M. Tuason & Co.,
Inc. filed the instant civil actions of certiorari and
prohibition praying, inter alia, that the trial court be
ordered to dismiss the complaint and enjoined from
proceeding in the said case. After the petitioners had filed

On appeal to this Court, that decision was reversed and

the validity of OCT No. 735 and the titles derived
therefrom was once more upheld. (Benin vs. Tuason, L26127, Alcantara vs. Tuason, L-26128 and Pili vs. Tuason,
L-26129, all decided on June 28, 1974, 57 SCRA 531).
The ruling in the Benin, Alcantara and Pili cases was
applied in Mara, Inc. vs. Estrella, L-40511, July 25, 1975, 65
SCRA 471. That ruling is simply a reiteration or
confirmation of the holding in the following cases directly
or incidentally sustaining OCT No. 735: Bank of the P. I. vs.
Acua, 59 Phil. 183; Tiburcio vs. PHHC, 106 Phil.
447;Galvez and Tiburcio vs. Tuason y de la Paz, 119 Phil.
612; Alcantara vs. Tuason, 92 Phil. 796; Santiago vs. J. M.
Tuason & Co., Inc. 110 Phil. 16; J. M. Tuason & Co., Inc. vs.
Bolaos, 95 Phil. 106; J. M. Tuason & Co., Inc. vs. Santiago,

99 Phil. 615; J. M. Tuason & Co., Inc. vs. De Guzman, 99

Phil. 281; J. M. Tuason & Co., Inc. vs. Aguirre, 117 Phil.
110; J. M. Tuason & Co., Inc. vs. Macalindong, 116 Phil.
1227; J. M. Tuason & Co., Inc. vs. Magdangal, 114 Phil.
42; Varsity Hills, Inc. vs. Navarro, L-30889, February 29,
1972, 43 SCRA 503, and People's Homesite and Housing
Corporation vs. Mencias, L-24114, August 16, 1967, 20
SCRA 1031.
Considering the governing principle of stare decisis et non
quieta movere (follow past precedents and do not disturb
what has been settled) it becomes evident that
respondents Aquial and Cordova cannot maintain their
action in Civil Case No. 8943 without eroding the long
settled holding of the courts that OCT No. 735 is valid and
no longer open to attack.
It is against public policy that matters already decided on
the merits be relitigated again and again, consuming the
court's time and energies at the expense of other
litigants: Interest rei publicae ut finis sit litium." (Varsity
Hills, Inc. vs. Navarro, supra).
Finding the petition for certiorari and prohibition to be
meritorious, the trial court is directed to dismiss Civil Case
No. 8943 with prejudice and without costs. No costs.
SO ORDERED.
Barredo (Actg. Chairman), Antonio, Concepcion Jr., and
Santos, JJ., concur.
Fernando, J, took no part.

DECISION
TINGA, J.:
Simple and uncomplicated is the central issue involved,
yet whopping is the amount at stake in this case.
After much wrangling in the Court of Tax Appeals (CTA) and
the Court of Appeals, Fortune Tobacco Corporation
(Fortune Tobacco) was granted a tax refund or tax credit
representing specific taxes erroneously collected from its
tobacco products. The tax refund is being re-claimed by
the Commissioner of Internal Revenue (Commissioner) in
this petition.
The following undisputed facts, summarized by the Court
of Appeals, are quoted in the assailed Decision 1 dated 28
September 2004:

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 167274-75

July 21, 2008

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
FORTUNE TOBACCO CORPORATION, Respondent.

CAG.R. SP No. 80675

xxxx
Petitioner2 is a domestic corporation duly organized and
existing under and by virtue of the laws of the Republic of
the Philippines, with principal address at Fortune Avenue,
Parang, Marikina City.

Petitioner is the manufacturer/producer of, among others,

the following cigarette brands, with tax rate classification
based on net retail price prescribed by Annex "D" to R.A.
No. 4280, to wit:
Brand

Tax Rate

Champion M 100

P1.00

Salem M 100

P1.00

Salem M King

P1.00

Camel F King

P1.00

Camel Lights Box 20s

P1.00

Camel Filters Box 20s

P1.00

Winston F Kings

P5.00

Winston Lights

P5.00

Immediately prior to January 1, 1997, the abovementioned cigarette brands were subject to ad valorem
tax pursuant to then Section 142 of the Tax Code of 1977,
as amended. However, on January 1, 1997, R.A. No. 8240
took effect whereby a shift from the ad valorem tax (AVT)
system to the specific tax system was made and
subjecting the aforesaid cigarette brands to specific tax
under [S]ection 142 thereof, now renumbered as Sec. 145
of the Tax Code of 1997, pertinent provisions of which are
quoted thus:
Section 145. Cigars and Cigarettes-

(A) Cigars. There shall be levied, assessed and

collected on cigars a tax of One peso (P1.00) per
cigar.
"(B) Cigarettes packed by hand. There shall be
levied, assessesed and collected on cigarettes
packed by hand a tax of Forty centavos (P0.40) per
pack.
(C) Cigarettes packed by machine. There shall
be levied, assessed and collected on cigarettes
packed by machine a tax at the rates prescribed
below:
(1) If the net retail price (excluding the excise
tax and the value-added tax) is above Ten
pesos (P10.00) per pack, the tax shall be
Twelve (P12.00) per pack;
(2) If the net retail price (excluding the excise
tax and the value added tax) exceeds Six
pesos and Fifty centavos (P6.50) but does not
exceed Ten pesos (P10.00) per pack, the tax
shall be Eight Pesos (P8.00) per pack.
(3) If the net retail price (excluding the excise
tax and the value-added tax) is Five pesos
(P5.00) but does not exceed Six Pesos and
fifty centavos (P6.50) per pack, the tax shall
be Five pesos (P5.00) per pack;
(4) If the net retail price (excluding the excise
tax and the value-added tax) is below Five

pesos (P5.00) per pack, the tax shall be One

peso (P1.00) per pack;
"Variants of existing brands of cigarettes which are
introduced in the domestic market after the effectivity of
R.A. No. 8240 shall be taxed under the highest
classification of any variant of that brand.
The excise tax from any brand of cigarettes within the next
three (3) years from the effectivity of R.A. No. 8240 shall
not be lower than the tax, which is due from each brand on
October 1, 1996. Provided, however, that in cases were
(sic) the excise tax rate imposed in paragraphs (1), (2), (3)
and (4) hereinabove will result in an increase in excise tax
of more than seventy percent (70%), for a brand of
cigarette, the increase shall take effect in two tranches:
fifty percent (50%) of the increase shall be effective in
1997 and one hundred percent (100%) of the increase
shall be effective in 1998.
Duly registered or existing brands of cigarettes or new
brands thereof packed by machine shall only be packed in
twenties.
The rates of excise tax on cigars and cigarettes
under paragraphs (1), (2) (3) and (4) hereof, shall
be increased by twelve percent (12%) on January 1,
2000. (Emphasis supplied)
New brands shall be classified according to their current
net retail price.
For the above purpose, net retail price shall mean the
price at which the cigarette is sold on retail in twenty (20)

major supermarkets in Metro Manila (for brands of

cigarettes marketed nationally), excluding the amount
intended to cover the applicable excise tax and valueadded tax. For brands which are marketed only outside
Metro [M]anila, the net retail price shall mean the price
at which the cigarette is sold in five (5) major
supermarkets in the region excluding the amount intended
to cover the applicable excise tax and the value-added
tax.
The classification of each brand of cigarettes based on its
average retail price as of October 1, 1996, as set forth in
Annex "D," shall remain in force until revised by Congress.
Variant of a brand shall refer to a brand on which a
modifier is prefixed and/or suffixed to the root name of the
brand and/or a different brand which carries the same logo
or design of the existing brand.
To implement the provisions for a twelve percent (12%)
increase of excise tax on, among others, cigars and
cigarettes packed by machines by January 1, 2000, the
Secretary of Finance, upon recommendation of the
respondent Commissioner of Internal Revenue, issued
Revenue Regulations No. 17-99, dated December 16,
1999, which provides the increase on the applicable tax
rates on cigar and cigarettes as follows:

the excise tax that is actually being paid prior to

January 1, 2000."
For the period covering January 1-31, 2000, petitioner
allegedly paid specific taxes on all brands manufactured
and removed in the total amounts of P585,705,250.00.
SECTION

145

ARTICLES

(A)

PRESENT
SPECIFIC TAX
RATE PRIOR
TO JAN. 1,
2000
P1.00/cigar

NEW SPECIFIC TAX RATE

EFFECTIVE JAN. 1, 2000

P1.12/cigar

(B)Cigarettes
packed by machine
(1) Net retail price
(excluding VAT and
excise)
exceeds P10.00 per
pack
(2) Exceeds P10.00
per pack

P12.00/pack

P13.44/ pack

P8.00/pack

P8.96/pack

(3) Net retail price

(excluding VAT and
excise)
is P5.00
to P6.50 per pack

P5.00/pack

P5.60/pack

(4) Net Retail Price

(excluding VAT and
excise)
is
below P5.00
per
pack

P1.00/pack

P1.12/pack

Revenue Regulations No. 17-99 likewise provides in the

last paragraph of Section 1 thereof, "(t)hat the new
specific tax rate for any existing brand of cigars,
cigarettes packed by machine, distilled spirits,
wines and fermented liquor shall not be lower than

On February 7, 2000, petitioner filed with respondents

Appellate Division a claim for refund or tax credit of its
purportedly overpaid excise tax for the month of January
2000 in the amount of P35,651,410.00
On June 21, 2001, petitioner filed with respondents Legal
Service a letter dated June 20, 2001 reiterating all the
claims for refund/tax credit of its overpaid excise taxes
filed on various dates, including the present claim for the
month of January 2000 in the amount of P35,651,410.00.
As there was no action on the part of the respondent,
petitioner filed the instant petition for review with this
Court on December 11, 2001, in order to comply with the
two-year period for filing a claim for refund.
In his answer filed on January 16, 2002, respondent raised
the following Special and Affirmative Defenses;
4. Petitioners alleged claim for refund is subject to
administrative routinary investigation/examination
by the Bureau;
5. The amount of P35,651,410 being claimed by
petitioner as alleged overpaid excise tax for the
month of January 2000 was not properly
documented.

6. In an action for tax refund, the burden of proof is

on the taxpayer to establish its right to refund, and
failure to sustain the burden is fatal to its claim for
refund/credit.
7. Petitioner must show that it has complied with
the provisions of Section 204(C) in relation [to]
Section 229 of the Tax Code on the prescriptive
period for claiming tax refund/credit;
8. Claims for refund are construed strictly against
the claimant for the same partake of tax exemption
from taxation; and
9. The last paragraph of Section 1 of Revenue
Regulation[s] [No.]17-99 is a valid implementing
regulation which has the force and effect of law."
CA G.R. SP No. 83165

the last paragraph of Section 1 of Revenue Regulation[s]

[No.] 17-99 is in accordance with the pertinent provisions
of Republic Act [No.] 8240, now incorporated in Section
145 of the Tax Code of 1997; and (2) Whether or not
petitioner is entitled to a refund ofP35,651,410.00 as
alleged overpaid excise tax for the month of January 2000.
xxxx
Hence, the respondent CTA in its assailed October 21,
2002 [twin] Decisions[s] disposed in CTA Case Nos. 6365 &
6383:
WHEREFORE, in view of the foregoing, the court finds the
instant petition meritorious and in accordance with law.
Accordingly, respondent is hereby ORDERED to REFUND to
petitioner the amount of P35,651.410.00 representing
erroneously paid excise taxes for the period January 1 to
January 31, 2000.

The petition contains essentially similar facts, except that

the said case questions the CTAs December 4, 2003
decision
in
CTA
Case
No.
6612
granting
respondents3 claim
for
refund
of
the
amount
of P355,385,920.00 representing erroneously or illegally
collected specific taxes covering the period January 1,
2002 to December 31, 2002, as well as its March 17, 2004
Resolution denying a reconsideration thereof.

SO ORDERED.

xxxx

However, on consolidated motions for reconsideration filed

by the respondent in CTA Case Nos. 6363 and 6383, the
July 15, 2002 resolution was set aside, and the Tax Court
ruled, this time with a semblance of finality, that the
respondent is entitled to the refund claimed. Hence, in a

In both CTA Case Nos. 6365 & 6383 and CTA No. 6612, the
Court of Tax Appeals reduced the issues to be resolved into
two as stipulated by the parties, to wit: (1) Whether or not

Herein petitioner sought reconsideration of the abovequoted decision. In [twin] resolution[s] [both] dated July
15, 2003, the Tax Court, in an apparent change of heart,
granted the petitioners consolidated motions for
reconsideration, thereby denying the respondents claim
for refund.

resolution dated November 4, 2003, the tax court

reinstated its December 21, 2002 Decision and disposed
as follows:
WHEREFORE, our Decisions in CTA Case Nos. 6365 and
6383 are hereby REINSTATED. Accordingly, respondent is
hereby ORDERED to REFUND petitioner the total amount
of P680,387,025.00 representing erroneously paid excise
taxes for the period January 1, 2000 to January 31, 2000
and February 1, 2000 to December 31, 2001.
SO ORDERED.
Meanwhile, on December 4, 2003, the Court of Tax Appeals
rendered decision in CTA Case No. 6612 granting the
prayer for the refund of the amount of P355,385,920.00
representing overpaid excise tax for the period covering
January 1, 2002 to December 31, 2002. The tax court
disposed of the case as follows:
IN VIEW OF THE FOREGOING, the Petition for Review is
GRANTED. Accordingly, respondent is hereby ORDERED to
REFUND to petitioner the amount of P355,385,920.00
representing overpaid excise tax for the period covering
January 1, 2002 to December 31, 2002.
SO ORDERED.
Petitioner sought reconsideration of the decision, but the
same was denied in a Resolution dated March 17,
2004.4 (Emphasis supplied) (Citations omitted)
The Commissioner appealed the aforesaid decisions of the
CTA. The petition questioning the grant of refund in the

amount of P680,387,025.00 was docketed as CA-G.R. SP

No. 80675, whereas that assailing the grant of refund in
the amount of P355,385,920.00 was docketed as CA-G.R.
SP No. 83165. The petitions were consolidated and
eventually denied by the Court of Appeals. The appellate
court also denied reconsideration in its Resolution5 dated 1
March 2005.
In its Memorandum6 22 dated November 2006, filed on
behalf of the Commissioner, the Office of the Solicitor
General (OSG) seeks to convince the Court that the literal
interpretation given by the CTA and the Court of Appeals of
Section 145 of the Tax Code of 1997 (Tax Code) would lead
to a lower tax imposable on 1 January 2000 than that
imposable during the transition period. Instead of an
increase of 12% in the tax rate effective on 1 January 2000
as allegedly mandated by the Tax Code, the appellate
courts ruling would result in a significant decrease in the
tax rate by as much as 66%.
The OSG argues that Section 145 of the Tax Code admits
of several interpretations, such as:
1. That by January 1, 2000, the excise tax on
cigarettes should be the higher tax imposed under
the specific tax system and the tax imposed under
the ad valorem tax system plus the 12% increase
imposed by par. 5, Sec. 145 of the Tax Code;
2. The increase of 12% starting on January 1, 2000
does not apply to the brands of cigarettes listed
under Annex "D" referred to in par. 8, Sec. 145 of
the Tax Code;

3. The 12% increment shall be computed based on

the net retail price as indicated in par. C, sub-par.
(1)-(4), Sec. 145 of the Tax Code even if the
resulting figure will be lower than the amount
already being paid at the end of the transition
period. This is the interpretation followed by both
the CTA and the Court of Appeals.7
This being so, the interpretation which will give life to the
legislative intent to raise revenue should govern, the OSG
stresses.
Finally, the OSG asserts that a tax refund is in the nature
of a tax exemption and must, therefore, be construed
strictly against the taxpayer, such as Fortune Tobacco.
In its Memorandum8 dated 10 November 2006, Fortune
Tobacco argues that the CTA and the Court of Appeals
merely followed the letter of the law when they ruled that
the basis for the 12% increase in the tax rate should be
the net retail price of the cigarettes in the market as
outlined in paragraph C, sub paragraphs (1)-(4), Section
145 of the Tax Code. The Commissioner allegedly has gone
beyond his delegated rule-making power when he
promulgated, enforced and implemented Revenue
Regulation No. 17-99, which effectively created a separate
classification for cigarettes based on the excise tax
"actually being paid prior to January 1, 2000."9
It should be mentioned at the outset that there is no
dispute between the fact of payment of the taxes sought
to be refunded and the receipt thereof by the Bureau of
Internal Revenue (BIR). There is also no question about the
mathematical accuracy of Fortune Tobaccos claim since

the documentary evidence in support of the refund has not

been controverted by the revenue agency. Likewise, the
claims have been made and the actions have been filed
within the two (2)-year prescriptive period provided under
Section 229 of the Tax Code.
The power to tax is inherent in the State, such power being
inherently legislative, based on the principle that taxes are
a grant of the people who are taxed, and the grant must
be made by the immediate representatives of the people;
and where the people have laid the power, there it must
remain and be exercised.10
This entire controversy revolves around the interplay
between Section 145 of the Tax Code and Revenue
Regulation 17-99. The main issue is an inquiry into
whether the revenue regulation has exceeded the
allowable limits of legislative delegation.
For ease of reference, Section 145 of the Tax Code is again
reproduced in full as follows:
Section 145. Cigars and Cigarettes(A) Cigars.There shall be levied, assessed and
collected on cigars a tax of One peso (P1.00) per
cigar.
(B). Cigarettes packed by hand.There shall be
levied, assessed and collected on cigarettes packed
by hand a tax of Forty centavos (P0.40) per pack.
(C) Cigarettes packed by machine.There shall
be levied, assessed and collected on cigarettes

packed by machine a tax at the rates prescribed

below:
(1) If the net retail price (excluding the excise
tax and the value-added tax) is above Ten
pesos (P10.00) per pack, the tax shall be
Twelve pesos (P12.00) per pack;
(2) If the net retail price (excluding the excise
tax and the value added tax) exceeds Six
pesos and Fifty centavos (P6.50) but does
not exceed Ten pesos (P10.00) per pack, the
tax shall be Eight Pesos (P8.00) per pack.
(3) If the net retail price (excluding the excise
tax and the value-added tax) is Five pesos
(P5.00) but does not exceed Six Pesos and
fifty centavos (P6.50) per pack, the tax shall
be Five pesos (P5.00) per pack;
(4) If the net retail price (excluding the excise
tax and the value-added tax) is below Five
pesos (P5.00) per pack, the tax shall be One
peso (P1.00) per pack;
Variants of existing brands of cigarettes which are
introduced in the domestic market after the effectivity of
R.A. No. 8240 shall be taxed under the highest
classification of any variant of that brand.
The excise tax from any brand of cigarettes within the next
three (3) years from the effectivity of R.A. No. 8240 shall
not be lower than the tax, which is due from each brand on
October 1, 1996. Provided, however, That in cases where

the excise tax rates imposed in paragraphs (1), (2), (3) and
(4) hereinabove will result in an increase in excise tax of
more than seventy percent (70%), for a brand of cigarette,
the increase shall take effect in two tranches: fifty percent
(50%) of the increase shall be effective in 1997 and one
hundred percent (100%) of the increase shall be effective
in 1998.
Duly registered or existing brands of cigarettes or new
brands thereof packed by machine shall only be packed in
twenties.
The rates of excise tax on cigars and cigarettes
under paragraphs (1), (2) (3) and (4) hereof, shall
be increased by twelve percent (12%) on January 1,
2000.
New brands shall be classified according to their current
net retail price.
For the above purpose, net retail price shall mean the
price at which the cigarette is sold on retail in twenty (20)
major supermarkets in Metro Manila (for brands of
cigarettes marketed nationally), excluding the amount
intended to cover the applicable excise tax and valueadded tax. For brands which are marketed only outside
Metro Manila, the net retail price shall mean the price
at which the cigarette is sold in five (5) major intended to
cover the applicable excise tax and the value-added tax.
The classification of each brand of cigarettes based on its
average retail price as of October 1, 1996, as set forth in
Annex "D," shall remain in force until revised by Congress.

Variant of a brand shall refer to a brand on which a

modifier is prefixed and/or suffixed to the root name of the
brand and/or a different brand which carries the same logo
or design of the existing brand.11 (Emphasis supplied)
Revenue Regulation 17-99, which was issued pursuant to
the unquestioned authority of the Secretary of Finance to
promulgate rules and regulations for the effective
implementation of the Tax Code,12 interprets the abovequoted provision and reflects the 12% increase in excise
taxes in the following manner:
SECTI
ON

DESCRIPTION
ARTICLES

145

(A)

OF

PRESENT
SPECIFIC
TAX RATES
PRIOR TO
JAN.
1,
2000
P1.00/ciga
r

NEW SPECIFIC TAX RATE

Effective Jan.. 1, 2000

(1) Net Retail Price

(excluding
VAT
and
Excise) exceeds P10.00
per pack
(2) Net Retail Price
(excluding
VAT
and
Excise)
is P6.51
up
to P10.00 per pack

P12.00/pa
ck

P13.44/pack

P8.00/pac
k

P8.96/pack

(3) Net Retail Price

(excluding
VAT
and
excise) is P5.00 to P6.50
per pack

P5.00/pac
k

P5.60/pack

(4) Net Retail Price

(excluding
VAT
and
excise) is below P5.00
per pack)

P1.00/pac
k

P1.12/pack

P1.12/cigar

(B)Cigarettes packed by
Machine

This table reflects Section 145 of the Tax Code insofar as it

mandates a 12% increase effective on 1 January 2000
based on the taxes indicated under paragraph C, subparagraph (1)-(4). However, Revenue Regulation No. 17-99
went further and added that "[T]he new specific tax rate
for any existing brand of cigars, cigarettes packed by
machine, distilled spirits, wines and fermented liquor shall
not be lower than the excise tax that is actually being paid
prior to January 1, 2000."13
Parenthetically, Section 145 states that during the
transition period, i.e., within the next three (3) years from
the effectivity of the Tax Code, the excise tax from any
brand of cigarettes shall not be lower than the tax due
from each brand on 1 October 1996. This qualification,
however, is conspicuously absent as regards the 12%
increase which is to be applied on cigars and cigarettes
packed by machine, among others, effective on 1 January
2000. Clearly and unmistakably, Section 145 mandates a
new rate of excise tax for cigarettes packed by machine
due to the 12% increase effective on 1 January 2000
without regard to whether the revenue collection starting
from this period may turn out to be lower than that
collected prior to this date.
By adding the qualification that the tax due after the 12%
increase becomes effective shall not be lower than the tax
actually paid prior to 1 January 2000, Revenue Regulation
No. 17-99 effectively imposes a tax which is the higher
amount between the ad valorem tax being paid at the end
of the three (3)-year transition period and the specific tax
under paragraph C, sub-paragraph (1)-(4), as increased by
12%a situation not supported by the plain wording of
Section 145 of the Tax Code.

This is not the first time that national revenue officials had
ventured in the area of unauthorized administrative
legislation.
In Commissioner
of
Internal
Revenue
v.
Reyes,14 respondent was not informed in writing of the law
and the facts on which the assessment of estate taxes was
made pursuant to Section 228 of the 1997 Tax Code, as
amended by Republic Act (R.A.) No. 8424. She was merely
notified of the findings by the Commissioner, who had
simply relied upon the old provisions of the law and
Revenue Regulation No. 12-85 which was based on the old
provision of the law. The Court held that in case of
discrepancy between the law as amended and the
implementing regulation based on the old law, the former
necessarily prevails. The law must still be followed, even
though the existing tax regulation at that time provided for
a different procedure.15
In Commissioner of Internal Revenue v. Central Luzon
Drug Corporation,16 the tax authorities gave the term "tax
credit" in Sections 2(i) and 4 of Revenue Regulation 2-94 a
meaning utterly disparate from what R.A. No. 7432
provides. Their interpretation muddled up the intent of
Congress to grant a mere discount privilege and not a
sales discount. The Court, striking down the revenue
regulation, held that an administrative agency issuing
regulations may not enlarge, alter or restrict the provisions
of the law it administers, and it cannot engraft additional
requirements not contemplated by the legislature. The
Court emphasized that tax administrators are not allowed
to expand or contract the legislative mandate and that the
"plain
meaning
rule"
or verba
legis in
statutory
construction should be applied such that where the words
of a statute are clear, plain and free from ambiguity, it

must be given its literal meaning and applied without

attempted interpretation.
As we have previously declared, rule-making power must
be confined to details for regulating the mode or
proceedings in order to carry into effect the law as it has
been enacted, and it cannot be extended to amend or
expand the statutory requirements or to embrace matters
not covered by the statute. Administrative regulations
must always be in harmony with the provisions of the law
because any resulting discrepancy between the two will
always be resolved in favor of the basic law.17
In Commissioner of Internal Revenue v. Michel J. Lhuillier
Pawnshop, Inc.,18 Commissioner Jose Ong issued Revenue
Memorandum Order (RMO) No. 15-91, as well as the
clarificatory Revenue Memorandum Circular (RMC) 43-91,
imposing a 5% lending investors tax under the 1977 Tax
Code, as amended by Executive Order (E.O.) No. 273, on
pawnshops. The Commissioner anchored the imposition on
the definition of lending investors provided in the 1977 Tax
Code which, according to him, was broad enough to
include pawnshop operators. However, the Court noted
that pawnshops and lending investors were subjected to
different tax treatments under the Tax Code prior to its
amendment by the executive order; that Congress never
intended to treat pawnshops in the same way as lending
investors; and that the particularly involved section of the
Tax Code explicitly subjected lending investors and dealers
in securities only to percentage tax. And so the Court
affirmed the invalidity of the challenged circulars, stressing
that "administrative issuances must not override, supplant
or modify the law, but must remain consistent with the law
they intend to carry out."19

In Philippine Bank of Communications v. Commissioner of

Internal Revenue,20 the then acting Commissioner issued
RMC 7-85, changing the prescriptive period of two years to
ten years for claims of excess quarterly income tax
payments, thereby creating a clear inconsistency with the
provision of Section 230 of the 1977 Tax Code. The Court
nullified the circular, ruling that the BIR did not simply
interpret the law; rather it legislated guidelines contrary to
the statute passed by Congress. The Court held:
It bears repeating that Revenue memorandum-circulars
are considered administrative rulings (in the sense of more
specific and less general interpretations of tax laws) which
are issued from time to time by the Commissioner of
Internal Revenue. It is widely accepted that the
interpretation placed upon a statute by the executive
officers, whose duty is to enforce it, is entitled to great
respect by the courts. Nevertheless, such interpretation is
not conclusive and will be ignored if judicially found to be
erroneous.
Thus,
courts
will
not
countenance
administrative issuances that override, instead of
remaining consistent and in harmony with, the law they
seek to apply and implement.21
In Commissioner of Internal Revenue v. CA, et al.,22 the
central issue was the validity of RMO 4-87 which had
construed the amnesty coverage under E.O. No. 41 (1986)
to include only assessments issued by the BIR after the
promulgation of the executive order on 22 August 1986
and not assessments made to that date. Resolving the
issue in the negative, the Court held:
x x x all such issuances must not override, but must
remain consistent and in harmony with, the law they seek

to apply and implement. Administrative rules and

regulations are intended to carry out, neither to supplant
nor to modify, the law.23
xxx
If, as the Commissioner argues, Executive Order No. 41
had not been intended to include 1981-1985 tax liabilities
already assessed (administratively) prior to 22 August
1986, the law could have simply so provided in its
exclusionary clauses. It did not. The conclusion is
unavoidable, and it is that the executive order has been
designed to be in the nature of a general grant of tax
amnesty subject only to the cases specifically excepted by
it.24
In the case at bar, the OSGs argument that by 1 January
2000, the excise tax on cigarettes should be the higher tax
imposed under the specific tax system and the tax
imposed under the ad valorem tax system plus the 12%
increase imposed by paragraph 5, Section 145 of the Tax
Code, is an unsuccessful attempt to justify what is clearly
an impermissible incursion into the limits of administrative
legislation. Such an interpretation is not supported by the
clear language of the law and is obviously only meant to
validate the OSGs thesis that Section 145 of the Tax Code
is ambiguous and admits of several interpretations.
The contention that the increase of 12% starting on 1
January 2000 does not apply to the brands of cigarettes
listed under Annex "D" is likewise unmeritorious, absurd
even. Paragraph 8, Section 145 of the Tax Code simply
states that, "[T]he classification of each brand of cigarettes
based on its average net retail price as of October 1, 1996,

as set forth in Annex D, shall remain in force until revised

by Congress." This declaration certainly does not lend
itself to the interpretation given to it by the OSG. As
plainly worded, the average net retail prices of the listed
brands under Annex "D," which classify cigarettes
according to their net retail price into low, medium or high,
obviously remain the bases for the application of the
increase in excise tax rates effective on 1 January 2000.
The foregoing leads us to conclude that Revenue
Regulation No. 17-99 is indeed indefensibly flawed. The
Commissioner cannot seek refuge in his claim that the
purpose behind the passage of the Tax Code is to generate
additional revenues for the government. Revenue
generation has undoubtedly been a major consideration in
the passage of the Tax Code. However, as borne by the
legislative record,25 the shift from the ad valorem system
to the specific tax system is likewise meant to promote fair
competition among the players in the industries
concerned, to ensure an equitable distribution of the tax
burden and to simplify tax administration by classifying
cigarettes, among others, into high, medium and lowpriced based on their net retail price and accordingly
graduating tax rates.
At any rate, this advertence to the legislative record is
merely gratuitous because, as we have held, the meaning
of the law is clear on its face and free from the ambiguities
that the Commissioner imputes. We simply cannot
disregard the letter of the law on the pretext of pursuing
its spirit.26
Finally, the Commissioners contention that a tax refund
partakes the nature of a tax exemption does not apply to

the tax refund to which Fortune Tobacco is entitled. There

is parity between tax refund and tax exemption only when
the former is based either on a tax exemption statute or a
tax refund statute. Obviously, that is not the situation
here. Quite the contrary, Fortune Tobaccos claim for refund
is premised on its erroneous payment of the tax, or better
still the governments exaction in the absence of a law.
Tax exemption is a result of legislative grace. And he who
claims an exemption from the burden of taxation must
justify his claim by showing that the legislature intended to
exempt him by words too plain to be mistaken.27 The rule is
that tax exemptions must be strictly construed such that
the exemption will not be held to be conferred unless the
terms under which it is granted clearly and distinctly show
that such was the intention.28
A claim for tax refund may be based on statutes granting
tax exemption or tax refund. In such case, the rule of strict
interpretation against the taxpayer is applicable as the
claim for refund partakes of the nature of an exemption, a
legislative grace, which cannot be allowed unless granted
in the most explicit and categorical language. The
taxpayer must show that the legislature intended to
exempt him from the tax by words too plain to be
mistaken.29
Tax refunds (or tax credits), on the other hand, are not
founded principally on legislative grace but on the legal
principle which underlies all quasi-contracts abhorring a
persons unjust enrichment at the expense of another. 30The
dynamic of erroneous payment of tax fits to a tee the
prototypic quasi-contract, solutio indebiti, which covers not
only mistake in fact but also mistake in law.31

The Government is not exempt from the application of

solutio indebiti.32 Indeed, the taxpayer expects fair dealing
from the Government, and the latter has the duty to
refund without any unreasonable delay what it has
erroneously collected.33 If the State expects its taxpayers
to observe fairness and honesty in paying their taxes, it
must hold itself against the same standard in refunding
excess (or erroneous) payments of such taxes. It should
not unjustly enrich itself at the expense of taxpayers. 34 And
so, given its essence, a claim for tax refund necessitates
only preponderance of evidence for its approbation like in
any other ordinary civil case.
Under the Tax Code itself, apparently in recognition of the
pervasive quasi-contract principle, a claim for tax refund
may be based on the following: (a) erroneously or illegally
assessed or collected internal revenue taxes; (b) penalties
imposed without authority; and (c) any sum alleged to
have been excessive or in any manner wrongfully
collected.35
What is controlling in this case is the well-settled doctrine
of strict interpretation in the imposition of taxes, not the
similar doctrine as applied to tax exemptions. The rule in
the interpretation of tax laws is that a statute will not be
construed as imposing a tax unless it does so clearly,
expressly, and unambiguously. A tax cannot be imposed
without clear and express words for that purpose.
Accordingly, the general rule of requiring adherence to the
letter in construing statutes applies with peculiar strictness
to tax laws and the provisions of a taxing act are not to be
extended by implication. In answering the question of who
is subject to tax statutes, it is basic that in case of doubt,
such statutes are to be construed most strongly against
the government and in favor of the subjects or citizens

because burdens are not to be imposed nor presumed to

be imposed beyond what statutes expressly and clearly
import.36 As burdens, taxes should not be unduly exacted
nor assumed beyond the plain meaning of the tax laws.37
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals in CA G.R. SP No. 80675, dated 28
September 2004, and its Resolution, dated 1 March 2005,
are AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 72005 May 29, 1987
PHILIPPINE BRITISH ASSURANCE CO., INC., petitioner,
vs.
HONORABLE
INTERMEDIATE
APPELLATE
COURT;
SYCWIN COATING & WIRES, INC., and DOMINADOR
CACPAL,
CHIEF
DEPUTY
SHERRIF
OF
MANILA, respondents.

GANCAYCO, J.:
This is a Petition for Review on certiorari of the Resolution
dated September 12, 1985 of the Intermediate Appellate
Court
in
AC-G.R.
No.
CR-05409 1 granting
private
respondent's motion for execution pending appeal and
ordering the issuance of the corresponding writ of execution
on the counterbond to lift attachment filed by petitioner. The
focal issue that emerges is whether an order of execution
pending appeal of a judgment maybe enforced on the said
bond. In the Resolution of September 25, 1985 2 this Court as
prayed for, without necessarily giving due course to the
petition, issued a temporary restraining order enjoining the
respondents from enforcing the order complaint of.

The records disclose that private respondent Sycwin Coating

& Wires, Inc., filed a complaint for collection of a sum of
money against Varian Industrial Corporation before the
Regional Trial Court of Quezon City. During the pendency of
the suit, private respondent succeeded in attaching some of
the properties of Varian Industrial Corporation upon the
posting of a supersedeas bond. 3 The latter in turn posted a
counterbond in the sum of P1,400, 000.00 4 thru petitioner
Philippine British Assurance Co., Inc., so the attached
properties were released.
On December 28, 1984, the trial court rendered a Decision,
the dispositive portion of which reads:
WHEREFORE, plaintiff's Motion for Summary
Judgment is hereby GRANTED, and judgment is
rendered in favor of the plaintiff and against
the defendant Varian Industrial Corporation,
and the latter is hereby ordered:
1. To pay plaintiff the amount of P1,401,468.00,
the principal obligation with 12% interest per
annum from the date of default until fully paid;
2. To pay plaintiff 5% of the principal obligation
as liquidated damages;
3. To pay plaintiff P30,000.00 as exemplary
damages;
4. To pay plaintiff 15% of P1,401,468.00, the
principal obligation, as and for attorney's fees;
and
5. To pay the costs of suit.

Accordingly, the counterclaim of the defendant

is hereby DISMISSED for lack of merit.
SO ORDERED.

Varian Industrial Corporation appealed the decision to the

respondent Court. Sycwin then filed a petition for execution
pending appeal against the properties of Varian in respondent
Court. Varian was required to file its comment but none was
filed. In the Resolution of July 5, 1985, respondent Court
ordered the execution pending appeal as prayed
for. 6 However, the writ of execution was returned unsatisfied
as Varian failed to deliver the previously attached personal
properties upon demand. In a Petition dated August 13, 1985
filed with respondent Court Sycwin prayed that the surety
(herein petitioner) be ordered to pay the value of its
bond. 7 In compliance with the Resolution of August 23, 1985
of the respondent Court herein petitioner filed its
comment. 8 In the Resolution of September 12, 1985, 9 the
respondent Court granted the petition. Hence this action.
It is the submission of private respondent Sycwin that without
a previous motion for reconsideration of the questioned
resolution, certiorari would not lie. While as a general rule a
motion for reconsideration has been considered a
condition sine qua non for the granting of a writ of certiorari,
this rule does not apply when special circumstances warrant
immediate or more direct action. 10 It has been held further
that a motion for reconsideration may be dispensed with in
cases like this where execution had been ordered and the
need for relief was extremely urgent. 11
The counterbond provides:
WHEREAS, in the above-entitled case pending
in the Regional Trial Court, National Capital

Judicial Region, Branch LXXXV, Quezon City, an

order of Attachment was issued against
abovenamed Defendant;
WHEREAS, the Defendant, for the purpose of
lifting and/or dissolving the order of attachment
issued against them in the above-en-titled
case, have offered to file a counterbond in the
sum of PESOS ONE MILLION FOUR HUNDRED
THOUSAND ONLY (P1,400,000.00), Philippine
Currency, as provided for in Section 5, Rule 57
of the Revised Rules of Court.
NOW, THEREFORE, we, VARIAN INDUSTRIAL
CORPORATION, as Principal and the PHILIPPINE
BRITISH ASSURANCE COMPANY, INC., a
corporation duly organized and existing under
and by virtue of the laws of the Philippines, as
Surety, in consideration of the above and of the
lifting or dissolution of the order of attachment,
hereby jointly and severally, bind ourselves in
favor of the above Plaintiff in the sum of PESOS
ONE MILLION FOUR HUNDRED THOUSAND ONLY
(P1,400,000.00), Philippine Currency, under the
condition that in case the Plaintiff recovers
judgment in the action, and Defendant will, on
demand, re-deliver the attached property so
released to the Officer of the Court and the
same shall be applied to the payment of the
judgment, or in default thereof, the defendant
and Surety will, on demand, pay to the Plaintiff
the full value of the property released.
EXECUTED at Manila, Philippines, this 28th day
of June, 1984. 12

Sections 5, 12, and 17 of Rule 57 of the Revised Rules of

Court also provide:
SEC. 5. Manner of attaching property. The
officer executing the order shall without delay
attach, to await judgment and execution in the
action, all the properties of the party against
whom the order is issued in the province, not
exempt from execution, or so much thereof as
may be sufficient to satisfy the applicant's
demand, unless the former makes a deposit
with the clerk or judge of the court from which
the order issued, or gives a counter-bond
executed to the applicant, in an amount
sufficient to satisfy such demand besides costs,
or in an amount equal to the value of the
property which is about to be attached, to
secure payment to the applicant of any
judgement ment which he may recover in the
action. The officer shall also forthwith serve a
copy of the applicant's affidavit and bond, and
of the order of attachment, on the adverse
party, if he be found within the province.
SEC. 12. Discharge of attachment upon giving
counterbond. At any time after an order of
attachment has been granted, the party whose
property has been attached, or the person
appearing on his behalf, may, upon reasonable
notice to the applicant, apply to the judge who
granted the order, or to the judge of the court
in which the action is pending, for an order
discharging the attachment wholly or in part on
the security given. The judge shall, after
hearing, order the discharge of the attachment
if a cash deposit is made, or a counter-bond

executed to the attaching creditor is filed, on

behalf of the adverse party, with the clerk or
judge of the court where the application is
made, in an amount equal to the value of the
property attached as determined by the
judge, to secure the payment of any judgment
that the attaching creditor may recover in the
action. Upon the filing of such counter-bond,
copy thereof shall forthwith be served on the
attaching creditor or his lawyer. Upon the
discharge of an attachment in accordance with
the provisions of this section the property
attached, or the proceeds of any sale thereof,
shall be delivered to the party making the
deposit or giving the counterbond aforesaid
standing in place of the property so released.
Should such counterbond for any reason be
found to be, or become, insufficient, and the
party furnishing the same fail to file an
additional counterbond, the attaching creditor
may apply for a new order of attachment.
SEC. 17. When execution returned unsatisfied,
recovery had upon bond. If the execution be
returned unsatisfied in whole or in part, the
surety or sureties on any counter-bond given
pursuant to the provisions of this rule to secure
the payment of the judgment shall become
charged on such counter- bond, and bound to
pay to the judgement creditor upon demand,
the amount due under the judgment, which
amount may be recovered from such surety or
sureties after notice and summary hearing in
the same action. (Emphasis supplied.)

Under Sections 5 and 12, Rule 57 above reproduced it is

provided that the counterbond is intended to secure the
payment of "any judgment" that the attaching creditor may
recover in the action. Under Section 17 of same rule it
provides that when "the execution be returned unsatisfied in
whole or in part" it is only then that "payment of
thejudgment shall become charged on such counterbond."
The counterbond was issued in accordance with the
provisions of Section 5, Rule 57 of the Rules of Court as
provided in the second paragraph aforecited which is deemed
reproduced as part of the counterbond. In the third paragraph
it is also stipulated that the counterbond is to be "applied for
the payment of the judgment." Neither the rules nor the
provisions of the counterbond limited its application to a final
and executory judgment. Indeed, it is specified that it applies
to the payment of any judgment that maybe recovered by
plaintiff. Thus, the only logical conclusion is that an execution
of any judgment including one pending appeal if returned
unsatisfied maybe charged against such a counterbond.
It is well recognized rule that where the law does not
distinguish, courts should not distinguish. Ubi lex non
distinguish nec nos distinguere debemos. 13 "The rule,
founded on logic, is a corollary of the principle that general
words and phrases in a statute should ordinarily be accorded
their natural and general significance. 14 The rule requires
that a general term or phrase should not be reduced into
parts and one part distinguished from the other so as to
justify its exclusion from the operation of the law. 15 In other
words, there should be no distinction in the application of a
statute where none is indicated.16 For courts are not
authorized to distinguish where the law makes no distinction.
They should instead administer the law not as they think it
ought to be but as they find it and without regard to
consequences. 17

A corollary of the principle is the rule that where the law does
not make any exception, courts may not except something
therefrom, unless there is compelling reason apparent in the
law to justify it.18 Thus where a statute grants a person
against whom possession of "any land" is unlawfully withheld
the right to bring an action for unlawful detainer, this Court
held that the phrase "any land" includes all kinds of land,
whether agricultural, residential, or mineral.19 Since the law
in this case does not make any distinction nor intended to
make any exception, when it speaks of "any judgment" which
maybe charged against the counterbond, it should be
interpreted to refer not only to a final and executory
judgment in the case but also a judgment pending appeal.
All that is required is that the conditions provided for by law
are complied with, as outlined in the case of Towers
Assurance Corporation v. Ororama Supermart, 20
Under Section 17, in order that the judgment
creditor might recover from the surety on the
counterbond, it is necessary (1) that the
execution be first issued against the principal
debtor and that such execution was returned
unsatisfied in whole or in part; (2) that the
creditor make a demand upon the surety for
the satisfaction of the judgment, and (3) that
the surety be given notice and a summary
hearing on the same action as to his liability for
the judgment under his counterbond.
The rule therefore, is that the counterbond to lift attachment
that is issued in accordance with the provisions of Section 5,
Rule 57, of the Rules of Court, shall be charged with the
payment of any judgment that is returned unsatisfied. It
covers not only a final and executory judgement but also the
execution of a judgment pending appeal.

WHEREFORE, the petition is hereby DISMISSED for lack of

merit and the restraining order issued on September 25, 1985
is hereby dissolved with costs against petitioner.
SO ORDERED.
Yap (Chairman), Narvasa,
Sarmiento, JJ., concur.
Feliciano, J., is on leave.

Melencio-Herrera,

Cruz

and

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 115245 July 11, 1995

JUANITO C. PILAR, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.

In M.R. Nos. 93-2654 and 94-0065 dated November 3,

1993 and February 13, 1994 respectively, the COMELEC
imposed upon petitioner the fine of Ten Thousand Pesos
(P10,000.00) for failure to file his statement of
contributions and expenditures.
In M.R. No. 94-0594 dated February 24, 1994, the
COMELEC denied the motion for reconsideration of
petitioner and deemed final M.R. Nos. 93-2654 and 940065 (Rollo, p. 14).
Petitioner went to the COMELEC En Banc (UND No. 94040), which denied the petition in a Resolution dated April
28, 1994 (Rollo, pp. 10-13).
Hence, this petition for certiorari.

QUIASON, J.:

We dismiss the petition.

This is a petition for certiorari under Rule 65 of the Revised

Rules of Court assailing the Resolution dated April 28,
1994 of the Commission on Elections (COMELEC) in UND
No. 94-040.
I
On March 22, 1992, petitioner Juanito C. Pilar filed his
certificate of candidacy for the position of member of the
Sangguniang Panlalawigan of the Province of Isabela.
On March 25, 1992, petitioner withdrew his certificate of
candidacy.

II
Section 14 of R.A. No. 7166 entitled "An Act Providing for
Synchronized National and Local Elections and for Electoral
Reforms, Authorizing Appropriations Therefor, and for
Other Purposes" provides as follows:
Statement
of
Contributions
and
Expenditures: Effect of Failure to File
Statement. Every candidate and treasurer of
the political party shall, within thirty (30)
days after the day of the election, file in
duplicate with the offices of the Commission
the full, true and itemized statement of all

contributions and expenditures in connection

with the election.
No person elected to any public office shall
enter upon the duties of his office until he
has filed the statement of contributions and
expenditures herein required.
The same prohibition shall apply if the
political party which nominated the winning
candidate fails to file the statement required
herein within the period prescribed by this
Act.
Except candidates for elective barangay
office, failure to file the statements or reports
in connection with electoral contributions
and expenditures as required herein shall
constitute an administrative offense for
which the offenders shall be liable to pay an
administrative fine ranging from One
Thousand Pesos ( P1,000.00) to Thirty
Thousand Pesos (P30,000.00), in the
discretion of the Commission.
The fine shall be paid within thirty (30) days
from receipt of notice of such failure;
otherwise, it shall be enforceable by a writ of
execution issued by the Commission against
the properties of the offender.
It shall be the duty of every city or municipal
election registrar to advise in writing, by
personal delivery or registered mail, within

five (5) days from the date of election all

candidates residing in his jurisdiction to
comply with their obligation to file their
statements
of
contributions
and
expenditures.
For the commission of a second or
subsequent offense under this Section, the
administrative fine shall be from Two
Thousand Pesos (P2,000.00) to Sixty
Thousand Pesos (P60,000.00), in the
discretion of the Commission. In addition, the
offender shall be subject to perpetual
disqualification
to
hold
public
office
(Emphasis supplied).
To implement the provisions of law relative to election
contributions
and
expenditures,
the
COMELEC
promulgated on January 13, 1992 Resolution No. 2348 (Re:
Rules and Regulations Governing Electoral Contributions
and Expenditures in Connection with the National and
Local Elections on
May 11, 1992). The pertinent provisions of said Resolution
are:
Sec. 13. Statement of contributions and
expenditures: Reminders to candidates to
file statements. Within five (5) days from the
day of the election, the Law Department of
the Commission, the regional election
director of the National Capital Region, the
provincial election supervisors and the
election registrars shall advise in writing by
personal delivery or registered mail all

candidates who filed their certificates of

candidacy with them to comply with their
obligation to file their statements of
contributions and expenditures in connection
with the elections. Every election registrar
shall also advise all candidates residing in his
jurisdiction to comply with said obligation
(Emphasis supplied).
Sec. 17. Effect of failure to file statement. (a)
No person elected to any public office shall
enter upon the duties of his office until he
has filed the statement of contributions and
expenditures herein required.
The same prohibition shall apply if the
political party which nominated the winning
candidates fails to file the statement
required within the period prescribed by law.
(b) Except candidates for elective barangay
office, failure to file statements or reports in
connection with the electoral contributions
and expenditures as required herein shall
constitute an administrative offense for
which the offenders shall be liable to pay an
administrative fine ranging from One
Thousand Pesos (P1,000) to Thirty Thousand
Pesos (P30,000), in the discretion of the
Commission.
The fine shall be paid within thirty (30) days
from receipt of notice of such failure;
otherwise, it shall be enforceable by a writ of

execution issued by the Commission against

the properties of the offender.
For the commission of a second or
subsequent offense under this section, the
administrative fine shall be from Two
Thousand Pesos (P2,000) to Sixty Thousand
Pesos (P60,000), in the discretion of the
Commission. In addition, the offender shall
be subject to perpetual disqualification to
hold public office.
Petitioner argues that he cannot be held liable for failure to
file a statement of contributions and expenditures because
he was a "non-candidate," having withdrawn his
certificates of candidacy three days after its filing.
Petitioner posits that "it is . . . clear from the law that
candidate must have entered the political contest, and
should have either won or lost" (Rollo, p. 39).
Petitioner's argument is without merit.
Section 14 of R.A. No. 7166 states that "every candidate"
has the obligation to file his statement of contributions and
expenditures.
Well-recognized is the rule that where the law does not
distinguish, courts should not distinguish, Ubi lex non
distinguit nec nos distinguere debemos (Philippine British
Assurance Co. Inc. v. Intermediate Appellate Court, 150
SCRA 520 [1987]; cf Olfato v. Commission on Elections,
103 SCRA 741 [1981]). No distinction is to be made in the
application of a law where none is indicated (Lo Cham v.
Ocampo, 77 Phil. 636 [1946]).

In the case at bench, as the law makes no distinction or

qualification as to whether the candidate pursued his
candidacy or withdrew the same, the term "every
candidate" must be deemed to refer not only to a
candidate who pursued his campaign, but also to one who
withdrew his candidacy.
The COMELEC, the body tasked with the enforcement and
administration of all laws and regulations relative to the
conduct of an election, plebiscite, initiative, referendum,
and recall (The Constitution of the Republic of the
Philippines, Art. IX(C), Sec. 2[1]), issued Resolution No.
2348 in implementation or interpretation of the provisions
of Republic Act No. 7166 on election contributions and
expenditures. Section 13 of Resolution No. 2348
categorically refers to "all candidates who filed their
certificates of candidacy."
Furthermore, Section 14 of the law uses the word "shall."
As a general rule, the use of the word "shall" in a statute
implies that the statute is mandatory, and imposes a duty
which may be enforced , particularly if public policy is in
favor of this meaning or where public interest is involved.
We apply the general rule (Baranda v. Gustilo, 165 SCRA
757 [1988]; Diokno v. Rehabilitation Finance Corporation,
91 Phil. 608 [1952]).
The state has an interest in seeing that the electoral
process is clean, and ultimately expressive of the true will
of the electorate. One way of attaining such objective is to
pass legislation regulating contributions and expenditures
of candidates, and compelling the publication of the same.
Admittedly, contributions and expenditures are made for
the purpose of influencing the results of the elections (B.P.

Blg. 881, Sec. 94; Resolution No. 2348, Sec. 1). Thus, laws
and regulations prescribe what contributions are
prohibited (B.P. Blg. 881, Sec. 95, Resolution No. 2348,
Sec. 4), or unlawful (B.P. Blg. 881, Sec. 96), and what
expenditures are authorized (B.P. Blg. 881, Sec. 102; R.A.
No. 7166, Sec. 13; Resolution No. 2348, Sec. 7) or lawful
(Resolution No. 2348, Sec. 8).
Such statutes are not peculiar to the Philippines. In
"corrupt and illegal practices acts" of several states in the
United States, as well as in federal statutes, expenditures
of candidates are regulated by requiring the filing of
statements of expenses and by limiting the amount of
money that may be spent by a candidate. Some statutes
also regulate the solicitation of campaign contributions (26
Am Jur 2d, Elections 287). These laws are designed to
compel publicity with respect to matters contained in the
statements and to prevent, by such publicity, the improper
use of moneys devoted by candidates to the furtherance
of their ambitions (26 Am Jur 2d, Elections 289). These
statutes also enable voters to evaluate the influences
exerted on behalf of candidates by the contributors, and to
furnish evidence of corrupt practices for annulment of
elections (Sparkman v. Saylor [Court of Appeals of
Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
State courts have also ruled that such provisions are
mandatory as to the requirement of filing (State ex rel.
Butchofsky v. Crawford [Court of Civil Appeals of Texas],
269 S.W. 2d 536 [1954]; Best v. Sidebottom, 270 Ky.
423,109 S.W. 2d 826 [1937]; Sparkman v. Saylor, supra.)
It is not improbable that a candidate who withdrew his
candidacy has accepted contributions and incurred

expenditures, even in the short span of his campaign. The

evil sought to be prevented by the law is not all too
remote.
It is notesworthy that Resolution No. 2348 even
contemplates the situation where a candidate may not
have received any contribution or made any expenditure.
Such a candidate is not excused from filing a statement,
and is in fact required to file a statement to that effect.
Under Section 15 of Resolution No. 2348, it is provided
that "[i]f a candidate or treasurer of the party has received
no contribution, made no expenditure, or has no pending
obligation, the statement shall reflect such fact."
Lastly, we note that under the fourth paragraph of Section
73 of the B.P. Blg. 881 or the Omnibus Election Code of the
Philippines, it is provided that "[t]he filing or withdrawal of
certificate of candidacy shall not affect whatever civil,
criminal or administrative liabilities which a candidate may
have incurred." Petitioner's withdrawal of his candidacy did
not extinguish his liability for the administrative fine.
WHEREFORE, the petition is DISMISSED.
Narvasa, C.J., Feliciano, Regalado, Davide, Jr., Romero,
Bellosillo, Puno, Vitug, Mendoza and Francisco, JJ., concur.
Kapunan, J., is on leave.