Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-15819

October 27, 1920

CARLOS PALANCA, plaintiff-appelle,

vs.
THE CITY OF MANILA and WENCESLAO TRINIDAD, defendants-appellants.
City Fiscal Diaz for appellants.
Cohn & Fisher for appellee.

MALCOLM, J.:
This is an appeal from an amended decision of the Court of First Instance of the city of Manila, the
Honorable Simplicio del Rosario presiding, requiring the defendant City to pay to the plaintiff the sum
of P2,400 with legal interest thereon from the respective dates on which the several payments
composing the amount were made, without costs. It is one of those exceptional cases in which the
facts are agreed upon the law is certain, and in which there is merely needed, in our judgment, the
application of the law to the facts to decide the issue. We propose to set out in order the facts, the
law, the issue, and the opinion.
F A C T S.
Omitting the formal paragraphs 1 and 8 of the stipulation, the facts are:
2. That at all times between the 1st day of July, 1914, to and including the 30th day of June,
1916, plaintiff herein has been engaged in the business of distilling spirituous liquors in the
city of Manila, Philippine Islands, and has been, during all of said period of time, the lawful
holder of the distiller's license required by the laws of the Philippine Islands then in force for
the operation and conduct of said business, and that he has paid the taxes imposed upon
holders of such licenses.
3. That the premises in which plaintiff conducted his said business of wholesale liquor
distiller under said license during the said period of time are located at No. 1925 Calle
Anloague, Manila, Philippine Islands.
4. That between the 1st day of June, 1914, and the 30th day of June, 1916, both dates
inclusive, plaintiff maintained a store at Nos. 538-540 Calle Pinpin, in the city of Manila,
Philippine Islands, for the sale at wholesale of distilled liquors, as hereinafter specified; which

said store is not adjacent to plaintiff's said distillery, but is entirely separate and distinct
therefrom.
5. That the said store at Nos. 538-540 Calle Pinpin was operated and maintained by plaintiff
soley and exclusively for the sale at wholesale of liquors distilled by him at his said licensed
distillery at No. 1925 Calle Anloague; and that at no time has plaintiff sold or offered for sale,
or stored or kept for sale at said store Nos. 538-540 Calle Pinpin any liquors other than those
distilled by him at his said distillery; that during the period of time to which this stipulation
relates no sales of the products of plaintiff's distillery were made at the distillery, but the sales
of the entire product of said distillery were made at the said store at Calle Pinpin, Nos. 538540.
6. That the defendant, the city of Manila, through the city assessor and collector, made
demand upon plaintiff that he take out a wholesale liquor dealer's license and pay therefor at
the rate of P1,200 a year, as a condition to allowing plaintiff to operate and maintain his said
store at Nos. 538-540 Calle Pinpin and sell therein at wholesale the liquors distilled by him
pursuant to his said distiller's license; and plaintiff, therefore, under protest, took out the
license required of him with respect to said store.
1awph!l.net

7. That thereafter, the plaintiff paid to the city assessor and collector of the city of Manila,
acting for and on behalf of the defendant, city of Manila, and on account of the wholesale
liquor dealer's license mentioned in paragraph 6 of this stipulation, the sum of P300 for each
of the third and fourth quarters of the year 1914, a like sum for each of the quarters of the
year 1915, and a like sum for each of the first and second quarters of the year 1916, making
a total of payments made during said period of the sum of P2,400; that at the time of making
the said payments, the plaintiff duly protested the same in writing; that said protests were
overruled and denied, and no part of the money so paid under protest has been refunded to
plaintiff.
L A W.
It will be noted that the protested payments cover the period between July 1, 1914 and June 30,
1916. The law then in force regulating the sale of intoxicating liquors within the city of Manila was the
Manila Liquor License Act No. 59, as amended by Act No. 95. Section 16 and 17 thereof, the latter
as superseded by Act No. 95, provided:
Sec. 16. Licenses for periods of one year may be issued to any person or persons of good
character, authorizing him or them to conduct the business of a distiller of alcoholic liquors
and to sell, give away or otherwise dispose of the products of such distillery, in quantities of
one gallon (three and seventy-eight one-hundredths litres) or more, upon payment in
advance of the sum of six hundred pesos. A license of this class shall be known as a
"distiller's license," and it shall be unlawful for any person or persons to conduct any distillery
for the manufacture of alcoholic liquors without such license, or, having secured such
license, to sell, give away or otherwise dispose of the products of such distillery except as
herein prescribed.

Sec. 17. Licenses for periods of one year may be issued to any person or persons of good
character, authorizing him or them to keep in stock and sell or give away fermented malt,
vinous and spirituous liquors in quantities of one gallon (three and seventy-eight onehundredths litres) or more, upon payment in advance of the sum of twelve hundred pesos;
but such licenses may be paid in advance in four quarterly installments of three hundred
pesos each, at the election of the licensee. A license of this class shall be known as a "First
Class Wholesale Liquor License," and it shall be unlawful for any person or persons to sell or
otherwise dispose of fermented malt, vinous and spirituous liquors at wholesale without such
license, or having obtained such license, to sell or otherwise dispose of such liquors except
as herein prescribed, but nothing herein shall be construed as prohibiting any person or
persons holding a "Brewer's License" or "Distiller's License" from disposing of the products of
such brewery or distillery.
I S S U E.
The sole question presented by the appeal is whether plaintiff, by taking out and paying for his
license as a distiller, was entitled to sell the products of his distillery in a store separate and distinct
therefrom without the necessity of taking out and paying for an additional license as a wholesale
liquor dealer.
O P I N I O N.
Although the city fiscal advances numerous canons of statutory construction which are not debatable
in support of his plea for a revocation, we yet reiterate what we said in the beginning of this decision,
that there is merely needed the application of the law to the facts to decide the issue. Statues which
are plain and specific should be applied without attempted construction and interpretation. (Lizarraga
Hermanos vs. Yap Tico [1913], 24 Phil., 504; Philippine Railway Co. vs. Nolting [1916], 34 Phil., 401;
U.S. vs. Fisher [1804], 3 Cranch, 358.)
Concentrating our attention, therefore, on the specific legal provisions, it is first noted that according
to section 16 of the Manila Liquor License Act, the license to be granted to distillers not only
authorizes the licensee "to conduct the business of a distiller of alcoholic liquors" but also "to sell,
give away or otherwise dispose of the products of such distillery, in quantities of one gallon or more."
The legislative intention is reinforced by the succeeding section of the same Act as amended, which
provides that persons desiring to engage in business as wholesale liquor dealers shall obtain the
wholesale liquor dealer's license, with the proviso that "nothing herein shall be construed as
prohibiting any person or persons holding a 'brewer's license' or 'distiller's license' from disposing of
the products of such brewery or distillery." No provision of the Act limits the place of sale or
disposition of the products of the licensed distiller to the distillery proper. To read into the law the
words "at the place of production" would be doing violence to its phraseology and would be invading
the legislative sphere.
Legislative intention is most eloquently demonstrated by a comparison of the law as it existed in
1914 to 1916 and as it now exists. The Administrative Code of 1916 in its sections 2502 and 2503
and the Administrative Code of 1917 in its sections 2530 and 2531, continue the identical language
of Act No. 59 as amended by Act No. 95, but with the careful insertion of the phrases "in the

distillery" and "at the place of production." Since the enactment of the Administrative Code of 1916,
there can be no doubt that a distiller disposing of the products of his distillery at an establishment
separate and distinct from the distillery itself must obtain a wholesale liquor dealer's license. And the
fact that the Legislature found it necessary, in order to effect that purpose, to modify the terms of the
original statute when reenacting it as a part of the Administrative Code, by the insertion of the words
"at the place of production," shows that prior to the introduction of that amendment the statute had a
different meaning. It is an express recognition on the part of the legislative branch of the government
that without the use of such words of limitation the license to the distiller would permit him to sell the
products of the distillery at places other than "the place of production."
Among the numerous points made by the city fiscal to support his case, is one intended to show that
the Manila Liquor License Act was taken from the State of Ohio; that this is shown by the fact that
the bill was presented in the Philippine Commission by its President Mr. Taft; That years before, Mr.
Taft had taken part as counsel in a case before the Supreme Court of Ohio, the result of which bears
out the contention of the city fiscal; and that, accordingly, the statute adopted from Ohio carried with
it the construction there given to it. We agree that both pursuant to the Philippine Code of Civil
Procedure (secs. 275, 313, as amended by Act No. 2210, sec. 1) and the rules of statutory
construction, the courts could avail themselves of the actual proceedings of the legislative body to
assist in determining the construction of a statute of doubtful import. (U.S. vs. Pons [1916], 34 Phil.,
729; 25 R.C.L., pp. 1039, 1040.) But waiving for the moment the observation before made, to the
effect that the true meaning of the language used in the statute is not at all obscure, the proceedings
in the Philippine Commission prove in this instance to be of little assistance. The public session
minutes of the Philippine Commission, as quoted in the brief of the fiscal, simply showed in a general
way the power of the Commission to enact legislation of this character.
As to the case cited by counsel, in which Mr. Taft was an attorney (Senior vs. Ratterman [1887], 44
Ohio St., 661), the principal holding there was that wholesale liquor dealers not manufacturers are
within the terms of the Act of the General Assembly passed May 14, 1986, and are liable to the tax
therein imposed. A later decision of much more importance, which the fiscal overlooked, coming
from the same court, is Brewing Co. vs. Talbot ([1898], 59 Ohio, St., 511). In the course of the
decision, it was said: "As the statute formerly stood manufacturers were exempt from the tax without
regard to the place or places where they sold their products. But since the amendment of March 21,
1887 (84 O.L., 224) they are so exempt only when they confine their business to selling at the
manufactory. By that amendment the words 'at the manufactory' were inserted as they now appear in
sections 4364-16, above quoted, and they are so far restrictive of the class of exemptions from the
tax as they existed prior to the amendment, that thereafter manufacturers who should engage in the
business of selling their liquors elsewhere than at the manufactory, become liable to the tax like
other dealers. If that was not the purpose and effect of the amendment it had non whatever." If then
the fiscal's rather far-fetched assumptions predicated on the statues of Ohio show anything, it is that
in Ohio, like in the Philippines, legislative amendment was required before liquor manufactures
became liable to the tax imposed on other dealers.
We hold that under the law in force during the period to which this litigation relates, the plaintiff under
his distiller's license could not be required to take out an additional license as a wholesale liquor
dealer for the sale of the products of his distillery.

Two minor points quire brief consideration before we bring this decision to a close. The judgment of
the trial court permitted the plaintiff to recover the amount of the license fee paid under protest with
interest. This was correct for a number of reasons. In the first place, the Manila Liquor License Act,
both as previously existing and as now existing, is a part of the Manila Charter; so that under no
condition would section 1579 of the Administrative Code of 1917 permitting actions for the recovery
of internal revenue taxes illegally collected "without interest," be applicable. And in the second place,
this action concerns taxes collected before the enactment of said section 1579 (Hongkong &
Shanghai Banking Corporation vs. Rafferty [1918], 39 Phil., 145)
On the insistence of the fiscal, the trial court was persuaded to amend the judgment rendered by
eliminating therefrom the payment of costs by the defendant to the plaintiff. In so doing the attorney
led the court to commit an error which, unfortunately, cannot now be righted, since the plaintiff did
not appeal, by misinterpreting the language of our decision in Hongkong & Shanghai Banking
Corporation vs. Rafferty, supra. The ruling in that case was that no costs shall be allowed against the
Government of the Philippine Islands where the Government is the unsuccessful party. There is,
however, a marked difference between sovereignties, such as the United States, and States, and
governments such as exist in Porto Rico and the Philippine Islands, and public corporations which
sue and can be sued. It is admitted herein that the defendant is the City of Manila. Consequently, the
general rule that costs are imposed upon the unsuccessful party applies in municipal corporation
cases. Plaintiff has the right to his costs in this instance.
Judgment is affirmed, with costs against the appellants. So ordered.
Mapa, C.J., Johnson, Araullo, Avancea and Villamor, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-29131

August 27, 1969

NATIONAL MARKETING CORPORATION, plaintiff-appellant,

vs.
MIGUEL D. TECSON, ET AL., defendants,
MIGUEL D. TECSON, defendant-appellee,
THE INSURANCE COMMISSIONER, petitioner.
Government Corporate Counsel Leopoldo M. Abellera and Trial Atty. Antonio M. Brillantes for
plaintiff-appellant.
Antonio T. Lacdan for defendant-appellee.
Office of the Solicitor General for petitioner.
CONCEPCION, C.J.:

This appeal has been certified to us by the Court of Appeals only one question of law being involved
therein.
On November 14, 1955, the Court of First Instance of Manila rendered judgment, in Civil Case No.
20520 thereof, entitled "Price Stabilization Corporation vs. Miguel D. Tecson and Alto Surety and
Insurance Co., Inc.," the dispositive part of which reads as follows:
For the foregoing consideration, the Court decides this case:
(a) Ordering the defendants Miguel D. Tecson and Alto Surety Insurance Co., Inc. to pay
jointly and severally plaintiff PRATRA the sum of P7,200.00 plus 7% interest from May 25,
1960 until the amount is fully paid, plus P500.00 for attorney's fees, and plus costs;
(b) ordering defendant Miguel D. Tecson to indemnify his co-defendant Alto Surety &
Insurance Co., Inc. on the cross-claim for all the amounts it would be made to pay in this
decision, in case defendant Alto Surety & Insurance Co., Inc. pay the amount adjudged to
plaintiff in this decision. From the date of such payment defendant Miguel D. Tecson would
pay the Alto Surety & Insurance Co., Inc., interest at 12% per annum until Miguel D. Tecson
has fully reimbursed plaintiff of the said amount.
Copy of this decision was, on November 21, 1955, served upon the defendants in said case. On
December 21, 1965, the National Marketing Corporation, as successor to all the properties, assets,
rights, and choses in action of the Price Stabilization Corporation, as plaintiff in that case and
judgment creditor therein, filed, with the same court, a complaint, docketed as Civil Case No. 63701
thereof, against the same defendants, for the revival of the judgment rendered in said Case No.
20520. Defendant Miguel D. Tecson moved to dismiss said complaint, upon the ground of lack of
jurisdiction over the subject matter thereof and prescription of action. Acting upon the motion and
plaintiff's opposition thereto, said Court issued, on February 14, 1966, an order reading:
Defendant Miguel Tecson seeks the dismissal of the complaint on the ground of lack of
jurisdiction and prescription. As for lack of jurisdiction, as the amount involved is less than
P10,000 as actually these proceedings are a revival of a decision issued by this same court,
the matter of jurisdiction must be admitted. But as for prescription. Plaintiffs admit the
decision of this Court became final on December 21, 1955. This case was filed exactly on
December 21, 1965 but more than ten years have passed a year is a period of 365 days
(Art. 13, CCP). Plaintiff forgot that 1960, 1964 were both leap years so that when this present
case was filed it was filed two days too late.
The complaint insofar as Miguel Tecson is concerned is, therefore, dismissed as having
prescribed.
1wph1.t

The National Marketing Corporation appealed from such order to the Court of Appeals, which, on
March 20, 1969t certified the case to this Court, upon the ground that the only question therein
raised is one of law, namely, whether or not the present action for the revival of a judgment is barred
by the statute of limitations.

Pursuant to Art. 1144(3) of our Civil Code, an action upon a judgment "must be brought within ten
years from the time the right of action accrues," which, in the language of Art. 1152 of the same
Code, "commences from the time the judgment sought to be revived has become final." This, in turn,
took place on December 21, 1955, or thirty (30) days from notice of the judgment which was
received by the defendants herein on November 21, 1955 no appeal having been taken
therefrom. 1 The issue is thus confined to the date on which ten (10) years from December 21, 1955
expired.
Plaintiff-appellant alleges that it was December 21, 1965, but appellee Tecson maintains otherwise,
because "when the laws speak of years ... it shall be understood that years are of three hundred
sixty-five days each" according to Art. 13 of our Civil Code and, 1960 and 1964 being leap
years, the month of February in both had 29 days, so that ten (10) years of 365 days each, or an
aggregate of 3,650 days, from December 21, 1955, expired on December 19, 1965. The lower court
accepted this view in its appealed order of dismissal.
Plaintiff-appellant insists that the same "is erroneous, because a year means a calendar
year (Statutory Construction, Interpretation of Laws, by Crawford, p. 383) and since what is being
computed here is the number of years, a calendar year should be used as the basis of computation.
There is no question that when it is not a leap year, December 21 to December 21 of the following
year is one year. If the extra day in a leap year is not a day of the year, because it is the 366th day,
then to what year does it belong? Certainly, it must belong to the year where it falls and, therefore,
that the 366 days constitute one year." 2
The very conclusion thus reached by appellant shows that its theory contravenes the explicit
provision of Art. 13 of the Civil Code of the Philippines, limiting the connotation of each "year" as
the term is used in our laws to 365 days. Indeed, prior to the approval of the Civil Code of Spain,
the Supreme Court thereof had held, on March 30, 1887, that, when the law spoke of months, it
meant a "natural" month or "solar" month, in the absence of express provision to the contrary. Such
provision was incorporated into the Civil Code of Spain, subsequently promulgated. Hence, the
same Supreme Court declared 3 that, pursuant to Art. 7 of said Code, "whenever months ... are
referred to in the law, it shall be understood that the months are of 30 days," not the "natural," or
"solar" or "calendar" months, unless they are "designated by name," in which case "they shall be
computed by the actual number of days they have. This concept was later, modified in the
Philippines, by Section 13 of the Revised Administrative Code, Pursuant to which, "month shall be
understood to refer to a calendar month." 4 In the language of this Court, in People vs. Del
Rosario, 5 with the approval of the Civil Code of the Philippines (Republic Act 386) ... we
have 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 has added thereto
the term "years" and explicitly ordains that "it shall be understood that years are of three hundred
sixty-five days."
Although some members of the Court are inclined to think that this legislation is not realistic, for
failure to conform with ordinary experience or practice, the theory of plaintiff-appellant herein 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. If public interest demands a reversion to the policy embodied in the Revised
Administrative Code, this may be done through legislative process, not by judicial decree.
WHEREFORE, the order appealed from should be as it is hereby affirmed, without costs. It is so
ordered.
Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.
Reyes, J.B.L., and Zaldivar, JJ., are on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-30642 April 30, 1985
PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and
NESTOR S. FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR.,
CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH S. FLORESCA and CARMEN S.
FLORESCA;
LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children
LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and
TOMAS MARTINEZ;
SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children
JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;
LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children
EDNA, GEORGE and LARRY III, all surnamed VILLAR;
DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor
children EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed
LANUZA;
EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children
JOSE, LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,
vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII,
Court of First Instance of Manila, respondents.
Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:
This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII,
dated December 16, 1968 dismissing petitioners' complaint for damages on the ground of lack of
jurisdiction.
Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter
referred to as Philex), who, while working at its copper mines underground operations at Tuba,
Benguet on June 28, 1967, died as a result of the cave-in that buried them in the tunnels of the
mine. Specifically, the complaint alleges that Philex, in violation of government rules and regulations,
negligently and deliberately failed to take the required precautions for the protection of the lives of its
men working underground. Portion of the complaint reads:
xxx xxx xxx
9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with
gross and reckless negligence and imprudence and deliberate failure to take the
required precautions for the due protection of the lives of its men working
underground at the time, and in utter violation of the laws and the rules and
regulations duly promulgated by the Government pursuant thereto, allowed great
amount of water and mud to accumulate in an open pit area at the mine above Block
43-S-1 which seeped through and saturated the 600 ft. column of broken ore and
rock below it, thereby exerting tremendous pressure on the working spaces at its
4300 level, with the result that, on the said date, at about 4 o'clock in the afternoon,
with the collapse of all underground supports due to such enormous pressure,
approximately 500,000 cubic feet of broken ores rocks, mud and water, accompanied
by surface boulders, blasted through the tunnels and flowed out and filled in, in a
matter of approximately five (5) minutes, the underground workings, ripped timber
supports and carried off materials, machines and equipment which blocked all
avenues of exit, thereby trapping within its tunnels of all its men above referred to,
including those named in the next preceding paragraph, represented by the plaintiffs
herein;
10. That out of the 48 mine workers who were then working at defendant PHILEX's
mine on the said date, five (5) were able to escape from the terrifying holocaust; 22
were rescued within the next 7 days; and the rest, 21 in number, including those
referred to in paragraph 7 hereinabove, were left mercilessly to their fate,
notwithstanding the fact that up to then, a great many of them were still alive,
entombed in the tunnels of the mine, but were not rescued due to defendant
PHILEX's decision to abandon rescue operations, in utter disregard of its bounden
legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations
duly promulgated by the duly constituted authorities as set out by the Special
Committee above referred to, in their Report of investigation, pages 7-13, Annex 'B'
hereof, but also failed completely to provide its men working underground the
necessary security for the protection of their lives notwithstanding the fact that it had
vast financial resources, it having made, during the year 1966 alone, a total operating
income of P 38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its
llth Annual Report for the year ended December 31, 1966, and with aggregate assets
totalling P 45,794,103.00 as of December 31, 1966;
xxx xxx xxx
(pp. 42-44, rec.)
A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen's
Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance
has no jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said
motion to dismiss claiming that the causes of action are not based on the provisions of the
Workmen's Compensation Act but on the provisions of the Civil Code allowing the award of actual,
moral and exemplary damages, particularly:
Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre- existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter.
Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasidelict.
(b) Art. 1173The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.
Art. 2201. x x x x x x x x x
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible
for all damages which may be reasonably attributed to the non-performance of the
obligation.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant
acted with gross negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27,
1968 dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen's
Compensation Commission. On petitioners' motion for reconsideration of the said order, respondent
Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed
Philex to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was
opposed by petitioners.
On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that
in accordance with the established jurisprudence, the Workmen's Compensation Commission has
exclusive original jurisdiction over damage or compensation claims for work-connected deaths or
injuries of workmen or employees, irrespective of whether or not the employer was negligent, adding
that if the employer's negligence results in work-connected deaths or injuries, the employer shall,
pursuant to Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to
50% of the compensation fixed in the Act.
Petitioners thus filed the present petition.
In their brief, petitioners raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS'
COMPLAINT FOR LACK OF JURISDICTION.
II
THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR
DISTINCTION BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND
CLAIMS FOR COMPENSATION UNDER THE WORKMEN'S COMPENSATION ACT.
A
In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause
of action since the complaint is based on the provisions of the Civil Code on damages, particularly
Articles 2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen's
Compensation Act. They point out that the complaint alleges gross and brazen negligence on the
part of Philex in failing to take the necessary security for the protection of the lives of its employees
working underground. They also assert that since Philex opted to file a motion to dismiss in the
court a quo, the allegations in their complaint including those contained in the annexes are deemed
admitted.
In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen's Compensation Act and the
claims for damages based on gross negligence of Philex under the Civil Code. They point out that
workmen's compensation refers to liability for compensation for loss resulting from injury, disability or
death of the working man through industrial accident or disease, without regard to the fault or

negligence of the employer, while the claim for damages under the Civil Code which petitioners
pursued in the regular court, refers to the employer's liability for reckless and wanton negligence
resulting in the death of the employees and for which the regular court has jurisdiction to adjudicate
the same.
On the other hand, Philex asserts that work-connected injuries are compensable exclusively under
the provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read:
SEC. 5. Exclusive right to compensation.The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury ...
SEC. 46. Jurisdiction. The Workmen's Compensation Commissioner shall have
exclusive jurisdiction to hear and decide claims for compensation under the
Workmen's Compensation Act, subject to appeal to the Supreme Court, ...
Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all
claims of workmen against their employer for damages due to accident suffered in the course of
employment shall be investigated and adjudicated by the Workmen's Compensation Commission,"
subject to appeal to the Supreme Court.
Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A of
the Act provides an additional compensation in case the employer fails to comply with the
requirements of safety as imposed by law to prevent accidents. In fact, it points out that Philex
voluntarily paid the compensation due the petitioners and all the payments have been accepted in
behalf of the deceased miners, except the heirs of Nazarito Floresca who insisted that they are
entitled to a greater amount of damages under the Civil Code.
In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara,
now President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and
Assistant General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections,
formerly UP Law Center Director Froilan Bacungan, appeared as amici curiae and thereafter,
submitted their respective memoranda.
The issue to be resolved as WE stated in the resolution of November 26, 1976, is:
Whether the action of an injured employee or worker or that of his heirs in case of his
death under the Workmen's Compensation Act is exclusive, selective or cumulative,
that is to say, whether his or his heirs' action is exclusively restricted to seeking the
limited compensation provided under the Workmen's Compensation Act or whether
they have a right of selection or choice of action between availing of the worker's
right under the Workmen's Compensation Act and suing in the regular courts under
the Civil Code for higher damages (actual, moral and/or exemplary) from the

employer by virtue of negligence (or fault) of the employer or of his other employees
or whether they may avail cumulatively of both actions, i.e., collect the limited
compensation under the Workmen's Compensation Act and sue in addition for
damages in the regular courts.
There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee
or worker, or the heirs in case of his death, may initiate a complaint to recover damages (not
compensation under the Workmen's Compensation Act) with the regular court on the basis of
negligence of an employer pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He
submits that the remedy of an injured employee for work-connected injury or accident is exclusive in
accordance with Section 5 of the Workmen's Compensation Act, while Atty. Bacungan's position is
that the action is selective. He opines that the heirs of the employee in case of his death have a right
of choice to avail themselves of the benefits provided under the Workmen's Compensation Act or to
sue in the regular court under the Civil Code for higher damages from the employer by virtue of
negligence of the latter. Atty. Bocobo's stand is the same as that of Atty. Bacungan and adds that
once the heirs elect the remedy provided for under the Act, they are no longer entitled to avail
themselves of the remedy provided for under the Civil Code by filing an action for higher damages in
the regular court, and vice versa.
On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to
dismiss on the ground that they have amicably settled their claim with respondent Philex. In the
resolution of September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners
are connected, it appearing that there are other petitioners in this case.
WE hold that the former Court of First Instance has jurisdiction to try the case,
It should be underscored that petitioners' complaint is not for compensation based on the Workmen's
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of
eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of
the Workmen's Compensation Act to entitle them to compensation thereunder. In fact, no allegation
appeared in the complaint that the employees died from accident arising out of and in the course of
their employments. The complaint instead alleges gross and reckless negligence and deliberate
failure on the part of Philex to protect the lives of its workers as a consequence of which a cave-in
occurred resulting in the death of the employees working underground. Settled is the rule that in
ascertaining whether or not the cause of action is in the nature of workmen's compensation claim or
a claim for damages pursuant to the provisions of the Civil Code, the test is the averments or
allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).
In the present case, there exists between Philex and the deceased employees a contractual
relationship. The alleged gross and reckless negligence and deliberate failure that amount to bad
faith on the part of Philex, constitute a breach of contract for which it may be held liable for damages.
The provisions of the Civil Code on cases of breach of contract when there is fraud or bad faith,
read:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages
if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is able shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was constituted.
In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the nonperformance of the obligation.
Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as
assessed by the court.
The rationale in awarding compensation under the Workmen's Compensation Act differs from that in
giving damages under the Civil Code. The compensation acts are based on a theory of
compensation distinct from the existing theories of damages, payments under the acts being made
as compensation and not as damages (99 C.J.S. 53). Compensation is given to mitigate the
harshness and insecurity of industrial life for the workman and his family. Hence, an employer is
liable whether negligence exists or not since liability is created by law. Recovery under the Act is not
based on any theory of actionable wrong on the part of the employer (99 C.J.S. 36).
In other words, under the compensation acts, the employer is liable to pay compensation benefits for
loss of income, as long as the death, sickness or injury is work-connected or work-aggravated, even
if the death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On
the other hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It
is the indemnity recoverable by a person who has sustained injury either in his person, property or
relative rights, through the act or default of another (25 C.J.S. 452).
The claimant for damages under the Civil Code has the burden of proving the causal relation
between the defendant's negligence and the resulting injury as well as the damages suffered. While
under the Workmen's Compensation Act, there is a presumption in favor of the deceased or injured
employee that the death or injury is work-connected or work-aggravated; and the employer has the
burden to prove otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551;
Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).
The claim of petitioners that the case is not cognizable by the Workmen's Compensation
Commission then, now Employees Compensation Commission, is strengthened by the fact that
unlike in the Civil Code, the Workmen's Compensation Act did not contain any provision for an award
of actual, moral and exemplary damages. What the Act provided was merely the right of the heirs to
claim limited compensation for the death in the amount of six thousand (P6,000.00) pesos plus burial
expenses of two hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12
and 13, Workmen's Compensation Act), and an additional compensation of only 50% if the complaint
alleges failure on the part of the employer to "install and maintain safety appliances or to take other

precautions for the prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case
at bar, the amount sought to be recovered is over and above that which was provided under the
Workmen's Compensation Act and which cannot be granted by the Commission.
Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of his
employer but caused by factors outside the industrial plant of his employer. Under the Civil Code, the
liability of the employer, depends on breach of contract or tort. The Workmen's Compensation Act
was specifically enacted to afford protection to the employees or workmen. It is a social legislation
designed to give relief to the workman who has been the victim of an accident causing his death or
ailment or injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).
WE now come to the query as to whether or not the injured employee or his heirs in case of death
have a right of selection or choice of action between availing themselves of the worker's right under
the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher
damages (actual, moral and exemplary) from the employers by virtue of that negligence or fault of
the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the
limited compensation under the Workmen's Compensation Act and sue in addition for damages in
the regular courts.
In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442,
ruled that an injured worker has a choice of either to recover from the employer the fixed amounts
set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the
tortfeasor for higher damages but he cannot pursue both courses of action simultaneously.
In Pacaa WE said:
In the analogous case of Esguerra vs. Munoz Palma, involving the application of
Section 6 of the Workmen's Compensation Act on the injured workers' right to sue
third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking
for the Court, pointed out that the injured worker has the choice of remedies but
cannot pursue both courses of action simultaneously and thus balanced the relative
advantage of recourse under the Workmen's Compensation Act as against an
ordinary action.
As applied to this case, petitioner Esguerra cannot maintain his action for damages
against the respondents (defendants below), because he has elected to seek
compensation under the Workmen's Compensation Law, and his claim (case No.
44549 of the Compensation Commission) was being processed at the time he filed
this action in the Court of First Instance. It is argued for petitioner that as the
damages recoverable under the Civil Code are much more extensive than the
amounts that may be awarded under the Workmen's Compensation Act, they should
not be deemed incompatible. As already indicated, the injured laborer was initially
free to choose either to recover from the employer the fixed amounts set by the
Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller indemnity

obtainable by the first course is balanced by the claimant's being relieved of the
burden of proving the causal connection between the defendant's negligence and the
resulting injury, and of having to establish the extent of the damage suffered; issues
that are apt to be troublesome to establish satisfactorily. Having staked his fortunes
on a particular remedy, petitioner is precluded from pursuing the alternate course, at
least until the prior claim is rejected by the Compensation Commission. Anyway,
under the proviso of Section 6 aforequoted, if the employer Franklin Baker Company
recovers, by derivative action against the alleged tortfeasors, a sum greater than the
compensation he may have paid the herein petitioner, the excess accrues to the
latter.
Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party
tortfeasor, said rule should likewise apply to the employer-tortfeasor.
Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by
Philex and the said heirs.
With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14,
1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry
Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for
compensation to the Regional Office No. 1 of the then Department of Labor and all of them have
been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be
paid in installments (pp. 106-107, rec.). Such allegation was admitted by herein petitioners in their
opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but
they set up the defense that the claims were filed under the Workmen's Compensation Act before
they learned of the official report of the committee created to investigate the accident which
established the criminal negligence and violation of law by Philex, and which report was forwarded
by the Director of Mines to the then Executive Secretary Rafael Salas in a letter dated October 19,
1967 only (p. 76, rec.).
WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been remiss in its contractual obligations
with the deceased miners only after receiving compensation under the Act. Had petitioners been
aware of said violation of government rules and regulations by Philex, and of its negligence, they
would not have sought redress under the Workmen's Compensation Commission which awarded a
lesser amount for compensation. The choice of the first remedy was based on ignorance or a
mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should
therefore be remanded to the lower court for further proceedings. However, should the petitioners be
successful in their bid before the lower court, the payments made under the Workmen's
Compensation Act should be deducted from the damages that may be decreed in their favor.
B

Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case.
The Court merely applies and gives effect to the constitutional guarantees of social justice then
secured by Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by
Sections 6, 7, and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of
the 1973 Constitution, as amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201,
2216, 2231 and 2232 of the New Civil Code of 1950.
To emphasize, the 1935 Constitution declares that:
Sec. 5. The promotion of social justice to insure the well-being and economic security
of all the people should be the concern of the State (Art. II).
Sec. 6. The State shall afford protection to labor, especially to working women, and
minors, and shall regulate the relations between landowner and tenant, and between
labor and capital in industry and in agriculture. The State may provide for compulsory
arbitration (Art. XIV).
The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity,
welfare, and security of all the people "... regulate the use ... and disposition of private property and
equitably diffuse property ownership and profits "establish, maintain and ensure adequate social
services in, the field of education, health, housing, employment, welfare and social security to
guarantee the enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II, 1973
Constitution); "... afford protection to labor, ... and regulate the relations between workers and
employers ..., and assure the rights of workers to ... just and humane conditions of work"(Sec. 9, Art.
II, 1973 Constitution, emphasis supplied).
The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of
the 1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor
Code, thus:
Art. 3. Declaration of basic policy.The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers. The State
shall assure the rights of workers to self-organization, collective bargaining, security
of tenure, and just and humane conditions of work. (emphasis supplied).
The aforestated constitutional principles as implemented by the aforementioned articles of the New
Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor
Code. Section 5 of the Workmen's Compensation Act (before it was amended by R.A. No. 772 on
June 20, 1952), predecessor of Article 173 of the New Labor Code, has been superseded by the
aforestated provisions of the New Civil Code, a subsequent law, which took effect on August 30,
1950, which obey the constitutional mandates of social justice enhancing as they do the rights of the
workers as against their employers. Article 173 of the New Labor Code seems to diminish the rights
of the workers and therefore collides with the social justice guarantee of the Constitution and the
liberal provisions of the New Civil Code.

The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution
are statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert
Jackson in the case of West Virginia State Board of Education vs. Barnette, with characteristic
eloquence, enunciated:
The very purpose of a Bill of Rights was to withdraw certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities and
officials and to establish them as legal principles to be applied by the courts. One's
right to life, liberty, and property, to free speech, a free press, freedom of worship and
assembly, and other fundamental rights may not be submitted to vote; they depend
on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis
supplied).
In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New
Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and
employees.
Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as
amended, promulgated on May 1, 1974, but which took effect six months thereafter, provides that
"all doubts in the implementation and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor" (Art. 2, Labor Code).
Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it
is presumed that the law-making body intended right and justice to prevail. "
More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the
laborer."
Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the
Workmen's Compensation Act provided:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury (emphasis supplied).
Employers contracting laborecsrs in the Philippine Islands for work outside the same
may stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment; and all service
contracts made in the manner prescribed in this section shall be presumed to include
such agreement.

Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was
amended by Commonwealth Act No. 772 on June 20, 1952, thus:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
to injuries received outside the Island through accidents happening in and during the
performance of the duties of the employment. Such stipulation shall not prejudice the
right of the laborers to the benefits of the Workmen's Compensation Law of the place
where the accident occurs, should such law be more favorable to them (As amended
by section 5 of Republic Act No. 772).
Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions
of the New Civil Code, because said Article 173 provides:
Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the
State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee, his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents. The
payment of compensation under this Title shall bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act
Numbered Eleven hundred sixty-one, as amended, Commonwealth Act Numbered
One hundred eighty- six, as amended, Commonwealth Act Numbered Six hundred
ten, as amended, Republic Act Numbered Forty-eight hundred Sixty-four, as
amended, and other laws whose benefits are administered by the System during the
period of such payment for the same disability or death, and conversely (emphasis
supplied).
As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the
Revised Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610,
as amended, R.A. No. 4864, as amended, and all other laws whose benefits are administered by the
System (referring to the GSIS or SSS).
Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor
Code does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore
quoted.
It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence,
is not barred by Article 173 of the New Labor Code. And the damages recoverable under the New
Civil Code are not administered by the System provided for by the New Labor Code, which defines

the "System" as referring to the Government Service Insurance System or the Social Security
System (Art. 167 [c], [d] and [e] of the New Labor Code).
Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the
law of the land.
Article 8 of the New Civil Code provides:
Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines.
The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:
Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying
or interpreting the laws or the Constitution form part of this jurisdiction's legal system.
These decisions, although in themselves not laws, constitute evidence of what the
laws mean. The application or interpretation placed by the Court upon a law is part of
the law as of the date of the enactment of the said law since the Court's application
or interpretation merely establishes the contemporaneous legislative intent that the
construed law purports to carry into effect" (65 SCRA 270, 272-273 [1975]).
WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute
itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).
The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it was
amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of
the deceased, ailing or injured employee to the compensation provided for therein. Said Section 5
was not accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu
Autobus Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to
recover from the employer the fixed amount set by the Workmen's Compensation Act or to prosecute
an ordinary civil action against the tortfeasor for greater damages; but he cannot pursue both
courses of action simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied
Article 1711 of the Civil Code as against the Workmen's Compensation Act, reiterating the 1969
ruling in the case of Valencia vs. Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958
case of Esguerra vs. Munoz Palma (104 Phil. 582), both penned by Justice J.B.L. Reyes. Said
Pacana case was concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar, Castro,
Fernando and Villamor.
Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first
paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even refer,
neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act
did, with greater reason said Article 173 must be subject to the same interpretation adopted in the
cases of Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3)
cases is faithful to and advances the social justice guarantees enshrined in both the 1935 and 1973
Constitutions.

It should be stressed likewise that there is no similar provision on social justice in the American
Federal Constitution, nor in the various state constitutions of the American Union. Consequently, the
restrictive nature of the American decisions on the Workmen's Compensation Act cannot limit the
range and compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil
Code, vis-a-vis Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6
of Article XIV of the 1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of
Principles and State Policies of Article II of the 1973 Constitution.
The dissent seems to subordinate the life of the laborer to the property rights of the employer. The
right to life is guaranteed specifically by the due process clause of the Constitution. To relieve the
employer from liability for the death of his workers arising from his gross or wanton fault or failure to
provide safety devices for the protection of his employees or workers against the dangers which are
inherent in underground mining, is to deprive the deceased worker and his heirs of the right to
recover indemnity for the loss of the life of the worker and the consequent loss to his family without
due process of law. The dissent in effect condones and therefore encourages such gross or wanton
neglect on the part of the employer to comply with his legal obligation to provide safety measures for
the protection of the life, limb and health of his worker. Even from the moral viewpoint alone, such
attitude is un-Christian.
It is therefore patent that giving effect to the social justice guarantees of the Constitution, as
implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making,
but is rendering obedience to the mandates of the fundamental law and the implementing legislation
aforementioned.
The Court, to repeat, is not legislating in the instant case.
It is axiomatic that no ordinary statute can override a constitutional provision.
The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor
Code subvert the rights of the petitioners as surviving heirs of the deceased mining employees.
Section 5 of the Workmen's Compensation Act and Article 173 of the New Labor Code are
retrogressive; because they are a throwback to the obsolete laissez-faire doctrine of Adam Smith
enunciated in 1776 in his treatise Wealth of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964),
which has been discarded soon after the close of the 18th century due to the Industrial Revolution
that generated the machines and other mechanical devices (beginning with Eli Whitney's cotton gin
of 1793 and Robert Fulton's steamboat of 1807) for production and transportation which are
dangerous to life, limb and health. The old socio-political-economic philosophy of live-and-let-live is
now superdesed by the benign Christian shibboleth of live-and-help others to live. Those who
profess to be Christians should not adhere to Cain's selfish affirmation that he is not his brother's
keeper. In this our civilization, each one of us is our brother's keeper. No man is an island. To assert
otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler (3 MN 1,150
reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era of
economic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic
reactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates
man and debases him; because the decision derisively refers to the lowly worker as "servant" and
utilizes with aristocratic arrogance "master" for "employer." It robs man of his inherent dignity and

dehumanizes him. To stress this affront to human dignity, WE only have to restate the quotation from
Prisley, thus: "The mere relation of the master and the servant never can imply an obligation on the
part of the master to take more care of the servant than he may reasonably be expected to do
himself." This is the very selfish doctrine that provoked the American Civil War which generated so
much hatred and drew so much precious blood on American plains and valleys from 1861 to 1864.
"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law
insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth;
its spirit giveth life."
C
It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.
That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or
court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws.
"
Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain
instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in
the law; because the mind of the legislator, like all human beings, is finite and therefore cannot
envisage all possible cases to which the law may apply Nor has the human mind the infinite capacity
to anticipate all situations.
But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American
Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply
the omissions or to clarify the ambiguities in the American Constitution and the statutes.
'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies
that the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist,
Modern Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is
even independent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).
Many of the great expounders of the American Constitution likewise share the same view. Chief
Justice Marshall pronounced: "It is emphatically the province and duty of the Judicial department to
say what the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice
Hughes when he said that "the Constitution is what the judge says it is (Address on May 3, 1907,
quoted by President Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice
Cardozo who pronounced that "No doubt the limits for the judge are narrower. He legislates only
between gaps. He fills the open spaces in the law. " (The Nature of the Judicial Process, p. 113). In
the language of Chief Justice Harlan F. Stone, "The only limit to the judicial legislation is the restraint
of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained by
Justice Frankfurter and Justice Robert Jackson. In the rhetoric of Justice Frankfurter, "the courts
breathe life, feeble or strong, into the inert pages of the Constitution and all statute books."

It should be stressed that the liability of the employer under Section 5 of the Workmen's
Compensation Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused
by the nature of the work, without any fault on the part of the employers. It is correctly termed no
fault liability. Section 5 of the Workmen's Compensation Act, as amended, or Article 173 of the New
Labor Code, does not cover the tortious liability of the employer occasioned by his fault or culpable
negligence in failing to provide the safety devices required by the law for the protection of the life,
limb and health of the workers. Under either Section 5 or Article 173, the employer remains liable to
pay compensation benefits to the employee whose death, ailment or injury is work-connected, even
if the employer has faithfully and diligently furnished all the safety measures and contrivances
decreed by the law to protect the employee.
The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice
Cardozo, "the law has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The
Nature of the Judicial Process 100). Justice Cardozo warned that: "Sometimes the conservatism of
judges has threatened for an interval to rob the legislation of its efficacy. ... Precedents established in
those items exert an unhappy influence even now" (citing Pound, Common Law and Legislation 21
Harvard Law Review 383, 387).
Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a
cautionary undertone: "that judges do and must legislate, but they can do so only interstitially they
are confined from molar to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204
1917). And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845,
852- 853), Justice Holmes pronounced:
The great ordinances of the Constitution do not establish and divide fields of black
and white. Even the more specific of them are found to terminate in a penumbra
shading gradually from one extreme to the other. x x x. When we come to the
fundamental distinctions it is still more obvious that they must be received with a
certain latitude or our government could not go on.
To make a rule of conduct applicable to an individual who but for such action would
be free from it is to legislate yet it is what the judges do whenever they determine
which of two competing principles of policy shall prevail.
xxx xxx xxx
It does not seem to need argument to show that however we may disguise it by
veiling words we do not and cannot carry out the distinction between legislative and
executive action with mathematical precision and divide the branches into waterlight
compartments, were it ever so desirable to do so, which I am far from believing that it
is, or that the Constitution requires.
True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly
concede that in certain cases judges do legislate. They criticize the assumption by the courts of such
law-making power as dangerous for it may degenerate into Judicial tyranny. They include

Blackstone, Jeremy Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer,
Ronald Dworkin, Rolf Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or
legal commentators, who either deny the power of the courts to legislate in-between gaps of the law,
or decry the exercise of such power, have not pointed to examples of the exercise by the courts of
such law-making authority in the interpretation and application of the laws in specific cases that gave
rise to judicial tyranny or oppression or that such judicial legislation has not protected public interest
or individual welfare, particularly the lowly workers or the underprivileged.
On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost among them
is the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US
335), Escubedo vs. Illinois (378 US 478), which guaranteed the accused under custodial
investigation his rights to remain silent and to counsel and to be informed of such rights as even as it
protects him against the use of force or intimidation to extort confession from him. These rights are
not found in the American Bill of Rights. These rights are now institutionalized in Section 20, Article
IV of the 1973 Constitution. Only the peace-and-order adherents were critical of the activism of the
American Supreme Court led by Chief Justice Earl Warren.
Even the definition of Identical offenses for purposes of the double jeopardy provision was
developed by American judicial decisions, not by amendment to the Bill of Rights on double jeopardy
(see Justice Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have
been re-stated in Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in
Section 9 of Rule 117 of the 1964 Revised Rules of Court. In both provisions, the second offense is
the same as the first offense if the second offense is an attempt to commit the first or frustration
thereof or necessarily includes or is necessarily included in the first offense.
The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed
by judicial decisions in the United States and in the Philippines even before people vs. Ylagan (58
Phil. 851-853).
Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537)
as securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of
Brown vs. Maryland Board of Education (349 US 294), holding that the equal protection clause
means that the Negroes are entitled to attend the same schools attended by the whites-equal
facilities in the same school-which was extended to public parks and public buses.
De-segregation, not segregation, is now the governing principle.
Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46
Phil. 440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working
women-according primacy to property rights over human rights. The case of People vs. Pomar is no
longer the rule.
As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice
Holmes had been railing against the conservatism of Judges perverting the guarantee of due
process to protect property rights as against human rights or social justice for the working man. The

law fixing maximum hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in
the case of West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American
Supreme Court upheld the rights of workers to social justice in the form of guaranteed minimum
wage for women and minors, working hours not exceeding eight (8) daily, and maternity leave for
women employees.
The power of judicial review and the principle of separation of powers as well as the rule on political
questions have been evolved and grafted into the American Constitution by judicial decisions
(Marbury vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs.
Government, 277 US 210-212, 72 L. ed. 852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate
concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question
as beyond the ambit of judicial review. There is nothing in both the American and Philippine
Constitutions expressly providing that the power of the courts is limited by the principle of separation
of powers and the doctrine on political questions. There are numerous cases in Philippine
jurisprudence applying the doctrines of separation of powers and political questions and invoking
American precedents.
Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in
the Supreme Court the power to review the validity or constitutionality of any legislative enactment or
executive act.
WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET
ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A
GREATER AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN PETITIONERS, THE
PAYMENTS ALREADY MADE TO THEM PURSUANT TO THE WORKMEN'S COMPENSATION
ACT SHALL BE DEDUCTED. NO COSTS.
SO ORDERED.
Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur.
Concepcion, Jr., J., is on leave.
Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

A
This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides
for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found
in Title XVIII-Damages that:
COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF
DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.
Compensation and damages are synonymous. In Esguerra vs. Muoz Palma, etc., et al., 104 Phil.
582, 586, Justice J.B.L. Reyes had said:
Petitioner also avers that compensation is not damages. This argument is but a play
on words. The term compensation' is used in the law (Act 3812 and Republic Act
772) in the sense of indemnity for damages suffered, being awarded for a personal
injury caused or aggravated by or in the course of employment. ...
By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply
to the complaint involved in the instant case. That "special law", in reference to the complaint, can be
no other than the Workmen's Compensation
Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will
preclude the exercise of the other. The petitioners had already exercised their option to come under
the Workmen's Compensation Act, and they have already received compensation payable to them
under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already
become a "finished transaction".
There are two considerations why it is believed petitioners should no longer be allowed to exercise
the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".
In the second place, it should be plainly equitable that, if a person entitled to an "election of
remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to
avail himself of the second option. At the very least, if he wants to make a second election, in
disregard of the first election he has made, when he makes the second election he should surrender
the benefits he had obtained under the first election, This was not done in the case before the Court.
B.
'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding
"the exclusory provision of the Workmen's Compensation Act." I may further add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.
Act No. 3428 was adopted by the Philippine legislature, in Spanish and some
sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter
209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's
Compensation Act, p. 2]
Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the
Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.
Sec. 112. Hawaii
Statutory Synopsis. The act is compulsory as to employees in 'all industrial
employment' and employees of the territory and its political subdivisions. (Sections
7480-7481, S.S., Vol. 1, p. 713.)
Compensation is not payable when injury is due to employee's willful intention to
injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)
When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p.
714.)
2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act
to an employee
by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer
under the Civil Code and other laws, because of said injury (Paragraphing and
emphasis supplied)
In regards to the intent of the Legislature under the foregoing provision:
A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read
and considered in their natural, ordinary, commonly-accepted and most obvious
significations, according to good and approved usage and without resorting to forced
or subtle construction Courts, therefore, as a rule, cannot presume that the lawmaking body does not know the meaning of words and the rules of grammar.

Consequently, the grammatical reading of a statute must be presumed to yield its

correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied]
3. The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment. (Italics supplied)
The use of the word "exclusively is a further confirmation of the exclusory provision of the Act,
subject only to exceptions which may be provided in the Act itself.
4. It might be mentioned that, within the Act itself, provision is made for remedies other than within
the Act itself. Thus, Section 6, in part, provides:
SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall
be optional with such injured employee either to claim compensation from his
employer, under this Act, or sue such other person for damages, in accordance with
law; ... (Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to
sue his employer under the Civil Code, the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.
5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code
nor to any other law relative to the liability of the employer. After 1927, there were occasions when
the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies
under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5
unless otherwise provided in the Act itself.
(a) The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment (and all service
contracts made in the manner prescribed in this section be presumed to include such
agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the
elimination of the underlined words in parentheses, and the addition of this sentence at the end of
the paragraph:
Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such
law be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time,
if he had so desired, the legislator could have amended the first paragraph of Section 5 so that the
employee would have the option to sue the employer under the Act, or under the Civil Code, should
the latter be more favorable to him.
(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).
In time, it must have been thought that it was inequitable to have the amount of compensation,
caused by negligence on the part of the employer, to be the same amount payable when the
employer was not negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June
20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case there
was negligence on the part of the employer. That additional section evidenced the intent of the legislator
not to give an option to an employee, injured with negligence on the part of the employer, to sue the latter
under the provisions of the Civil Code.
On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again
given the opportunity to provide, but he did not, the option to an employee to sue under the Act or
under the Civil Code.
When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court
is unjustifiably legislating.
It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.
GUTIERREZ, JR., J., dissenting:
To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove
the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present
Labor Code on employees' compensation.
Workmen's compensation evolved to remedy the evils associated with the situation in the early years
of the industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort
suit that his employer was either negligent or in bad faith, that his injury was caused by the employer
and not a fellow worker, and that he was not guilty of contributory negligence. The employer could
employ not only his wealth in defeating the claim for damages but a host of common law defenses
available to him as well. The worker was supposed to know what he entered into when he accepted
employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an obligation on
the part of the master to take more care of the servant than he may reasonably be expected to do of
himself." By entering into a contract of employment, the worker was deemed to accept the risks of
employment that he should discover and guard against himself.
The problems associated with the application of the fellow servant rule, the assumption of risk
doctrine, the principle of contributory negligence, and the many other defenses so easily raised in
protracted damage suits illustrated the need for a system whereby workers had only to prove the fact
of covered employment and the fact of injury arising from employment in order to be compensated.
The need for a compensation scheme where liability is created solely by statute and made
compulsory and where the element of fault-either the fault of the employer or the fault of the
employee-disregarded became obvious. Another objective was to have simplified, expeditious,
inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if
not automatically, receive compensation for work-related injuries.
Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.
I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer
is required to act swiftly on compensation claims. An administrative agency supervises the program.
And because the overwhelming mass of workingmen are benefited by the compensation system,
individual workers who may want to sue for big amounts of damages must yield to the interests of
their entire working class.
The nature of the compensation principle is explained as follows:
An appreciation of the nature of the compensation principle is essential to an
understanding of the acts and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both
the avoidable and unavoidable variety had become enormous, and government was
faced with the problem of who was to pay for the human wreckage wrought by the
dangers of modern industry. If the accident was avoidable and could be attributed to

the carelessness of the employer, existing tort principles offered some measure of
redress. Even here, however, the woeful inadequacy of the fault principle was
manifest. The uncertainty of the outcome of torts litigation in court placed the
employee at a substantial disadvantage. So long as liability depended on fault there
could be no recovery until the finger of blame had been pointed officially at the
employer or his agents. In most cases both the facts and the law were uncertain. The
witnesses, who were usually fellow workers of the victim, were torn between
friendship or loyalty to their class, on the one hand, and fear of reprisal by the
employer, on the other. The expense and delay of litigation often prompted the
injured employee to accept a compromise settlement for a fraction of the full value of
his claim. Even if suit were successfully prosecuted, a large share of the proceeds of
the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a
part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.
xxx xxx xxx
Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or servicesshould ultimately bear the cost of the injuries or deaths that are incident to the
manufacture, preparation and distribution of the product. ...
xxx xxx xxx
Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among
the ultimate consumers. So long as each competing unit in a given industry is
uniformly affected, no producer can gain any substantial competitive advantage or
suffer any appreciable loss by reason of the general adoption of the compensation
principle.
In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be
fixed at a figure that will not disrupt too violently the traffic in the product of the
industry affected. Thus predictability and moderateness of cost are necessary from
the broad economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important
respects: Fault on the part of either employer or employee is eliminated; and
compensation payable according to a definitely limited schedule is substituted for
damages. All compensation acts alike work these two major changes, irrespective of
how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee

represents a compromise in which each party surrenders certain advantages in order
to gain others which are of more importance both to him and to society. The
employer gives up the immunity he otherwise would enjoy in cases where he is not at
fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.
The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the
Act. If the court feels that the basic compromise unduly favors the employer, it will be
tempted to restore what it regards as a proper balance by adopting an interpretation
that favors the worker. In this way, a compensation act drawn in a spirit of extreme
conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so
interpreted by the courts that employers can have little reason to complain. Much of
the unevenness and apparent conflict in compensation decisions throughout the
various jurisdictions must be attributed to this." (Malone & Plant, Workmen's
Compensation American Casebook Series, pp. 63-65).
The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in
to law. We have a system whose parts must mesh harmonious with one another if it is to succeed.
The basic theory has to be followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of
the system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury. ...
Article 173 of the labor Code also provides:

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

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

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

A
This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides
for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found
in Title XVIII-Damages that:
COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF
DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.
Compensation and damages are synonymous. In Esguerra vs. Muoz Palma, etc., et al., 104 Phil.
582, 586, Justice J.B.L. Reyes had said:
Petitioner also avers that compensation is not damages. This argument is but a play
on words. The term compensation' is used in the law (Act 3812 and Republic Act
772) in the sense of indemnity for damages suffered, being awarded for a personal
injury caused or aggravated by or in the course of employment. ...
By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply
to the complaint involved in the instant case. That "special law", in reference to the complaint, can be
no other than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will
preclude the exercise of the other. The petitioners had already exercised their option to come under
the Workmen's Compensation Act, and they have already received compensation payable to them
under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already
become a "finished transaction".
There are two considerations why it is believed petitioners should no longer be allowed to exercise
the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".
In the second place, it should be plainly equitable that, if a person entitled to an "election of
remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to
avail himself of the second option. At the very least, if he wants to make a second election, in
disregard of the first election he has made, when he makes the second election he should surrender
the benefits he had obtained under the first election, This was not done in the case before the Court.
B.
'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding
"the exclusory provision of the Workmen's Compensation Act." I may further add:
1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.
Act No. 3428 was adopted by the Philippine legislature, in Spanish and some
sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter
209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's
Compensation Act, p. 2]
Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the
Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.
Sec. 112. Hawaii
Statutory Synopsis. The act is compulsory as to employees in 'all industrial
employment' and employees of the territory and its political subdivisions. (Sections
7480-7481, S.S., Vol. 1, p. 713.)
Compensation is not payable when injury is due to employee's willful intention to
injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)
When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p.
714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act
to an employee
by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer
under the Civil Code and other laws, because of said injury (Paragraphing and
emphasis supplied)
In regards to the intent of the Legislature under the foregoing provision:
A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read
and considered in their natural, ordinary, commonly-accepted and most obvious
significations, according to good and approved usage and without resorting to forced
or subtle construction Courts, therefore, as a rule, cannot presume that the lawmaking body does not know the meaning of words and the rules of grammar.
Consequently, the grammatical reading of a statute must be presumed to yield its
correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied]
3. The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment. (Italics supplied)
The use of the word "exclusively is a further confirmation of the exclusory provision of the Act,
subject only to exceptions which may be provided in the Act itself.
4. It might be mentioned that, within the Act itself, provision is made for remedies other than within
the Act itself. Thus, Section 6, in part, provides:
SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it shall
be optional with such injured employee either to claim compensation from his
employer, under this Act, or sue such other person for damages, in accordance with
law; ... (Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to
sue his employer under the Civil Code, the legislator could very easily have formulated the said first

paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.
5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code
nor to any other law relative to the liability of the employer. After 1927, there were occasions when
the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies
under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5
unless otherwise provided in the Act itself.
(a) The original second paragraph of Section 5 provided:
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment (and all service
contracts made in the manner prescribed in this section be presumed to include such
agreement).
On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the
elimination of the underlined words in parentheses, and the addition of this sentence at the end of
the paragraph:
Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such
law be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time,
if he had so desired, the legislator could have amended the first paragraph of Section 5 so that the
employee would have the option to sue the employer under the Act, or under the Civil Code, should
the latter be more favorable to him.
(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).
In time, it must have been thought that it was inequitable to have the amount of compensation,
caused by negligence on the part of the employer, to be the same amount payable when the
employer was not negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June
20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case there
was negligence on the part of the employer. That additional section evidenced the intent of the legislator

not to give an option to an employee, injured with negligence on the part of the employer, to sue the latter
under the provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again
given the opportunity to provide, but he did not, the option to an employee to sue under the Act or
under the Civil Code.
When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court
is unjustifiably legislating.
It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.
GUTIERREZ, JR., J., dissenting:
To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove
the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present
Labor Code on employees' compensation.
Workmen's compensation evolved to remedy the evils associated with the situation in the early years
of the industrial revolution when injured workingmen had to rely on damage suits to get recompense.
Before workmen's compensation, an injured worker seeking damages would have to prove in a tort
suit that his employer was either negligent or in bad faith, that his injury was caused by the employer
and not a fellow worker, and that he was not guilty of contributory negligence. The employer could
employ not only his wealth in defeating the claim for damages but a host of common law defenses
available to him as well. The worker was supposed to know what he entered into when he accepted
employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an obligation on
the part of the master to take more care of the servant than he may reasonably be expected to do of
himself." By entering into a contract of employment, the worker was deemed to accept the risks of
employment that he should discover and guard against himself.
The problems associated with the application of the fellow servant rule, the assumption of risk
doctrine, the principle of contributory negligence, and the many other defenses so easily raised in
protracted damage suits illustrated the need for a system whereby workers had only to prove the fact
of covered employment and the fact of injury arising from employment in order to be compensated.
The need for a compensation scheme where liability is created solely by statute and made
compulsory and where the element of fault-either the fault of the employer or the fault of the
employee-disregarded became obvious. Another objective was to have simplified, expeditious,
inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if
not automatically, receive compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.
I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer
is required to act swiftly on compensation claims. An administrative agency supervises the program.
And because the overwhelming mass of workingmen are benefited by the compensation system,
individual workers who may want to sue for big amounts of damages must yield to the interests of
their entire working class.
The nature of the compensation principle is explained as follows:
An appreciation of the nature of the compensation principle is essential to an
understanding of the acts and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both
the avoidable and unavoidable variety had become enormous, and government was
faced with the problem of who was to pay for the human wreckage wrought by the
dangers of modern industry. If the accident was avoidable and could be attributed to
the carelessness of the employer, existing tort principles offered some measure of
redress. Even here, however, the woeful inadequacy of the fault principle was
manifest. The uncertainty of the outcome of torts litigation in court placed the
employee at a substantial disadvantage. So long as liability depended on fault there
could be no recovery until the finger of blame had been pointed officially at the
employer or his agents. In most cases both the facts and the law were uncertain. The
witnesses, who were usually fellow workers of the victim, were torn between
friendship or loyalty to their class, on the one hand, and fear of reprisal by the
employer, on the other. The expense and delay of litigation often prompted the
injured employee to accept a compromise settlement for a fraction of the full value of
his claim. Even if suit were successfully prosecuted, a large share of the proceeds of
the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a
part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.
xxx xxx xxx
Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or servicesshould ultimately bear the cost of the injuries or deaths that are incident to the
manufacture, preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among
the ultimate consumers. So long as each competing unit in a given industry is
uniformly affected, no producer can gain any substantial competitive advantage or
suffer any appreciable loss by reason of the general adoption of the compensation
principle.
In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be
fixed at a figure that will not disrupt too violently the traffic in the product of the
industry affected. Thus predictability and moderateness of cost are necessary from
the broad economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important
respects: Fault on the part of either employer or employee is eliminated; and
compensation payable according to a definitely limited schedule is substituted for
damages. All compensation acts alike work these two major changes, irrespective of
how they may differ in other particulars.
Compensation, when regarded from the viewpoint of employer and employee
represents a compromise in which each party surrenders certain advantages in order
to gain others which are of more importance both to him and to society. The
employer gives up the immunity he otherwise would enjoy in cases where he is not at
fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.
The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the
Act. If the court feels that the basic compromise unduly favors the employer, it will be
tempted to restore what it regards as a proper balance by adopting an interpretation
that favors the worker. In this way, a compensation act drawn in a spirit of extreme
conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so
interpreted by the courts that employers can have little reason to complain. Much of
the unevenness and apparent conflict in compensation decisions throughout the
various jurisdictions must be attributed to this." (Malone & Plant, Workmen's
Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in
to law. We have a system whose parts must mesh harmonious with one another if it is to succeed.
The basic theory has to be followed.
If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of
the system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury. ...
Article 173 of the labor Code also provides:
ART. 173. Exclusivenesss of liability.Unless otherwise provided, the liability of the
State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents.
I am against the Court assuming the role of legislator in a matter calling for actuarial studies and
public hearings. If employers already required to contribute to the State Insurance Fund will still have
to bear the cost of damage suits or get insurance for that purpose, a major study will be necessary.
The issue before us is more far reaching than the interests of the poor victims and their families. All
workers covered by workmen's compensation and all employers who employ covered employees
are affected. Even as I have deepest sympathies for the victims, I regret that I am constrained to
dissent from the majority opinion.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-44143 August 31, 1988

THE PEOPLE OF THE PHILIPPINES, plaintiff,

vs.
EUSEBIO NAZARIO, accused-appellant.
The Solicitor General for plaintiff-appellee.
Teofilo Ragodon for accused-appellant.

SARMIENTO, J.:
The petitioner was charged with violation of certain municipal ordinances of the municipal council of
Pagbilao, in Quezon province. By way of confession and avoidance, the petitioner would admit
having committed the acts charged but would claim that the ordinances are unconstitutional, or,
assuming their constitutionality, that they do not apply to him in any event.
The facts are not disputed:
This defendant is charged of the crime of Violation of Municipal Ordinance in an
information filed by the provincial Fiscal, dated October 9, 1968, as follows:
That in the years 1964, 1965 and 1966, in the Municipality of
Pagbilao, Province of Quezon, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, being then the
owner and operator of a fishpond situated in the barrio of
Pinagbayanan, of said municipality, did then and there willfully,
unlawfully and feloniously refuse and fail to pay the municipal taxes in
the total amount of THREE HUNDRED SIXTY TWO PESOS AND
SIXTY TWO CENTAVOS (P362.62), required of him as fishpond
operator as provided for under Ordinance No. 4, series of 1955, as
amended, inspite of repeated demands made upon him by the
Municipal Treasurer of Pagbilao, Quezon, to pay the same.
Contrary to law.
For the prosecution the following witnesses testified in substance as follows;
MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon

In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused

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

On cross-examination, this witness declared:

I worked with the accused up to March 1964.
NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of
Pinagbayanan, Pagbilao, Quezon
I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know
the accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao,
Quezon. He still operates the fishpond up to the present and I know this fact as I am
the barrio captain of Pinagbayanan.
On cross-examination, this witness declared:
I came to know the accused when he first operated his fishpond since 1959.
On re-direct examination, this witness declared:
I was present during the catching of fish in 1967 and the accused was there.
On re-cross examination, this witness declared:
I do not remember the month in 1962 when the accused caught fish.
RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon,
married
As Municipal Treasurer I am in charge of tax collection. I know the accused even
before I was Municipal Treasurer of Pagbilao. I have written the accused a letter
asking him to pay his taxes (Exhibit B). Said letter was received by the accused as
per registry return receipt, Exhibit B-1. The letter demanded for payment of P362.00,
more or less, by way of taxes which he did not pay up to the present. The former
Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused (Exhibit
C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D),
requesting information if accused paid taxes with that office. The Commission sent
me a certificate (Exhibits D-1, D-2 & D-3). The accused had a fishpond lease
agreement. The taxes unpaid were for the years 1964, 1965 and 1966.
On cross-examination, this witness declared:
I have demanded the taxes for 38.10 hectares.
On question of the court, this witness declared:
What I was collecting from the accused is the fee on fishpond operation, not rental.

The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C,
D, D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits
D, D-1, D-2 and D-3 which were not admitted for being immaterial.
For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner
and general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old
Sta. Mesa, Sampaloc, Manila, declared in substance as follows:
I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at
Manila or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my
business is in Manila and my family lives at Manila. I never resided at Pagbilao,
Quezon. I do not own a house at Pagbilao. I am a lessee of a fishpond located at
Pagbilao, Quezon, and I have a lease agreement to that effect with the Philippine
Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966, the contract of
lease, Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and
12, series of 1955, 1965 and 1966, were translated into English by the Institute of
National Language to better understand the ordinances. There were exchange of
letters between me and the Municipal Treasurer of Pagbilao regarding the payment
of the taxes on my leased fishpond situated at Pagbilao. There was a letter of
demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by
mail at my residence at Manila. I answered the letter of demand, Exhibit 3, with
Exhibit 3-A. I requested an inspection of my fishpond to determine its condition as it
was not then in operation. The Municipal Treasurer Alvarez went there once in 1967
and he found that it was destroyed by the typhoon and there were pictures taken
marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of demand, Exhibit
5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit 5A from Administrative Order No. 6, Exhibit 6. I received another letter of demand from
Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16, 1966,
Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A, dated
February 26, 1966. I received another letter of demand from Treasurer Alvarez of
Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to
Treasurer Caparros to ask for an application for license tax and he said none and he
told me just to pay my taxes. I did not pay because up to now I do not know whether I
am covered by the Ordinance or not. The letters of demand asked me to pay
different amounts for taxes for the fishpond. Because under Sec. 2309 of the
Revised Administrative Code, municipal taxes lapse if not paid and they are
collecting on a lapsed ordinance. Because under the Tax Code, fishermen are
exempted from percentage tax and privilege tax. There is no law empowering the
municipality to pass ordinance taxing fishpond operators.
The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4C, 5, 5-A, 6, 6-A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the
court.
From their evidence the prosecution would want to show to the court that the
accused, as lessee or operator of a fishpond in the municipality of Pagbilao, refused,

and still refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in
violation of Municipal Ordinance No. 4, series of 1955, as amended by Municipal
Ordinance No. 15, series of 1965, and finally amended by Municipal Ordinance No.
12, series of 1966.
On the other hand, the accused, by his evidence, tends to show to the court that the
taxes sought to be collected have already lapsed and that there is no law
empowering municipalities to pass ordinances taxing fishpond operators. The
defense, by their evidence, tried to show further that, as lessee of a forest land to be
converted into a fishpond, he is not covered by said municipal ordinances; and finally
that the accused should not be taxed as fishpond operator because there is no
fishpond yet being operated by him, considering that the supposed fishpond was
under construction during the period covered by the taxes sought to be collected.
Finally, the defendant claims that the ordinance in question is ultra vires as it is
outside of the power of the municipal council of Pagbilao, Quezon, to enact; and that
the defendant claims that the ordinance in question is ambiguous and uncertain.
There is no question from the evidences presented that the accused is a lessee of a
parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under
Fishpond Lease Agreement No. 1066, entered into by the accused and the
government, through the Secretary of Agriculture and Natural Resources on August
21, 1959.
There is no question from the evidences presented that the 27.1998 hectares of land
leased by the defendant from the government for fishpond purposes was actually
converted into fishpond and used as such, and therefore defendant is an operator of
a fishpond within the purview of the ordinance in question. 1
The trial Court 2 returned a verdict of guilty and disposed as follows:
VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond
reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended
by Ordinance No. 15, series of 1965 and further amended by Ordinance No. 12, series of 1966, of
the Municipal Council of Pagbilao, Quezon; and hereby sentences him to pay a fine of P50.00, with
subsidiary imprisonment in case of insolvency at the rate of P8.00 a day, and to pay the costs of this
proceeding.
SO ORDERED. 3
In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that:
I.
THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955,
AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY

ORDINANCE NO. 12, SERIES OF 1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS

NULL AND VOID FOR BEING AMBIGUOUS AND UNCERTAIN.
II.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS
AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO.
III.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION
COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND NOT
TO LESSEES OF PUBLIC LANDS.
IV.
THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF
VALID, CANNOT BE ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND DOES
NOT COVER NONRESIDENTS. 4
The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965,
and Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to
this appeal, the salient portions thereof are hereinbelow quoted:
Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of
fishpond on part thereof per annum. 5
xxx xxx xxx
Sec. l (a). For the convenience of those who have or owners or managers of
fishponds within the territorial limits of this municipality, the date of payment of
municipal tax relative thereto, shall begin after the lapse of three (3) years starting
from the date said fishpond is approved by the Bureau of Fisheries. 6
xxx xxx xxx
Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction
thereof per annum beginning and taking effect from the year 1964, if the fishpond
started operating before the year 1964. 7
The first objection refers to the ordinances being allegedly "ambiguous and uncertain." 8 The
petitioner contends that being a mere lessee of the fishpond, he is not covered since the said ordinances
speak of "owner or manager." He likewise maintains that they are vague insofar as they reckon the date

of payment: Whereas Ordinance No. 4 provides that parties shall commence payment "after the lapse of
three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries." 9 Ordinance
No. 12 states that liability for the tax accrues "beginning and taking effect from the year 1964 if the
fishpond started operating before the year 1964." 10

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men
"of common intelligence must necessarily guess at its meaning and differ as to its application." 11 It is
repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons,
especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers
unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.
But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving
clause or by construction. Thus, in Coates v. City of Cincinnati, 12 the U.S. Supreme Court struck down
an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there
conduct themselves in a manner annoying to persons passing by." 13 Clearly, the ordinance imposed no
standard at all "because one may never know in advance what 'annoys some people but does not annoy
others.' " 14
Coates highlights what has been referred to as a "perfectly vague" 15 act whose obscurity is evident on
its face. It is to be distinguished, however, from legislation couched in imprecise language but which
nonetheless specifies a standard though defectively phrased in which case, it may be "saved" by
proper construction.
It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to
certain types of activities. In that event, such statutes may not be challenged whenever directed
against such activities. In Parker v. Levy, 16 a prosecution originally under the U.S. Uniform Code of
Military Justice (prohibiting, specifically, "conduct unbecoming an officer and gentleman"), the defendant,
an army officer who had urged his men not to go to Vietnam and called the Special Forces trained to fight
there thieves and murderers, was not allowed to invoke the void for vagueness doctrine on the premise
that accepted military interpretation and practice had provided enough standards, and consequently, a fair
notice that his conduct was impermissible.
It is interesting that in Gonzales v. Commission on Elections, 17 a divided Court sustained an act of
Congress (Republic Act No. 4880 penalizing "the too early nomination of candidates" 18 limiting the
election campaign period, and prohibiting "partisan political activities"), amid challenges of vagueness and
overbreadth on the ground that the law had included an "enumeration of the acts deemed included in the
terms 'election campaign' or 'partisan political activity" 19 that would supply the standards. "As thus limited,
the objection that may be raised as to vagueness has been minimized, if not totally set at rest." 20 In his
opinion, however, Justice Sanchez would stress that the conduct sought to be prohibited "is not clearly
defined at all." 21 "As worded in R.A 4880, prohibited discussion could cover the entire spectrum of
expression relating to candidates and political parties." 22 He was unimpressed with the "restrictions"
Fernando's opinion had relied on: " 'Simple expressions of opinions and thoughts concerning the election'
and expression of 'views on current political problems or issues' leave the reader conjecture, to
guesswork, upon the extent of protection offered, be it as to the nature of the utterance ('simple
expressions of opinion and thoughts') or the subject of the utterance ('current political problems or
issues')." 23

The Court likewise had occasion to apply the "balancing-of-interests" test, 24 insofar as the statute's
ban on early nomination of candidates was concerned: "The rational connection between the prohibition
of Section 50-A and its object, the indirect and modest scope of its restriction on the rights of speech and
assembly, and the embracing public interest which Congress has found in the moderation of partisan
political activity, lead us to the conclusion that the statute may stand consistently with and does not offend
the Constitution." 25 In that case, Castro would have the balance achieved in favor of State authority at the
"expense" of individual liberties.
In the United States, which had ample impact on Castro's separate opinion, the balancing test finds
a close kin, referred to as the "less restrictive alternative " 26 doctrine, under which the court searches
for alternatives available to the Government outside of statutory limits, or for "less drastic means" 27 open
to the State, that would render the statute unnecessary. In United States v. Robel, 28 legislation was
assailed, banning members of the (American) Communist Party from working in any defense facility. The
U.S. Supreme Court, in nullifying the statute, held that it impaired the right of association, and that in any
case, a screening process was available to the State that would have enabled it to Identify dangerous
elements holding defense positions. 29 In that event, the balance would have been struck in favor of
individual liberties.
It should be noted that it is in free expression cases that the result is usually close. It is said,
however, that the choice of the courts is usually narrowed where the controversy involves say,
economic rights, 30 or as in the Levycase, military affairs, in which less precision in analysis is required
and in which the competence of the legislature is presumed.
In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is
unmistakable from their very provisions that the appellant falls within its coverage. As the actual
operator of the fishponds, he comes within the term " manager." He does not deny the fact that he
financed the construction of the fishponds, introduced fish fries into the fishponds, and had
employed laborers to maintain them. 31 While it appears that it is the National Government which owns
them, 32 the Government never shared in the profits they had generated. It is therefore only logical that he
shoulders the burden of tax under the said ordinances.
We agree with the trial court that the ordinances are in the character of revenue
measures 33 designed to assist the coffers of the municipality of Pagbilao. And obviously, it cannot be the
owner, the Government, on whom liability should attach, for one thing, upon the ancient principle that the
Government is immune from taxes and for another, since it is not the Government that had been making
money from the venture.
Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits
brought about by the business, the appellant is clearly liable for the municipal taxes in question. He
cannot say that he did not have a fair notice of such a liability to make such ordinances vague.
Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that
"the imposition of tax has to depend upon an uncertain date yet to be determined (three years after
the 'approval of the fishpond' by the Bureau of Fisheries, and upon an uncertain event (if the
fishpond started operating before 1964), also to be determined by an uncertain individual or
individuals." 34 Ordinance No. 15, in making the tax payable "after the lapse of three (3) years starting
from the date said fishpond is approved by the Bureau of Fisheries," 35 is unequivocal about the date of

payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and taking
effect from the year 1964 if the fishpond started operating before the year 1964 ," 36 does not give rise to
any ambiguity. In either case, the dates of payment have been definitely established. The fact that the
appellant has been allegedly uncertain about the reckoning dates as far as his liability for the years
1964, 1965, and 1966 is concerned presents a mere problem in computation, but it does not make the
ordinances vague. In addition, the same would have been at most a difficult piece of legislation, which is
not unfamiliar in this jurisdiction, but hardly a vague law.

As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior
thereto (Ordinance No. 12), and for new fishponds, three years after their approval by the Bureau of
Fisheries (Ordinance No. 15). This is so since the amendatory act (Ordinance No. 12) merely
granted amnesty unto old, delinquent fishpond operators. It did not repeal its mother ordinances
(Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still prevail.
To the Court, the ordinances in question set forth enough standards that clarify imagined
ambiguities. While such standards are not apparent from the face thereof, they are visible from the
intent of the said ordinances.
The next inquiry is whether or not they can be said to be ex post facto measures. The appellant
argues that they are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the
payment of the imposed tax shall "beginning and taking effect from the year 1964, if the fishpond
started operating before the year 1964.' In other words, it penalizes acts or events occurring before
its passage, that is to say, 1964 and even prior thereto." 37
The Court finds no merit in this contention. As the Solicitor General notes, "Municipal Ordinance No.
4 was passed on May 14, 1955. 38 Hence, it cannot be said that the amendment (under Ordinance No.
12) is being made to apply retroactively (to 1964) since the reckoning period is 1955 (date of enactment).
Essentially, Ordinances Nos. 12 and 15 are in the nature of curative measures intended to facilitate and
enhance the collection of revenues the originally act, Ordinance No. 4, had prescribed. 39 Moreover, the
act (of non-payment of the tax), had been, since 1955, made punishable, and it cannot be said that
Ordinance No. 12 imposes a retroactive penalty. As we have noted, it operates to grant amnesty to
operators who had been delinquent between 1955 and 1964. It does not mete out a penalty, much less, a
retrospective one.
The appellant assails, finally, the power of the municipal council of Pagbilao to tax "public forest
land." 40 In Golden Ribbon Lumber Co., Inc. v. City of Butuan 41 we held that local governments' taxing
power does not extend to forest products or concessions under Republic Act No. 2264, the Local
Autonomy Act then in force. (Republic Act No. 2264 likewise prohibited municipalities from imposing
percentage taxes on sales.)
First of all, the tax in question is not a tax on property, although the rate thereof is based on the area
of fishponds ("P3.00 per hectare" 42). Secondly, fishponds are not forest lands, although we have held
them to the agricultural lands. 43By definition, "forest" is "a large tract of land covered with a natural growth
of trees and underbush; a large wood." 44(Accordingly, even if the challenged taxes were directed on the
fishponds, they would not have been taxes on forest products.)

They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not
charged against sales, which would have offended the doctrine enshrined by Golden Ribbon
Lumber, 45 but rather on occupation, which is allowed under Republic Act No. 2264. 46 They are what have
been classified as fixed annual taxes and this is obvious from the ordinances themselves.
There is, then, no merit in the last objection.
WHEREFORE, the appeal is DISMISSED. Costs against the appellant.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Cortes, Grio-Aquino
and Medialdea, JJ., concur.
Melencio-Herrera, and Regalado, J., took no part.
Gancayco, J., is on leave.

EN BANC

[G.R. No. 148560. November 19, 2001]

JOSEPH EJERCITO ESTRADA, petitioner, vs. SANDIGANBAYAN (Third

Division) and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
BELLOSILLO, J.:

JOHN STUART MILL, in his essay On Liberty, unleashes the full fury of his pen in defense
of the rights of the individual from the vast powers of the State and the inroads of societal
pressure. But even as he draws a sacrosanct line demarcating the limits on individuality beyond
which the State cannot tread - asserting that "individual spontaneity" must be allowed to flourish
with very little regard to social interference - he veritably acknowledges that the exercise of
rights and liberties is imbued with a civic obligation, which society is justified in enforcing at all
cost, against those who would endeavor to withhold fulfillment. Thus he says -

The sole end for which mankind is warranted, individually or collectively, in

interfering with the liberty of action of any of their number, is self-protection. The
only purpose for which power can be rightfully exercised over any member of a
civilized community, against his will, is to prevent harm to others.
Parallel to individual liberty is the natural and illimitable right of the State to selfpreservation. With the end of maintaining the integrity and cohesiveness of the body politic, it

behooves the State to formulate a system of laws that would compel obeisance to its collective
wisdom and inflict punishment for non-observance.
The movement from Mill's individual liberalism to unsystematic collectivism wrought
changes in the social order, carrying with it a new formulation of fundamental rights and duties
more attuned to the imperatives of contemporary socio-political ideologies. In the process, the
web of rights and State impositions became tangled and obscured, enmeshed in threads of
multiple shades and colors, the skein irregular and broken. Antagonism, often outright collision,
between the law as the expression of the will of the State, and the zealous attempts by its
members to preserve their individuality and dignity, inevitably followed. It is when individual
rights are pitted against State authority that judicial conscience is put to its severest test.
Petitioner Joseph Ejercito Estrada, the highest-ranking official to be prosecuted under RA
7080 (An Act Defining and Penalizing the Crime of Plunder),[1] as amended by RA 7659,[2] wishes
to impress upon us that the assailed law is so defectively fashioned that it crosses that thin but
distinct line which divides the valid from the constitutionally infirm. He therefore makes a
stringent call for this Court to subject the Plunder Law to the crucible of constitutionality mainly
because, according to him, (a) it suffers from the vice of vagueness; (b) it dispenses with the
"reasonable doubt" standard in criminal prosecutions; and, (c) it abolishes the element ofmens
rea in crimes already punishable under The Revised Penal Code, all of which are purportedly
clear violations of the fundamental rights of the accused to due process and to be informed of the
nature and cause of the accusation against him.
Specifically, the provisions of the Plunder Law claimed by petitioner to have transgressed
constitutional boundaries are Secs. 1, par. (d), 2 and 4 which are reproduced hereunder:

Section 1. x x x x (d) "Ill-gotten wealth" means any asset, property, business,

enterprise or material possession of any person within the purview of Section Two (2)
hereof, acquired by him directly or indirectly through dummies, nominees, agents,
subordinates and/or business associates by any combination or series of the following
means or similar schemes:
(1) Through misappropriation, conversion, misuse, or malversation of public funds or
raids on the public treasury;
(2) By receiving, directly or indirectly, any commission, gift, share, percentage,
kickbacks or any other form of pecuniary benefit from any person and/or entity in
connection with any government contract or project or by reason of the office or
position of the public office concerned;
(3) By the illegal or fraudulent conveyance or disposition of assets belonging to the
National Government or any of its subdivisions, agencies or instrumentalities, or
government owned or controlled corporations and their subsidiaries;

(4) By obtaining, receiving or accepting directly or indirectly any shares of stock,

equity or any other form of interest or participation including the promise of future
employment in any business enterprise or undertaking;
(5) By establishing agricultural, industrial or commercial monopolies or other
combinations and/or implementation of decrees and orders intended to benefit
particular persons or special interests; or
(6) By taking advantage of official position, authority, relationship, connection or
influence to unjustly enrich himself or themselves at the expense and to the damage
and prejudice of the Filipino people and the Republic of the Philippines.
Section 2. Definition of the Crime of Plunder, Penalties. - Any public officer who, by
himself or in connivance with members of his family, relatives by affinity or
consanguinity, business associates, subordinates or other persons, amasses,
accumulates or acquires ill-gotten wealth through a combination or series of overt or
criminal acts as described in Section 1 (d) hereof, in the aggregate amount or total
value of at least fifty million pesos (P50,000,000.00) shall be guilty of the crime of
plunder and shall be punished by reclusion perpetua to death. Any person who
participated with the said public officer in the commission of an offense contributing
to the crime of plunder shall likewise be punished for such offense. In the imposition
of penalties, the degree of participation and the attendance of mitigating and
extenuating circumstances as provided by the Revised Penal Code shall be considered
by the court. The court shall declare any and all ill-gotten wealth and their interests
and other incomes and assets including the properties and shares of stocks derived
from the deposit or investment thereof forfeited in favor of the State (underscoring
supplied).
Section 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it
shall not be necessary to prove each and every criminal act done by the accused in
furtherance of the scheme or conspiracy to amass, accumulate or acquire ill-gotten
wealth, it being sufficient to establish beyond reasonable doubt a pattern of overt or
criminal acts indicative of the overall unlawful scheme or conspiracy(underscoring
supplied).
On 4 April 2001 the Office of the Ombudsman filed before the Sandiganbayan eight (8)
separate Informations, docketed as: (a) Crim. Case No. 26558, for violation of RA 7080, as
amended by RA 7659; (b) Crim. Cases Nos. 26559 to 26562, inclusive, for violation of Secs. 3,
par. (a), 3, par. (a), 3, par. (e) and 3, par. (e), of RA 3019 (Anti-Graft and Corrupt Practices
Act), respectively; (c) Crim. Case No. 26563, for violation of Sec. 7, par. (d), of RA 6713
(The Code of Conduct and Ethical Standards for Public Officials and Employees); (d) Crim.
Case No. 26564, for Perjury (Art. 183 of The Revised Penal Code); and, (e) Crim. Case No.
26565, for Illegal Use Of An Alias (CA No. 142, as amended by RA 6085).

On 11 April 2001 petitioner filed an Omnibus Motion for the remand of the case to the
Ombudsman for preliminary investigation with respect to specification "d" of the charges in the
Information in Crim. Case No. 26558; and, for reconsideration/reinvestigation of the offenses
under specifications "a," "b," and "c" to give the accused an opportunity to file counter-affidavits
and other documents necessary to prove lack of probable cause. Noticeably, the grounds raised
were only lack of preliminary investigation, reconsideration/reinvestigation of offenses, and
opportunity to prove lack of probable cause. The purported ambiguity of the charges and the
vagueness of the law under which they are charged were never raised in that Omnibus
Motion thus indicating the explicitness and comprehensibility of the Plunder Law.
On 25 April 2001 the Sandiganbayan, Third Division, issued a Resolution in Crim. Case No.
26558 finding that "a probable cause for the offense of PLUNDER exists to justify the issuance
of warrants for the arrest of the accused." On 25 June 2001 petitioner's motion for
reconsideration was denied by the Sandiganbayan.
On 14 June 2001 petitioner moved to quash the Information in Crim. Case No. 26558 on the
ground that the facts alleged therein did not constitute an indictable offense since the law on
which it was based was unconstitutional for vagueness, and that the Amended Information for
Plunder charged more than one (1) offense. On 21 June 2001 the Government filed
its Opposition to the Motion to Quash, and five (5) days later or on 26 June 2001 petitioner
submitted his Reply to the Opposition. On 9 July 2001 the Sandiganbayan denied
petitioner's Motion to Quash.
As concisely delineated by this Court during the oral arguments on 18 September 2001, the
issues for resolution in the instant petition for certiorari are: (a) The Plunder Law is
unconstitutional for being vague; (b) The Plunder Law requires less evidence for proving the
predicate crimes of plunder and therefore violates the rights of the accused to due process; and,
(c) Whether Plunder as defined in RA 7080 is a malum prohibitum, and if so, whether it is within
the power of Congress to so classify it.
Preliminarily, the whole gamut of legal concepts pertaining to the validity of legislation is
predicated on the basic principle that a legislative measure is presumed to be in harmony with the
Constitution.[3] Courts invariably train their sights on this fundamental rule whenever a legislative
act is under a constitutional attack, for it is the postulate of constitutional adjudication. This
strong predilection for constitutionality takes its bearings on the idea that it is forbidden for one
branch of the government to encroach upon the duties and powers of another. Thus it has been
said that the presumption is based on the deference the judicial branch accords to its coordinate
branch - the legislature.
If there is any reasonable basis upon which the legislation may firmly rest, the courts must
assume that the legislature is ever conscious of the borders and edges of its plenary powers, and
has passed the law with full knowledge of the facts and for the purpose of promoting what is
right and advancing the welfare of the majority. Hence in determining whether the acts of the
legislature are in tune with the fundamental law, courts should proceed with judicial restraint and
act with caution and forbearance. Every intendment of the law must be adjudged by the courts in
favor of its constitutionality, invalidity being a measure of last resort. In construing therefore the
provisions of a statute, courts must first ascertain whether an interpretation is fairly possible to
sidestep the question of constitutionality.

In La Union Credit Cooperative, Inc. v. Yaranon[4] we held that as

long as there is some basis for the decision of the court, the constitutionality of the challenged
law will not be touched and the case will be decided on other available grounds. Yet the force of
the presumption is not sufficient to catapult a fundamentally deficient law into the safe environs
of constitutionality. Of course, where the law clearly and palpably transgresses the hallowed
domain of the organic law, it must be struck down on sight lest the positive commands of the
fundamental law be unduly eroded.
Verily, the onerous task of rebutting the presumption weighs heavily on the party
challenging the validity of the statute. He must demonstrate beyond any tinge of doubt that there
is indeed an infringement of the constitution, for absent such a showing, there can be no finding
of unconstitutionality. A doubt, even if well-founded, will hardly suffice. As tersely put by
Justice Malcolm, "To doubt is to sustain."[5] And petitioner has miserably failed in the instant
case to discharge his burden and overcome the presumption of constitutionality of the Plunder
Law.
As it is written, the Plunder Law contains ascertainable standards and well-defined
parameters which would enable the accused to determine the nature of his violation. Section 2 is
sufficiently explicit in its description ofthe acts, conduct and conditions required or forbidden,
and prescribes the elements of the crime with reasonable certainty and particularity. Thus -

1. That the offender is a public officer who acts by himself or in connivance with
members of his family, relatives by affinity or consanguinity, business associates,
subordinates or other persons;
2. That he amassed, accumulated or acquired ill-gotten wealth through a combination
or series of the following overt or criminal acts: (a) through misappropriation,
conversion, misuse, or malversation of public funds or raids on the public treasury;
(b) by receiving, directly or indirectly, any commission, gift, share, percentage,
kickback or any other form of pecuniary benefits from any person and/or entity in
connection with any government contract or project or by reason of the office or
position of the public officer; (c) by the illegal or fraudulent conveyance or
disposition of assets belonging to the NationalGovernment or any of its subdivisions,
agencies or instrumentalities of Government owned or controlled corporations or
their subsidiaries; (d) by obtaining, receiving or accepting directly or indirectly any
shares of stock, equity or any other form of interest or participation including the
promise of future employment in any business enterprise or undertaking; (e) by
establishing agricultural, industrial or commercial monopolies or other combinations
and/or implementation of decrees and orders intended to benefit particular persons or
special interests; or (f) by taking advantage of official position, authority,
relationship, connection or influence to unjustly enrich himself or themselves at the
expense and to the damage and prejudice of the Filipino people and the Republic of
the Philippines; and,

3. That the aggregate amount or total value of the ill-gotten wealth amassed,
accumulated or acquired is at least P50,000,000.00.
As long as the law affords some comprehensible guide or rule that would inform those who
are subject to it what conduct would render them liable to its penalties, its validity will be
sustained. It must sufficiently guide the judge in its application; the counsel, in defending one
charged with its violation; and more importantly, the accused, in identifying the realm of the
proscribed conduct. Indeed, it can be understood with little difficulty that what the assailed
statute punishes is the act of a public officer in amassing or accumulating ill-gotten wealth of at
least P50,000,000.00 through a series or combination of acts enumerated in Sec. 1, par. (d), of
the Plunder Law.
In fact, the amended Information itself closely tracks the language of the law, indicating with
reasonable certainty the various elements of the offense which petitioner is alleged to have
committed:

"The undersigned Ombudsman, Prosecutor and OIC-Director, EPIB, Office of the

Ombudsman, hereby accuses former PRESIDENT OF THE REPUBLIC OF THE
PHILIPPINES, Joseph Ejercito Estrada, a.k.a. 'ASIONG SALONGA' and a.k.a.
'JOSE VELARDE,' together with Jose 'Jinggoy' Estrada, Charlie 'Atong' Ang, Edward
Serapio, Yolanda T. Ricaforte, Alma Alfaro, JOHN DOE a.k.a. Eleuterio
Tan OR Eleuterio Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, and
John DOES & Jane Does, of the crime of Plunder, defined and penalized under R.A.
No. 7080, as amended by Sec. 12 of R.A. No. 7659, committed as follows:
That during the period from June, 1998 to January 2001, in the Philippines, and within
the jurisdiction of this Honorable Court, accused Joseph Ejercito Estrada, THEN A
PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, by
himself AND/OR in CONNIVANCE/CONSPIRACY with his co-accused, WHO
ARE MEMBERS OF HIS FAMILY, RELATIVES BY AFFINITY OR
CONSANGUINITY, BUSINESS ASSOCIATES, SUBORDINATES AND/OR
OTHER PERSONS, BY TAKING UNDUE ADVANTAGE OF HIS OFFICIAL
POSITION, AUTHORITY, RELATIONSHIP, CONNECTION, OR
INFLUENCE, did then and there willfully, unlawfully and criminally amass,
accumulate and acquire BY HIMSELF, DIRECTLY OR INDIRECTLY, ill-gotten
wealth in the aggregate amount or TOTAL VALUE of FOUR BILLION NINETY
SEVEN MILLION EIGHT HUNDRED FOUR THOUSAND ONE HUNDRED
SEVENTY THREE PESOS AND SEVENTEEN
CENTAVOS (P4,097,804,173.17), more or less, THEREBY UNJUSTLY
ENRICHING HIMSELF OR THEMSELVES AT THE EXPENSE AND TO THE
DAMAGE OF THE FILIPINO PEOPLE AND THE REPUBLIC OF THE
PHILIPPINES, through ANY OR A combination OR A series of overt OR criminal
acts, OR SIMILAR SCHEMES OR MEANS, described as follows:

(a) by receiving OR collecting, directly or indirectly, on SEVERAL INSTANCES,

MONEY IN THE AGGREGATE AMOUNT OF FIVE HUNDRED FORTYFIVE MILLION PESOS (P545,000,000.00), MORE OR LESS, FROM
ILLEGAL GAMBLING IN THE FORM OF GIFT, SHARE, PERCENTAGE,
KICKBACK OR ANY FORM OF PECUNIARY BENEFIT, BY HIMSELF
AND/OR in connection with co-accused CHARLIE 'ATONG' ANG, Jose 'Jinggoy'
Estrada, Yolanda T. Ricaforte, Edward Serapio, AND JOHN DOES AND JANE
DOES, in consideration OF TOLERATION OR PROTECTION OF ILLEGAL
GAMBLING;
(b) by DIVERTING, RECEIVING, misappropriating,
converting OR misusing DIRECTLY OR INDIRECTLY, for HIS OR THEIR
PERSONAL gain and benefit, public funds in the amount of ONE HUNDRED
THIRTY MILLION PESOS (P130,000,000.00), more or less, representing a portion
of the TWO HUNDRED MILLION PESOS (P200,000,000.00) tobacco excise tax
share allocated for the province of Ilocos Surunder R.A. No. 7171, by himself
and/or in connivance with co-accused Charlie 'Atong' Ang, Alma Alfaro, JOHN
DOE a.k.a. Eleuterio Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, AND
OTHER JOHN DOES & JANE DOES; (italic supplied).
(c) by directing, ordering and compelling, FOR HIS PERSONAL GAIN AND
BENEFIT, the Government Service Insurance System (GSIS) TO PURCHASE
351,878,000 SHARES OF STOCKS, MORE OR LESS, and the Social Security
System (SSS), 329,855,000 SHARES OF STOCK, MORE OR LESS, OF THE
BELLE CORPORATION IN THE AMOUNT OF MORE OR LESS ONE
BILLION ONE HUNDRED TWO MILLION NINE HUNDRED SIXTY FIVE
THOUSAND SIX HUNDRED SEVEN PESOS AND FIFTY CENTAVOS
(P1,102,965,607.50) AND MORE OR LESS SEVEN HUNDRED FORTY FOUR
MILLION SIX HUNDRED TWELVE THOUSAND AND FOUR HUNDRED
FIFTY PESOS (P744,612,450.00), RESPECTIVELY, OR A TOTAL OF MORE
OR LESS ONE BILLION EIGHT HUNDRED FORTY SEVEN MILLION
FIVE HUNDRED SEVENTY EIGHT THOUSAND FIFTY SEVEN PESOS AND
FIFTY CENTAVOS (P1,847,578,057.50); AND BY COLLECTING OR
RECEIVING, DIRECTLY OR INDIRECTLY, BY HIMSELF AND/OR IN
CONNIVANCE WITH JOHN DOES AND JANE DOES, COMMISSIONS OR
PERCENTAGES BY REASON OF SAID PURCHASES OF SHARES OF
STOCK IN THE AMOUNT OF ONE HUNDRED EIGHTY NINE MILLION
SEVEN HUNDRED THOUSAND PESOS (P189,700,000.00) MORE OR LESS,
FROM THE BELLE CORPORATION WHICH BECAME PART OF THE
DEPOSIT IN THE EQUITABLE-PCI BANK UNDER THE ACCOUNT
NAME 'JOSE VELARDE;'

(d) by unjustly enriching himself FROM COMMISSIONS, GIFTS, SHARES,

PERCENTAGES, KICKBACKS, OR ANY FORM OF PECUNIARY
BENEFITS, IN CONNIVANCE WITH JOHN DOES AND JANE DOES, in the
amount of MORE OR LESS THREE BILLION TWO HUNDRED THIRTY THREE
MILLION ONE HUNDRED FOUR THOUSAND ONE HUNDRED SEVENTY
THREE PESOS AND SEVENTEEN CENTAVOS (P3,233,104,173.17) AND
DEPOSITING THE SAME UNDER HIS ACCOUNT NAME 'JOSE
VELARDE' AT THE EQUITABLE-PCI BANK."
We discern nothing in the foregoing that is vague or ambiguous - as there is obviously none
- that will confuse petitioner in his defense. Although subject to proof, these factual assertions
clearly show that the elements of the crime are easily understood and provide adequate contrast
between the innocent and the prohibited acts. Upon such unequivocal assertions, petitioner is
completely informed of the accusations against him as to enable him to prepare for an intelligent
defense.
Petitioner, however, bewails the failure of the law to provide for the statutory definition of
the terms "combination" and "series" in the key phrase "a combination or series of overt or
criminal acts" found in Sec. 1, par. (d), and Sec. 2, and the word "pattern" in Sec.
4. These omissions, according to petitioner, render the Plunder Law unconstitutional for being
impermissibly vague and overbroad and deny him the right to be informed of the nature and
cause of the accusation against him, hence, violative of his fundamental right to due process.
The rationalization seems to us to be pure sophistry. A statute is not rendered uncertain and
void merely because general terms are used therein, or because of the employment of terms
without defining them;[6] much less do we have to define every word we use. Besides, there is no
positive constitutional or statutory command requiring the legislature to define each and every
word in an enactment. Congress is not restricted in the form of expression of its will, and its
inability to so define the words employed in a statute will not necessarily result in the vagueness
or ambiguity of the law so long as the legislative will is clear, or at least, can be gathered from
the whole act, which is distinctly expressed in the Plunder Law.
Moreover, it is a well-settled principle of legal hermeneutics that words of a statute will be
interpreted in their natural, plain and ordinary acceptation and signification, [7] unless it is evident
that the legislature intended a technical or special legal meaning to those words. [8] The intention
of the lawmakers - who are, ordinarily, untrained philologists and lexicographers - to
use statutory phraseology in such a manner is always presumed. Thus, Webster's New Collegiate
Dictionary contains the following commonly accepted definition of the words
"combination" and "series:"

Combination - the result or product of combining; the act or process of

combining. To combine is to bring into such close relationship as to obscure
individual characters.
Series - a number of things or events of the same class coming one after another in
spatial and temporal succession.

That Congress intended the words "combination" and "series" to be understood in their
popular meanings is pristinely evident from the legislative deliberations on the bill which
eventually became RA 7080 or the Plunder Law:

DELIBERATIONS OF THE BICAMERAL COMMITTEE ON JUSTICE, 7 May

1991
REP. ISIDRO: I am just intrigued again by our definition of plunder. We say
THROUGH A COMBINATION OR SERIES OF OVERT OR CRIMINAL ACTS AS
MENTIONED IN SECTION ONE HEREOF. Now when we say combination, we
actually mean to say, if there are two or more means, we mean to say that number one
and two or number one and something else are included, how about a series of the
same act? For example, through misappropriation, conversion, misuse, will these be
included also?
REP. GARCIA: Yeah, because we say a series.
REP. ISIDRO: Series.
REP. GARCIA: Yeah, we include series.
REP. ISIDRO: But we say we begin with a combination.
REP. GARCIA: Yes.
REP. ISIDRO: When we say combination, it seems that REP. GARCIA: Two.
REP. ISIDRO: Not only two but we seem to mean that two of the enumerated means not twice of one
enumeration.
REP. GARCIA: No, no, not twice.
REP. ISIDRO: Not twice?
REP. GARCIA: Yes. Combination is not twice - but combination, two acts.
REP. ISIDRO: So in other words, thats it. When we say combination, we mean, two different acts. It
cannot be a repetition of the same act.
REP. GARCIA: That be referred to series, yeah.
REP. ISIDRO: No, no. Supposing one act is repeated, so there are two.
REP. GARCIA: A series.
REP. ISIDRO: Thats not series. Its a combination. Because when we say combination or series, we
seem to say that two or more, di ba?
REP. GARCIA: Yes, this distinguishes it really from ordinary crimes. That is why, I said, that is a very
good suggestion because if it is only one act, it may fall under ordinary crime but we have here a
combination or series of overt or criminal acts. So x x x x
REP. GARCIA: Series. One after the other eh di....

SEN. TANADA: So that would fall under the term series?

REP. GARCIA: Series, oo.
REP. ISIDRO: Now, if it is a combination, ano, two misappropriations....
REP. GARCIA: Its not... Two misappropriations will not be combination. Series.
REP. ISIDRO: So, it is not a combination?
REP. GARCIA: Yes.
REP. ISIDRO: When you say combination, two different?
REP. GARCIA: Yes.
SEN. TANADA: Two different.
REP. ISIDRO: Two different acts.
REP. GARCIA: For example, ha...
REP. ISIDRO: Now a series, meaning, repetition...
DELIBERATIONS ON SENATE BILL NO. 733, 6 June 1989
SENATOR MACEDA: In line with our interpellations that sometimes one or maybe even two acts may
already result in such a big amount, on line 25, would the Sponsor consider deleting the words a
series of overt or, to read, therefore: or conspiracy COMMITTED by criminal acts such as.
Remove the idea of necessitating a series. Anyway, the criminal acts are in the plural.
SENATOR TANADA: That would mean a combination of two or more of the acts mentioned in this.
THE PRESIDENT: Probably two or more would be....
SENATOR MACEDA: Yes, because a series implies several or many; two or more.
SENATOR TANADA: Accepted, Mr. President x x x x
THE PRESIDENT: If there is only one, then he has to be prosecuted under the particular crime. But
when we say acts of plunder there should be, at least, two or more.
SENATOR ROMULO: In other words, that is already covered by existing laws, Mr. President.

Thus when the Plunder Law speaks of "combination," it is referring to at least two (2) acts
falling under different categories of enumeration provided in Sec. 1, par. (d), e.g., raids on the
public treasury in Sec. 1, par. (d), subpar. (1), and fraudulent conveyance of assets belonging to
the National Government under Sec. 1, par. (d), subpar. (3).
On the other hand, to constitute a series" there must be two (2) or more overt or criminal
acts falling under the same category of enumeration found in Sec. 1, par. (d), say,
misappropriation, malversation and raids onthe public treasury, all of which fall under Sec. 1,
par. (d), subpar. (1). Verily, had the legislature intended a technical or distinctive meaning for
"combination" and "series," it would have taken greater pains in specifically providing for it in
the law.
As for "pattern," we agree with the observations of the Sandiganbayan[9] that this term is
sufficiently defined in Sec. 4, in relation to Sec. 1, par. (d), and Sec. 2 -

x x x x under Sec. 1 (d) of the law, a 'pattern' consists of at least a combination or

series of overt or criminal acts enumerated in subsections (1) to (6) of Sec. 1
(d). Secondly, pursuant to Sec. 2 of the law, the pattern of overt or criminal acts is
directed towards a common purpose or goal which is to enable the public officer to
amass, accumulate or acquire ill-gotten wealth. And thirdly, there must either be an
'overall unlawful scheme' or 'conspiracy' to achieve said common goal. As commonly
understood, the term 'overall unlawful scheme' indicates a 'general plan of action or
method' which the principal accused and public officer and others conniving with him
follow to achieve the aforesaid common goal. In the alternative, if there is no such
overall scheme or where the schemes or methods used by multiple accused vary, the
overt or criminal acts must form part of a conspiracy to attain a common goal.
Hence, it cannot plausibly be contended that the law does not give a fair warning and
sufficient notice of what it seeks to penalize. Under the circumstances, petitioner's reliance on the
"void-for-vagueness" doctrine is manifestly misplaced. The doctrine has been formulated in
various ways, but is most commonly stated to the effect that a statute establishing a criminal
offense must define the offense with sufficient definiteness that persons of ordinary intelligence
can understand what conduct is prohibited by the statute. It can only be invoked against that
specie of legislation that is utterly vague on its face, i.e., that which cannot be clarified either by
a saving clause or by construction.
A statute or act may be said to be vague when it lacks comprehensible standards that men of
common intelligence must necessarily guess at its meaning and differ in its application. In
such instance, the statute is repugnant to the Constitution in two (2) respects - it violates due
process for failure to accord persons, especially the parties targeted by it, fair notice of what
conduct to avoid; and, it leaves law enforcers unbridled discretion in carrying out its provisions
and becomes an arbitrary flexing of the Government muscle. [10] But the doctrine does not apply as
against legislations that are merely couched in imprecise language but which nonetheless specify
astandard though defectively phrased; or to those that are apparently ambiguous yet fairly
applicable to certain types of activities. The first may be "saved" by proper construction, while
no challenge may be mounted as against the second whenever directed against such activities.
[11]
With more reason, the doctrine cannot be invoked where the assailed statute is clear and free
from ambiguity, as in this case.
The test in determining whether a criminal statute is void for uncertainty is whether the
language conveys a sufficiently definite warning as to the proscribed conduct when measured by
common understanding and practice.[12] It must be stressed, however, that the "vagueness"
doctrine merely requires a reasonable degree of certainty for the statute to be upheld - not
absolute precision or mathematical exactitude, as petitioner seems to suggest. Flexibility, rather
than meticulous specificity, is permissible as long as the metes and bounds of the statute are
clearly delineated. An act will not be held invalid merely because it might have been more
explicit in its wordings or detailed in its provisions, especially where, because of the nature of
the act, it would be impossible to provide all the details in advance as in all other statutes.
Moreover, we agree with, hence we adopt, the observations of Mr. Justice Vicente V.
Mendoza during the deliberations of the Court that the allegations that the Plunder Law is vague
and overbroad do not justify a facial review of its validity -

The void-for-vagueness doctrine states that "a statute which either forbids or requires
the doing of an act in terms so vague that men of common intelligence must
necessarily guess at its meaning and differ as to its application, violates the first
essential of due process of law."[13] The overbreadth doctrine, on the other hand, decrees that
"a governmental purpose may not be achieved by means which sweep unnecessarily broadly and
thereby invade the area of protected freedoms."[14]

A facial challenge is allowed to be made to a vague statute and to one which is

overbroad because of possible "chilling effect" upon protected speech. The theory is
that "[w]hen statutes regulate or proscribe speech and no readily apparent construction
suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the
transcendent value to all society of constitutionally protected expression is deemed to
justify allowing attacks on overly broad statutes with no requirement that the person
making the attack demonstrate that his own conduct could not be regulated by a
statute drawn with narrow specificity."[15] The possible harm to society in permitting
some unprotected speech to go unpunished is outweighed by the possibility that the
protected speech of others may be deterred and perceived grievances left to fester
because of possible inhibitory effects of overly broad statutes.
This rationale does not apply to penal statutes. Criminal statutes have general in
terrorem effect resulting from their very existence, and, if facial challenge is allowed
for this reason alone, the State may well be prevented from enacting laws against
socially harmful conduct. In the area of criminal law, the law cannot take chances as
in the area of free speech.
The overbreadth and vagueness doctrines then have special application only to free
speech cases. They are inapt for testing the validity of penal statutes. As the U.S.
Supreme Court put it, in an opinion by Chief Justice Rehnquist, "we have not
recognized an 'overbreadth' doctrine outside the limited context of the First
Amendment."[16] In Broadrick v. Oklahoma,[17] the Court ruled that "claims of facial
overbreadth have been entertained in cases involving statutes which, by their terms,
seek to regulate only spoken words" and, again, that "overbreadth claims, if
entertained at all, have been curtailed when invoked against ordinary criminal laws
that are sought to be applied to protected conduct." For this reason, it has been held
that "a facial challenge to a legislative act is the most difficult challenge to mount
successfully, since the challenger must establish that no set of circumstances exists
under which the Act would be valid."[18] As for the vagueness doctrine, it is said that a
litigant may challenge a statute on its face only if it is vague in all its possible
applications. "A plaintiff who engages in some conduct that is clearly proscribed
cannot complain of the vagueness of the law as applied to the conduct of others." [19]

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools
developed for testing "on their faces" statutes in free speech cases or, as they are
called in American law, First Amendment cases. They cannot be made to do service
when what is involved is a criminal statute. With respect to such statute, the
established rule is that "one to whom application of a statute is constitutional will not
be heard to attack the statute on the ground that impliedly it might also be taken as
applying to other persons or other situations in which its application might be
unconstitutional."[20] As has been pointed out, "vagueness challenges in the First
Amendment context, like overbreadth challenges typically produce facial invalidation,
while statutes found vague as a matter of due process typically are invalidated [only]
'as applied' to a particular defendant."[21] Consequently, there is no basis for
petitioner's claim that this Court review the Anti-Plunder Law on its face and in its
entirety.
Indeed, "on its face" invalidation of statutes results in striking them down entirely on
the ground that they might be applied to parties not before the Court whose activities
are constitutionally protected.[22] It constitutes a departure from the case and
controversy requirement of the Constitution and permits decisions to be made without
concrete factual settings and in sterile abstract contexts. [23] But, as the U.S. Supreme
Court pointed out inYounger v. Harris[24]
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring
correction of these deficiencies before the statute is put into effect, is rarely if ever an
appropriate task for the judiciary. The combination of the relative remoteness of the
controversy, the impact on the legislative process of the relief sought, and above all
the speculative and amorphous nature of the required line-by-line analysis of detailed
statutes, . . .ordinarily results in a kind of case that is wholly unsatisfactory for
deciding constitutional questions, whichever way they might be decided.
For these reasons, "on its face" invalidation of statutes has been described as
"manifestly strong medicine," to be employed "sparingly and only as a last
resort,"[25] and is generally disfavored.[26] In determining the constitutionality of a
statute, therefore, its provisions which are alleged to have been violated in a case must
be examined in the light of the conduct with which the defendant is charged. [27]
In light of the foregoing disquisition, it is evident that the purported ambiguity of the
Plunder Law, so tenaciously claimed and argued at length by petitioner, is more imagined than
real. Ambiguity, where none exists, cannot be created by dissecting parts and words in the statute
to furnish support to critics who cavil at the want of scientific precision in the law. Every
provision of the law should be construed in relation and with reference to every other part. To be
sure, it will take more than nitpicking to overturn the well-entrenched presumption of
constitutionality and validity of the Plunder Law. A fortiori, petitioner cannot feign ignorance of
what the Plunder Law is all about. Being one of the Senators who voted for its passage,

petitioner must be aware that the law was extensively deliberated upon by the Senate and its
appropriate committees by reason of which he even registered his affirmative vote with full
knowledge of its legal implications and sound constitutional anchorage.
The parallel case of Gallego v. Sandiganbayan[28] must be mentioned if only to illustrate and
emphasize the point that courts are loathed to declare a statute void for uncertainty unless the law
itself is so imperfect and deficient in its details, and is susceptible of no reasonable construction
that will support and give it effect. In that case, petitioners Gallego and Agoncillo challenged the
constitutionality of Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act for being
vague. Petitioners posited, among others, that the term "unwarranted" is highly imprecise and
elastic with no common law meaning or settled definition by prior judicial or administrative
precedents; that, for its vagueness, Sec. 3, par. (e), violates due process in that it does not give
fair warning or sufficient notice of what it seeks to penalize. Petitioners further argued that the
Information charged them with three (3) distinct offenses, to wit: (a) giving of "unwarranted"
benefits through manifest partiality; (b) giving of "unwarranted" benefits through evident bad
faith; and, (c) giving of "unwarranted" benefits through gross inexcusable negligence while in
the discharge of their official function and that their right to be informed of the nature and cause
of the accusation against them was violated because they were left to guess which of the three (3)
offenses, if not all, they were being charged and prosecuted.
In dismissing the petition, this Court held that Sec. 3, par. (e), of The Anti-Graft and Corrupt
Practices Act does not suffer from the constitutional defect of vagueness. The phrases "manifest
partiality," "evident bad faith," and "gross and inexcusable negligence" merely describe the
different modes by which the offense penalized in Sec. 3, par. (e), of the statute may be
committed, and the use of all these phrases in the same Information does not mean that the
indictment charges three (3) distinct offenses.

The word 'unwarranted' is not uncertain. It seems lacking adequate or official support;
unjustified; unauthorized (Webster, Third International Dictionary, p. 2514); or
without justification or adequate reason (Philadelphia Newspapers, Inc. v. US Dept. of
Justice, C.D. Pa., 405 F. Supp. 8, 12, cited in Words and Phrases, Permanent Edition,
Vol. 43-A 1978, Cumulative Annual Pocket Part, p. 19).
The assailed provisions of the Anti-Graft and Corrupt Practices Act consider a corrupt
practice and make unlawful the act of the public officer in:
x x x 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, x x x (Section 3 [e], Rep.
Act 3019, as amended).
It is not at all difficult to comprehend that what the aforequoted penal provisions
penalize is the act of a public officer, in the discharge of his official, administrative or
judicial functions, in giving any private party benefits, advantage or preference which

is unjustified, unauthorized or without justification or adequate reason, through

manifest partiality, evident bad faith or gross inexcusable negligence.
We do not subscribe to petitioner's stand. Primarily, all the essential elements of plunder can
be culled and understood from its definition in Sec. 2, in relation to Sec. 1, par. (d), and "pattern"
is not one of them.Moreover, the epigraph and opening clause of Sec. 4 is clear and unequivocal:

SEC. 4. Rule of Evidence. - For purposes of establishing the crime of plunder

xxxx
It purports to do no more than prescribe a rule of procedure for the prosecution of a criminal
case for plunder. Being a purely procedural measure, Sec. 4 does not define or establish any
substantive right in favor of the accused but only operates in furtherance of a remedy. It is only a
means to an end, an aid to substantive law. Indubitably, even without invoking Sec. 4, a
conviction for plunder may be had, for what is crucial for the prosecution is to present sufficient
evidence to engender that moral certitude exacted by the fundamental law to prove the guilt of
the accused beyond reasonable doubt. Thus, even granting for the sake of argument that Sec. 4 is
flawed and vitiated for the reasons advanced by petitioner, it may simply be severed from the rest
of the provisions without necessarily resulting in the demise of the law; after all, the existing
rules on evidence can supplant Sec. 4 more than enough. Besides, Sec. 7 of RA 7080 provides
for a separability clause -

Sec. 7. Separability of Provisions. - If any provisions of this Act or the application

thereof to any person or circumstance
is held invalid, the remaining provisions of this Act and the application of such
provisions to other persons or circumstances shall not be affected thereby.
Implicit in the foregoing section is that to avoid the whole act from being declared invalid as
a result of the nullity of some of its provisions, assuming that to be the case although it is not
really so, all the provisions thereof should accordingly be treated independently of each other,
especially if by doing so, the objectives of the statute can best be achieved.
As regards the third issue, again we agree with Justice Mendoza that plunder is a malum in
se which requires proof of criminal intent. Thus, he says, in his Concurring Opinion -

x x x Precisely because the constitutive crimes are mala in se the element of mens
rea must be proven in a prosecution for plunder. It is noteworthy that the amended
information alleges that the crime of plunder was committed "willfully, unlawfully
and criminally." It thus alleges guilty knowledge on the part of petitioner.
In support of his contention that the statute eliminates the requirement of mens
rea and that is the reason he claims the statute is void, petitioner cites the following
remarks of Senator Taada made during the deliberation on S.B. No. 733:

SENATOR TAADA . . . And the evidence that will be required to convict him would
not be evidence for each and every individual criminal act but only evidence sufficient
to establish the conspiracy or scheme to commit this crime of plunder.[33]
However, Senator Taada was discussing 4 as shown by the succeeding portion of the
transcript quoted by petitioner:
SENATOR ROMULO: And, Mr. President, the Gentleman feels that it is contained in
Section 4, Rule of Evidence, which, in the Gentleman's view, would provide for a
speedier and faster process of attending to this kind of cases?
SENATOR TAADA: Yes, Mr. President . . .[34]
Senator Taada was only saying that where the charge is conspiracy to commit plunder,
the prosecution need not prove each and every criminal act done to further the scheme
or conspiracy, it being enough if it proves beyond reasonable doubt a pattern of overt
or ciminal acts indicative of the overall unlawful scheme or conspiracy. As far as the
acts constituting the pattern are concerned, however, the elements of the crime must
be proved and the requisite mens rea must be shown.
Indeed, 2 provides that Any person who participated with the said public officer in the commission of an
offense contributing to the crime of plunder shall likewise be punished for such
offense. In the imposition of penalties, the degree of participation and the attendance
of mitigating and extenuating circumstances, as provided by the Revised Penal Code,
shall be considered by the court.
The application of mitigating and extenuating circumstances in the Revised Penal
Code to prosecutions under the Anti-Plunder Law indicates quite clearly that mens
rea is an element of plunder since the degree of responsibility of the offender is
determined by his criminal intent. It is true that 2 refers to "any person who
participates with the said public officer in the commission of an offense contributing
to the crime of plunder." There is no reason to believe, however, that it does not apply
as well to the public officer as principal in the crime. As Justice Holmes said: "We
agree to all the generalities about not supplying criminal laws with what they omit,
but there is no canon against using common sense in construing laws as saying what
they obviously mean."[35]
Finally, any doubt as to whether the crime of plunder is a malum in se must be deemed
to have been resolved in the affirmative by the decision of Congress in 1993 to
include it among the heinous crimes punishable byreclusion perpetua to death. Other

heinous crimes are punished with death as a straight penalty in R.A. No.
7659. Referring to these groups of heinous crimes, this Court held in People v.
Echegaray:[36]
The evil of a crime may take various forms. There are crimes that are, by their very
nature, despicable, either because life was callously taken or the victim is treated like
an animal and utterly dehumanized as to completely disrupt the normal course of his
or her growth as a human being . . . . Seen in this light, the capital crimes of
kidnapping and serious illegal detention for ransom resulting in the death of the victim
or the victim is raped, tortured, or subjected to dehumanizing acts; destructive arson
resulting in death; and drug offenses involving minors or resulting in the death of the
victim in the case of other crimes; as well as murder, rape,
parricide,infanticide, kidnapping and serious illegal detention, where the victim is
detained for more than three days or serious physical injuries were inflicted on the
victim or threats to kill him were made or the victim is a minor, robbery with
homicide, rape or intentional mutilation, destructive arson, and carnapping where the
owner, driver or occupant of the carnapped vehicle is killed or raped, which are
penalized by reclusion perpetua to death, are clearly heinous by their very nature.
There are crimes, however, in which the abomination lies in the significance and
implications of the subject criminal acts in the scheme of the larger socio-political and
economic context in which the state finds itself to be struggling to develop and
provide for its poor and underprivileged masses. Reeling from decades of corrupt
tyrannical rule that bankrupted the government and impoverished the population, the
Philippine Government must muster the political will to dismantle the culture of
corruption, dishonesty, greed and syndicated criminality that so deeply entrenched
itself in the structures of society and the psyche of the populace. [With the
government] terribly lacking the money to provide even the most basic services to its
people, any form of misappropriation or misapplication of government funds
translates to an actual threat to the very existence of government, and in turn, the very
survival of the people it governs over. Viewed in this context, no less heinous are the
effects and repercussions of crimes like qualified bribery, destructive arson resulting
in death, and drug offenses involving government officials, employees or officers, that
their perpetrators must not be allowed to cause further destruction and damage to
society.
The legislative declaration in R.A. No. 7659 that plunder is a heinous offense implies
that it is a malum in se. For when the acts punished are inherently immoral or
inherently wrong, they are mala in se[37] and it does not matter that such acts are
punished in a special law, especially since in the case of plunder the predicate crimes
are mainly mala in se. Indeed, it would be absurd to treat prosecutions for plunder as
though they are mere prosecutions for violations of the Bouncing Check Law (B.P.

Blg. 22) or of an ordinance against jaywalking, without regard to the inherent

wrongness of the acts.
To clinch, petitioner likewise assails the validity of RA 7659, the amendatory law of RA
7080, on constitutional grounds. Suffice it to say however that it is now too late in the day for
him to resurrect this long deadissue, the same having been eternally consigned by People v.
Echegaray[38] to the archives of jurisprudential history. The declaration of this Court therein that
RA 7659 is constitutionally valid stands as a declaration of the State, and becomes, by necessary
effect, assimilated in the Constitution now as an integral part of it.
Our nation has been racked by scandals of corruption and obscene profligacy of officials in
high places which have shaken its very foundation. The anatomy of graft and corruption has
become more elaborate in thecorridors of time as unscrupulous people relentlessly contrive more
and more ingenious ways to bilk the coffers of the government. Drastic and radical measures are
imperative to fight the increasingly sophisticated, extraordinarily methodical and
economically catastrophic looting of the national treasury. Such is the Plunder Law, especially
designed to disentangle those ghastly tissues of grand-scale corruption which, if left unchecked,
will spread like a malignant tumor and ultimately consume the moral and institutional fiber of
our nation. The Plunder Law, indeed, is a living testament to the will of the legislature to
ultimately eradicate this scourge and thus secure society against the avarice and other venalities
in public office.
These are times that try men's souls. In the checkered history of this nation, few issues of
national importance can equal the amount of interest and passion generated by petitioner's
ignominious fall from the highest office, and his eventual prosecution and trial under a virginal
statute. This continuing saga has driven a wedge of dissension among our people that may linger
for a long time. Only by responding to the clarion call for patriotism, to rise above factionalism
and prejudices, shall we emerge triumphant in the midst of ferment.
PREMISES CONSIDERED, this Court holds that RA 7080 otherwise known as the
Plunder Law, as amended by RA 7659, is CONSTITUTIONAL. Consequently, the petition to
declare the law unconstitutional is DISMISSED for lack of merit.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-2348

February 27, 1950

GREGORIO PERFECTO, plaintiff-appellee,

vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-appellant.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Francisco Carreon for oppositor
and appellant.
Gregorio Perfecto in his own behalf.
BENGZON, J.:
In April, 1947 the Collector of Internal Revenue required Mr. Justice Gregorio Perfecto to pay income
tax upon his salary as member of this Court during the year 1946. After paying the amount (P802),
he instituted this action in the Manila Court of First Instance contending that the assessment was
illegal, his salary not being taxable for the reason that imposition of taxes thereon would reduce it in
violation of the Constitution.
The Manila judge upheld his contention, and required the refund of the amount collected. The
defendant appealed.
The death of Mr. Justice Perfecto has freed us from the embarrassment of passing upon the claim of
a colleague. Still, as the outcome indirectly affects all the members of the Court, consideration of the
matter is not without its vexing feature. Yet adjudication may not be declined, because (a) we are not
legally disqualified; (b) jurisdiction may not be renounced, ad it is the defendant who appeals to this
Court, and there is no other tribunal to which the controversy may be referred; (c) supreme courts in
the United States have decided similar disputes relating to themselves; (d) the question touches all
the members of the judiciary from top to bottom; and (e) the issue involves the right of other
constitutional officers whose compensation is equally protected by the Constitution, for instance, the
President, the Auditor-General and the members of the Commission on Elections. Anyway the
subject has been thoroughly discussed in many American lawsuits and opinions, and we shall hardly
do nothing more than to borrow therefrom and to compare their conclusions to local conditions.
There shall be little occasion to formulate new propositions, for the situation is not unprecedented.
Our Constitution provides in its Article VIII, section 9, that the members of the Supreme Court and all
judges of inferior courts "shall receive such compensation as may be fixed by law, which shall not be
diminished during their continuance in office." It also provides that "until Congress shall provide
otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of sixteen
thousand pesos". When in 1945 Mr. Justice Perfecto assumed office, Congress had not "provided
otherwise", by fixing a different salary for associate justices. He received salary at the rate provided
by the Constitution, i.e., fifteen thousand pesos a year.
Now, does the imposition of an income tax upon this salary in 1946 amount to a diminution thereof?.
A note found at page 534 of volume 11 of the American Law Reports answers the question in the
affirmative. It says:
Where the Constitution of a state provides that the salaries of its judicial officers shall not be
dismissed during their continuance in office, it had been held that the state legislature cannot
impose a tax upon the compensation paid to the judges of its court. New Orleans v. Lea
(1859) 14 La. Ann. 194; Opinion of Attorney-General if N. C. (1856) 48 N. C. (3 Jones, L.)
Appx. 1; Re Taxation of Salaries of Judges (1902) 131 N. C. 692, 42 S. E. 970; Com. ex. rel.
Hepburn v. Mann (1843) 5 Watts & S,. (Pa.) 403 [but see to the contrary the earlier and much
criticized case of Northumberland county v. Chapman (1829) 2 Rawle (Pa.) 73] *
A different rule prevails in Wisconsin, according to the same annotation. Another state holding the
contrary view is Missouri.

The Constitution of the United States, likes ours, forbids the diminution of the compensation of
Judges of the Supreme Court and of inferior courts. The Federal Governments has an income tax
law. Does it embrace the salaries of federal judges? In answering this question, we should consider
four periods:
First period. No attempts was made to tax the compensation of Federal judges up to 1862 1.
Second period. 1862-1918. In July, 1862, a statute was passed subjecting the salaries of "civil
officers of the United States" to an income tax of three per cent. Revenue officers, construed it as
including the compensation of all judges; but Chief Justice Taney, speaking for the judiciary, wrote to
the Secretary of the Treasury a letter of protest saying, among other things:
The act in question, as you interpret it, diminishes the compensation of every judge 3 per
cent, and if it can be diminished to that extent by the name of a tax, it may, in the same way,
be reduced from time to time, at the pleasure of the legislature.
The judiciary is one of the three great departments of the government, created and
established by the Constitution. Its duties and powers are specifically set forth, and are of a
character that requires it to be perfectly independent of the two other departments, and in
order to place it beyond the reach and above even the suspicion of any such influence, the
power to reduce their compensation is expressly withheld from Congress, and excepted from
their powers of legislation.
Language could not be more plain than that used in the Constitution. It is, moreover, one of
its most important and essential provisions. For the articles which limits the powers of the
legislative and executive branches of the government, and those which provide safeguards
for the protection of the citizen in his person and property, would be of little value without a
judiciary to uphold and maintain them, which was free from every influence, direct and
indirect, that might by possibility in times of political excitement warp their judgments.
Upon these grounds I regard an act of Congress retaining in the Treasury a portion of the
Compensation of the judges, as unconstitutional and void 2.
The protest was unheeded, although it apparently bore the approval of the whole Supreme Court,
that ordered it printed among its records. But in 1869 Attorney-General Hoar upon the request of the
Secretary of the Treasury rendered an opinion agreeing with the Chief Justice. The collection of the
tax was consequently discontinued and the amounts theretofore received were all refunded. For half
a century thereafter judges' salaries were not taxed as income. 3
Third period. 1919-1938. The Federal Income Tax Act of February 24, 1919 expressly provided that
taxable income shall include "the compensation of the judges of the Supreme Court and inferior
courts of the United States". Under such Act, Walter Evans, United States judge since 1899, paid
income tax on his salary; and maintaining that the impost reduced his compensation, he sued to
recover the money he had delivered under protest. He was upheld in 1920 by the Supreme Court in
an epoch-making decision.*, explaining the purpose, history and meaning of the Constitutional
provision forbidding impairment of judicial salaries and the effect of an income tax upon the salary of
a judge.
With what purpose does the Constitution provide that the compensation of the judges "shall
not be diminished during their continuance in office"? Is it primarily to benefit the judges, or
rather to promote the public weal by giving them that independence which makes for an
impartial and courageous discharge of the judicial function? Does the provision merely forbid

direct diminution, such as expressly reducing the compensation from a greater to a less sum
per year, and thereby leave the way open for indirect, yet effective, diminution, such as
withholding or calling back a part as tax on the whole? Or does it mean that the judge shall
have a sure and continuing right to the compensation, whereon he confidently may rely for
his support during his continuance in office, so that he need have no apprehension lest his
situation in this regard may be changed to his disadvantage?
The Constitution was framed on the fundamental theory that a larger measure of liberty and
justice would be assured by vesting the three powers the legislative, the executive, and
the judicial in separate departments, each relatively independent of the others and it was
recognized that without this independence if it was not made both real and enduring
the separation would fail of its purpose. all agreed that restraints and checks must be
imposed to secure the requisite measure of independence; for otherwise the legislative
department, inherently the strongest, might encroach on or even come to dominate the
others, and the judicial, naturally the weakest, might be dwarf or swayed by the other two,
especially by the legislative.
The particular need for making the judiciary independent was elaborately pointed our by
Alexander Hamilton in the Federalist, No. 78, from which we excerpt the following:
xxx

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At a later period John Marshall, whose rich experience as lawyer, legislator, and chief justice
enable him to speak as no one else could, tersely said (debates Va. Gonv. 1829-1831, pp.
616, 619): . . . Our courts are the balance wheel of our whole constitutional system; and our
is the only constitutional system so balanced and controlled. Other constitutional systems
lacks complete poise and certainly of operation because they lack the support and
interpretation of authoritative, undisputable courts of law. It is clear beyond all need of
exposition that for the definite maintenance of constitutional understandings it is
indispensable, alike for the preservation of the liberty of the individual and for the
preservation of the integrity of the powers of the government, that there should be some
nonpolitical forum in which those understandings can be impartially debated and determined.
That forum our courts supply. There the individual may assert his rights; there the
government must accept definition of its authority. There the individual may challenge the
legality of governmental action and have it adjudged by the test of fundamental principles,
and that test the government must abide; there the government can check the too
aggressive self-assertion of the individual and establish its power upon lines which all can
comprehend and heed. The constitutional powers of the courts constitute the ultimate
safeguard alike of individual privilege and of governmental prerogative. It is in this sense that
our judiciary is the balance wheel of our entire system; it is meant to maintain that nice
adjustment between individual rights and governmental powers which constitutes political
liberty. Constitutional government in the United States, pp. 17, 142.
Conscious in the nature and scope of the power being vested in the national courts,
recognizing that they would be charge with responsibilities more delicate and important than
any ever before confide to judicial tribunals, and appreciating that they were to be, in the
words of George Washington, "the keystone of our political fabric", the convention with
unusual accord incorporated in the Constitution the provision that the judges "shall hold their
offices during good behavior, and shall at stated times receive for their services a
compensation which shall not be diminished during their continuance in office." Can there be
any doubt that the two things thus coupled in place the clause in respect of tenure during
good behaviour and that in respect of an undiminishable compensation-were equally coupled

in purpose? And is it not plain that their purposes was to invest the judges with an
independence in keeping with the delicacy and importance of their task, and with the
imperative need for its impartial and fearless performance? Mr. Hamilton said in explanation
and support of the provision (Federalist No. 79): "Next to permanency in office, nothing can
contribute more to the independence of the judges than a fixed provision for their
support. . . . In the general course of human nature, a power over a man's subsistence
amounts to a power over his will.
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These considerations make it very plain, as we think, that the primary purpose of the
prohibition against diminution was not to benefit the judges, but, like the clause in respect of
tenure, to attract good and competent men to the bench, and to promote that independence
of action and judgment which is essential to the maintenance of the guaranties, limitations,
and pervading principles of the constitution, and to the admiration of justice without respect
to persons, and with equal concern for the poor and the rich.
xxx

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But it is urged that what plaintiff was made to pay back was an income tax, and that a like tax
was exacted of others engaged in private employment.
If the tax in respect of his compensation be prohibited, it can find no justification in the
taxation of other income as to which there is no prohibition, for, of course, doing what the
Constitution permits gives no license to do what it prohibits.
The prohibition is general, contains no excepting words, and appears to be directed against
all diminution, whether for one purpose or another; and the reason for its adoption, as
publicly assigned at the time and commonly accepted ever since, make with impelling force
for the conclusion that the fathers of the Constitution intended to prohibit diminution by
taxation as well as otherwise, that they regarded the independence of the judges as of far
greater importance than any revenue that could come from taxing their salaries. (American
law Reports, annotated, Vol. 11, pp. 522-25; Evans vs. Gore, supra.)
In September 1, 1919, Samuel J. Graham assumed office as judge of the Unites States court of
claims. His salary was taxed by virtue of the same time income tax of February 24, 1919. At the time
he qualified, a statute fixed his salary at P7,500. He filed action for reimbursement, submitting the
same theory on which Evans v. Gore had been decided. The Supreme Court of the United States in
1925 reaffirmed that decision. It overruled the distinction offered by Solicitor-General Beck that
Judge Graham took office after the income tax had been levied on judicial salaries, (Evans qualified
before), and that Congress had power "to impose taxes which should apply to the salaries of Federal
judges appointed after the enactment of the taxing statute." (The law had made no distinction as to
judges appointed before or after its passage)
Fourth period. 1939 Foiled in their previous attempts, the Revenue men persisted, and
succeeded in inserting in the United States Revenue Act of June, 1932 the modified proviso that
"gross income" on which taxes were payable included the compensation "of judges of courts of the
United States taking office after June 6, 1932". Joseph W. Woodrough qualified as United States
circuit judge on May 1, 1933. His salary as judge was taxed, and before the Supreme Court of the
United States the issue of decrease of remuneration again came up. That court, however, ruled
against him, declaring (in 1939) that Congress had the power to adopt the law. It said:

The question immediately before us is whether Congress exceeded its constitutional power
in providing that United States judges appointed after the Revenue Act of 1932 shall not
enjoy immunity from the incidence of taxation to which everyone else within the defined
classes of income is subjected. Thereby, of course, Congress has committed itself to the
position that a non-discriminatory tax laid generally on net income is not, when applied to the
income of federal judge, a diminution of his salary within the prohibition of Article 3, Sec. 1 of
the Constitution. To suggest that it makes inroads upon the independence of judges who
took office after the Congress has thus charged them with the common duties of citizenship,
by making them bear their aliquot share of the cost of maintaining the Government, is to
trivialize the great historic experience on which the framers based the safeguards of Article 3,
Sec. 1. To subject them to a general tax is merely to recognize that judges also are citizens,
and that their particular function in government does not generate an immunity from sharing
with their fellow citizens the material burden of the government whose Constitution and laws
they are charged with administering. (O'Malley vs. Woodrough, 59 S. Ct. 838, A. L. R. 1379.)
Now, the case for the defendant-appellant Collector of Internal Revenue is premised mainly on this
decision (Note A). He claims it holds "that federal judges are subject to the payment of income taxes
without violating the constitutional prohibition against the reduction of their salaries during their
continuance in office", and that it "is a complete repudiation of the ratio decidenci of Evans vs. Gore".
To grasp the full import of the O'Malley precedent, we should bear in mind that:
1. It does not entirely overturn Miles vs. Graham. "To the extent that what the Court now says is
inconsistent with what said in Miles vs. Graham, the latter can not survive", Justice Frankfurter
announced.
2. It does not expressly touch nor amend the doctrine in Evans vs, Gore, although it indicates that
the Congressional Act in dispute avoided in part the consequences of that case.
Carefully analyzing the three cases (Evans, Miles and O'Malley) and piecing them together, the
logical conclusion may be reached that although Congress may validly declare by law that salaries
of judges appointed thereaftershall be taxed as income (O'Malley vs. Woodrough) it may not tax the
salaries of those judges already in office at the time of such declaration because such taxation would
diminish their salaries (Evans vs. Gore; Miles vs. Graham). In this manner the rationalizing principle
that will harmonize the allegedly discordant decision may be condensed.
By the way, Justice Frankfurter, writing the O'Malley decision, says the Evans precedent met with
disfavor from legal scholarship opinion. Examining the issues of Harvard Law review at the time
of Evans vs. Gore (Frankfurter is a Harvard graduate and professor), we found that such school
publication criticized it. Believing this to be the "inarticulate consideration that may have influenced
the grounds on which the case went off"4, we looked into the criticism, and discovered that it was
predicated on the position that the 16th Amendment empowered Congress "to collect taxes on
incomes from whatever source derived" admitting of no exception. Said the Harvard Law Journal:
In the recent case of Evans vs. Gore the Supreme Court of the United States decided that by
taxing the salary of a federal judge as a part of his income, Congress was in effect reducing
his salary and thus violating Art. III, sec. 1, of the Constitution. Admitting for the present
purpose that such a tax really is a reduction of salary, even so it would seem that the words
of the amendment giving power to tax 'incomes, from whatever source derived', are
sufficiently strong to overrule pro tanto the provisions of Art. III, sec. 1. But, two years ago,
the court had already suggested that the amendment in no way extended the subjects open
to federal taxation. The decision in Evans vs. Gore affirms that view, and virtually strikes from

the amendment the words "from whatever source derived". (Harvard law Review, vol. 34, p.
70)
The Unites States Court's shift of position5 might be attributed to the above detraction which, without
appearing on the surface, led to Frankfurter's sweeping expression about judges being also citizens
liable to income tax. But it must be remembered that undisclosed factor the 16th Amendment
has no counterpart in the Philippine legal system. Our Constitution does not repeat it. Wherefore, as
the underlying influence and the unuttered reason has no validity in this jurisdiction, the broad
generality loses much of its force.
Anyhow the O'Malley case declares no more than that Congress may validly enact a law taxing the
salaries of judges appointed after its passage. Here in the Philippines no such law has been
approved.
Besides, it is markworthy that, as Judge Woodrough had qualified after the express legislative
declaration taxing salaries, he could not very well complain. The United States Supreme Court
probably had in mind what in other cases was maintained, namely, that the tax levied on the salary
in effect decreased the emoluments of the office and therefore the judge qualified with such reduced
emoluments.6
The O'Malley ruling does not cover the situation in which judges already in office are made to pay
tax by executive interpretation, without express legislative declaration. That state of affairs is
controlled by the administrative and judicial standards herein-before described in the "second
period" of the Federal Government, namely, the views of Chief Justice Taney and of AttorneyGeneral Hoar and the constant practice from 1869 to 1938, i.e., when the Income Tax Law merely
taxes "income" in general, it does not include salaries of judges protected from diminution.
In this connection the respondent would make capital of the circumstance that the Act of 1932,
upheld in the O'Malley case, has subsequently been amended by making it applicable even to
judges who took office before1932. This shows, the appellant argues, that Congress interprets the
O'Malley ruling to permit legislative taxation of the salary of judges whether appointed before the tax
or after. The answer to this is that the Federal Supreme Court expressly withheld opinion on that
amendment in the O'Malley case. Which is significant. Anyway, and again, there is here no
congressional directive taxing judges' salaries.
Wherefore, unless and until our Legislature approves an amendment to the Income Tax Law
expressly taxing "that salaries of judges thereafter appointed", the O'Malley case is not relevant. As
in the United States during the second period, we must hold that salaries of judges are not included
in the word "income" taxed by the Income Tax Law. Two paramount circumstances may additionally
be indicated, to wit: First, when the Income Tax Law was first applied to the Philippines 1913, taxable
"income" did not include salaries of judicial officers when these are protected from diminution. That
was the prevailing official belief in the United States, which must be deemed to have been
transplanted here;7 and second, when the Philippine Constitutional Convention approved (in 1935)
the prohibition against diminution off the judges' compensation, the Federal principle was known that
income tax on judicial salaries really impairs them. Evans vs. Gore and Miles vs. Graham were then
outstanding doctrines; and the inference is not illogical that in restraining the impairment of judicial
compensation the Fathers of the Constitution intended to preclude taxation of the same. 8
It seems that prior to the O'Malley decision the Philippine Government did not collect income tax on
salaries of judges. This may be gleaned from General Circular No. 449 of the Department of Finance
dated March 4, 1940, which says in part:

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The question of whether or not the salaries of judges should be taken into account in
computing additional residence taxes is closely linked with the liability of judges to income
tax on their salaries, in fact, whatever resolution is adopted with respect to either of said
taxes be followed with respect to the other. The opinion of the Supreme Court of the United
States in the case of O'Malley v. Woodrough, 59 S. Ct. 838, to which the attention of this
department has been drawn, appears to have enunciated a new doctrine regarding the
liability of judges to income tax upon their salaries. In view of the fact that the question is of
great significance, the matter was taken up in the Council of State, and the Honorable, the
Secretary of Justice was requested to give an opinion on whether or not, having in mind the
said decision of the Supreme Court of the United States in the case of O'Malley v.
Woodrough, there is justification in reversing our present ruling to the effect that judges are
not liable to tax on their salaries. After going over the opinion of the court in the said case,
the Honorable, the Secretary of Justice, stated that although the ruling of the Supreme Court
of the United States is not binding in the Philippines, the doctrine therein enunciated has
resolved the issue of the taxability of judges' salaries into a question of policy. Forthwith, His
Excellency the President decided that the best policy to adopt would be to collect income
and additional residence taxes from the President of the Philippines, the members of the
Judiciary, and the Auditor General, and the undersigned was authorized to act accordingly.
In view of the foregoing, income and additional residence taxes should be levied on the
salaries received by the President of the Philippines, members of the Judiciary, and the
Auditor General during the calendar year 1939 and thereafter. . . . . (Emphasis ours.)
Of course, the Secretary of Justice correctly opined that the O'Malley decision "resolved the issue of
taxability of judges' salaries into a question of policy." But that policy must be enunciated by
Congressional enactment, as was done in the O'Malley case, not by Executive Fiat or interpretation.
This is not proclaiming a general tax immunity for men on the bench. These pay taxes. Upon buying
gasoline, or other commodities, they pay the corresponding duties. Owning real property, they pay
taxes thereon. And on incomes other than their judicial salary, assessments are levied. It is only
when the tax is charged directly on their salary and the effect of the tax is to diminish their official
stipend that the taxation must be resisted as an infringement of the fundamental charter.
Judges would indeed be hapless guardians of the Constitution if they did not perceive and block
encroachments upon their prerogatives in whatever form. The undiminishable character of judicial
salaries is not a mere privilege of judges personal and therefore waivable but a basic limitation
upon legislative or executive action imposed in the public interest. (Evans vs. Gore)
Indeed the exemption of the judicial salary from reduction by taxation is not really a gratuity or
privilege. Let the highest court of Maryland speak:
The exemption of the judicial compensation from reduction is not in any true sense a gratuity,
privilege or exemption. It is essentially and primarily compensation based upon valuable
consideration. The covenant on the part of the government is a guaranty whose fulfillment is
as much as part of the consideration agreed as is the money salary. The undertaking has its
own particular value to the citizens in securing the independence of the judiciary in crises;
and in the establishment of the compensation upon a permanent foundation whereby judicial
preferment may be prudently accepted by those who are qualified by talent, knowledge,
integrity and capacity, but are not possessed of such a private fortune as to make an assured
salary an object of personal concern. On the other hand, the members of the judiciary

relinquish their position at the bar, with all its professional emoluments, sever their
connection with their clients, and dedicate themselves exclusively to the discharge of the
onerous duties of their high office. So, it is irrefutable that they guaranty against a reduction
of salary by the imposition of a tax is not an exemption from taxation in the sense of freedom
from a burden or service to which others are liable. The exemption for a public purpose or a
valid consideration is merely a nominal exemption, since the valid and full consideration or
the public purpose promoted is received in the place of the tax. Theory and Practice of
Taxation (1900), D. A. Wells, p. 541. (Gordy vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series, p.
80)
It is hard to see, appellants asserts, how the imposition of the income tax may imperil the
independence of the judicial department. The danger may be demonstrated. Suppose there is power
to tax the salary of judges, and the judiciary incurs the displeasure of the Legislature and the
Executive. In retaliation the income tax law is amended so as to levy a 30 per cent on all salaries of
government officials on the level of judges. This naturally reduces the salary of the judges by 30 per
cent, but they may not grumble because the tax is general on all receiving the same amount of
earning, and affects the Executive and the Legislative branches in equal measure. However, means
are provided thereafter in other laws, for the increase of salaries of the Executive and the Legislative
branches, or their perquisites such as allowances, per diems, quarters, etc. that actually compensate
for the 30 per cent reduction on their salaries. Result: Judges compensation is thereby diminished
during their incumbency thanks to the income tax law. Consequence: Judges must "toe the line" or
else. Second consequence: Some few judges might falter; the great majority will not. But knowing
the frailty of human nature, and this chink in the judicial armor, will the parties losing their cases
against the Executive or the Congress believe that the judicature has not yielded to their pressure?
Respondent asserts in argumentation that by executive order the President has subjected his salary
to the income tax law. In our opinion this shows obviously that, without such voluntary act of the
President, his salary would not be taxable, because of constitutional protection against diminution.
To argue from this executive gesture that the judiciary could, and should act in like manner is to
assume that, in the matter of compensation and power and need of security, the judiciary is on a par
with the Executive. Such assumption certainly ignores the prevailing state of affairs.
The judgment will be affirmed. So ordered.
Moran, C.J., Pablo, Padilla, Tuason, Montemayor, Reyes and Torres, JJ., concur.

Separate Opinions
OZAETA., J., dissenting:
It is indeed embarrassing that this case was initiated by a member of this Court upon which devolves
the duty to decide it finally. The question of whether the salaries of the judges, the members of the
Commission on Elections, the Auditor General, and the President of the Philippines are immune from
taxation, might have been raised by any interested party other than a justice of the Supreme Court
with less embarrassment to the latter.
The question is simple and not difficult of solution. We shall state our opinion as concisely as
possible.

The first income tax law of the Philippines was Act No. 2833, which was approved on March 7, 1919,
to take effect on January 1, 1920. Section 1 (a) of said Act provided:
There shall be levied, assessed, collected, and paid annually upon the entire net income
received in the preceding calendar year from all sources by every individual, a citizen or
resident of the Philippine Islands, a tax of two per centum upon such income. . . . (Emphasis
ours.)
Section 2 (a) of said Act provided:
Subject only to such exemptions and deductions as are hereinafter allowed, the taxable net
income of a person shall include gains, profits, and income derived from salaries, wages or
compensation for personal service of whatever kind and is whatever form paid, or from
professions, vocations, businesses, trade, commerce, sales, or dealings in property, whether
real or personal, growing out of the ownership or use of or interest in real or personal
property, also from interest, rent, dividends, securities, or the transaction of any business
carried on for gain or profit, or gains, profits, and income derived from any source whatever.
That income tax law has been amended several times, specially as to the rates of the tax, but the
above-quoted provisions (except as to the rate) have been preserved intact in the subsequent Acts.
The present income tax law is Title II of the National Internal Revenue Code, Commonwealth Act No.
466, sections 21, 28 and 29 of which incorporate the texts of the above-quoted provisions of the
original Act in exactly the same language. There can be no dispute whatsoever that judges (who are
individuals) and their salaries (which are income) are as clearly comprehended within the abovequoted provisions of the law as if they were specifically mentioned therein; and in fact all judges had
been and were paying income tax on their salaries when the Constitution of the Philippines was
discussed and approved by the Constitutional Convention and when it was submitted to the people
for confirmation in the plebiscite of May 14, 1935.
Now, the Constitution provides that the members of the Supreme Court and all judges of inferior
courts "shall receive such compensation as may be fixed by law, which shall not be diminished
during their continuance in office." (Section 9, Article VIII, emphasis ours.)a
The simple question is: In approving the provisions against the diminution of the compensation of
judges and other specified officers during their continuance in office, did the framers of the
Constitution intend to nullify the then existing income tax law insofar as it imposed a tax on the
salaries of said officers ? If they did not, then the income tax law, which has been incorporated in the
present National Internal Revenue Code, remains in force in its entirety and said officers cannot
claim exemption therefrom on their salaries.
Section 2 of Article XVI of the Constitution provides that all laws of the Philippine Islands shall
remain operative, unless inconsistent with this Constitution, until amended, altered, modified. or
repealed by the Congress of the Philippines.
In resolving the question at bar, we must take into consideration the following well-settled rules:
"A constitution shall be held to be prepared and adopted in reference to existing statutory
laws, upon the provisions of which in detail it must depend to be set in practical operation"
(People vs. Potter, 47 N. Y. 375; People vs. Draper, 15 N. Y. 537; Cass vs. Dillon, 2 Ohio St.
607; People vs. N. Y., 25 Wend. (N. Y. 22). (Barry vs. Traux, 3 A. & E. Ann. Cas 191, 193.).

Courts are bound to presume that the people adopting a constitution are familiar with the
previous and existing laws upon the subjects to which its provisions relate, and upon which
they express their judgment and opinion in its adoption (Baltimore vs. State, 15 Md. 376,
480; 74 Am. Dec. 572; State vs. Mace, 5 Md. 337; Bandel vs. Isaac, 13 Md. 202; Manly vs.
State, 7 Md. 135; Hamilton vs. St. Louis County Ct., 15 Mo. 5; People vs. Gies, 25 Mich. 83;
Servis vs. Beatty, 32 Miss. 52; Pope vs. Phifer, 3 Heisk. (Tenn.) 686; People vs. Harding, 53
Mich. 48, 51 Am. Rep. 95; Creve Coeur Lake Ice Co. vs. Tamm, 138 Mo. 385, 39 S. W. Rep.
791). (Idem.)
A constitutional provision must be presumed to have been framed and adopted in the light
and understanding of prior and existing laws and with reference to them. Constitutions, like
statutes, are properly to be expounded in the light of conditions existing at the time of their
adoption, the general spirit of the times, and the prevailing sentiments among the people.
Reference may be made to the historical facts relating to the original or political institutions of
the community or to prior well-known practices and usages. (11 Am. Ju., Constitutional Law,
676-678.)
The salaries provided in the Constitution for the Chief Justice and each associate Justice,
respectively, of the Supreme Court were the same salaries ]which they were receiving at the time the
Constitution was framed and adopted and on which they were paying income tax under the existing
income tax law. It seems clear to us that for them to receive the same salaries, subject to the same
tax, after the adoption of the Constitution as before does not involve any diminution at all. The fact
that the plaintiff was not a member of the Court when the Constitution took effect, makes no
difference. The salaries of justices and judges were subject to income tax when he was appointed in
the early part of 1945. In fact he must have declared and paid income tax on his salary for 19454
he claimed exemption only beginning 1946. It seems likewise clear that when the framers of the
Constitution fixed those salaries, they must have taken into consideration that the recipients were
paying income tax thereon. There was no necessity to provide expressly that said salaries shall be
subject to income tax because they knew that already so provided. On the other hand, if exemption
from any tax on said salaries had been intended, it would have been specifically to so provide,
instead of merely saying that the compensation as fixed "shall not be diminished during their
continuance in office."
In the light of the antecedents, the prohibition against diminution cannot be interpreted to include or
refer to general taxation but to a law by which said salaries may be fixed. The sentence in question
reads: "They shall receive such compensation as may be fixed by law, which shall not be diminished
during their continuance in office." The next sentence reads: "Until the Congress shall provide
otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of P16,000,
and each associate Justice, P15,000." It is plain that the Constitution authorizes the Congress to
pass a law fixing another rate of compensation, but that such rate must be higher than that which the
justices receive at he time of its enactment or, if lower, it must not affect those justice already in
office. In other words, Congress may approve a law increasing the salaries of the justices at any
time, but it cannot approve a law decreasing their salaries unless such law is made effective only as
to justices appointed after its approval.
It would be a strained and unreasonable construction of the prohibition against diminution to read
into it an exemption from taxation. There is no justification for the belief or assumption that the
framers of the Constitution intended to exempt the salaries of said officers from taxes. They knew
that it was and is the unavoidable duty of every citizen to bear his aliquot share of the cost of
maintaining the Government; that taxes are the very blood that sustains the life of the Government.
To make all citizens share the burden of taxation equitably, the Constitution expressly provides that
"the rule of taxation shall be uniform." (Section 22 [1], Article VI.) We think it would be a

contravention of this provision to read into the prohibition against diminution of the salaries of the
judges and other specified officers an exemption from taxes on their salaries. How could the rule of
income taxation be uniform if it should not be applied to a group of citizens in the same situation as
other income earners ? It is to us inconceivable that the framers ever intended to relieve certain
officers of the Government from sharing with their fellows citizens the material burden of the
Government to exempt their salaries from taxes. Moreover, the Constitution itself specifies what
properties are exempt from taxes, namely: "Cemeteries, churches, and parsonages or convents
appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious,
charitable, or educational purposes." (Sec. 22 [3], Article VI.) The omission of the salaries in question
from this enumeration is in itself an eloquent manifestation of intention to continue the imposition of
taxes thereon as provided in the existing law. Inclusio est exclusio alterius.
We have thus far read and construed the pertinent portions of our own Constitution and income tax
law in the light of the antecedent circumstances and of the operative factors which prevailed at the
time our Constitution was framed, independently of the construction now prevailing in the United
States of similar provisions of the federal Constitution in relation to the present federal income tax
law, under which the justices of the Supreme Court, and the federal judges are now, and since the
case of O'Malley vs. Woodrough was decided on May 22, 1939, have been, paying income tax on
their salaries. Were this a majority opinion, we could end here with the consequent reversal of the
judgment appealed from. But ours is a voice in the wilderness, and we may permit ourselves to utter
it with more vehemence and emphasis so that future players on this stage perchance may hear and
heed it. Who knows? The Gospel itself was a voice in the wilderness at the time it was uttered.
We have to comment on Anglo-American precedents since the majority decision from which we
dissent is based on some of them. Indeed, the majority say they "hardly do nothing more than to
borrow therefrom and to compare their conclusions to local conditions." which we shall presently
show did not obtain in the United States at the time the federal and state Constitutions were
adopted. We shall further show that in any event what they now borrow is not usable because it has
long been withdrawn from circulation.
When the American Constitution was framed and adopted, there was no income tax law in the
United States. To this circumstance may be attributed the claim made by some federal judges
headed by Chief Justice Taney, when under the Act of Congress of July 1, 1862, their salaries were
subjected to an income tax, that such tax was a diminution of their salaries and therefore prohibited
by the Constitution. Chief Justice Taney's claim and his protest against the tax were not heeded, but
no federal judge deemed it proper to sue the Collector of Internal Revenue to recover the taxes they
continued to pay under protest for several years. In 1869, the Secretary of the Treasury referred the
question to Atty. General Hoar, and that officer rendered an opinion in substantial accord with Chief
Justice Taney's protest, and also advised that the tax on the President's compensation was likewise
invalid. No judicial pronouncement, however, was made of such invalidity until June 1, 1920, when
the case of Evans vs. Gore(253 U.S. 245, 64 L. ed. 887) was decided upon the constitutionality of
section 213 of the Act of February 24, 1919, which required the computation of incomes for the
purpose of taxation to embrace all gains, profits, income and the like, "including in the case of the
President of the United States, the judges of the Supreme and inferior courts of the United States,
[and others] . . . the compensation received as such." The Supreme Court of the United States,
speaking through Mr. Justice Van Devanter, sustained the suit with the dissent of Justice Holmes
and Brandeis. The doctrine of Evans vs. Gore holding in effect that an income tax on a judge's salary
is a diminution thereof prohibited by the Constitution, was reaffirmed in 1925 in Miles vs. Graham, 69
L. ed 1067.
In 1939, however, the case of O'Malley vs. Woodrough (59 S. Ct. 838, 122 A. L. R. 1379) was
brought up to the test the validity of section 22 of the Revenue Act of June 6, 1932, which included in

the "gross income," on the basis of which taxes were to be paid, the compensation of "judges of
courts of the United States taking office after June 6, 1932." And in that case the Supreme Court of
the United States, with only one dissent (that of Justice Butler), abandoned the doctrine of Evans vs.
Gore and Miles vs. Graham by holding:
To subject them [the judges] to a general tax is merely to recognize that judges are also
citizens, and that their particular function in government does not generate an immunity from
sharing with their fellow citizens the material burden of the government whose Constitution
and laws they are charged with administering.
The decision also says:
To suggest that it [the law in question] makes inroads upon the independence of judges who
took office after Congress had thus charged them with the common duties of citizenship, by
making them bear their aliquot share of the cost of maintaining the Government, is to
trivialize the great historic experience on which the framers based the safeguard of Article 3,
section 1.
Commenting on the above-quoted portions of the latest decision of the Supreme Court of the United
States on the subject, Prof. William Bennett, Munro, in his book, The Government of the United
States, which is used as a text in various universities, says: ". . .
All of which seems to be common sense, for surely the framers of the Constitution from ever
cutting a judge's salary, did not intend to relieve all federal judges from the general
obligations of citizenship. As for the President, he has never raised the issue; every occupant
of the White House since 1913 has paid his income tax without protest. (Pages 371-372.)
We emphasize that the doctrine of Evans vs. Gore and Miles vs. Graham is no longer operative, and
that all United States judges, including those who took office before June 6, 1932, are subject to and
pay income tax on their salaries; for after the submission of O'Malley vs. Woodrough for decision the
Congress of the United States, by section 3 of the Public Salary Act of 1939, amended section 22 (a)
of the Revenue Act of June 6, 1932, so as to make it applicable to "judges of courts of the United
States who took office on or before June 6, 1932." And the validity of that Act, in force for more than
a decade, has not been challenged.
Our colleagues import and transplant here the dead limbs of Evans vs. Gore and Miles vs.
Graham and attempt to revive and nurture them with painstaking analyses and diagnoses that they
had not suffered a fatal blow fromO'Malley vs. Woodrough. We refuse to join this heroic attempt
because we believe it is futile.
They disregard the actual damage and minimize it by trying to discover the process by which it was
inflicted and he motivations that led to the infliction. They say that the chief axe-wielder, Justice
Frankfurter, was a Harvard graduate and professor and that the Harvard Law Journal had
criticized Evans vs. Gore; that the dissenters in said case (Holmes and Brandeis) were Harvard men
like Frankfurter; and that they believe this to be the "inarticulate consideration that may have
influenced the grounds on which the case [O'Malley vs. Woodrough] went off." This argument is not
valid, in our humble belief. It was not only the Harvard Law Journal that had criticized Evans vs.
Gore. Justice Frankfurter and his colleagues said that the decision in that case "met with wide and
steadily growing disfavor from legal scholarship and professional opinion," and they cited the
following: Clark, Furthermore Limitations Upon Federal Income Taxation, 30 Yale L. J. 75;
Corwin, Constitutional Law in 1919-1920, 15 Am. Pol. Sci. Rev. 635, 641-644; Fellman, Diminution
of Judicial Salaries, 24 Iowa L. Rev. 89; Lowndes, Taxing Income of Federal Judiciary, 19 Va. L. Rev.

153; Powell, Constitutional Law in 1919-1920, 19 Mich. L. Rev. 117, 118; Powell,The Sixteenth
Amendment and Income from State Securities, National Income Tax Magazine (July, 1923), 5, 6; 20
Columbia L. Rev. 794; 43 Harvard L. Rev. 318; 20 Ill. L. Rev. 376; 45 Law Quarterly Rev. 291; 7 Va.
L. Rev. 69; 3 University of Chicago L. Rev. 141. Justice Frankfurter and his colleagues also said that
"Evans vs. Gore itself was rejected by most of the courts before whom the matter came after that
decision." Is not the intention to throw Evans vs. Gore into the graveyard of abandoned cases
manifest from all this and from the holding that judges are also citizens, liable to income tax on their
salaries?
The majority say that "unless and until our legislature approves an amendment to the income tax law
expressly taxing 'the salaries of judges thereafter appointed,' the O'Malley case is not relevant." We
have shown that our income tax law taxes the salaries of judges as clearly as if they are specifically
mentioned therein, and that said law took effect long before the adoption of the Constitution and long
before the plaintiff was appointed.
We agree that the purpose of the constitutional provision against diminution of the salaries of judges
during their continuance in office is to safeguard the independence of the Judicial Department. But
we disagree that to subject the salaries of judges to a general income tax law applicable
to all income earners would in any way affect their independence. Our own experience since the
income tax law went effect in 1920 is the best refutation of such assumption.
The majority give an example by which the independence of judges may be imperiled thru the
imposition of a tax on their salaries. They say: Suppose there is power to tax the salaries of judges
and the judiciary incurs the displeasure of the Legislature and the Executive. In retaliation the
income tax law is amended so as to levy a 30 per cent tax on all salaries of government officials on
the level of judges, and by means of another law the salaries of the executive and the legislative
branches are increased to compensate for the 30 per cent reduction of their salaries. To this we
reply that if such a vindictive measure is ever resorted to (which we cannot imagine), we shall be the
first ones to vote to strike it down as a palpable violation of the Constitution. There is no parity
between such hypothetical law and the general income tax law invoked by the defendant in this
case. We believe that an income tax law applicable only against the salaries of judges and not
against those or all other income earners may be successfully assailed as being in contravention not
only of the provision against diminution of the salaries of judges but also of the uniformity of the rule
of taxation as well as of the equal protection clause of the Constitution. So the danger apprehended
by the majority is not real but surely imaginary.
We vote for the reversal of the judgment appealed from the dismissal of plaintiff's complaint.
Paras J., concurs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56

August 31, 1953

PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees,

vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.

Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
This is a joint appeal from the decision of the Court of First Instance of Manila declaring section 13 of
Republic Act No. 590 unconstitutional, and ordering the appellant Saturnino David as Collector of
Internal Revenue to re-fund to Justice Pastor M. Endencia the sum of P1,744.45, representing the
income tax collected on his salary as Associate Justice of the Court of Appeals in 1951, and to
Justice Fernando Jugo the amount of P2,345.46, representing the income tax collected on his salary
from January 1,1950 to October 19, 1950, as Presiding Justice of the Court of Appeals, and from
October 20, 1950 to December 31,1950, as Associate Justice of the Supreme Court, without special
pronouncement as to costs.
Because of the similarity of the two cases, involving as they do the same question of law, they were
jointly submitted for determination in the lower court. Judge Higinio B. Macadaeg presiding, in a
rather exhaustive and well considered decision found and held that under the doctrine laid down by
this Court in the case of Perfecto vs. Meer, 85 Phil., 552, the collection of income taxes from the
salaries of Justice Jugo and Justice Endencia was a diminution of their compensation and therefore
was in violation of the Constitution of the Philippines, and so ordered the refund of said taxes.
We see no profit and necessity in again discussing and considering the proposition and the
arguments pro and cons involved in the case of Perfecto vs. Meer, supra, which are raised, brought
up and presented here. In that case, we have held despite the ruling enunciated by the United
States Federal Supreme Court in the case of O 'Malley vs. Woodrought 307 U. S., 277, that taxing
the salary of a judicial officer in the Philippines is a diminution of such salary and so violates the
Constitution. We shall now confine our-selves to a discussion and determination of the remaining
question of whether or not Republic Act No. 590, particularly section 13, can justify and legalize the
collection of income tax on the salary of judicial officers.
According to the brief of the Solicitor General on behalf of appellant Collector of Internal Revenue,
our decision in the case of Perfecto vs. Meer, supra, was not received favorably by Congress,
because immediately after its promulgation, Congress enacted Republic Act No. 590. To bring home
his point, the Solicitor General reproduced what he considers the pertinent discussion in the Lower
House of House Bill No. 1127 which became Republic Act No. 590.
For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:.
SEC. 9. The members of the Supreme Court and all judges of inferior courts shall hold office
during good behavior, until they reach the age of seventy years, or become incapacitated to
discharge the duties of their office. They shall receive such compensation as may be fixed by
law, which shall not be diminished during their continuance in office. Until the Congress shall
provide otherwise, the Chief Justice of the Supreme Court shall receive an annual
compensation of sixteen thousand pesos, and each Associate Justice, fifteen thousand
pesos.

As already stated construing and applying the above constitutional provision, we held in the Perfecto
case that judicial officers are exempt from the payment of income tax on their salaries, because the
collection thereof by the Government was a decrease or diminution of their salaries during their
continuance in office, a thing which is expressly prohibited by the Constitution. Thereafter, according
to the Solicitor General, because Congress did not favorably receive the decision in the Perfecto
case, Congress promulgated Republic Act No. 590, if not to counteract the ruling in that decision, at
least now to authorize and legalize the collection of income tax on the salaries of judicial officers. We
quote section 13 of Republic Act No. 590:
SEC 13. No salary wherever received by any public officer of the Republic of the Philippines
shall be considered as exempt from the income tax, payment of which is hereby declared not
to be dimunition of his compensation fixed by the Constitution or by law.
So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly
section 9, Article VIII, has held that judicial officers are exempt from payment of income tax on their
salaries, because the collection thereof was a diminution of such salaries, specifically prohibited by
the Constitution. Now comes the Legislature and in section 13, Republic Act No. 590, says that "no
salary wherever received by any public officer of the Republic (naturally including a judicial officer)
shall be considered as exempt from the income tax," and proceeds to declare that payment of said
income tax is not a diminution of his compensation. Can the Legislature validly do this? May the
Legislature lawfully declare the collection of income tax on the salary of a public official, specially a
judicial officer, not a decrease of his salary, after the Supreme Court has found and decided
otherwise? To determine this question, we shall have to go back to the fundamental principles
regarding separation of powers.
Under our system of constitutional government, the Legislative department is assigned the power to
make and enact laws. The Executive department is charged with the execution of carrying out of the
provisions of said laws. But the interpretation and application of said laws belong exclusively to the
Judicial department. And this authority to interpret and apply the laws extends to the Constitution.
Before the courts can determine whether a law is constitutional or not, it will have to interpret and
ascertain the meaning not only of said law, but also of the pertinent portion of the Constitution in
order to decide whether there is a conflict between the two, because if there is, then the law will
have to give way and has to be declared invalid and unconstitutional.
Defining and interpreting the law is a judicial function and the legislative branch may not limit
or restrict the power granted to the courts by the Constitution. (Bandy vs. Mickelson et al.,
44N. W., 2nd 341, 342.)
When it is clear that a statute transgresses the authority vested in the legislature by the
Constitution, it is the duty of the courts to declare the act unconstitutional because they
cannot shrink from it without violating their oaths of office. This duty of the courts to maintain
the Constitution as the fundamental law of the state is imperative and unceasing; and, as
Chief Justice Marshall said, whenever a statute is in violation of the fundamental law, the
courts must so adjudge and thereby give effect to the Constitution. Any other course would
lead to the destruction of the Constitution. Since the question as to the constitutionality of a
statute is a judicial matter, the courts will not decline the exercise of jurisdiction upon the

suggestion that action might be taken by political agencies in disregard of the judgment of
the judicial tribunals. (11 Am. Jur., 714-715.)
Under the American system of constitutional government, among the most important
functions in trusted to the judiciary are the interpreting of Constitutions and, as a closely
connected power, the determination of whether laws and acts of the legislature are or are not
contrary to the provisions of the Federal and State Constitutions. (11 Am. Jur., 905.).
By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says that taxing the
salary of a judicial officer is not a decrease of compensation. This is a clear example of interpretation
or ascertainment of the meaning of the phrase "which shall not be diminished during their
continuance in office," found in section 9, Article VIII of the Constitution, referring to the salaries of
judicial officers. This act of interpreting the Constitution or any part thereof by the Legislature is an
invasion of the well-defined and established province and jurisdiction of the Judiciary.
The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or act
declaratory of what the law was before its passage, so as to give it any binding weight with
the courts. A legislative definition of a word as used in a statute is not conclusive of its
meaning as used elsewhere; otherwise, the legislature would be usurping a judicial function
in defining a term. (11 Am. Jur., 914, emphasis supplied)
The legislature cannot, upon passing a law which violates a constitutional provision, validate
it so as to prevent an attack thereon in the courts, by a declaration that it shall be so
construed as not to violate the constitutional inhibition. (11 Am. Jur., 919, emphasis supplied)
We have already said that the Legislature under our form of government is assigned the task and
the power to make and enact laws, but not to interpret them. This is more true with regard to the
interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative
department. If the Legislature may declare what a law means, or what a specific portion of the
Constitution means, especially after the courts have in actual case ascertain its meaning by
interpretation and applied it in a decision, this would surely cause confusion and instability in judicial
processes and court decisions. Under such a system, a final court determination of a case based on
a judicial interpretation of the law of the Constitution may be undermined or even annulled by a
subsequent and different interpretation of the law or of the Constitution by the Legislative
department. That would be neither wise nor desirable, besides being clearly violative of the
fundamental, principles of our constitutional system of government, particularly those governing the
separation of powers.
So much for the constitutional aspect of the case. Considering the practical side thereof, we believe
that the collection of income tax on a salary is an actual and evident diminution thereof. Under the
old system where the in-come tax was paid at the end of the year or sometime thereafter, the
decrease may not be so apparent and clear. All that the official who had previously received his full
salary was called upon to do, was to fulfill his obligation and to exercise his privilege of paying his
income tax on his salary. His salary fixed by law was received by him in the amount of said tax
comes from his other sources of income, he may not fully realize the fact that his salary had been
decreased in the amount of said income tax. But under the present system of withholding the income

tax at the source, where the full amount of the income tax corresponding to his salary is computed in
advance and divided into equal portions corresponding to the number of pay-days during the year
and actually deducted from his salary corresponding to each payday, said official actually does not
receive his salary in full, because the income tax is deducted therefrom every payday, that is to say,
twice a month. Let us take the case of Justice Endencia. As Associate Justice of the Court of
Appeals, his salary is fixed at p12,000 a year, that is to say, he should receive P1,000 a month or
P500 every payday, fifteenth and end of month. In the present case, the amount collected by the
Collector of Internal Revenue on said salary is P1,744.45 for one year. Divided by twelve (months)
we shall have P145.37 a month. And further dividing it by two paydays will bring it down to P72.685,
which is the income tax deducted form the collected on his salary each half month. So, if Justice
Endencia's salary as a judicial officer were not exempt from payment of the income tax, instead of
receiving P500 every payday, he would be actually receiving P427.31 only, and instead of receiving
P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear that every payday, his
salary is actually decreased by P72.685 and every year is decreased by P1,744.45?
Reading the discussion in the lower House in connection with House Bill No. 1127, which became
Republic Act No. 590, it would seem that one of the main reasons behind the enactment of the law
was the feeling among certain legislators that members of the Supreme Court should not enjoy any
exemption and that as citizens, out of patriotism and love for their country, they should pay income
tax on their salaries. It might be stated in this connection that the exemption is not enjoyed by the
members of the Supreme Court alone but also by all judicial officers including Justices of the Court
of Appeals and judges of inferior courts. The exemption also extends to other constitutional officers,
like the President of the Republic, the Auditor General, the members of the Commission on
Elections, and possibly members of the Board of Tax Appeals, commissioners of the Public Service
Commission, and judges of the Court of Industrial Relations. Compares to the number of all these
officials, that of the Supreme Court Justices is relatively insignificant. There are more than 990 other
judicial officers enjoying the exemption, including 15 Justices of the Court of Appeals, about 107
Judges of First Instance, 38 Municipal Judges and about 830 Justices of the Peace. The reason
behind the exemption in the Constitution, as interpreted by the United States Federal Supreme Court
and this Court, is to preserve the independence of the Judiciary, not only of this High Tribunal but of
the other courts, whose present membership number more than 990 judicial officials.
The exemption was not primarily intended to benefit judicial officers, but was grounded on public
policy. As said by Justice Van Devanter of the United States Supreme Court in the case of Evans vs.
Gore (253 U. S., 245):
The primary purpose of the prohibition against diminution was not to benefit the judges, but,
like the clause in respect of tenure, to attract good and competent men to the bench and to
promote that independence of action and judgment which is essential to the maintenance of
the guaranties, limitations and pervading principles of the Constitution and to the
administration of justice without respect to person and with equal concern for the poor and
the rich. Such being its purpose, it is to be construed, not as a private grant, but as a
limitation imposed in the public interest; in other words, not restrictively, but in accord with its
spirit and the principle on which it proceeds.

Having in mind the limited number of judicial officers in the Philippines enjoying this exemption,
especially when the great bulk thereof are justices of the peace, many of them receiving as low as
P200 a month, and considering further the other exemptions allowed by the income tax law, such as
P3,000 for a married person and P600 for each dependent, the amount of national revenue to be
derived from income tax on the salaries of judicial officers, were if not for the constitutional
exemption, could not be large or substantial. But even if it were otherwise, it should not affect, much
less outweigh the purpose and the considerations that prompted the establishment of the
constitutional exemption. In the same case of Evans vs. Gore, supra, the Federal Supreme Court
declared "that they (fathers of the Constitution) regarded the independence of the judges as far as
greater importance than any revenue that could come from taxing their salaries.
When a judicial officer assumed office, he does not exactly ask for exemption from payment of
income tax on his salary, as a privilege . It is already attached to his office, provided and secured by
the fundamental law, not primarily for his benefit, but based on public interest, to secure and
preserve his independence of judicial thought and action. When we come to the members of the
Supreme Court, this excemption to them is relatively of short duration. Because of the limited
membership in this High Tribunal, eleven, and due to the high standards of experience, practice and
training required, one generally enters its portals and comes to join its membership quite late in life,
on the aver-age, around his sixtieth year, and being required to retire at seventy, assuming that he
does not die or become incapacitated earlier, naturally he is not in a position to receive the benefit of
exemption for long. It is rather to the justices of the peace that the exemption can give more benefit.
They are relatively more numerous, and because of the meager salary they receive, they can less
afford to pay the income tax on it and its diminution by the amount of the income tax if paid would be
real, substantial and onerous.
Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as long as it is
based on public policy or public interest. While all other citizens are subject to arrest when charged
with the commission of a crime, members of the Senate and House of Representatives except in
cases of treason, felony and breach of the peace are exempt from arrest, during their attendance in
the session of the Legislature; and while all other citizens are generally liable for any speech, remark
or statement, oral or written, tending to cause the dishonor, discredit or contempt of a natural or
juridical person or to blacken the memory of one who is dead, Senators and Congressmen in making
such statements during their sessions are extended immunity and exemption.
And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural and
juridical, are exempt from taxes on their lands, buildings and improvements thereon when used
exclusively for educational purposes, even if they derive income therefrom. (Art. VI, Sec. 22 [3].)
Holders of government bonds are exempted from the payment of taxes on the income or interest
they receive therefrom (sec. 29 (b) [4], National Internal Revenue Code as amended by Republic Act
No. 566). Payments or income received by any person residing in the Philippines under the laws of
the United States administered by the United States Veterans Administration are exempt from
taxation. (Republic Act No. 360). Funds received by officers and enlisted men of the Philippine Army
who served in the Armed Forces of the United States, allowances earned by virtue of such services
corresponding to the taxable years 1942 to 1945, inclusive, are exempted from income tax.
(Republic Act No. 210). The payment of wages and allowances of officers and enlisted men of the
Army Forces of the Philippines sent to Korea are also exempted from taxation. (Republic Act No.

35). In other words, for reasons of public policy and public interest, a citizen may justifiably by
constitutional provision or statute be exempted from his ordinary obligation of paying taxes on his
income. Under the same public policy and perhaps for the same it not higher considerations, the
framers of the Constitution deemed it wise and necessary to exempt judicial officers from paying
taxes on their salaries so as not to decrease their compensation, thereby insuring the independence
of the Judiciary.
In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the effect
that the collection of income tax on the salary of a judicial officer is a diminution thereof and so
violates the Constitution. We further hold that the interpretation and application of the Constitution
and of statutes is within the exclusive province and jurisdiction of the Judicial department, and that in
enacting a law, the Legislature may not legally provide therein that it be interpreted in such a way
that it may not violate a Constitutional prohibition, thereby tying the hands of the courts in their task
of later interpreting said statute, specially when the interpretation sought and provided in said statute
runs counter to a previous interpretation already given in a case by the highest court of the land.
In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with no
pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78780

July 23, 1987

DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners,

vs.
COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT
OF THE PHILIPPINES, respondents.
RESOLUTION
MELENCIO-HERRERA, J.:
Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53,
respectively, of the Regional Trial Court, National Capital Judicial Region, all with stations in Manila,
seek to prohibit and/or perpetually enjoin respondents, the Commissioner of Internal Revenue and
the Financial Officer of the Supreme Court, from making any deduction of withholding taxes from
their salaries.
In a nutshell, they submit that "any tax withheld from their emoluments or compensation as judicial
officers constitutes a decrease or diminution of their salaries, contrary to the provision of Section 10,
Article VIII of the 1987 Constitution mandating that "(d)uring their continuance in office, their salary

shall not be decreased," even as it is anathema to the Ideal of an independent judiciary envisioned in
and by said Constitution."
It may be pointed out that, early on, the Court had dealt with the matter administratively in response
to representations that the Court direct its Finance Officer to discontinue the withholding of taxes
from salaries of members of the Bench. Thus, on June 4, 1987, the Court en banc had reaffirmed the
Chief Justice's directive as follows:
RE: Question of exemption from income taxation. The Court REAFFIRMED the Chief
Justice's previous and standing directive to the Fiscal Management and Budget Office of this
Court to continue with the deduction of the withholding taxes from the salaries of the Justices
of the Supreme Court as well as from the salaries of all other members of the judiciary.
That should have resolved the question. However, with the filing of this petition, the Court has
deemed it best to settle the legal issue raised through this judicial pronouncement. As will be shown
hereinafter, the clear intent of the Constitutional Commission was to delete the proposed express
grant of exemption from payment of income tax to members of the Judiciary, so as to "give
substance to equality among the three branches of Government" in the words of Commissioner
Rigos. In the course of the deliberations, it was further expressly made clear, specially with regard to
Commissioner Joaquin F. Bernas' accepted amendment to the amendment of Commissioner Rigos,
that the salaries of members of the Judiciary would be subject to the general income tax applied to
all taxpayers.
This intent was somehow and inadvertently not clearly set forth in the final text of the Constitution as
approved and ratified in February, 1987 (infra, pp. 7-8). Although the intent may have been obscured
by the failure to include in the General Provisions a proscription against exemption of any public
officer or employee, including constitutional officers, from payment of income tax, the Court since
then has authorized the continuation of the deduction of the withholding tax from the salaries of the
members of the Supreme Court, as well as from the salaries of all other members of the Judiciary.
The Court hereby makes of record that it had then discarded the ruling in Perfecto vs. Meer and
Endencia vs. David, infra, that declared the salaries of members of the Judiciary exempt from
payment of the income tax and considered such payment as a diminution of their salaries during
their continuance in office. The Court hereby reiterates that the salaries of Justices and Judges are
properly subject to a general income tax law applicable to all income earners and that the payment
of such income tax by Justices and Judges does not fall within the constitutional protection against
decrease of their salaries during their continuance in office.
A comparison of the Constitutional provisions involved is called for. The 1935 Constitution provided:
... (The members of the Supreme Court and all judges of inferior courts) shall receive such
compensation as may be fixed by law, which shall not be diminished during their continuance
in office ... 1 (Emphasis supplied).
Under the 1973 Constitution, the same provision read:

The salary of the Chief Justice and of the Associate Justices of the Supreme court, and of
judges of inferior courts shall be fixed by law, which shall not be decreased during their
continuance in office. ... 2 (Emphasis ours).
And in respect of income tax exemption, another provision in the same 1973 Constitution specifically
stipulated:
No salary or any form of emolument of any public officer or employee, including
constitutional officers, shall be exempt from payment of income tax. 3
The provision in the 1987 Constitution, which petitioners rely on, reads:
The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of
judges of lower courts shall be fixed by law. During their continuance in office, their salary
shall not be decreased. 4(Emphasis supplied).
The 1987 Constitution does not contain a provision similar to Section 6, Article XV of the 1973
Constitution, for which reason, petitioners claim that the intent of the framers is to revert to the
original concept of "non-diminution "of salaries of judicial officers.
The deliberations of the 1986 Constitutional Commission relevant to Section 10, Article VIII, negate
such contention.
The draft proposal of Section 10, Article VIII, of the 1987 Constitution read:
Section 13. The salary of the Chief Justice and the Associate Justices of the Supreme Court
and of judges of the lower courts shall be fixed by law. During their continuance in office,
their salary shall not be diminished nor subjected to income tax. Until the National Assembly
shall provide otherwise, the Chief Justice shall receive an annual salary of _____________
and each Associate Justice ______________ pesos. 5 (Emphasis ours)
During the debates on the draft Article (Committee Report No. 18), two Commissioners presented
their objections to the provision on tax exemption, thus:
MS. AQUINO. Finally, on the matter of exemption from tax of the salary of justices, does this
not violate the principle of the uniformity of taxation and the principle of equal protection of
the law? After all, tax is levied not on the salary but on the combined income, such that when
the judge receives a salary and it is comingled with the other income, we tax the income, not
the salary. Why do we have to give special privileges to the salary of justices?
MR. CONCEPCION. It is the independence of the judiciary. We prohibit the increase or
decrease of their salary during their term. This is an indirect way of decreasing their salary
and affecting the independence of the judges.

MS. AQUINO. I appreciate that to be in the nature of a clause to respect tenure, but the
special privilege on taxation might, in effect, be a violation of the principle of uniformity in
taxation and the equal protection clause. 6
xxx

xxx

xxx

MR. OPLE. x x x
Of course, we share deeply the concern expressed by the sponsor, Commissioner Roberto
Concepcion, for whom we have the highest respect, to surround the Supreme Court and the
judicial system as a whole with the whole armor of defense against the executive and
legislative invasion of their independence. But in so doing, some of the citizens outside,
especially the humble government employees, might say that in trying to erect a bastion of
justice, we might end up with the fortress of privileges, an island of extra territoriality under
the Republic of the Philippines, because a good number of powers and rights accorded to
the Judiciary here may not be enjoyed in the remotest degree by other employees of the
government.
An example is the exception from income tax, which is a kind of economic immunity, which
is, of course, denied to the entire executive department and the legislative. 7
And during the period of amendments on the draft Article, on July 14, 1986, Commissioner Cirilo A.
Rigos proposed that the term "diminished" be changed to "decreased" and that the words "nor
subjected to income tax" be deleted so as to "give substance to equality among the three branches
in the government.
Commissioner Florenz D. Regalado, on behalf of the Committee on the Judiciary, defended the
original draft and referred to the ruling of this Court in Perfecto vs. Meer 8 that "the independence of
the judges is of far greater importance than any revenue that could come from taxing their salaries."
Commissioner Rigos then moved that the matter be put to a vote. Commissioner Joaquin G. Bernas
stood up "in support of an amendment to the amendment with the request for a modification of the
amendment," as follows:
FR. BERNAS. Yes. I am going to propose an amendment to the amendment saying that it is
not enough to drop the phrase "shall not be subjected to income tax," because if that is all
that the Gentleman will do, then he will just fall back on the decision in Perfecto vs. Meer and
in Dencia vs. David [should be Endencia and Jugo vs. David, etc., 93 Phil. 696[ which
excludes them from income tax, but rather I would propose that the statement will read:
"During their continuance in office, their salary shall not be diminished BUT MAY BE
SUBJECT TO GENERAL INCOME TAX."IN support of this position, I would say that the
argument seems to be that the justice and judges should not be subjected to income tax
because they already gave up the income from their practice. That is true also of Cabinet
members and all other employees. And I know right now, for instance, there are many people
who have accepted employment in the government involving a reduction of income and yet
are still subject to income tax. So, they are not the only citizens whose income is reduced by
accepting service in government.

Commissioner Rigos accepted the proposed amendment to the amendment. Commissioner Rustico
F. de los Reyes, Jr. then moved for a suspension of the session. Upon resumption, Commissioner
Bernas announced:
During the suspension, we came to an understanding with the original proponent,
Commissioner Rigos, that his amendment on page 6,. line 4 would read: "During their
continuance in office, their salary shall not be DECREASED."But this is on the understanding
that there will be a provision in the Constitution similar to Section 6 of Article XV, the General
Provisions of the 1973 Constitution, which says:
No salary or any form of emolument of any public officer or employee, including
constitutional officers, shall be exempt from payment of income tax.
So, we put a period (.) after "DECREASED" on the understanding that the salary of justices
is subject to tax.
When queried about the specific Article in the General Provisions on non-exemption from tax of
salaries of public officers, Commissioner Bernas replied:
FR BERNAS. Yes, I do not know if such an article will be found in the General Provisions.
But at any rate, when we put a period (.) after "DECREASED," it is on the understanding that
the doctrine in Perfecto vs. Meer and Dencia vs. David will not apply anymore.
The amendment to the original draft, as discussed and understood, was finally approved without
objection.
THE PRESIDING OFFICER (Mr. Bengzon). The understanding, therefore, is that there will
be a provision under the Article on General Provisions. Could Commissioner Rosario Braid
kindly take note that the salaries of officials of the government including constitutional
officers shall not be exempt from income tax? The amendment proposed herein and
accepted by the Committee now reads as follows: "During their continuance in office, their
salary shall not be DECREASED"; and the phrase "nor subjected to income tax" is deleted. 9
The debates, interpellations and opinions expressed regarding the constitutional provision in
question until it was finally approved by the Commission disclosed that the true intent of the framers
of the 1987 Constitution, in adopting it, was to make the salaries of members of the Judiciary
taxable. The ascertainment of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the organic law and of the people adopting
it should be given effect.10 The primary task in constitutional construction is to ascertain and
thereafter assure the realization of the purpose of the framers and of the people in the adoption of
the Constitution.11 it may also be safely assumed that the people in ratifying the Constitution were
guided mainly by the explanation offered by the framers.12
1avvphi1

Besides, construing Section 10, Articles VIII, of the 1987 Constitution, which, for clarity, is again
reproduced hereunder:

The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of
judges of lower courts shall be fixed by law. During their continuance in office, their salary
shall not be decreased. (Emphasis supplied).
it is plain that the Constitution authorizes Congress to pass a law fixing another rate of compensation
of Justices and Judges but such rate must be higher than that which they are receiving at the time of
enactment, or if lower, it would be applicable only to those appointed after its approval. It would be a
strained construction to read into the provision an exemption from taxation in the light of the
discussion in the Constitutional Commission.
With the foregoing interpretation, and as stated heretofore, the ruling that "the imposition of income
tax upon the salary of judges is a dimunition thereof, and so violates the Constitution" in Perfecto vs.
Meer,13 as affirmed inEndencia vs. David 14 must be declared discarded. The framers of the
fundamental law, as the alter ego of the people, have expressed in clear and unmistakable terms the
meaning and import of Section 10, Article VIII, of the 1987 Constitution that they have adopted
Stated otherwise, we accord due respect to the intent of the people, through the discussions and
deliberations of their representatives, in the spirit that all citizens should bear their aliquot part of the
cost of maintaining the government and should share the burden of general income taxation
equitably.
WHEREFORE, the instant petition for Prohibition is hereby dismissed.
Teehankee, C.J., Fernan, Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento and Cortes, JJ., concur.
Yap, J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-26702 October 18, 1979
JUAN AUGUSTO B. PRIMICIAS, plaintiff-appellee,
vs.
THE MUNICIPALITY OF URDANETA, PANGASINAN, ET AL., defendants-appellants.
Ambrosio Padilla Law Offices for appellee.
Primicias, Castillo & Macaraeg for appellants.

DE CASTRO, J.:

The main issue in this appeal is the validity of Ordinance No. 3, Series of 1964, enacted on March
13,1964 by the Municipal Council of Urdaneta, Pangasinan, which was declared null and void by the
Court of First Instance of Lingayen, Pangasinan, in its decision dated June 29, 1966, the dispositive
portion of which reads as follows:
WHEREFORE, this Court renders decision declaring Ordinance No, 3, Series of
1964, to be null and void; making the writ of preliminary injunction heretofore issued
against the defendant, Felix D. Soriano definite and permanent; and further
restraining the defendants, Amadeo R. Perez, Jr., Lorenzo G. Suyat and Estanislao
Andrada, from enforcing the said ordinance all throughout Urdaneta; and ordering
the said defendants to return to the plaintiff his drivers (sic) license CIN 017644, a
copy of which is Exhibit D-1, and to pay the costs of suit. 1
From the aforecited decision, defendants appealed to this Court. The antecedent facts of this case
are as follows:2
On February 8, 1965, Juan Augusta B. Primacias plaintiff appellee, was driving his car within the
jurisdiction of Urdaneta when a member of Urdaneta's Municipal Police asked him to stop. He was
told, upon stopping, that he had violated Municipal Ordinance No. 3, Series of 1964, "and more
particularly, for overtaking a truck." The policeman then asked for plaintiff's license which he
surrendered, and a temporary operator's permit was issued to him. This incident took place about
200 meters away from a school building, at Barrio Nancamaliran, Urdaneta.
Thereafter, a criminal complaint was filed in the Municipal Court of Urdaneta against Primicias for
violation of Ordinance No. 3, Series of 1964. Due to the institution of the criminal case, plaintiff
Primicias initiated an action for the annulment of said ordinance with prayer for the issuance of
preliminary injunction for the purpose of restraining defendants Municipality of Urdaneta, Mayor
Perez, Police Chief Suyat, Judge Soriano and Patrolman Andrada from enforcing the ordinance. The
writ was issued and Judge Soriano was enjoined from further proceeding in the criminal case.
After trial, the Court of First Instance rendered the questioned decision holding that the ordinance
was null and void and had been repealed by Republic Act No. 4136, otherwise known as the Land
Transportation and Traffic Code. Now, defendants, appellants herein, allege that the lower court
erred in: 3
1. declaring that Municipal Ordinance No. 3 (Series of 1964) of Urdaneta is null and
void;
2. requiring the municipal council of Urdaneta in the enactment of said ordinance to
give maximum allowable speed and to make classification of highways;
3. holding that said ordinance is in conflict with section 35 par. b(4) of Republic Act
4136;
4. requiring that said ordinance be approved by the Land Transportation
Commissioner;
5. holding that said ordinance is not clear and definite in its terms;
6. issuing ex-parte a writ of injunction to restrain the proceedings in criminal case no.
3140.

The ordinance in question provides: 4

SECTION 1 - That the following speed limits for vehicular traffic along the National
Highway and the Provincial Roads within the territorial limits of Urdaneta shall be as
follows:
a. Thru crowded streets approaching intersections at 'blind corners,
passing school zones or thickly populated areas, duly marked with
sign posts, the maximum speed limit allowable shall be 20 kph.
SECTION 2 - That any person or persons caught driving any motor vehicle violating
the provisions of this ordinance shall be fined P10.00 for the first offense; P20.00 for
the second offense; and P30.00 for the third and succeeding offenses, the Municipal
Judge shall recommend the cancellation of the license of the offender to the Motor
Vehicle's Office (MVO); or failure to pay the fine imposed, he shall suffer a subsidiary
imprisonment in accordance with law.
Appellants contend that the Ordinance is valid, being "patterned after and based on Section 53, 5 par.
4 of Act No. 3992, as amended (Revised Motor Vehicle Law)." In so arguing, appellants fail to note that
Act No. 3992 has been superseded by Republic Act No. 4136, the Land Transportation and 'Traffic Code,
which became effective on June 20, 1964, about three months after the questioned ordinance was
approved by Urdaneta's Municipal Council. The explicit repeal of the aforesaid Act is embodied in Section
63, Republic Act No. 4136, to wit:
Act Numbered thirty-nine hundred ninety-two (3992) as amended, and all laws,
executive orders, ordinance, resolutions, regulations or paints thereof in conflict with
the provisions of this Act are repealed.
By this express repeal, and the general rule that a later law prevails over an earlier law, 6 appellants
are in error in contending that "a later enactment of the law relating to the same subject matter as that of
an earlier statute is not sufficient to cause an implied repeal of the original law." Pursuant to Section 63,
Republic Act No. 4136, the ordinance at bar is thus placed within the ambit of Republic Act No. 4136, and
not Act No. 3992. The validity of Ordinance No. 3, Series of 1964, must therefore be determined vis-a-vis
Republic Act No. 4136, the "mother statute" so to speak, which was in force at the time the criminal case
was brought against Primicias for the violation of the said ordinance.
An essential requisite for a valid ordinance is, among others, that is "must not contravene . . . the
statute," 7 for it is a "fundamental principle that municipal ordinances are inferior in status and subordinate
to the laws of the state." 8 Following this general rule, whenever there is a conflict between an ordinance
and a statute, the ordinance "must give way. 9
Since the Ordinance is aimed at regulating traffic, Chapter IV Traffic Rules), Article I (Speed Limits
and Keeping to the Right), consisting of sections 35, to 38 of Republic Act No. 4136, particularly
Sections 35, 36, 38 contain the provisions material to its validity. Section 35 (b), Republic Act No.
4136, which took the place of Section 53, par. (4), Act No. 3992, provides restrictions as to speed
thus:
MAXIMUM ALLOWABLE SPEEDS

Passenger cars and

Motor trucks

motorcycle

and buses

by habitation.

80 km.

50 km.

2. On through streets or

per hour

per hour

blind corners" when so designated.

40 km.

30 km.

3. On city and municipal

per hour

per hour

designated "through streets."

30 km.

30 km.

4. Through crowded streets ap

per hour

per hour

1. On open country roads, with

"blind corners" not closely bordered

boulevards, clear of traffic, with "no

streets, with light traffic, when not

proaching intersection at "blind cor

ners," passing school zones, passing

other vehicles which are stationary, or

for similar circumstances.

20 km.

per hour

per hour

20 km.

A look at the aforecited section and Section 1, par. (a) of the Ordinance shows that the latter is more
or less a restatement only of number (4), par. (b), Section 35. As observed by the trial court, the
Ordinance "refers to only one of the four classifications mentioned in paragraph (b), Section
35." 10 limiting the rates of speed for
vehicular traffic along the national highway and The provincial roads within the
territorial limits of Urdaneta to 20 kilometers per hour without regard to whether the
road is an open country roads (six), or through streets or boulevards, or city or
municipal streets with light traffic. 11
As also found correctly by the lower court, the Municipal Council of Urdaneta did not make any
classification of its thoroughfares, contrary to the explicit requirement laid down by Section 38,
Republic Act No. 4136, which provides:
Classification of highways. - Public highways shall be properly classified for traffic
purposes by the provincial board or city council having jurisdiction over them, and
said provincial board, municipal board or city council shall provide appropriate signs
therefor, subject to the approval of the Commissioner. It shall be the duty of every
provincial, city and municipal secretary to certify to the Commissioner the names,
locations, and limits of all "through streets" designated as such by the provincial
board, municipal board or council.
Under this section, a local legislative body intending to control traffic in public highways 12 is
supposed to classify, first, and then mark them with proper signs, all to be approved by the Land
Transportation Commissioner. To hold that the provisions of Section 38 are mandatory is sanctioned by a
ruling 13 that
statutes which confer upon a public body or officer . . . power to perform acts which
concern the public interests or rights of individuals, are generally, regarded as

mandatory although the language is permissive only since the are construed as
imposing duties rather than conferring privileges.
The classifications which must be based on Section 35 are necessary in view of Section 36 which
states that "no provincial, city or municipal authority shall enact or enforce any ordinance or
resolution specifying maximum allowable speeds other than those provided in this Act." In this case,
however, there is no showing that the marking of the streets and areas falling under Section 1, par.
(a), Ordinance No. 3, Series of 1964, was done with the approval of the Land Transportation
Commissioner. Thus, on this very ground alone, the Ordinance becomes invalid. Since it lacks the
requirement imposed by Section 38, the provincial, city, or municipal board or council is enjoined
under Section 62 of the Land Transportation and Traffic Code from "enacting or enforcing any
ordinance or resolution in conflict with the provisions of this Act."
Regarding the contention that the lower court erred in holding that said "Ordinance is not clear and
definite in its terms." We agree with the Court a quo that when the Municipal Council of Urdaneta
used the phrase "vehicular traffic" (Section 1, Ordinance) it "did not distinguish between passenger
cars and motor vehicles and motor trucks and buses." 14 This conclusion is bolstered by the fact that
nowhere in the Ordinance is "vehicular traffic" defined. Considering that this is a regulatory ordinance, its
clearness, definiteness and certainty are all the more important so that "an average man should be able
with due care, after reading it,, to understand and ascertain whether he will incur a penalty for particular
acts or courses of conduct." 15 In comparison, Section 35(b), Republic Act No. 4136 on which Section 1 of
the Ordinance must be based, stated that the rates of speed enumerated therein refer to motor
vehicle, 16 specifying the speed for each kind of vehicle. At the same time, to avoid vagueness, Art. 11,
Section 3 defines what a motor vehicle is and passenger automobiles are.
On the issue of whether a writ of injunction can restrain the proceedings in Criminal Case No. 3140,
the general rule is that "ordinarily, criminal prosecution may not be blocked by court prohibition or
injunction." 17 Exceptions however are allowed in the following instances:
1. for the orderly administration of justice;
2. to prevent the use of the strong arm of the law in an oppressive and vindictive
manner;
3. to avoid multiplicity of actions;
4. to afford adequate protection to constitutional rights;
5. in proper cases, because the statute relied upon is unconstitutional or was held
invalid. 18
The local statute or ordinance at bar being invalid, the exception just cited obtains in this case.
Hence, the lower court did not err in issuing the writ of injunction against defendants. Moreover,
considering that "our law on municipal corporations is in principle patterned after that of the United
States, " 19 it would not be amiss for Us to adopt in this instance the ruling that to enjoin the enforcement
of a void ordinance, "injunction has frequently been sustained in order to prevent a multiplicity of
prosecutions under it." 20
In view of the foregoing, the appealed decision is hereby affirmed.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-22036 April 30, 1979
TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE PARISH PRIEST
OF THE ROMAN CATHOLIC CHURCH OF VICTORIA, TARLAC, petitioner-appellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and JOVITA ESCOBAR
DE FAUSTO,respondents-appellees.
D. Taedo, Jr. for appellants.
J. Palanca, Sr. for appellee.

AQUINO, J.:
This case is about the efficaciousness or enforceability of a devise of ricelands located at Guimba,
Nueva Ecija, with a total area of around forty- four hectares That devise was made in the will of the
late Father Pascual Rigor, a native of Victoria Tarlac, in favor of his nearest male relative who would
study for the priesthood.
The parish priest of Victoria, who claimed to be a trustee of the said lands, appealed to this Court
from the decision of the Court of Appeals affirming the order of the probate court declaring that the
said devise was inoperative (Rigor vs. Parish Priest of the Roman Catholic Church of Victoria,
Tarlac, CA-G.R. No. 24319-R, August 1, 1963).
The record discloses that Father Rigor, the parish priest of Pulilan, Bulacan, died on August 9, 1935,
leaving a will executed on October 29, 1933 which was probated by the Court of First Instance of
Tarlac in its order of December 5, 1935. Named as devisees in the will were the testators nearest
relatives, namely, his three sisters: Florencia Rigor-Escobar, Belina Rigor-Manaloto and Nestora
Rigor-Quiambao. The testator gave a devise to his cousin, Fortunato Gamalinda.
In addition, the will contained the following controversial bequest (paragraphing supplied to facilitate
comprehension of the testamentary provisions):
Doy y dejo como legado CUATRO (4) PARCELAS de terreno palayeros situados en
el municipiooo de Guimba de la provinciaaa de NUEVA ECIJA, cuyo num. de
CERTIFICADO DE TRANSFERENCIA DE TITULO SON; Titulo Num. 6530, mide
16,249 m. cuadrados de superficie Titulo Num. 6548, mide 242,998 m. cuadrados de
superficie y annual 6525, mide 62,665 m. cuadrados de superficie; y Titulo Num.
6521, mide 119,251 m. cuadrados de superficie; a cualquier pariente mio varon mas
cercano que estudie la carrera eclesiatica hasta ordenarse de Presbiterado o sea
Sacerdote; las condiciones de estate legado son;

(1.a) Prohibe en absoluto la venta de estos terrenos arriba situados objectos de este
legado;
(2.a) Que el legatario pariente mio mas cercano tendra derecho de empezar a gozar
y administrar de este legado al principiar a curzar la Sagrada Teologio, y ordenado
de Sacerdote, hasta su muerte; pero que pierde el legatario este derecho de
administrar y gozar de este legado al dejar de continuar sus estudios para ordenarse
de Presbiterado (Sacerdote).
Que el legatario una vez Sacerdote ya estara obligado a celebrar cada ao VEINTE
(20) Misas rezadas en sufragio de mi alma y de mis padres difuntos, y si el actual
legatario, quedase excomulgado, IPSO FACTO se le despoja este legado, y la
administracion de esto pasara a cargo del actual Parroco y sus sucesores de la
Iglecia Catolica de Victoria, Tarlac.
Y en intervalo de tiempo que no haya legatario acondicionado segun lo arriba queda
expresado, pasara la administracion de este legado a cargo del actual Parroco
Catolico y sus sucesores, de Victoria, Tarlac.
El Parroco administrador de estate legado, acumulara, anualmente todos los
productos que puede tener estate legado, ganando o sacando de los productos
anuales el CINCO (5) por ciento para su administracion, y los derechos
correspondientes de las VEINTE (20) Misas rezadas que debiera el Parroco celebrar
cada ao, depositando todo lo restante de los productos de estate legado, en un
banco, a nombre de estate legado.
To implement the foregoing bequest, the administratix in 1940 submitted a project containing the
following item:
5. LEGACY OF THE CHURCH
That it be adjudicated in favor of the legacy purported to be given to the nearest male
relative who shall take the priesthood, and in the interim to be administered by the
actual Catholic Priest of the Roman Catholic Church of Victoria, Tarlac, Philippines,
or his successors, the real properties hereinbelow indicated, to wit:

Title No.

Lot
No.

Area
in
Has.

Tax
Dec.

Ass.
Valu
e

T6530

3663

1.62
49

1874
0

P
340.
00

T-

3445-

24.2

1873

7,29

6548

998

0.00

T6525

3670

6.26
65

1873
6

1,88
0.00

T6521

3666

11.9
251

1873
3

3,58
0.00

Total amount and value 44.1163 P13,090.00

Judge Roman A. Cruz in his order of August 15, 1940, approving the project of partition, directed that
after payment of the obligations of the estate (including the sum of P3,132.26 due to the church of
the Victoria parish) the administratrix should deliver to the devisees their respective shares.
It may be noted that the administratrix and Judge Cruz did not bother to analyze the meaning and
implications of Father Rigor's bequest to his nearest male relative who would study for the
priesthood. Inasmuch as no nephew of the testator claimed the devise and as the administratrix and
the legal heirs believed that the parish priest of Victoria had no right to administer the ricelands, the
same were not delivered to that ecclesiastic. The testate proceeding remained pending.
About thirteen years after the approval of the project of partition, or on February 19, 1954, the parish
priest of Victoria filed in the pending testate proceeding a petition praying for the appointment of a
new administrator (succeeding the deceased administration Florencia Rigor), who should deliver to
the church the said ricelands, and further praying that the possessors thereof be ordered to render
an accounting of the fruits. The probate court granted the petition. A new administrator was
appointed. On January 31, 1957 the parish priest filed another petition for the delivery of the
ricelands to the church as trustee.
The intestate heirs of Father Rigor countered with a petition dated March 25, 1957 praying that the
bequest be d inoperative and that they be adjudged as the persons entitled to the said ricelands
since, as admitted by the parish priest of Victoria, "no nearest male relative of" the testator "has ever
studied for the priesthood" (pp. 25 and 35, Record on Appeal). That petition was opposed by the
parish priest of Victoria.
Finding that petition to be meritorious, the lower court, through Judge Bernabe de Aquino, declared
the bequest inoperative and adjudicated the ricelands to the testator's legal heirs in his order of June
28, 1957. The parish priest filed two motions for reconsideration.
Judge De Aquino granted the respond motion for reconsideration in his order of December 10, 1957
on the ground that the testator had a grandnephew named Edgardo G. Cunanan (the grandson of
his first cousin) who was a seminarian in the San Jose Seminary of the Jesuit Fathers in Quezon
City. The administrator was directed to deliver the ricelands to the parish priest of Victoria as trustee.

The legal heirs appealed to the Court of Appeals. It reversed that order. It held that Father Rigor had
created a testamentary trust for his nearest male relative who would take the holy orders but that
such trust could exist only for twenty years because to enforce it beyond that period would violate
"the rule against perpetuities. It ruled that since no legatee claimed the ricelands within twenty years
after the testator's death, the same should pass to his legal heirs, citing articles 888 and 912(2) of
the old Civil Code and article 870 of the new Civil Code.
The parish priest in this appeal contends that the Court of Appeals erred in not finding that the
testator created a public charitable trust and in not liberally construing the testamentary provisions
so as to render the trust operative and to prevent intestacy.
As refutation, the legal heirs argue that the Court of Appeals d the bequest inoperative because no
one among the testator's nearest male relatives had studied for the priesthood and not because the
trust was a private charitable trust. According to the legal heirs, that factual finding is binding on this
Court. They point out that appellant priest's change of theory cannot be countenanced in this
appeal .
In this case, as in cases involving the law of contracts and statutory construction, where the intention
of the contracting parties or of the lawmaking body is to be ascertained, the primary issue is the
determination of the testator's intention which is the law of the case (dicat testor et erit lex. Santos
vs. Manarang, 27 Phil. 209, 215; Rodriguez vs. Court of Appeals, L-28734, March 28, 1969, 27
SCRA 546).
The will of the testator is the first and principal law in the matter of testaments. When his intention is
clearly and precisely expressed, any interpretation must be in accord with the plain and literal
meaning of his words, except when it may certainly appear that his intention was different from that
literally expressed (In re Estate of Calderon, 26 Phil. 333).
The intent of the testator is the cardinal rule in the construction of wills." It is "the life and soul of a
will It is "the first greatest rule, the sovereign guide, the polestar, in giving effect to a will". (See
Dissent of Justice Moreland in Santos vs. Manarang, 27 Phil. 209, 223, 237-8.)
One canon in the interpretation of the testamentary provisions is that "the testator's intention is to be
ascertained from the words of the wilt taking into consideration the circumstances under which it was
made", but excluding the testator's oral declarations as to his intention (Art. 789, Civil Code of the
Philippines).
To ascertain Father Rigor's intention, it may be useful to make the following re-statement of the
provisions of his will.
1. that he bequeathed the ricelands to anyone of his nearest male relatives who would pursue an
ecclesiastical career until his ordination as a priest.
2. That the devisee could not sell the ricelands.
3. That the devisee at the inception of his studies in sacred theology could enjoy and administer the
ricelands, and once ordained as a priest, he could continue enjoying and administering the same up
to the time of his death but the devisee would cease to enjoy and administer the ricelands if he
discontinued his studies for the priesthood.

4. That if the devisee became a priest, he would be obligated to celebrate every year twenty masses
with prayers for the repose of the souls of Father Rigor and his parents.
5. That if the devisee is excommunicated, he would be divested of the legacy and the administration
of the riceland would pass to the incumbent parish priest of Victoria and his successors.
6. That during the interval of time that there is no qualified devisee as contemplated above, the
administration of the ricelands would be under the responsibility of the incumbent parish priest of
Victoria and his successors, and
7. That the parish priest-administrator of the ricelands would accumulate annually the products
thereof, obtaining or getting from the annual produce five percent thereof for his administration and
the fees corresponding to the twenty masses with prayers that the parish priest would celebrate for
each year, depositing the balance of the income of the devise in the bank in the name of his
bequest.
From the foregoing testamentary provisions, it may be deduced that the testator intended to devise
the ricelands to his nearest male relative who would become a priest, who was forbidden to sell the
ricelands, who would lose the devise if he discontinued his studies for the priesthood, or having been
ordained a priest, he was excommunicated, and who would be obligated to say annually twenty
masses with prayers for the repose of the souls of the testator and his parents.
On the other hand, it is clear that the parish priest of Victoria would administer the ricelands only in
two situations: one, during the interval of time that no nearest male relative of the testator was
studying for the priesthood and two, in case the testator's nephew became a priest and he was
excommunicated.
What is not clear is the duration of "el intervalo de tiempo que no haya legatario acondicionado", or
how long after the testator's death would it be determined that he had a nephew who would pursue
an ecclesiastical vocation. It is that patent ambiguity that has brought about the controversy between
the parish priest of Victoria and the testator's legal heirs.
Interwoven with that equivocal provision is the time when the nearest male relative who would study
for the priesthood should be determined. Did the testator contemplate only his nearest male
relative at the time of his death? Or did he have in mind any of his nearest male relatives at anytime
after his death?
We hold that the said bequest refers to the testator's nearest male relative living at the time of his
death and not to any indefinite time thereafter. "In order to be capacitated to inherit, the heir, devisee
or legatee must be living at the moment the succession opens, except in case of representation,
when it is proper" (Art. 1025, Civil Code).
The said testamentary provisions should be sensibly or reasonably construed. To construe them as
referring to the testator's nearest male relative at anytime after his death would render the provisions
difficult to apply and create uncertainty as to the disposition of his estate. That could not have been
his intention.
In 1935, when the testator died, his nearest leagal heirs were his three sisters or second-degree
relatives, Mrs. Escobar, Mrs. Manaloto and Mrs. Quiambao. Obviously, when the testator specified
his nearest male relative, he must have had in mind his nephew or a son of his sister, who would be
his third-degree relative, or possibly a grandnephew. But since he could not prognosticate the exact

date of his death or state with certitude what category of nearest male relative would be living at the
time of his death, he could not specify that his nearest male relative would be his nephew or
grandnephews (the son of his nephew or niece) and so he had to use the term "nearest male
relative".
It is contended by the legal heirs that the said devise was in reality intended for Ramon Quiambao,
the testator's nephew and godchild, who was the son of his sister, Mrs. Quiambao. To prove that
contention, the legal heirs presented in the lower court the affidavit of Beatriz Gamalinda, the
maternal grandmother of Edgardo Cunanan, who deposed that after Father Rigor's death her own
son, Valentin Gamalinda, Jr., did not claim the devise, although he was studying for the priesthood at
the San Carlos Seminary, because she (Beatriz) knew that Father Rigor had intended that devise for
his nearest male relative beloning to the Rigor family (pp. 105-114, Record on Appeal).
Mrs. Gamalinda further deposed that her own grandchild, Edgardo G. Cunanan, was not the one
contemplated in Father Rigor's will and that Edgardo's father told her that he was not consulted by
the parish priest of Victoria before the latter filed his second motion for reconsideration which was
based on the ground that the testator's grandnephew, Edgardo, was studying for the priesthood at
the San Jose Seminary.
Parenthetically, it should be stated at this juncture that Edgardo ceased to be a seminarian in 1961.
For that reason, the legal heirs apprised the Court of Appeals that the probate court's order
adjudicating the ricelands to the parish priest of Victoria had no more leg to stand on (p. 84,
Appellant's brief).
Of course, Mrs. Gamalinda's affidavit, which is tantamount to evidence aliunde as to the testator's
intention and which is hearsay, has no probative value. Our opinion that the said bequest refers to
the testator's nephew who was living at the time of his death, when his succession was opened and
the successional rights to his estate became vested, rests on a judicious and unbiased reading of
the terms of the will.
Had the testator intended that the "cualquier pariente mio varon mas cercano que estudie la camera
eclesiatica" would include indefinitely anyone of his nearest male relatives born after his death, he
could have so specified in his will He must have known that such a broad provision would suspend
for an unlimited period of time the efficaciousness of his bequest.
What then did the testator mean by "el intervalo de tiempo que no haya legatario acondicionado"?
The reasonable view is that he was referring to a situation whereby his nephew living at the time of
his death, who would like to become a priest, was still in grade school or in high school or was not
yet in the seminary. In that case, the parish priest of Victoria would administer the ricelands before
the nephew entered the seminary. But the moment the testator's nephew entered the seminary, then
he would be entitled to enjoy and administer the ricelands and receive the fruits thereof. In that
event, the trusteeship would be terminated.
Following that interpretation of the will the inquiry would be whether at the time Father Rigor died in
1935 he had a nephew who was studying for the priesthood or who had manifested his desire to
follow the ecclesiastical career. That query is categorically answered in paragraph 4 of appellant
priest's petitions of February 19, 1954 and January 31, 1957. He unequivocally alleged therein that
"not male relative of the late (Father) Pascual Rigor has ever studied for the priesthood" (pp. 25 and
35, Record on Appeal).
Inasmuch as the testator was not survived by any nephew who became a priest, the unavoidable
conclusion is that the bequest in question was ineffectual or inoperative. Therefore, the

administration of the ricelands by the parish priest of Victoria, as envisaged in the wilt was likewise
inoperative.
The appellant in contending that a public charitable trust was constituted by the testator in is favor
assumes that he was a trustee or a substitute devisee That contention is untenable. A reading of the
testamentary provisions regarding the disputed bequest not support the view that the parish priest of
Victoria was a trustee or a substitute devisee in the event that the testator was not survived by a
nephew who became a priest.
It should be understood that the parish priest of Victoria could become a trustee only when the
testator's nephew living at the time of his death, who desired to become a priest, had not yet entered
the seminary or, having been ordained a priest, he was excommunicated. Those two contingencies
did not arise, and could not have arisen in this case because no nephew of the testator manifested
any intention to enter the seminary or ever became a priest.
The Court of Appeals correctly ruled that this case is covered by article 888 of the old Civil Code,
now article 956, which provides that if "the bequest for any reason should be inoperative, it shall be
merged into the estate, except in cases of substitution and those in which the right of accretion
exists" ("el legado ... por qualquier causa, no tenga efecto se refundira en la masa de la herencia,
fuera de los casos de sustitucion y derecho de acrecer").
This case is also covered by article 912(2) of the old Civil Code, now article 960 (2), which provides
that legal succession takes place when the will "does not dispose of all that belongs to the testator."
There being no substitution nor accretion as to the said ricelands the same should be distributed
among the testator's legal heirs. The effect is as if the testator had made no disposition as to the
said ricelands.
The Civil Code recognizes that a person may die partly testate and partly intestate, or that there may
be mixed succession. The old rule as to the indivisibility of the testator's win is no longer valid. Thus,
if a conditional legacy does not take effect, there will be intestate succession as to the property
recovered by the said legacy (Macrohon Ong Ham vs. Saavedra, 51 Phil. 267).
We find no merit in the appeal The Appellate Court's decision is affirmed. Costs against the
petitioner.
SO ORDERED
Fernando, C.J.(Actg. ), Barredo (Actg. Chairman), Antonio, Concepcion, Jr., and Santos, JJ., concur.
Abad Santos, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 116422 November 4, 1996

AVELINA B. CONTE and LETICIA BOISER-PALMA, petitioners,

vs.
COMMISSION ON AUDIT (COA), respondent.

PANGANIBAN, J.:
Are the benefits provided for under Social Security System Resolution No. 56 to be
considered simply as "financial assistance" for retiring employees, or does such scheme
constitute a supplementary retirement plan proscribed by Republic Act No. 4968?
The foregoing question is addressed by this Court in resolving the instant petition
for certiorari which seeks to reverse and set aside Decision No. 94126 1 dated March 15, 1994 of respondent Commission on Audit, which denied petitioners'
request for reconsideration of its adverse ruling disapproving claims for financial assistance under
SSS Resolution No. 56.
The Facts
Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social
Security System (SSS) who retired from government service on May 9, 1990 and September
13, 1992, respectively. They availed of compulsory retirement benefits under Republic Act
No. 660. 2
In addition to retirement benefits provided under R.A. 660, petitioners also claimed SSS
"financial assistance" benefits granted under SSS Resolution No. 56, series of 1971.
A brief historical backgrounder is in order. SSS Resolution No. 56, 3 approved on January 21,
1971, provides financial incentive and inducement to SSS employees qualified to retire to avail of
retirement benefits under RA 660 as amended, rather than the retirement benefits under RA 1616
as amended, by giving them "financial assistance" equivalent in amount to the difference between
what a retiree would have received under RA 1616, less what he was entitled to under RA 660.
The said SSS Resolution No. 56 states:
RESOLUTION NO. 56
WHEREAS, the retirement benefits of SSS employees are provided for under
Republic Acts 660 and 1616 as amended;.
WHEREAS, SSS employees who are qualified for compulsory retirement at age 65
or for optional retirement at a lower age are entitled to either the life annuity under
R.A. 660, as amended, or the gratuity under R.A. 1616, as amended;
WHEREAS, a retirement benefit to be effective must be a periodic income as close
as possible to the monthly income that would have been due to the retiree during the
remaining years of his life were he still employed;

WHEREAS, the life annuity under R.A. 660, as amended, being closer to the monthly
income that was lost on account of old age than the gratuity under R.A. 1616, as
amended, would best serve the interest of the retiree;
WHEREAS, it is the policy of the Social Security Commission to promote and to
protect the interest of all SSS employees, with a view to providing for their well-being
during both their working and retirement years;
WHEREAS, the availment of life annuities built up by premiums paid on behalf of
SSS employees during their working years would mean more savings to the SSS;
WHEREAS, it is a duty of the Social Security Commission to effect savings in every
possible way for economical and efficient operations;
WHEREAS, it is the right of every SSS employee to choose freely and voluntarily the
benefit he is entitled to solely for his own benefit and for the benefit of his family;
NOW, THEREFORE, BE IT RESOLVED, That all the SSS employees who are
simultaneously qualified for compulsory retirement at age 65 or for optional
retirement at a lower age be encouraged to avail for themselves the life annuity
under R.A. 660, as amended;
RESOLVED, FURTHER, That SSS employees who availed themselves of the said
life annuity, in appreciation and recognition of their long and faithful service, be
granted financial assistance equivalent to the gratuity plus return of contributions
under R.A. 1616, as amended, less the five year guaranteed annuity under R.A. 660,
as amended;
RESOLVED, FINALLY, That the Administrator be authorized to act on all applications
for retirement submitted by SSS employees and subject to availability of funds, pay
the corresponding benefits in addition to the money value of all accumulated leaves.
(emphasis supplied)
Long after the promulgation of SSS Resolution No. 56, respondent Commission on Audit
(COA) issued a ruling, captioned as "3rd Indorsement" dated July 10, 1989, 4 disallowing in
audit "all such claims for financial assistance under SSS Resolution No. 56", for the reason that:

. . . the scheme of financial assistance authorized by the SSS is similar to those

separate retirement plan or incentive/separation pay plans adopted by other
government corporate agencies whichresults in the increase of benefits beyond what
is allowed under existing retirement laws. In this regard, attention . . . is invited to the
view expressed by the Secretary of Budget and Management dated February 17,
1988 to the COA General Counsel against the proliferation of retirement planswhich,
in COA Decision No. 591 dated August 31, 1988, was concurred in by this
Commission. . . .

Accordingly, all such claims for financial assistance under SSS Resolution No. 56
dated January 21, 1971 should be disallowed in audit. (emphasis supplied)
Despite the aforequoted ruling of respondent COA, then SSS Administrator Jose L. Cuisia,
Jr. nevertheless wrote 5 on February 12, 1990 then Executive Secretary Catalino Macaraig, Jr.,
seeking "presidential authority for SSS to continue implementing its Resolution No. 56 dated
January 21, 1971 granting financial assistance to its qualified retiring employees".
However, in a letter-reply dated May 28, 1990, 6 then Executive Secretary Macaraig advised
Administrator Cuisia that the Office of the President "is not inclined to favorably act on the herein
request, let alone over-rule the disallowance by COA" of such claims, because, aside from the
fact that decisions, order or actions of the COA in the exercise of its audit functions are
appealable to the Supreme Court 7 pursuant to Sec. 50 of PD 1445, the benefits under said Res.
56, though referred to as "financial assistance", constituted additional retirement benefits, and the
scheme partook of the nature of a supplementary pension/retirement plan proscribed by law.
The law referred to above is RA 4968 (The Teves Retirement Law), which took effect June
17, 1967 and amended CA 186 (otherwise known as the Government Service Insurance Act,
or the GSIS Charter), making Sec. 28 (b) of the latter act read as follows:
(b) Hereafter, no insurance or retirement plan for officers or employees shall be
created by employer. All supplementary retirement or pension plans heretofore in
force in any government office. agency or instrumentality or corporation owned or
controlled by the government, are hereby declared in operative or abolished;
Provided, That the rights of those who are already eligible to retire there under shall
not be affected." (emphasis supplied)
On January 12, 1993, herein petitioners filed with respondent COA their "letterappeal/protest" 8 seeking reconsideration of COA's ruling of July 10, 1989 disallowing claims for
financial assistance under Res. 56.
On November 15, 1993, petitioner Conte sought payment from SSS of the benefits under
Res. 56. On December 9, 1993, SSS Administrator Renato C. Valencia denied 9 the request in
consonance with the previous disallowance by respondent COA, but assured petitioner that
should the COA change its position, the SSS will resume the grant of benefits under said Res. 56.
On March 15, 1994, respondent COA rendered its COA Decision No. 94-126 denying
petitioners' request for reconsideration.
Thus this petition for certiorari under Rule 65 of the Rules of Court.
The Issues
The issues 10 submitted by petitioners may be simplified and restated thus: Did public respondent
abuse its discretion when it disallowed in audit petitioners' claims for benefits under SSS
Res. 562?

Petitioners argue that the financial assistance under Res. 56 is not a retirement plan
prohibited by RA 4968, and that Res. 56 provides benefits different from and "aside from"
what a retiring SSS employee would be entitled to under RA 660. Petitioners contend that it
"is a social amelioration and economic upliftment measure undertaken not only for the
benefit of the SSS but more so for the welfare of its qualified retiring employees." As such, it
"should be interpreted in a manner that would give the . . . most advantage to the recipient
the retiring employees whose dedicated, loyal, lengthy and faithful service to the agency of
government is recognized and amply rewarded the rationale for the financial assistance
plan." Petitioners reiterate the argument in their letter dated January 12, 1993 to COA that:
Motivation can be in the form of financial assistance, during their stay in the service
or upon retirement, as in the SSS Financial Assistance Plan. This is so, because
Government has to have some attractive remuneration programs to encourage wellqualified personnel to pursue a career in the government service, rather than in the
private sector or in foreign countries . . .
A more developmental view of the financial institutions' grant of certain forms of
financial assistance to its personnel, we believe, would enable government
administrators to see these financial forms of remuneration as contributory to the
national developmental efforts for effective and efficient administration of the
personnel programs in different institutions. 11
The Court's Ruling
Petitioners' contentions are not supported by law. We hold that Res. 56 constitutes a
supplementary retirement plan.
A cursory examination of the preambular clauses and provisions of Res. 56 provides a
number of clear indications that its financial assistance plan constitutes a supplemental
retirement/pension benefits plan. In particular, the fifth preambular clause which provides
that "it is the policy of the Social Security Commission to promote and to protect the interest
of all SSS employees, with a view to providing for their well-being during both their working
and retirement years", and the wording of the resolution itself which states "Resolved,
further, that SSS employees who availed themselves of the said life annuity (under RA
660), in appreciation and recognition of their long and faithful service, be granted financial
assistance . . . can only be interpreted to mean that the benefit being granted is none other
than a kind of amelioration to enable the retiring employee to enjoy (or survive) his
retirement years and a reward for his loyalty and service. Moreover, it is plain to see that the
grant of said financial assistance is inextricably linked with and inseparable from the
approval of retirement benefits under RA 660, i.e., that availment of said financial assistance
under Res. 56 may not be done independently of but only in conjunction with the availment
of retirement benefits under RA 660, and that the former is in augmentation or
supplementation of the latter benefits.
Likewise, then SSS Administrator Cuisia's historical overview of the origins and purpose of
Res. 56 is very instructive and sheds much light on the controversy: 12

Resolution No. 56, . . ., applies where a retiring SSS employee is qualified to claim under
either RA 660 (pension benefit, that is, 5 year lump sum pension and after 5 years,
lifetime pension), or RA 1616 (gratuity benefit plus return of contribution), at his
option. The benefits under RA 660 are entirely payable by GSIS while those under RA
1616 are entirely shouldered by SSS except the return of contribution by GSIS.

Resolution No. 56 came about upon observation that qualified SSS employees have
invariably opted to retire under RA 1616 instead of RA 660 because the total benefit
under the former is much greater than the 5-year lump sum under the latter. As a
consequence, the SSS usually ended up virtually paying the entire retirement
benefit, instead of GSIS which is the main insurance carrier for government
employees. Hence, the situation has become so expensive for SSS that a study of
the problem became inevitable.
As a result of the study and upon the recommendation of its Actuary, the SSS
Management recommended to the Social Security Commission that retiring
employees who are qualified to claim under either RA 660 or 1616 should be
"encouraged" to avail for themselves the life annuity under RA 660, as amended,
with the SSS providing a "financial assistance" equivalent to the difference between
the benefit under RA 1616 (gratuity plus return of contribution) and the 5-year lump
sum pension under RA 660.
The Social Security Commission, as the policy-making body of the SSS approved the
recommendation in line with its mandate to "insure the efficient, honest and
economical administration of the provisions and purposes of this Act. (Section 3 (c) of
the Social Security Law).
Necessarily, the situation was reversed with qualified SSS employees opting to retire
under RA No. 660 or RA 1146 instead of RA 1616, resulting in substantial savings for
the SSS despite its having to pay "financial assistance".
Until Resolution No. 56 was questioned by COA. (emphasis part of original text;
emphasis ours).
Although such financial assistance package may have been instituted for noble, altruistic
purposes as well as from self-interest and a desire to cut costs on the part of the SSS,
nevertheless, it is beyond any dispute that such package effectively constitutes a
supplementary retirement plan. The fact that it was designed to equalize the benefits
receivable from RA 1616 with those payable under RA 660 and make the latter program
more attractive, merely confirms the foregoing finding.
That the Res. 56 package is labelled "financial assistance" does not change its essential
nature. Retirement benefits are, after all, a form of reward for an employee's loyalty and
service to the employer, and are intended to help the employee enjoy the remaining years of
his life, lessening the burden of worrying about his financial support or upkeep. 13 On the other
hand, a pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to
entice competent people to enter the government service, and to permit them to retire from the

service with relative security, not only for those who have retained their vigor, but more so for
those who have been incapacitated by illness or accident. 14

Is SSS Resolution No. 56 then within the ambit of and thus proscribed by Sec. 28 (b) of CA
186 as amended by RA 4968?
We answer in the affirmative. Said Sec. 28 (b) as amended by RA 4968 in no uncertain
terms bars the creation of any insurance or retirement plan other than the GSIS for
government officers and employees, in order to prevent the undue and inequitous
proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of
law and is therefore invalid, void and of no effect. No ignore this and rule otherwise would be
tantamount to permitting every other government office or agency to put up its own
supplementary retirement benefit plan under the guise of such "financial assistance".
We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive
results it must have had, not only in reducing costs and expenses on the part of the SSS in
connection with the pay-out of retirement benefits and gratuities, but also in improving the
quality of life for scores of retirees. But it is simply beyond dispute that the SSS had no
authority to maintain and implement such retirement plan, particularly in the face of the
statutory prohibition. The SSS cannot, in the guise of rule-making, legislate or amend laws or
worse, render them nugatory.
It is doctrinal that in case of conflict between a statute and an administrative order, the
former must prevail.15 A rule or regulation must conform to and be consistent with the provisions
of the enabling statute in order for such rule or regulation to be valid. 16 The rule-making power of
a public administrative body is a delegated legislative power, which it may not use either to
abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond
the scope intended. Constitutional and statutory provisions control with respect to what rules and
regulations may be promulgated by such a body, as well as with respect to what fields are subject
to regulation by it. It may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute, particularly the statute it is administering or which
created it, or which are in derogation of, or defeat, the purpose of a statute. 17Though well-settled
is the rule that retirement laws are liberally interpreted in favor of the retiree, 18 nevertheless, there
is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of
any doubt as to theultra-vires nature and illegality of the disputed resolution constrains us to rule
against petitioners.
As a necessary consequence of the invalidity of Res. 56, we can hardly impute abuse of
discretion of any sort to respondent Commission for denying petitioners' request for
reconsideration of the 3rd Indorsement of July 10, 1989. On the contrary, we hold that public
respondent in its assailed Decision acted with circumspection in denying petitioners claim. It
reasoned thus:
After a careful evaluation of the facts herein obtaining, this Commission finds the
instant request to be devoid of merit. It bears stress that the financial assistance
contemplated under SSS Resolution No. 56 is granted to SSS employees who opt to
retire under R.A. No. 660. In fact, by the aggrieved parties' own admission (page 2 of

the request for reconsideration dated January 12, 1993), it is a financial assistance
granted by the SSS management to its employees. in addition to the retirement
benefits under Republic Act. No. 660." (underscoring supplied for emphasis) There is
therefore no question, that the said financial assistance partakes of the nature of a
retirement benefit that has the effect of modifying existing retirement laws particularly
R.A. No. 660.
Petitioners also asseverate that the scheme of financial assistance under Res. 56 may be
likened to the monetary benefits of government officials and employees who are paid, over
and above their salaries and allowances as provided by statute, an additional honorarium in
varying amounts. We find this comparison baseless and misplaced. As clarified by the
Solicitor General: 19
Petitioners' comparison of SSS Resolution No. 56 with the "honoraria" given to
government officials and employees of the "National Prosecution Service of the
Department of Justice", Office of the Government Corporate Counsel and even in the
"Office of the Solicitor General" is devoid of any basis. The monetary benefits or
"honoraria" given to these officials or employees are categorized as travelling and/or
representation expenses which are incurred by them in the course of handling cases,
attending court/administrative hearings, or performing other field work. These monetary
benefits are given upon rendition of service while the "financial benefits" under SSS
Resolution No. 56 are given upon retirement from service.

In a last-ditch attempt to convince this Court that their position is tenable, petitioners invoke
equity. They "believe that they are deserving of justice and equity in their quest for financial
assistance under SSS Resolution No. 56, not so much because the SSS is one of the very
few stable agencies of government where no doubt this recognition and reputation is
earned . . . but more so due to the miserable scale of compensation granted to employees in
various agencies to include those obtaining in the SSS." 20
We must admit we sympathize with petitioners in their financial predicament as a result of
their misplaced decision to avail of retirement benefits under RA 660, with the false
expectation that "financial assistance" under the disputed Res. 56 will also materialize.
Nevertheless, this Court has always held that equity, which has been aptly described as
"justice outside legality," is applied only in the absence of, and never against, statutory law or
judicial rules of procedure. 21 In this case, equity cannot be applied to give validity and effect to
Res. 56, which directly contravenes the clear mandate of the provisions of RA 4968.
Likewise, we cannot but be aware that the clear imbalance between the benefits available
under RA 660 and those under RA 1616 has created an unfair situation for it has shifted the
burden of paying such benefits from the GSIS (the main insurance carrier of government
employees) to the SSS. Without the corrective effects of Res. 56, all retiring SSS employees
without exception will be impelled to avail of benefits under RA 1616. The cumulative effect
of such availments on the financial standing and stability of the SSS is better left to
actuarians. But the solution or remedy for such situation can be provided only by Congress.
Judicial hands cannot, on the pretext of showing concern for the welfare of government
employees, bestow equity contrary to the clear provisions of law.

Nevertheless, insofar as herein petitioners are concerned, this Court cannot just sit back and
watch as these two erstwhile government employees, who after spending the best parts of
their lives in public service have retired hoping to enjoy their remaining years, face a
financially dismal if not distressed future, deprived of what should have been due them by
way of additional retirement benefits, on account of a bureaucratic boo-boo improvidently
hatched by their higher-ups. It is clear to our mind that petitioners applied for benefits under
RA 660 only because of the incentives offered by Res. 56, and that absent such incentives,
they would have without fall availed of RA 1616 instead. We likewise have no doubt that
petitioners are simply innocent bystanders in this whole bureaucratic rule-making/financial
scheme-making drama, and that therefore, to the extent possible, petitioners ought not be
penalized or made to suffer as a result of the subsequently determined invalidity of Res. 56,
the promulgation and implementation of which they had nothing to do with.
And here is where "equity" may properly be invoked: since "SSS employees who are
qualified for compulsory retirement at age 65 or for optional retirement at a lower age are
entitled to either the life annuity under R.A. 660, as amended, or the gratuity under R.A.
1616, as amended", 22 it appears that petitioners, being qualified to avail of benefits under RA
660, may also readily qualify under RA 1616. It would therefore not be misplaced to enjoin the
SSS to render all possible assistance to petitioners for the prompt processing and approval of
their applications under RA 1616, and in the meantime, unless barred by existing regulations, to
advance to petitioners the difference between the amounts due under RA 1616, and the amounts
they already obtained, if any, under RA 660.
WHEREFORE, the petition is hereby DISMISSED for lack of merit, there having been no
grave abuse of discretion on the part of respondent Commission. The assailed Decision of
public respondent is AFFIRMED, and SSS Resolution No. 56 is hereby declared ILLEGAL,
VOID AND OF NO EFFECT. The SSS is hereby urged to assist petitioners and facilitate their
applications under RA 1616, and to advance to them, unless barred by existing regulations,
the corresponding amounts representing the difference between the two benefits programs.
No costs.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza, Francisco, Hermosisima, Jr. and Tores, Jr., JJ., concur.