Republic of the Philippines liable were it not for the existence of Presidential Decree
SUPREME COURT No. 1564 which the court opined it had the duty to apply in the instant case.
Manila
SECOND DIVISION
G.R. No. 113092 September 1, 1994
MARTIN CENTENO, petitioner,
vs.
HON. VICTORIA VILLALON-PORNILLOS, Presiding Judge of the Regional Trial Court of Malolos,
Bulacan, Branch 10, and THE PEOPLE OF THE PHILIPPINES, respondents.
Santiago V. Marcos, Jr. for petitioner.
REGALADO, J.:
It is indeed unfortunate that a group of elderly men, who were moved by their desire to devote their
remaining years to the service of their Creator by forming their own civic organization for that purpose,
should find themselves enmeshed in a criminal case for making a solicitation from a community
member allegedly without the required permit from the Department of Social Welfare and Development.
The records of this case reveal that sometime in the last quarter of 1985, the officers of a civic
organization known as the Samahang Katandaan ng Nayon ng Tikay launched a fund drive for the
purpose of renovating the chapel of Barrio Tikay, Malolos, Bulacan. Petitioner Martin Centeno, the
chairman of the group, together with Vicente Yco, approached Judge Adoracion G. Angeles, a resident
of Tikay, and solicited from her a contribution of P1,500.00. It is admitted that the solicitation was made
without a permit from the Department of Social Welfare and Development.
As a consequence, based on the complaint of Judge Angeles, an information 1 was filed against
petitioner Martin Centeno, together with Religio Evaristo and Vicente Yco, for violation of Presidential
Decree No. 1564, or the Solicitation Permit Law, before the Municipal Trial Court of Malolos, Bulacan,
Branch 2, and docketed as Criminal Case No. 2602. Petitioner filed a motion to quash the
information 2 on the ground that the facts alleged therein do not constitute an offense, claiming that
Presidential Decree No. 1564 only covers solicitations made for charitable or public welfare purposes,
but not those made for a religious purpose such as the construction of a chapel. This was denied 3 by
the trial court, and petitioner's motion for reconsideration having met the same fate, trial on the merits
ensued.
On December 29, 1992, the said trial court rendered judgment 4 finding accused Vicente Yco and
petitioner Centeno guilty beyond reasonable doubt and sentencing them to each pay a fine of P200.00.
Nevertheless, the trial court recommended that the accused be pardoned on the basis of its finding that
they acted in good faith, plus the fact that it believed that the latter should not have been criminally
Both accused Centeno and Yco appealed to the Regional Trial Court of Malolos, Bulacan, Branch 10.
However, accused Yco subsequently withdrew his appeal, hence the case proceeded only with respect
to petitioner Centeno. On May 21, 1993, respondent Judge Villalon-Pornillos affirmed the decision of
the lower court but modified the penalty, allegedly because of the perversity of the act committed which
caused damage and prejudice to the complainant, by sentencing petitioner Centeno to suffer an
increased penalty of imprisonment of 6 months and a fine of P1,000.00, without subsidiary
imprisonment in case of insolvency. 5 The motion for reconsideration of the decision was denied by the
court. 6
Thus it is that a fine of P200.00 imposed as a penalty by the lowest court in the judicial hierarchy
eventually reached this highest tribunal, challenged on the sole issue of whether solicitations for
religious purposes are within the ambit of Presidential Decree No. 1564. Quantitatively, the financial
sanction is a nominal imposition but, on a question of principle, it is not a trifling matter. This Court is
gratified that it can now grant this case the benefit of a final adjudication.
Petitioner questions the applicability of Presidential Decree No. 1564 to solicitations for contributions
intended for religious purposes with the submissions that (1) the term "religious purpose" is not
expressly included in the provisions of the statute, hence what the law does not include, it excludes;
(2) penal laws are to be construed strictly against the State and liberally in favor of the accused; and (3)
to subject to State regulation solicitations made for a religious purpose would constitute an abridgment
of the right to freedom of religion guaranteed under the Constitution.
Presidential Decree No. 1564 (which amended Act No. 4075, otherwise known as the Solicitation
Permit Law), provides as follows:
Sec. 2. Any person, corporation, organization, or association desiring to solicit or
receive contributions for charitable or public welfare purposes shall first secure a
permit from the Regional Offices of the Department of Social Services and
Development as provided in the Integrated Reorganization Plan. Upon the filing of a
written application for a permit in the form prescribed by the Regional Offices of the
Department of Social Services and Development, the Regional Director or his duly
authorized representative may, in his discretion, issue a permanent or temporary
permit or disapprove the application. In the interest of the public, he may in his
discretion renew or revoke any permit issued under Act 4075.
The main issue to be resolved here is whether the phrase "charitable purposes" should be construed in
its broadest sense so as to include a religious purpose. We hold in the negative.
I. Indeed, it is an elementary rule of statutory construction that the express mention of one person,
thing, act, or consequence excludes all others. This rule is expressed in the familiar maxim "expressio
unius est exclusio alterius." Where a statute, by its terms, is expressly limited to certain matters, it may
not, by interpretation or construction, be extended to others. The rule proceeds from the premise that
the legislature would not have made specified enumerations in a statute had the intention been not to
restrict its meaning and to confine its terms to those expressly mentioned. 7
It will be observed that the 1987 Constitution, as well as several other statutes, treat the words
"charitable" and "religious" separately and independently of each other. Thus, the word "charitable" is
only one of three descriptive words used in Section 28 (3), Article VI of the Constitution which provides
that "charitable institutions, churches and personages . . ., and all lands, buildings, and improvements,
actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt
from taxation." There are certain provisions in statutes wherein these two terms are likewise dissociated
and individually mentioned, as for instance, Sections 26 (e) (corporations exempt from income tax) and
28 (8) (E) (exclusions from gross income) of the National Internal Revenue Code; Section 88 (purposes
for the organization of non-stock corporations) of the Corporation Code; and
Section 234 (b) (exemptions from real property tax) of the Local Government Code.
That these legislative enactments specifically spelled out "charitable" and "religious" in an enumeration,
whereas Presidential Decree No. 1564 merely stated "charitable or public welfare purposes," only goes
to show that the framers of the law in question never intended to include solicitations for religious
purposes within its coverage. Otherwise, there is no reason why it would not have so stated expressly.
All contributions designed to promote the work of the church are "charitable" in nature, since religious
activities depend for their support on voluntary contributions. 8 However, "religious purpose" is not
interchangeable with the expression "charitable purpose." While it is true that there is no religious
purpose which is not also a charitable purpose, yet the converse is not equally true, for there may be a
"charitable" purpose which is not "religious" in the legal sense of the term. 9 Although the term
"charitable" may include matters which are "religious," it is a broader term and includes matters which
are not "religious," and, accordingly, there is a distinction between "charitable purpose" and "religious
purpose," except where the two terms are obviously used synonymously, or where the distinction has
been done away with by statute. 10 The word "charitable," therefore, like most other words, is capable of
different significations. For example, in the law, exempting charitable uses from taxation, it has a very
wide meaning, but under Presidential Decree No. 1564 which is a penal law, it cannot be given such a
broad application since it would be prejudicial to petitioners.
To illustrate, the rule is that tax exemptions are generally construed strictly against the taxpayer.
However, there are cases wherein claims for exemption from tax for "religious purposes" have been
liberally construed as covered in the law granting tax exemptions for "charitable purposes." Thus, the
term "charitable purposes," within the meaning of a statute providing that the succession of any property
passing to or for the use of any institution for purposes only of public charity shall not be subject to
succession tax, is deemed to include religious purposes. 11 A gift for "religious purposes" was
considered as a bequest for "charitable use" as regards exemption from inheritance tax.12
On the other hand, to subsume the "religious" purpose of the solicitation within the concept of
"charitable" purpose which under Presidential Decree
No. 1564 requires a prior permit from the Department of Social Services and Development, under paid
of penal liability in the absence thereof, would be prejudicial to petitioner. Accordingly, the term
"charitable" should be strictly construed so as to exclude solicitations for "religious" purposes. Thereby,
we adhere to the fundamental doctrine underlying virtually all penal legislations that such interpretation
should be adopted as would favor the accused.
For, it is a well-entrenched rule that penal laws are to be construed strictly against the State and
liberally in favor of the accused. They are not to be extended or enlarged by implications, intendments,
analogies or equitable considerations. They are not to be strained by construction to spell out a new
offense, enlarge the field of crime or multiply felonies. Hence, in the interpretation of a penal statute, the
tendency is to subject it to careful scrutiny and to construe it with such strictness as to safeguard the
rights of the accused. If the statute is ambiguous and admits of two reasonable but contradictory
constructions, that which operates in favor of a party accused under its provisions is to be preferred.
The principle is that acts in and of themselves innocent and lawful cannot be held to be criminal unless
there is a clear and unequivocal expression of the legislative intent to make them such. Whatever is not
plainly within the provisions of a penal statute should be regarded as without its intendment. 13
The purpose of strict construction is not to enable a guilty person to escape punishment through a
technicality but to provide a precise definition of forbidden acts. 14 The word "charitable" is a matter of
description rather than of precise definition, and each case involving a determination of that which is
charitable must be decided on its own particular facts and circumstances. 15 The law does not
operate in vacuo nor should its applicability be determined by circumstances in the abstract.
Furthermore, in the provisions of the Constitution and the statutes mentioned above, the enumerations
therein given which include the words "charitable" and "religious" make use of the disjunctive "or." In its
elementary sense, "or" as used in a statute is a disjunctive article indicating an alternative. It often
connects a series of words or propositions indicating a choice of either. When "or" is used, the various
members of the enumeration are to be taken separately. 16 Accordingly, "charitable" and "religious,"
which are integral parts of an enumeration using the disjunctive "or" should be given different, distinct,
and disparate meanings. There is no compelling consideration why the same treatment or usage of
these words cannot be made applicable to the questioned provisions of Presidential Decree No. 1564.
II. Petitioner next avers that solicitations for religious purposes cannot be penalized under the law for,
otherwise, it will constitute an abridgment or restriction on the free exercise clause guaranteed under
the Constitution.
It may be conceded that the construction of a church is a social concern of the people and,
consequently, solicitations appurtenant thereto would necessarily involve public welfare. Prefatorily, it is
not implausible that the regulatory powers of the State may, to a certain degree, extend to solicitations
of this nature. Considering, however, that such an activity is within the cloak of the free exercise clause
under the right to freedom of religion guaranteed by the Constitution, it becomes imperative to delve into
the efficaciousness of a statutory grant of the power to regulate the exercise of this constitutional right
and the allowable restrictions which may possibly be imposed thereon.
The constitutional inhibition of legislation on the subject of religion has a double aspect. On the one
hand, it forestalls compulsion by law of the acceptance of any creed or the practice of any form of
worship. Freedom of conscience and freedom to adhere to such religious organization or form of
worship as the individual may choose cannot be restricted by law. On the other hand, it safeguards the
free exercise of the chosen form of religion. Thus, the constitution embraces two concepts, that is,
freedom to believe and freedom to act. The first is absolute but, in the nature of things, the second
cannot be. Conduct remains subject to regulation for the protection of society. The freedom to act must
have appropriate definitions to preserve the enforcement of that protection. In every case, the power to
regulate must be so exercised, in attaining a permissible end, as not to unduly infringe on the protected
freedom. 17
Whence, even the exercise of religion may be regulated, at some slight inconvenience, in order that the
State may protect its citizens from injury. Without doubt, a State may protect its citizens from fraudulent
solicitation by requiring a stranger in the community, before permitting him publicly to solicit funds for
any purpose, to establish his identity and his authority to act for the cause which he purports to
represent. The State is likewise free to regulate the time and manner of solicitation generally, in the
interest of public safety, peace, comfort, or convenience. 18
It does not follow, therefore, from the constitutional guaranties of the free exercise of religion that
everything which may be so called can be tolerated. 19 It has been said that a law advancing a
legitimate governmental interest is not necessarily invalid as one interfering with the "free exercise" of
religion merely because it also incidentally has a detrimental effect on the adherents of one or more
religion. 20 Thus, the general regulation, in the public interest, of solicitation, which does not involve any
religious test and does not unreasonably obstruct or delay the collection of funds, is not open to any
constitutional objection, even though the collection be for a religious purpose. Such regulation would not
constitute a prohibited previous restraint on the free exercise of religion or interpose an inadmissible
obstacle to its exercise. 21
Even with numerous regulative laws in existence, it is surprising how many operations are carried on by
persons and associations who, secreting their activities under the guise of benevolent purposes,
succeed in cheating and defrauding a generous public. It is in fact amazing how profitable the fraudulent
schemes and practices are to people who manipulate them. The State has authority under the exercise
of its police power to determine whether or not there shall be restrictions on soliciting by unscrupulous
persons or for unworthy causes or for fraudulent purposes. That solicitation of contributions under the
guise of charitable and benevolent purposes is grossly abused is a matter of common knowledge.
Certainly the solicitation of contributions in good faith for worthy purposes should not be denied, but
somewhere should be lodged the power to determine within reasonable limits the worthy from the
unworthy. 22 The objectionable practices of unscrupulous persons are prejudicial to worthy and proper
charities which naturally suffer when the confidence of the public in campaigns for the raising of money
for charity is lessened or destroyed. 23 Some regulation of public solicitation is, therefore, in the public
interest. 24
To conclude, solicitation for religious purposes may be subject to proper regulation by the State in the
exercise of police power. However, in the case at bar, considering that solicitations intended for a
religious purpose are not within the coverage of Presidential Decree No. 1564, as earlier demonstrated,
petitioner cannot be held criminally liable therefor.
As a final note, we reject the reason advanced by respondent judge for increasing the penalty imposed
by the trial court, premised on the supposed perversity of petitioner's act which thereby caused damage
to the complainant. It must be here emphasized that the trial court, in the dispositive portion of its
decision, even recommended executive clemency in favor of petitioner and the other accused after
finding that the latter acted in good faith in making the solicitation from the complainant, an observation
with which we fully agree. After all, mistake upon a doubtful and difficult question of law can be the
basis of good faith, especially for a layman.
There is likewise nothing in the findings of respondent judge which would indicate, impliedly or
otherwise, that petitioner and his co-accused acted abusively or malevolently. This could be reflective
upon her objectivity, considering that the complainant in this case is herself a judge of the Regional Trial
Court at Kalookan City. It bears stressing at this point that a judge is required to so behave at all times
as to promote public confidence in the integrity and impartiality of the judiciary, 25 should be vigilant
against any attempt to subvert its independence, and must resist any pressure from whatever source. 26
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and petitioner
Martin Centeno is ACQUITTED of the offense charged, with costs de oficio.
SO ORDERED.
Narvasa, C.J. and Puno, JJ., concur.
Separate Opinions
MENDOZA, J.:
I concur in the result reached in this case that the solicitation of donations for the repair of a chapel is
not covered by P.D. No. 1564 which requires a permit for the solicitation of contributions for "charitable
or public welfare purposes." My reasons are three-fold.
First. Solicitation of contributions for the construction of a church is not solicitation for "charitable or
public welfare purpose" but for a religious purpose, and a religious purpose is not necessarily a
charitable or public welfare purpose. A fund campaign for the construction or repair of a church is not
like fund drives for needy families or victims of calamity or for the construction of a civic center and the
like. Like solicitation of subscription to religious magazines, it is part of the propagation of religious faith
or evangelization. Such solicitation calls upon the virtue of faith, not of charity, save as those solicited
for money or aid may not belong to the same religion as the solicitor. Such solicitation does not engage
the philantrophic as much as the religious fervor of the person who is solicited for contribution.
Second. The purpose of the Decree is to protect the public against fraud in view of the proliferation of
fund campaigns for charity and other civic projects. On the other hand, since religious fund drives are
usually conducted among those belonging to the same religion, the need for public protection against
fraudulent solicitations does not exist in as great a degree as does the need for protection with respect
to solicitations for charity or civic projects so as to justify state regulation.
Third. To require a government permit before solicitation for religious purpose may be allowed is to lay a
prior restraint on the free exercise of religion. Such restraint, if followed, may well justify requiring a
permit before a church can make Sunday collections or enforce tithing. But in American Bible Society v.
City of Manila, 1 we precisely held that an ordinance requiring payment of a license fee before one may
engage in business could not be applied to the appellant's sale of bibles because that would impose a
condition on the exercise of a constitutional right. It is for the same reason that religious rallies are
exempted from the requirement of prior permit for public assemblies and other uses of public parks and
streets. 2 To read the Decree, therefore, as including within its reach solicitations for religious purposes
would be to construe it in a manner that it violates the Free Exercise of Religion Clause of the
Constitution, when what we are called upon to do is to ascertain whether a construction of the statute is
not fairly possible by which a constitutional violation may be avoided.
For these reasons, I vote to reverse the decision appealed from and to acquit petitioner.
Padilla, J., concurs.
# Separate Opinions

MENDOZA, J.:

I concur in the result reached in this case that the solicitation of donations for the repair of a chapel is
not covered by P.D. No. 1564 which requires a permit for the solicitation of contributions for "charitable
or public welfare purposes." My reasons are three-fold.

First. Solicitation of contributions for the construction of a church is not solicitation for "charitable or
public welfare purpose" but for a religious purpose, and a religious purpose is not necessarily a
charitable or public welfare purpose. A fund campaign for the construction or repair of a church is not
like fund drives for needy families or victims of calamity or for the construction of a civic center and the
like. Like solicitation of subscription to religious magazines, it is part of the propagation of religious faith
or evangelization. Such solicitation calls upon the virtue of faith, not of charity, save as those solicited
for money or aid may not belong to the same religion as the solicitor. Such solicitation does not engage
the philantrophic as much as the religious fervor of the person who is solicited for contribution.

Second. The purpose of the Decree is to protect the public against fraud in view of the proliferation of
fund campaigns for charity and other civic projects. On the other hand, since religious fund drives are
usually conducted among those belonging to the same religion, the need for public protection against
fraudulent solicitations does not exist in as great a degree as does the need for protection with respect
to solicitations for charity or civic projects so as to justify state regulation.

Third. To require a government permit before solicitation for religious purpose may be allowed is to lay a
prior restraint on the free exercise of religion. Such restraint, if followed, may well justify requiring a
permit before a church can make Sunday collections or enforce tithing. But in American Bible Society v.
City of Manila, 1 we precisely held that an ordinance requiring payment of a license fee before one may
engage in business could not be applied to the appellant's sale of bibles because that would impose a
condition on the exercise of a constitutional right. It is for the same reason that religious rallies are
exempted from the requirement of prior permit for public assemblies and other uses of public parks and
streets. 2 To read the Decree, therefore, as including within its reach solicitations for religious purposes
would be to construe it in a manner that it violates the Free Exercise of Religion Clause of the
Constitution, when what we are called upon to do is to ascertain whether a construction of the statute is
not fairly possible by which a constitutional violation may be avoided.

For these reasons, I vote to reverse the decision appealed from and to acquit petitioner.

Padilla, J., concurs.


THIRD DIVISION
G.R. Nos. 136149-51 September 19, 2000
PEOPLE OF THE PHILIPPINES, appellee,
vs.
WALPAN LADJAALAM y MIHAJIL alias "WARPAN," appellant.
DECISION
PANGANIBAN, J.:
Republic Act No. 8294 penalizes simple illegal possession of firearms, provided that the person
arrested committed "no other crime." Furthermore, if the person is held liable for murder or homicide,
illegal possession of firearms is an aggravating circumstance, but not a separate offense. Hence, where
an accused was convicted of direct assault with multiple attempted homicide for firing an unlicensed M-
14 rifle at several policemen who were about to serve a search warrant, he cannot be held guilty of the
separate offense of illegal possession of firearms. Neither can such unlawful act be considered to have
aggravated the direct assault.
The Case
Walpan Ladjaalam y Mihajil, also known as "Warpan," appeals before us the September 17, 1998
Decision1 of the Regional Trial Court (RTC) of Zamboanga City (Branch 16), which found him guilty of
three out of the four charges lodged against him.
Filed against appellant were four Informations,2 all signed by Assistant Regional State Prosecutor
Ricardo G. Cabaron and dated September 25, 1997. The first Information 3 was for maintaining a den for
the use of regulated drugs. It reads as follows:
"That on or about September 24, 1997, in the City of Zamboanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, Walpan Ladjaalam being then the owner of a
residential house located at Rio Hondo,4 this City, conspiring and confederating together, mutually
aiding and assisting x x x his co-accused wife Nur-in Ladjaalam and Ahmad Sailabbi y Hajaraini, did
then and there wilfully, unlawfully and feloniously, maintain said house as a den, where regulated drug
[was] used in any form."5
The second Information6 charged appellant with illegal possession of firearms and ammunition. We
quote it below:
"That on or about September 24, 1997, in the City of Zamboanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, conspiring and confederating together, mutually
aiding and assisting with one another, without any justifiable reason or purpose other than to use it in
the commission of crime, did then and there, wilfully, unlawfully, and feloniously have in their
possession and under their custody and control, the following weapons, to wit: one (1) M14 rifle with SN
1555225 with magazines and seven (7) rounds of live ammunition; two (2) magazines with twenty (20)
and twenty[-one] (21) rounds of live [ammunition]; one (1) homemade caliber .38 revolver with five (5)
live ammunition; one (1) M-79 (single) rifle with pouch and with five (5) empty shell[s]; one (1) home
made caliber .38 with SN-311092 with five live ammunition and one empty shell of [a] cal. 38 x x x
Smith and Wesson; two (2) .38 Caliber paltik revolver with Serial Number 311092 and one defaced M79
grenade launcher paltik, without first having obtained the necessary license and or permit therefor from
authorities concerned, in flagrant violation of the aforementioned law." 7
The third Information,8 for multiple attempted murder with direct assault, was worded thus:
"That on or about September 24, 1997, in the City of Zamboanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused being then armed with M-14 Armalite Rifles, M-16
Armalite Rifles and other assorted firearms and explosives, conspiring and confederating together,
mutually aiding and assisting x x x one another and with intent to kill, did then and there wilfully,
unlawfully and feloniously try and attempt to kill SPO1 WILLIAM B. JONES, JR., PO3 ENRIQUE C.
RIVERA[,] SPO1 AMADO A. MIRASOL, JR., and SPO1 RICARDO J. LACASTESANTOS, in the
following manner, to wit: by then and there firing their M-14 x x x Armalite Rifles, M-16 Armalite Rifles
and other assorted firearms and explosives, aimed and directed at the fatal parts of the bodies of the
above-named police officers, well known to the accused as members of the Philippine National Police,
Zamboanga City Police Office, and as such, agents of a person in authority, who at the time of the
attack were engaged in the performance of their duties, that is, on the occasion when said officers were
about to serve the Search Warrant legally issued by the Regional Trial Court, this City, to the person of
the accused thus commencing the commission of crime of multiple murder directly by overt acts, and if
the accused did not accomplish their unlawful purpose, that is, to kill the above-named Police Officers, it
was not by reason of their own voluntary desistance but rather because of the fact that all the above-
named police officers were able to seek cover during the firing and were not hit by the bullets and
explosives fired by the accused and also by the fact said police officers were able to wrestle with two (2)
of the accused namely: Walpan Ladjaalam y Mihajil a.k.a. Warpan and Ahmad Sailabbi y Hajairani,
who were subdued and subsequently placed under arrest; whereas accused PO2 Nurhakim T. Hadjula
was able to make good his escape and has remained at-large."9
In the fourth Information, appellant was charged with illegal possession of drugs. 10
On December 21, 1997, the cases against Nur-in Ladjaalam and Ahmad Sailabbi y Hajaraini were
dismissed upon motion of the Office of the City Prosecutor, which had conducted a reinvestigation of
the cases as ordered by the lower court. The accused were consequently released from jail.
The arraignment of appellant on all four (4) charges took place on January 6, 1998, during which he
entered a plea of not guilty.11 After pretrial, the assailed Decision was rendered, the dispositive part of
which reads:
"WHEREFORE, the Court finds accused WALPAN LADJAALAM y MIHAJIL a.k.a. WARPAN -
"1. in Criminal Case No. 14636, GUILTY BEYOND REASONABLE DOUBT of Violation of
Section 15-A, Article III, of Republic Act No. 6425, otherwise known as the Dangerous Drugs
Act of 1972, as amended, and SENTENCES said accused to the penalty of RECLUSION
PERPETUA and to pay a fine of FIVE HUNDRED THOUSAND (500,000.00) and to pay the
costs;
"2. In Criminal Case No. 14637, NOT GUILTY of Violation of Section 16, Article III, in relation
to Section 21, Article IV, of Republic Act No. 6425, otherwise known as the Dangerous Drugs
Act of 1972, as amended, and ACQUITS him of said crime with costs de oficio;
"3. in Criminal Case No. 14638, GUILTY BEYOND REASONABLE DOUBT of the crime of
Illegal Possession of Firearm and Ammunition penalized under Presidential Decree No. 1866,
as amended by Republic Act. No. 8294, and SENTENCES said accused to suffer an
indeterminate penalty of SIX (6) YEARS of prision correccional as minimum to EIGHT (8)
YEARS of prision mayor as maximum and to pay a fine [of] THIRTY THOUSAND
(P30,000.00) and pay the costs;
"4. in Criminal Case No. 14639, GUILTY BEYOND REASONABLE DOUBT of the crime of
Direct Assault with Multiple Attempted Homicide and SENTENCES said accused to an
indeterminate penalty of TWO (2) YEARS and FOUR (4) MONTHS of prision correccional as
minimum to SIX (6) YEARS of prision correccional as maximum and to pay a fine of ONE
THOUSAND (P1,000.00) and to pay the costs." (emphasis in the original)
Hence, this appeal.12
The Facts
Prosecutions Version
In its Brief,13 the Office of the Solicitor General presents the facts in this wise:
"At 1:45 p.m. of September 24, 1997, PO3 Allan Marcos Obut filed an application for the issuance of a
search warrant against appellant, his wife and some John Does (Exh. C). After the search warrant was
issued about 2:30 p.m. of the same day, a briefing was conducted inside the office of the Anti-
Vice/Narcotics Unit of the Zamboanga City Police Office in connection with the service of the search
warrant. The briefing was conducted by SPO2 Felipe Gaganting, Chief of the Anti-Vice/Narcotics Unit.
During the briefing, PO3 Renato Dela Pea was assigned as presentor of the warrant. SPO1 Ricardo
Lacastesantos and PO3 Enrique Rivera were designated to conduct the search. Other policemen were
assigned as perimeter guards (TSN, March 3, 1998, pp. 33-36).
"After the briefing, more than thirty (30) policemen headed by Police Superintendent Edwin Soledad
proceeded to the house of appellant and his wife at Rio Hondo on board several police vehicles (TSN,
March 4, 1998, p. 32; April 22, 1998, p. 54). Before they could reach appellants house, three (3)
persons sitting at a nearby store ran towards the house shouting, [P]olice, raid, raid (Ibid., March 3,
1998, pp. 41, 43-44; April 23, 1998, p. 4). When the policemen were about ten (10) meters from the
main gate of the house, they were met by a rapid burst of gunfire coming from the second floor of the
house. There was also gunfire at the back of the house (Ibid., March 5, 1998, pp. 14-16).
"SPO1 Mirasol, SPO2 Lacastesantos, PO3 Rivera, and PO3 Dela Pea who were with the first group of
policemen saw appellant fire an M14 rifle towards them. They all knew appellant. When they were fired
upon, the group, together with SPO2 Gaganting, PO3 Obut and Superintendent Soledad, sought cover
at the concrete fence to observe the movements at the second floor of the house while other policemen
surrounded the house (Ibid., March 4, 1998, pp. 50-51).
"In front of the house was an extension building connected to the concrete fence (Ibid., pp. 45-46, 57-
59, 73-76). Gaganting, Mirasol, Lacastesantos, Gregorio, and Obut entered the door of the extension
building. Gaganting opened the main (steel) gate of the house. The other members of the team then
entered. Lacastesantos and Mirasol entered the house through the main door and went inside the sala
of the ground floor while other policemen surrounded the house. Two (2) old women were in the sala
together with a young girl and three (3) children. One of the old women took the children to the second
floor while the young girl remained seated at the corner (Ibid., pp. 19-21).
"Lacastesantos and Mirasol proceeded to the second floor where they earlier saw appellant firing an
M14 rifle at them through the window. While they were going upstairs, appellant noticed their presence.
He went inside the bedroom and, after breaking and removing the jalousies, jumped from the window to
the roof of a neighboring house. Seeing this, Mirasol rushed downstairs and asked help from the other
members of the raiding team to arrest appellant. Lacastesantos went to the second floor and shouted to
the policemen outside not to fire in the direction of the second floor because there were children.
Mirasol and SPO1 Cesar Rabuya arrested appellant at the back of his house after a brief chase (Ibid.,
pp. 21-23).
"At the second floor, Lacastesantos saw an M14 rifle (Exh. B-3) with magazine on top of the sofa at the
sala on the second floor (Ibid., P. 27). The rifle bore Serial No. 1555225. He removed the magazine
from the rifle and the bullet inside the chamber of the rifle. He counted seventeen (17) live ammunition
inside the magazine. He saw two (2) more M14 rifle magazines on the sofa, one with twenty (20) live
ammunition (Exh. G-3) and another with twenty-one (21) live ammunition (Exh. G-4). He likewise saw
three (3) M16 rifle magazines (Exh. G-2) in a corner at the second floor (TSN, March 5, 1998, pp. 23-
32, 53-57).
"After Lacastesantos and Mirasol entered appellants house, Rivera, Dela Pea, Gregorio and Obut
followed and entered the house. After identifying themselves as members of the PNP Anti-
Vice/Narcotics Unit, Obut presented to the old women a copy of the search warrant. Dela Pea and
Rivera then searched appellants room on the ground floor in the presence of Punong Barangay Elhano
(TSN, March 3, 1998, pp. 41-43). On top of a table was a pencil case (Exh. J) with fifty (50) folded
aluminum foils inside (Exhs. J-1 to J-50), each containing methamphetamine hydrochloride or shabu.
"Other items were found during the search, namely, assorted coins in different denominations (Exh. W;
TSN, April 28, 1998, pp. 23-25), one (1) homemade .38 caliber revolver (Exh. B-2) with five (5) live
[ammunition], one (1) M79 single rifle with [a] pouch containing five (5) empty shells of an M79 rifle
(Exh. B-4), and one (1) empty shell of an M14 rifle (TSN, April 23, 1998, pp. 30-32).
"Rino Bartolome Locson was an informer of the Anti-Vice/Narcotics Unit of the Zamboanga Police. [O]n
the morning of September 24, 1997, he was instructed by SPO2 Gaganting to go to appellants house
to buy shabu. Locson knew appellant as a seller of shabu (TSN, April 22, 1998, p. 5) and had been to
appellants house about fifteen (15) times before. He went to Rio Hondo and arrived at appellants
house at 3:20 p.m. He bought P300.00 worth of shabu from appellant. The latter got three (3) decks of
shabu from his waist bag. Appellant instructed Locson to go behind the curtain where there was a table.
There were six (6) persons already smoking. There was a lighted kerosene lamp made of a medicine
bottle placed on the table. They asked Locson to smoke shabu and Locson obliged. He placed the
three (3) decks of shabu he bought on the table (Ibid., pp. 8-15).
"While they were smoking shabu, Locson heard gunfire coming from appellants house. They all stood
and entered appellants compound but were instructed to pass [through] the other side. They met
appellant at the back of his house. Appellant told them to escape because the police are already here.
They scampered and ran away because there were already shots. Locson jumped over the fence and
ran towards the seashore. Upon reaching a place near the Fisheries School, he took a tricycle and went
home (Ibid., pp. 17-19).
"The following day, September 25, 1997, he went to the police station and executed an affidavit (Exh.
M) narrating what transpired at appellants house [o]n the afternoon of September 24, 1997.
"After the search and before returning to the police station, P03 Dela Pea prepared a Receipt for
Property Seized (Exh. P & 3) listing the properties seized during the search. The receipt was signed by
Dela Pea as the seizure officer, and by Punong Barangay Hadji Hussin Elhano and radio reporter Jun
Cayona as witnesses. A copy of the receipt was given to appellant but he refused to acknowledge the
properties seized (TSN, April 23, 1998, pp. 11-12).
"An examination conducted by Police Inspector Mercedes D. Diestro, Forensic Chemist of the PNP
Crime Laboratory Service Office 9, on the paraffin casts taken from both hands of appellant yielded
positive for gunpowder nitrates (Exh. A-3), giving rise to the possibility that appellant had fired a gun
before the examination (TSN, March 3, 1998, p. 11). Gunpowder residue examinations conducted on
September 26, 1997 showed that the following firearms were fired (Exh. B-5): a .38 caliber revolver
(homemade) with Serial No. 311092 (Exh. B-1), another .38 caliber revolver (homemade) without a
serial number (Exh. B-2), a Cal. 7.62 mm M14 U.S. rifle with Serial No. 1555225 (Exh. B-3), and an
M79 rifle without a serial number (Exh. B-4). They were fired within five (5) days prior to the examination
(TSN, March 3, 1998, pp. 16-21).
"With respect to the crystalline substances, an examination conducted by Police Inspector Susan M.
Cayabyab, likewise a Forensic Chemist of the PNP Crime Laboratory Service Office 9, on the fifty (50)
pieces of folded aluminum foils each containing white crystalline granules with a total weight of 1.7426
grams (Exh. J-1 to J-50) yielded positive results for the presence of methamphetamine hydrochloride
(shabu) (Exh. L). However, the examination of one (1) crystalline stone weighing 83.2674 grams (Exh.
K) yielded negative results for the presence of methamphetamine hydrochloride (Exh. L).
"The records of the Regional Operation and Plans Division of the PNP Firearm and Explosive Section
show that appellant had not applied/filed any application for license to possess firearm and ammunition
or x x x been given authority to carry [a] firearm outside of his residence (Exh. X)" 14
Defenses Version
Appellant Ladjaalam agrees with the narration of facts given by the lower court. 15 Hence, we quote the
pertinent parts of the assailed Decision:
"Accused Walpan Ladjaalam y Mihajil a.k.a. Warpan, 30 years old, married, gave his occupation as
smuggling (tsn, p. 2, May 4, 1998). He used to go to Labuan in Malaysia and bring cigarettes to the
Philippines without paying taxes (tsn, pp. 40-41, id). He said that his true name [was] Abdul Nasser
Abdurakman and that Warpan or Walpan Ladjaalam [was] only his alias. However, he admitted that
more people kn[e]w him as Walpan Ladjaalam rather than Abdul Nasser Abdurakman (tsn. pp. 39-40;
46-47, id). He testified that [o]n the afternoon of September 24, 1997, when he was arrested by the
police, he was sleeping in the house of Dandao, a relative of his wife. He was alone. He slept in
Dandaos house and not in his house because they ha[d] a sort of a conference as Dandaos daughter
was leaving for Saudi Arabia. He noticed the presence of policemen in his neighborhood at Aplaya, Rio
Hondo when he heard shots. He woke up and went out of the house and that was the time that he was
arrested. He said he was arrested xxx [at] the other side of my house; at the other side of the fence
where I was sleeping. xxx. At the back of my house (tsn, p. 7, id.). He does not know who arrested him
considering that the one who arrested me does not have nameplate. He was arrested by four (4)
persons. Not one of those who arrested him testified in Court. He was handcuffed and placed inside a
jeep parked at Rio Hondo Elementary School. According to him, he did not fire a gun at the policemen
from [t]he second floor of his house. He said the policemen [were] the one[s] who fire[d] at us (tsn, p.
5, id.). If he fired a gun at the policemen for sure they [would] die [b]ecause the door is very near x x x
the vicinity of my house. He does not own the M14 rifle (Exh. B-3) which according to policemen, he
used in firing at them. The gun does not belong to him. He does not have a gun like that (tsn, p. 15, id.).
A policeman also owns an M14 rifle but he does not know the policeman (tsn, pp. 16-17, id). He said
that the M79 rifle (Exh. B-4), the three (3) empty M16 rifle magazines (Exh. G; G-1 to G-2), the two
(2) M14 magazines with live ammunition (Exh. G-3; G-4); the two (2) caliber .38 revolvers (Exhs. B-
1; B-2), the fifty (50) aluminum foils each containing shabu (Exhs. J-1 to J-50) placed inside a pencil
case (Exh. J, the assorted coins placed inside a blue bag (Exh. W) and the white crystalline stone
(Exh. K) all do not belong to him. He said that the policemen just produced those things as their
evidence. The firearms do not belong to him. They were brought by the policemen (tsn, p. 43, May 4,
1998). Regarding the blue bag containing assorted coins, he said: that is not ours, I think this (is) theirs,
xxx they just brought that as their evidence (tsn, pp. 15-24, id.)
"Walpan Ladjaalam declared there were occupants who were renting his extension house. He affirmed
that he owns that house. Four (4) persons were staying in the extension house. He could only recognize
the husband whose name is Momoy. They are from Jolo. They left the place already because they were
afraid when the police raided the place. (tsn, pp. 8-10, May 4, 1998). He does not know prosecution
witness Rino Locson y Bartolome. Although Locson recognized him, in his case he does not know
Locson and he does not recognize him (tsn, p.11, id). He did not sell anything to Locson and did not
entertain him. He is not selling shabu but he knows for a fact that there are plenty of person who are
engaged in selling shabu in that place, in that area known as Aplaya, Rio Hondo. One of them is Hadji
Agbi (tsn, pp.11-14, id).
"After his arrest Walpan Ladjaalam was brought to the police station where he stayed for one day and
one night before he was transferred to the City jail. While at the police station, he was not able to take a
bath. He smokes two packs of cigarette a day. While he was at the police station, he smoked [a]
cigarette given to him by his younger sister. He lighted the cigarettes with [a] match. From the police
station, he was brought to the PNP Regional Office at R.T. Lim Boulevard where he was subject to
paraffin examination (tsn, pp. 24-26, May 4, 1998).
"During the raid conducted on his house, his cousin Boy Ladjaalam, Ating Sapadi, and Jecar (Sikkal)
Usman, the younger brother of his wife were killed. Walpan Ladjaalam said that he saw that it was the
policeman who shot them[,] only I do not know his name." They were killed at the back of his house. He
said that no charges were filed against the one responsible for their death (tsn, pp. 30-33- May 4, 1998).
"Anilhawa Ahamad, more or less 80 years old, a widow was in the house of Walpan Ladjaalam whom
he calls Hadji Id at the time the police raided the house. She is the mother of Ahma Sailabbi. She was
together with Babo Dandan, two small children and a helper when soldiers entered the house. (W)hen
they arrived, they kept on firing (their guns) even inside the house (tsn, p.5, May 5, 1998). They were
armed with short and long firearms. They searched the house and scattered things and got what they
wanted. They entered the room of Walpan Ladjaalam. They tried to open a bag containing jewelry.
When Anilhawa tried to bring the bag outside the room, they grabbed the bag from her and poked a gun
at her. At that time Walpan Ladjaalam was not in the house. Ahamad Sailabbi was also not in the
house. A Search Warrant was shown to Anilhawa after the search was conducted and just before the
policemen left the place. Anilhawa Ahamad said that it was already late in the afternoon[;] before they
left that was the time the Search Warrant (was) given to us by xxx Barangay Captain Hussin Elhano
(tsn, pp.6-8, May 5, 1998). Barangay Chairman Elhano arrived already late in the afternoon, almost
sundown (tsn, p. 9, id). Anilhaw declared that aside from a bag containing jewelry and a bag full of
money, she had not seen anything else that was taken from Walpan Ladjaalams house (tsn, pp. 9-12,
id).
"Akmad (Ahmad) Sailabbi, 37 years old, married testified that about 4:00 oclock [o]n the afternoon of
September 24, 1997, ha was standing in front of his house when policemen arrived and immediately
arrested him. He was about to go to the City Proper to buy articles he was intending to bring to Sabah.
He had around P50,000.00 placed inside a waist bag tied around his waist. The policemen told him to
lie down in prone position and a policeman searched his back. They pulled his waist bag and took his
DiaStar wrist watch. He was shot three times and was hit on the forehead leaving a scar. His injury was
not treated. He was taken to the police station where he was detained for one day and one night. He
was detained at the City Jail for three months and five days after which he was released (tsn, pp. 25-29,
May 5, 1998).
"Melba Usma, 20 years old, a widow, testified that [o]n the afternoon of September 24, 1997, she was in
the house of her parents lying together with her husband Sikkal Usma. There is only one house
between her parents house and the house of Walpan Ladjaalam. Her husband Sikkal Usman is the
brother of Nur-in Ladjaalam, Walpans wife. When Melba heard shots, she went downstairs. A
policeman was looking for her husband. The policeman called her husband. When her husband went
down, he was instructed by the policeman to lie down in prone position. Then the policeman shot her
husband. The policeman had two other companions who also shot her husband while he was lying
down in prone position (tsn, pp.2-7, May 5, 1998).
"Murkisa Usman, 30 years old, married, declared that [o]n the afternoon of September 24, 1997, she
was sitting at the door of her house watching her children playing when a motorcyle, driven by a person,
stopped near her house. The driver was Gaganting whom she called a soldier. He went down from his
motorcycle, pulled a gun and poked it at Murkisa. Murkisa stood up and raised her hands. She got her
children and when she was about to enter the room of her house, Gaganting again poked a gun at her
and there was a shot. As a result of firing, three persons died, namely, Sikkal Usman, Boy Ladjaalam
and Atip Sapali Sali (tsn, pp. 8-10, May 5, 1998).
"Barangay Captain Hadji Hussin Elhano, 51 years old, testified that about 4:00 o clock [o]n the
afternoon of September 24, 1997, he was fetched by two policemen at Catabangan where he was
attending a seminar. Because of traffic along the way, they arrived at the Rio Hondo already late in the
afternoon. He saw policemen were already inside the house. Upon entering the gate, he saw Walpan at
the gate already handcuffed. Walpan called him but the police advised him not to approach Walpan.
The search was already over and things were already taken inside the house. When he went inside the
house, he saw the things that they (policemen) searched, the firearms and the shabu (tsn, p. 17. May
8, 1998). He did not see the Search Warrant. What was shown to him were the things recovered during
the search which were being listed. They were being counted and placed on a table. Upon seeing the
things that were recovered during the search, I just signed the receipt (Exh. "P"; "P-1") of the things x x
x taken during the search" (tsn, pp. 17-18. May 8, 1998). He saw three dead bodies at the side of the
fence when he went to the other side of the house. The three persons were killed outside the fence of
Walpan Ladjaalam (tsn, p. 18, id)."16
The Trial Courts Ruling
The trial court observed that the house of appellant was raided on September 24, 1997 by virtue of
Search Warrant No. 20 issued on the same day. However, the lower court nullified the said Warrant
because it had been issued for more than one specific offense, 17 in violation of Section 3, Rule 126 of
the Rules of Court.18 The court a quo ruled:
"It should be stated at the outset that Search Warrant No. 20 is totally null and void because it was
issued for more than one specific offense x x x contrary to Section 3, Rule 1[2]6 of the Rules of Court
which provides that A search warrant shall not issue but upon probable cause in connection with one
specific offense xxx. In Tambasan vs. People, 246 SCRA 184 (1995), the Supreme Court ruled that a
search warrant for more than one offense - a scatter shot warrant - violates Section 3, Rule 126 of the
[R]evised Rules of Court and is totally null and void."19 (emphasis in the original)
Nevertheless, the trial court deemed appellants arrest as valid. It emphasized that he had shot at the
officers who were trying to serve the void search warrant. This fact was established by the testimonies
of several police officers,20 who were participants in the raid, and confirmed by the laboratory report on
the paraffin tests conducted on the firearms and appellant.21 Additionally, the judge noted that Appellant
Ladjaalam, based on his statements in his Counter Affidavit, impliedly contradicted his assertions in
open court that there had been no exchange of gunfire during the raid.22 The trial court concluded that
the testimonies of these officers must prevail over appellants narration that he was not in his house
when the raid was conducted.
Prescinding from this point, the court a quo validated the arrest of appellant, reasoning thus:
"Under the circumstances, the policemen had authority to pursue and arrest Walpan Ladjaalam and
confiscate the firearm he used in shooting at the policemen and to enter his house to effect said arrest
and confiscation of the firearm. Under Rule 113, Section 5 (a), of the Rules of Court, A peace officer or
a private person may, without a warrant, arrest a person xxx (w)hen in his presence, the person to be
arrested has committed, is actually committing, or is attempting to commit an offense. An offense is
committed in the presence or within the view of an officer, within the meaning of the rule authorizing an
arrest without a warrant, when the officer sees the offense, although at a distance, or hears the
disturbances created thereby and proceeds at once to the scene thereof. At the time the policemen
entered the house of accused Walpan Ladjaalam after he had fired shots at the policemen who
intended to serve the Search Warrant to him, the accused was engaged in the commission of a crime,
and was pursued and arrested after he committed the crime of shooting at the policemen who were
about to serve the Search Warrant."23
As a consequence of the legal arrest, the seizure of the following was also deemed valid: the M14 rifle
(with a magazine containing seventeen live ammunition)24 used by appellant against the police
elements, two M14 magazines, and three other M16 rifle magazines. 25 The trial court observed that
these items were in "plain view" of the pursuing police officers. Moreover, it added that these same
items were "evidence [of] the commission of a crime and/or contraband and therefore, subject to
seizure"26 since appellant "had not applied for a license to possess firearm and had not been given
authority to carry firearm outside his residence."27
For being incredible and unsupported by evidence, appellants claim that the items that were seized by
the police officers had been planted was disbelieved by the trial court. It ruled that if the police officers
wanted to plant evidence to incriminate him, they could have done so during the previous raids or those
conducted after his arrest. To its mind, it was unbelievable that they would choose to plant evidence,
when they were accompanied by the barangay chairman and a radio reporter who might testify against
them. It then dismissed these allegations, saying that frame-up, like alibi, was an inherently weak
defense.28
The trial court also convicted the accused of the crime of maintaining a drug den. It reasoned as follows:
"The testimony of Rino Bartolome Locson, corroborated by SPO1 Ricardo Lacastesantos and SPO1
Amado Mirasol, Jr. clearly established that Walpan Ladjaalam operated and maintained a drug den in
his extension house where shabu or methamphetamine hydrochloride, a regulated drug, was sold, and
where persons or customers bought and used shabu or methamphetamine hydrochloride by burning the
said regulated drug and sniffing its smoke with the use of an aluminum foil tooter. A drug den is a lair or
hideaway where prohibited or regulated drugs are used in any form or are found. Its existence [may be]
proved not only by direct evidence but may also be established by proof of facts and circumstances,
including evidence of the general reputation of the house, or its general reputation among police
officers. The uncorroborated testimony of accused Walpan Ladjaalam a.k.a. Warpan that he did not
maintain an extension house or a room where drug users who allegedly buy shabu from him inhales or
smokes shabu cannot prevail over the testimonies of Locson, SPO1 Lacastesantos, and SPO1 Mirasol.
He admitted that he is the owner of the extension house but he alleged that there were four (4)
occupants who rented that extension house. He knew the name of only one of the four occupants who
are allegedly from Jolo, a certain Momoy, the husband. Aside from being uncorroborated, Walpans
testimony was not elaborated by evidence as to when or for how long was the extension house rented,
the amount of rental paid, or by any other document showing that the extension house was in fact
rented. The defense of denial put up by accused Walpan Ladjaalam a.k.a. 'Warpan is a weak defense.
Denial is the weakest defense and cannot prevail over the positive and categorical testimonies of the
prosecution witnesses. Denials, if unsubstantiated by clear and convincing evidence, are negative and
self-serving evidence which deserve no weight in law and cannot be given evidentiary weight over the
testimony of credible witnesses who testify on affirmative matters. As between the positive declaration
of the prosecution witnesses and the negative statements of the accused, the former deserve more
credence."29
In conclusion, the trial court explained appellants liability in this manner:
"x x x. The act of the accused in firing an M14 rifle to the policemen who were about to enter his house
to serve a search warrant constitutes the crime of direct assault with multiple attempted homicide[,] not
multiple attempted murder with direct assault[,] considering that no policeman was hit and injured by the
accused and no circumstance was proved to qualify the attempted killing to attempted murder.
"The accused Walpan Ladjaalam a.k.a. Warpan cannot be held liable [for] the crime of Violation of
Section 16, Article III, in relation to Section 21, Article IV, of Republic Act 6425 otherwise known as the
Dangerous Drugs Act of 1992, as amended, because the fifty (50) pieces of folded aluminum foils
having a total weight of 1.7426 grams all containing methamphetamine hydrochloride or shabu allegedly
found in his house are inadmissible as evidence against him considering that they were seized after [a]
search conducted by virtue of Search Warrant No. 20 which is totally null and void as it was issued for
more than one offense, and were not found in plain view of the police officers who seized them.
Neither could the accused be held liable for illegal possession of firearms and ammunition except for
the (1) M14 rifle with Serial Number 1555225 and with magazine containing fifteen (15) live ammunition
and two more M14 rifle magazines with twenty (20) and twenty-one (21) live ammunition respectively
considering that the policemen who recovered or seized the other firearms and ammunition did not
testify in court. The blue bag containing assorted coins cannot be returned to the accused Walpan
Ladjaalam a.k.a. Warpan because according to the accused the blue bag and assorted coins do not
belong to him[;] instead the said assorted coins should be turned over to the National Treasury." 30
The Issues
In his Brief, appellant submits the following Assignment of Errors:
I
"The trial court erred when it concluded that appellant Walpan Ladjaalam y Mihajil [had] fired first at the
police officers who went to his house to serve a search warrant upon him which led to an exchange of
fire between Ladjaalam and the police officer.
II
"The trial court erred when it denied the appellant the right and opportunity for an ocular inspection of
the scene of the firefight and where the house of the appellant [was] located.
III
"The trial court erred when it ruled that the presumption of regularity in the performance of their duties
[excluded] the claim of the appellant that the firearms and methamphetamine hydrochloride (i.e. shabu)
were planted by the police."31
In the interest of simplicity, we shall take up these issues seriatim: (a) denial of the request for ocular
inspection, (b) credibility of the prosecution witnesses, and (c) the defense of frame-up. In addition, we
shall also discuss the proper crimes and penalties to be imposed on appellant.
The Courts Ruling
The appeal has no merit.
First Issue: Denial of Request for Ocular Inspection
Appellant insists that the trial court erred in denying his request for an ocular inspection of the
Ladjaalam residence. He argues that an ocular inspection would have afforded the lower court "a better
perspective and an idea with respect to the scene of the crime." 32 We do not agree.
We fail to see the need for an ocular inspection in this case, especially in the light of the clear
testimonies of the prosecution witnesses.33 We note in particular that the defense had even requested
SPO1 Amado Mirasol Jr. to sketch the subject premises to give the lower court a fairly good idea of Q: Now, when this gate was opened, you said you went inside the house, right?
appellants house.34 Viewing the site of the raid would have only delayed the proceedings. 35 Moreover,
the question whether to view the setting of a relevant event has long been recognized to be within the A: Yes.
discretion of the trial judge.36 Here, there is no reason to disturb the exercise of that discretion. 37
Q: What did you see inside the house?
Second Issue: Credibility of Prosecution Witnesses
A: I, together with SPO1 Ricardo Lacastesantos, entered the main door of the house of Walfran [sic]
Appellant, in essence, questions the credibility of the prosecution witnesses.38 Suffice it to state that the Ladjaalam at the ground floor. We went inside the sala on the ground floor of his house[;] I saw two old
trial courts assessment of their credibility is generally accorded respect, even finality. 39 After carefully woman.
examining the records and finding no material inconsistencies to support appellants claim, we cannot
exempt this case from the general rule.40 Quite the contrary, the testimonies of these witnesses
positively showed that appellant had fired upon the approaching police elements, and that he had xxx xxx xxx
subsequently attempted to escape. SPO1 Amado Mirasol Jr.41testified thus:
PROSECUTOR NUVAL:
"PROSECUTOR NUVAL:
Q: Now, what did you do with these two old women?
Q: And, this trail is towards the front of the house of the accused?
A: I did not mind those two old women because those two women were sitting on the ground floor. I was
A: Yes. concentrating on the second floor because Ladjaalam was firing towards our group so, I, together with
Ricardo Lacastesantos, went upstairs to the second floor of the house.
Q: And its there where you were met by a volley of fire?
Q: Were you able to go to the second floor of the house?
A: Yes, Your Honor.
A: Yes.
COURT:
Q: What happened when you were already on the second floor?
Q: How far were you from the concrete fen[c]e when you were met by a volley of fire? ... You said you
were fired upon? A: While we were proceeding to the second floor, Walfan [sic] Ladjaalam, noticed our presence and
immediately went inside the bedroom [o]n the second floor and he went immediately and jumped from
the window of his house x x x leading to the roof of the neighbors house.
A: More or less, five (5) meters.
xxx xxx xxx
xxx xxx xxx
COURT:
PROSECUTOR NUVAL:
Reform. That is leading
Q: Now, you said you were able to enter the house after the gate was opened by your colleague Felipe
Gaganting ... I will reform that question.
Q: What happened when you entered and he jumped to the roofing of the neighbors house?
Q: Who opened the gate Mr. Witness?
A: Immediately, I myself, we immediately went downstairs and asked the assistance of the members of
the raiding team to arrest Walfan Ladjaalam.
A: SPO2 Felipe Gaganting, Efren Gregorio and Allan Marcos Obut.
xxx xxx xxx
Q: And, at that time you were hiding at the concrete fence?
PROSECUTOR NUVAL:
A: Yes.
Q: Were you able to go down? Q: After recovering this, what did you do with this firearm?

A: Yes. A: When I recovered it I removed the bullets inside the chamber[.] I removed the magazine and I turned
it over to the investigator.
Q: What happened when you were there?
Q: Where did you turn it over?
A: We immediately went out and I asked the assistance of the members of the raiding team and the
investigator of the unit especially SPO1 Cesar Rabuya. I was able to manage to arrest Walfan A: At the crime scene.
Ladjaalam."42
Q: Now, that magazine, can you still identify this?
What happened thereafter was narrated by Senior Police Officer Ricardo Lacastesantos,43 as follows:
A: Yes.
"Q: What did you notice [o]n the second floor?
Q: Why?
A: I went where the firing came from, so, I saw [an] M14 rifle and I shouted from the outside, do not fire
at the second floor because there [are] a lot of children here. A: I put x x x markings.

Q: Now, that rifle you said [was an] M14, where did you find this? xxx xxx xxx

A: At the sala set. COURT:

Q: This sala set where is this located? So, a[si]de from the magazine attached to the M14 rifle you found six more magazines?

A: Located [on] the second floor of the house. A: Yes, so, all in all six magazines, three empty M16 rifle magazines and three M14.

Q: Is there a sala [o]n the second floor? Q: The M16 magazines [were] empty?

A: Yes. A: Empty.

Q: Can you still identify that M14 rifle which you said you recovered from the sale set? Q: How about the M14?

A: Yes. A: Found with [ammunition].

Q: Why can you identify that? xxx xxx xxx

A: The Serial No. of M14 is 1555225 and I marked it with my initial. Q: So, where are the three M16 magazines?

Q: Now, I have here M14 rifle[;] will you please tell us where is the Serial No. of this? A: In the corner.

A: 1555225 and I put my initial, RJL. Q: What did you do with [these] three magazines of M16?

FISCAL NUVAL: A: I turned [them] over to the investigator.

This is already marked as our Exhibit B-3 with magazine, one magazine and seven round Q: Can you identify them?
[ammunition].
A: Yes, because of my initials[.] Q: Recently?

Q: Where are your initials? A: Because of the traces of brown residue, it could be possible that the gun was fired before the incident
x x x.
A: On the magazines.
COURT:
Q: RJL?
Q: There is also black residue?
A: RJL."44
A: Yes.
These were confirmed by the results of the paraffin tests conducted on appellant and on the weapons
seized during the raid. Both of his hands as well as the weapons, particularly the M-14 which he had Q: What does it indicate?
used, were positive for gunpowder nitrate. Police Inspector Mercedes Delfin-Diestro explained in open
court: A: It indicates that the firearm was recently fired.

"Q: Okay. Now, what was the result of your examination, Madam Witness? Q: And, where is this swab used at the time of the swabbing of this Exhibit?

A: The result of the examination [was] that both hands of the subject person, ha[d] presence of gun A: This one.
powder nitrates.
PROSECUTOR NUVAL:
Q: What do you mean Madam Witness, what does that indicate?
May we ask that this be marked as Exhibit B-3-A.
A: It indicates there is presence of powder nitrates.
COURT:
Q: Can we conclude that he fired a gun?
Q: The firing there indicates that the gun was recently fired, during the incident?
A: I cannot conclude that he fired a gun because there are so many circumstances [why] a person
[would be] positive on his hands for gun powder nitrates.
A: Yes.
Q: But, most likely, he fired a gun?
Q: And also before the incident it was fired because of the brown residue?
A: Yes.
A: Yes, Your Honor."45 (emphasis supplied)
xxx xxx xxx
Duly proven from the foregoing were the two elements46 of the crime of illegal possession of firearms.
Undoubtedly, the established fact that appellant had fired an M-14 rifle upon the approaching police
PROSECUTOR NUVAL: officers clearly showed the existence of the firearm or weapon and his possession thereof. Sufficing to
satisfy the second element was the prosecutions Certification 47 stating that he had not filed any
Q: What about, Madam Witness this Exhibit B-3, which is the M14 rifle. What did you do with this? application for license to possess a firearm, and that he had not been given authority to carry any
outside his residence.48 Further, it should be pointed out that his possession and use of an M-14 rifle
A: SPO3 Abu did the swabbing both in the chamber and the barrel wherein I observed there [were] were obviously unauthorized because this weapon could not be licensed in favor of, or carried by, a
black and traces of brown residue on the bolt, chamber and in the barrel. private individual.49

Q: And, that indicates Madam Witness...? Third Issue: Defense of Frame-up

A: It indicates that the gun was fired.

From the convoluted arguments strewn before us by appellant, we gather that the main defense he
raises is frame-up. He claims that the items seized from his house were "planted," and that the entire
Zamboanga police force was out to get him at all cost.
This Court has invariably held that the defense of frame-up is inherently weak, since it is easy to
fabricate, but terribly difficult to disprove.50 Absent any showing of an improper motive on the part of the
police officers,51 coupled with the presumption of regularity in the performance of their duty, such
defense cannot be given much credence.52Indeed, after examining the records of this case, we
conclude that appellant has failed to substantiate his claim. On the contrary, his statements in his
Counter Affidavit are inconsistent with his testimony during the trial. 53 He testified thus:
"Q Now, Mr. Witness, do you remember having executed an Affidavit/ a Counter-Affidavit?
A I could not remember.
Q I have here a Counter-Affidavit and it was signed before this representation on the 8th day of
December 1997[;] tell us whose signature is this appearing above the typewritten name
FISCAL NUVAL:
Q . . . . Walpan Ladjaalam, whose signature is this?
(Showing)
A Yes, Sir. This is mine.
Q Now, in paragraph[s] 1,2,3,4,5,6,7 and 8; you stated in this Counter-Affidavit which I quote: that I was
resting and sleeping when I heard the gunshots and I noticed that the shots were directed towards our
house.. and I inspected and x x x we were attacked by armed persons.. and I was apprehended by the
persons who attacked x x x our house; [the] house you are referring to [in] this paragraph, whose house
[are you] referring to, is this [what] you are referring to [as] your house or the house of your neighbors
[from] which you said you heard gunshots?
A Our house.
Q Now, in paragraph 6 of your Counter-Affidavit you stated and I quote: that [o]n that afternoon of
September 24, 1997, I was at home in my house Aplaya, Riohondo, Bo. Campo Muslim, my
companions in my house [were] the two old women and my children, is this correct?
A They were not there.
Q Now, in that statement Mr. Witness, you said that you were at home in [your] house at Aplaya,
Riohondo, Bo. Campo Muslim[;] which is which now, you were in your house or you were in your
neighbors[] house at that time when you heard gunshots?
A I was in the house near my house.
Q So, your statement particularly paragraph 6 of your Counter-Affidavit that you were at home in [your]
house at Aplaya Riohondo Bo. Campo Muslim, is x x x not correct?
A Yes, Sir. This is not correct."54
Crime and Punishment
The trial court convicted appellant of three crimes: (1) maintenance of a drug den, (2) direct assault with
attempted homicide, and (3) illegal possession of firearms. We will discuss each of these.
Maintenance of a Drug Den
We agree with the trial court that appellant was guilty of maintenance of a drug den, an offense for
which he was correctly sentenced to reclusion perpetua. His guilt was clearly established by the
testimony of Prosecution Witness Rino Bartolome Locson, who himself had used the extension house
of appellant as a drug den on several occasions, including the time of the raid. The formers testimony
was corroborated by all the raiding police officers who testified before the court. That appellant did not
deny ownership of the house and its extension lent credence to the prosecutions story.
Direct Assault with Multiple Attempted Homicide
The trial court was also correct in convicting appellant of direct assault55 with multiple counts of
attempted homicide. It found that "[t]he act of the accused [of] firing an M14 rifle [at] the policemen[,]
who were about to enter his house to serve a search warrant x x x" constituted such complex crime. 56
We note that direct assault with the use of a weapon carries the penalty of prision correccional in its
medium and maximum periods, while attempted homicide carries the penalty of prision
correccional.57 Hence, for the present complex crime, the penalty for direct assault, which constitutes
the "most serious crime," should be imposed and applied in its maximum period.58
Illegal Possession of Firearms
Aside from finding appellant guilty of direct assault with multiple attempted homicide, the trial court
convicted him also of the separate offense of illegal possession of firearms under PD 1866, as
amended by RA 8294, and sentenced him to 6 years of prision correccional to 8 years of prision mayor.
The Office of the Solicitor General (OSG) disagrees, on the ground that the trial court should not have
applied the new law. It contends that under the facts of the case, the applicable law should have been
PD 1866, as worded prior to its amendment by RA 8294.
The trial courts ruling and the OSGs submission exemplify the legal communitys difficulty in grappling
with the changes brought about by RA 8294. Hence, before us now are opposing views on how to
interpret Section 1 of the new law, which provides as follows:
"SECTION 1. Section 1 of Presidential Decree No. 1866, as amended, is hereby further amended to
read as follows:
"Section 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms or
Ammunition Instruments Used or Intended to be Used in the Manufacture of Firearms or Ammunition. --
The penalty of prision correccional in its maximum period and a fine of not less than Fifteen thousand
pesos (15,000) shall be imposed upon any person who shall unlawfully manufacture, deal in, acquire,
dispose, or possess any low powered firearm, such as rimfire handgun, .380 or .32 and other firearm of
similar firepower, part of firearm, ammunition, or machinery, tool or instrument used or intended to be
used in the manufacture of any firearm or ammunition: Provided, That no other crime was committed.
"The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos (30,000) shall
be imposed if the firearm is classified as high powered firearm which includes those with bores bigger in
diameter than .30 caliber and 9 millimeter such as caliber .40, .41, .44, .45 and also lesser calibered
firearms but considered powerful such as caliber .357 and caliber .22 centerfire magnum and other
firearms with firing capability of full automatic and by burst of two or three: Provided, however, That no
other crime was committed by the person arrested.
"If homicide or murder is committed with the use of an unlicensed firearm, such use of an unlicensed
firearm shall be considered as an aggravating circumstance.
"If the violation of this Section is in furtherance of or incident to, or in connection with the crime of
rebellion or insurrection, sedition, or attempted coup detat, such violation shall be absorbed as an
element of the crime of rebellion or insurrection, sedition, or attempted coup detat.
"The same penalty shall be imposed upon the owner, president, manager, director or other responsible
officer of any public or private firm, company, corporation or entity, who shall willfully or knowingly allow
any of the firearms owned by such firm, company, corporation or entity to be used by any person or
persons found guilty of violating the provisions of the preceding paragraphs or willfully or knowingly
allow any of them to use unlicensed firearms or firearms without any legal authority to be carried outside
of their residence in the course of their employment.
"The penalty of arresto mayor shall be imposed upon any person who shall carry any licensed firearm
outside his residence without legal authority therefor."
Citing People v. Jayson,59 the OSG argues that the foregoing provision does not cover the specific facts
of this case. Since another crime -- direct assault with multiple unlawful homicide -- was committed,
appellant cannot be convicted of simple illegal possession of firearms under the second paragraph of
the aforecited provision. Furthermore, since there was no killing in this case, illegal possession cannot
be deemed as an aggravating circumstance under the third paragraph of the provision. Based on these
premises, the OSG concludes that the applicable law is not RA 8294, but PD 1866 which, as worded
prior the new law, penalizes simple illegal possession of firearms even if another crime is committed at
the same time.60
Applying a different interpretation, the trial court posits that appellant should be convicted of illegal
possession of firearms, in addition to direct assault with multiple attempted homicide. It did not explain
its ruling, however. Considering that it could not have been ignorant of the proviso61 in the second
paragraph, it seemed to have construed "no other crime" as referring only to homicide and murder, in
both of which illegal possession of firearms is an aggravating circumstance. In other words, if a crime
other than murder or homicide is committed, a person may still be convicted of illegal possession of
firearms. In this case, the other crime committed was direct assault with multiple attempted homicide;
hence, the trial court found appellant guilty of illegal possession of firearms.
We cannot accept either of these interpretations because they ignore the plain language of the statute.
A simple reading thereof shows that if an unlicensed firearm is used in the commission of any crime,
there can be no separate offense of simple illegal possession of firearms. Hence, if the "other crime" is
murder or homicide, illegal possession of firearms becomes merely an aggravating circumstance, not a
separate offense. Since direct assault with multiple attempted homicide was committed in this case,
appellant can no longer be held liable for illegal possession of firearms.
Moreover, penal laws are construed liberally in favor of the accused. 62 In this case, the plain meaning of
RA 8294s simple language is most favorable to herein appellant. Verily, no other interpretation is
justified, for the language of the new law demonstrates the legislative intent to favor the
accused.63 Accordingly, appellant cannot be convicted of two separate offenses of illegal possession of
firearms and direct assault with attempted homicide. Moreover, since the crime committed was direct
assault and not homicide or murder, illegal possession of firearms cannot be deemed an aggravating
circumstance.
We reject the OSGs contention that PD 1866, as worded prior to its amendment by RA 8294, should be
applied in this case.1wphi1 When the crime was committed on September 24, 1997, the original
language of PD 1866 had already been expressly superseded by RA 8294 which took effect on July 6,
1997.64 In other words, no longer in existence was the earlier provision of PD 1866, which justified a
conviction for illegal possession of firearms separate from any other crime. It was replaced by RA 8294
which, among other amendments to PD 1866, contained the specific proviso that "no other crime was
committed."
Furthermore, the OSGs reliance on People v. Jayson65 is misplaced. True, this Court sustained the
conviction of appellant for illegal possession of firearms, although he had also committed homicide. We
explained, however, that "the criminal case for homicide [was] not before us for consideration."
Just as unacceptable is the interpretation of the trial court. We find no justification for limiting
the proviso in the second paragraph to murder and homicide. The law is clear: the accused can be
convicted of simple illegal possession of firearms, provided that "no other crime was committed by the
person arrested." If the intention of the law in the second paragraph were to refer only to homicide and
murder, it should have expressly said so, as it did in the third paragraph. Verily, where the law does not
distinguish, neither should we.
The Court is aware that this ruling effectively exonerates appellant of illegal possession of an M-14 rifle, an offense
which normally carries a penalty heavier than that for direct assault. While the penalty for the first is prision mayor,
for the second it is only prision correccional. Indeed, the accused may evade conviction for illegal possession of
firearms by using such weapons in committing an even lighter offense, 66 like alarm and scandal67 or slight physical
injuries,68 both of which are punishable by arresto menor.69 This consequence, however, necessarily arises from the
language of RA 8294, whose wisdom is not subject to the Courts review. Any perception that the result reached
here appears unwise should be addressed to Congress. Indeed, the Court has no discretion to give statutes a new
meaning detached from the manifest intendment and language of the legislature. Our task is constitutionally confined
only to applying the law and jurisprudence70 to the proven facts, and we have done so in this case.
WHEREFORE, the appealed Decision is hereby AFFIRMED with the MODIFICATION that appellant is found guilty
only of two offenses: (1) direct assault and multiple attempted homicide with the use of a weapon, for which he is
sentenced to 2 years and 4 months to 6 years of prision correccional; and (2) maintaining a drug den, for which he
was correctly sentenced by the trial court to reclusion perpetua. Costs against appellant.
Let a copy of this Decision be furnished the Congress of the Philippines for a possible review, at its sound discretion,
of RA 8294.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
 Republic of the Philippines Mandaue City, Cebu 14,078,381.00 211,185.00
SUPREME COURT
Manila Pavia, Iloilo 10,644,861.00 159,675.00
B. Sugarland Beverage Corp.
SECOND DIVISION Navotas, Metro Manila 171,790,790.00 2,576,865.00
Imus, Cavite 218,114,261.00 3,272,175.00
G.R. No. 175188 July 15, 2015
Pine Street, Mandaluyong 201,562,148.00 3,023,445.00
Totals 942,729,393.00 14,140,980.00 16
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
vs.
LA TONDENA DISTILLERS, INC. (LTDI [now GINEBRA SAN MIGUEL], Respondent. On October 14, 2003, claiming that it is exempt from paying DST, respondent filed with petitioner
Commissioner of Internal Revenue (CIR) an administrative claim for tax refund or tax credit in the
DECISION amount of 14,140,980.00, representing the DST it allegedly erroneously paid on the occasion of the
merger.17
DEL CASTILLO, J.:
On the same day, respondent filed with the CTA a Petition for Review, docketed as C.T.A. Case No.
The transfer of real property to a surviving corporation pursuant to a merger is not subject to 6796 and raffled to the Second (2nd) Division of the CTA. 18
Documentary Stamp Tax (DST).1
Ruling of the Court of Tax Appeals Division
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the September 26,
2006 Decision3 and the October 31, 2006 Resolution4 of the Court of Tax Appeals (CTA) in C.T.A. EB On January 6, 2006, the 2nd Division of the CTA rendered a Decision 19 finding respondent entitled to its
No. 178. claim for tax refund or tax credit in the amount of 14,140,980.00, representing its erroneously paid DST
for the taxable year 2001.20 The 2nd Division of the CTA ruled that Section 196 of the NIRC does not
Factual Antecedents apply because there is no purchaser or buyer in the case of a merger. 21 Citing Section 8022 of the
Corporation Code of the Philippines, the 2nd Division of the CTA explained that the assets of the
absorbed corporations were not bought or purchased by respondent but were transferred to and vested
On September 17, 2001, respondent La Tondea Distillers, Inc. entered into a Plan of Merger 5 with in respondent as an inherent legal consequence of the merger, without any further act or deed. 23 It also
Sugarland Beverage Corporation (SBC), SMC Juice, Inc. (SMCJI), and Metro Bottled Water noted that any doubts as to the tax-free nature of the merger had been already removed by the
Corporation (MBWC).6 As a result of the merger, the assets and liabilities of the absorbed corporations subsequent enactment of Republic Act No. (RA) 9243,24 which amended Section 19925 of the NIRC by
were transferred to respondent, the surviving corporation.7 Respondent later changed its corporate specifically exempting from the payment of DST the transfer of property pursuant to a
name to Ginebra San Miguel, Inc. (GSMI).8 merger.26Aggrieved, petitioner moved for reconsideration but the 2nd Division of the CTA denied the
same in a Resolution dated April 4, 2006.27
On September 26, 2001, respondent requested for a confirmation of the tax-free nature of the said
merger from the Bureau of Internal Revenue (BIR).9 Unfazed, petitioner elevated the matter to the CTA En Banc via a Petition for Review, docketed as
C.T.A.EB No. 178.
On November 5, 2001, the BIR issued a ruling stating that pursuant to Section 40(C)(2)10 and (6)(b)11 of
the 1997 National Internal Revenue Code (NIRC), no gain or loss shall be recognized by the absorbed Ruling of the Court of Tax Appeals En Banc
corporations as transferors of all assets and liabilities.12 However, the transfer of assets, such as real
properties, shall be subject to DST imposed under Section 196 13 of the NIRC.14
On September 26, 2006, the CTA En Banc rendered the assailed Decision, finding no reversible error
on the part of the 2nd Division of the CTA in granting respondents claim for tax refund or tax
Consequently, on various dates from October 31, 2001 to November 15, 2001, respondent paid to the credit.28 The CTA En Banc opined that Section 196 of the NIRC does not apply to a merger as the
BIR the following DST, to wit: properties subject of a merger are not sold, but are merely absorbed by the surviving corporation. 29 In
other words, the properties are transferred by operation of law, without any further act or deed. 30
DST
Property Locations Total Assets
Payments Petitioner sought reconsideration of the assailed Decision.
A. Metro Bottled Water Corp.
General Trias, Cavite 326,508,953.0015 4,897,635.00
On October 31, 2006, the CTA En Banc issued the assailed Resolution, denying petitioners motion for
reconsideration.31
Issue
Hence, petitioner filed the instant Petition for Review on Certiorari raising the sole issue of whether the
CTA En Banc erred in ruling that respondent is exempt from payment of DST. 32 Petitioners Arguments
Petitioner posits that DST is levied on the exercise of the privilege to convey real property regardless of
the manner of conveyance.33 Thus, it is imposed on all conveyances of realty, including realty transfer
during a corporate merger.34 As to the subsequent enactment of RA 9243, petitioner claims that
respondent cannot benefit from it as laws apply prospectively. 35 Respondents Arguments
Respondent, on the other hand, contends that DST is imposed only on conveyances, deeds,
instruments, or writing, where realty sold shall be conveyed to a purchaser or buyer. 36 In this case, there
is no purchaser or buyer as a merger is neither a sale nor a liquidation of corporate property but a
consolidation of properties, powers, and facilities of the constituent companies. 37
Our Ruling
The Petition must fail.
In Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation, 38 the Supreme Court
already ruled that Section 196of the NIRC does not include the transfer of real property from one
corporation to another pursuant to a merger. It explained that:
[W]e do not find merit in petitioners contention that Section 196 covers all transfers and conveyances of
real property for a valuable consideration. A perusal of the subject provision would clearly show it
pertains only to sale transactions where real property is conveyed to a purchaser for a consideration.
The phrase "granted, assigned, transferred or otherwise conveyed" is qualified by the word "sold" which
means that documentary stamp tax under Section 196 is imposed on the transfer of realty by way of
sale and does not apply to all conveyances of real property. Indeed, as correctly noted by the
respondent, the fact that Section 196 refers to words "sold", "purchaser" and "consideration"
undoubtedly leads to the conclusion that only sales of real property are contemplated therein.
Thus, petitioner obviously erred when it relied on the phrase "granted, assigned, transferred or
otherwise conveyed" in claiming that all conveyances of real property regardless of the manner of
transfer are subject to documentary stamp tax under Section 196. It is not proper to construe the
meaning of a statute on the basis of one part. x x x
xxxx
It should be emphasized that in the instant case, the transfer of SPPCs real property to respondent was
pursuant to their approved plan of merger.1wphi1 In a merger of two existing corporations, oneof the
corporations survives and continues the business, while the other is dissolved, and all its rights,
properties, and liabilities are acquired by the surviving corporation. Although there is a dissolution of the
absorbed or merged corporations, there is no winding up of their affairs or liquidation of their assets
because the surviving corporation automatically acquires all their rights, privileges, and powers, as well
as their liabilities. Here, SPPC ceased to have any legal personality and respondent PSPC stepped into
everything that was SPPCs, pursuant to the law and the terms of their Plan of Merger.
Pertinently, a merger of two corporations produces the following effects, among others:
Sec. 80. Effects of merger or consolidation. x x x
xxxx
4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the rights,
privileges, immunities and franchises of each of the constituent corporations; and all property, real or
personal, and all receivables due on whatever account, including subscriptions to shares and other
choses in action, and all and every other interest of, or belonging to, or due to each constituent
corporations, shall be taken and deemed to be transferred to and vested in such surviving or
consolidated corporation without further act or deed;
In a merger, the real properties are not deemed "sold" to the surviving corporation and the latter could
not be considered as "purchaser" of realty since the real properties subject of the merger were merely
absorbed by the surviving corporation by operation of law and these properties are deemed
automatically transferred to and vested in the surviving corporation without further act or deed.
Therefore, the transfer of real properties to the surviving corporation in pursuance of a merger is not
subject to documentary stamp tax. As stated at the outset, documentary stamp tax is imposed only on
all conveyances, deeds, instruments or writing where realty sold shall be conveyed to a purchaser or
purchasers. The transfer of SPPCs real property to respondent was neither a sale nor was it a
conveyance of real property for a consideration contracted to be paid as contemplated under Section
196 of the Tax Code. Hence, Section 196 of the Tax Code is inapplicable and respondent is not liable
for documentary stamp tax.39(Emphasis in the original)
Following the doctrine of stare decisis, which dictates that when a court has reached a conclusion in
one case, it should be applied to those that follow if the facts are substantially the same, even though
the parties may be different,40 we find that respondent is not liable for DST as the transfer of real
properties from the absorbed corporations to respondent was pursuant to a merger. And having
complied with the provisions of Sections 204(C)41and 22942 of the NIRC, we agree with the CTA that
respondent is entitled to a refund of the DST it erroneously paid on various dates between October 31,
2001 to November 15, 2001 in the total amount of 14,140,980.00.
Likewise without merit is petitioners contention that respondent cannot claim exemption under RA 9243
as this was enacted only in 2004 or after respondents tax liability accrued. To be clear, respondent did
not file its claim for tax refund or tax credit based on the exemption found in RA 9243. Rather, it filed a
claim for tax refund or tax credit on the ground that Section 196 of the NIRC does not include the
transfer of real property pursuant to a merger. In fact, the ratio decidendi (or reason for the decision) in
Pilipinas Shell Petroleum Corporation43 was based on Section 196 of the NIRC, in relation to Section 80
of the Corporation Code, not RA 9243. In that case, RA 9243 was mentioned only to emphasize that
"the enactment of the said law now removes any doubt and had made clear that the transfer of real
properties as a consequence of merger or consolidation is not subject to [DST]." 44
All told, we find no error on the part of the CTA in granting respondent's claim for tax refund or tax credit
in the amount of 14,140,980.00, representing its erroneously paid DST for the taxable year 2001.
 1
In closing, we must stress that taxes must not be imposed beyond what the law expressly and clearly Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation, G.R. No.
declares as tax laws must be construed strictly against the State and liberally in favor of the taxpayer. 45 192398, September 29, 2014, 736 SCRA 623, 640.
2 Rollo, pp. 8-20.
3 Id. at 22-30; penned by Presiding Justice Ernesto D. Acosta and concurred in by Associate
WHEREFORE, the Petition is hereby DENIED. The assailed September 26, 2006 Decision and the
October 31, 2006 Resolution of the Court of Tax Appeals in C.T.A. EB No. 178 are hereby AFFIRMED. Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova and
Olga Palanca-Enriquez.
4 Id. at 32-33.
SO ORDERED. 5 Id. at 69; the Securities and Exchange Commission (SEC) approved the Plan of Merger on

October 15, 2001.

6 Id.
MARIANO C. DEL CASTILLO***
7 Id.
Associate Justice
8 Id.
9 Id. at 70.
WE CONCUR: 10 SEC. 40. Determination of Amount and Recognition of Gain or Loss.

xxxx
DIOSDADO M. PERALTA* (C) Exchange of Property. x x x
Associate Justice (2) Exception. -No gain or loss shall be recognized if in pursuance of a plan of merger
or consolidation -
LUCAS P. BERSAMIN** JOSE CATRAL MENDOZA (a) A corporation, which is a party to a merger or consolidation, exchanges
Associate Justice Associate Justice property solely for stock in a corporation, which is a party to the merger or
consolidation; or
(b) A shareholder exchanges stock in a corporation, which is a party to the
MARVIC M.V.F. LEONEN merger or consolidation, solely for the stock of another corporation also a
Associate Justice party to the merger or consolidation; or
(c) A security holder of a corporation, which is a party to the merger or
ATTESTATION consolidation, exchanges his securities in such corporation, solely for stock
or securities in such corporation, a party to the merger or consolidation.
No gain or loss shall also be recognized if property is transferred to a corporation by a
I attest that the conclusions in the above Decision had been reached in consultation before the case person in exchange for stock or unit of participation in such a corporation of which as
was assigned to the writer of the opinion of the Court's Division. a result of such exchange said person, alone or together with others, not exceeding
four (4) persons, gains control of said corporation: Provided, That stocks issued for
MARIANO C. DEL CASTILLO services shall not be considered as issued in return for property.
Associate Justice 11 (6) Definitions.

Acting Chairperson b) The term merger or consolidation, when used in this Section, shall be understood
to mean: (i) the ordinary merger or consolidation, or (ii) the acquisition by one
CERTIFICATION corporation of all or substantially all the properties of another corporation solely for
stock: Provided, That for a transaction to be regarded as a merger or consolidation
within the purview of this Section, it must be undertaken for a bona fide business
Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's Attestation, purpose and not solely for the purpose of escaping the burden of taxation: Provided,
I certify that the conclusions in the above Decision had been reached in consultation before the case further, That in determining whether a bona fide business purpose exists, each and
was assigned to the writer of the opinion of the Court's Division. every step of the transaction shall be considered and the whole transaction or series
of transactions shall be treated as a single unit: Provided, finally , That in determining
MARIA LOURDES P.A. SERENO whether the property transferred constitutes a substantial portion of the property of
Chief Justice the transferor, the term property shall be taken to include the cash assets of the
transferor.
12 Rollo, p. 70.
13 SEC. 196. Stamp tax on Deeds of Sale and Conveyances of Real Property. - On all

Footnotes conveyances, deeds, instruments, or writings, other than grants, patents or original certificates
* Per Special Order No. 2088 dated July 1, 2015. of adjudication issued by the Government, whereby any land, tenement, or other realty sold
** Per Special Order No. 2079 dated June 29, 2015. shall be granted, assigned, transferred or otherwise conveyed to the purchaser, or purchasers,
*** Per Special Order No. 2087 (Revised) dated July 1, 2015. or to any other person or persons designated by such purchaser or purchasers, there shall be
collected a documentary stamp tax, at the rates herein below prescribed, based on the

consideration contracted to be paid for such realty or on its fair market value determined in
accordance with Section 6(E) of this Code, whichever is higher: Provided, That when one of
the contracting parties is the Government the tax herein imposed shall be based on the actual
consideration.
(a) When the consideration, or value received or contracted to be paid for such realty
after making proper allowance of any encumbrance, does not exceed One thousand
pesos (1,000.00) fifteen pesos (15.00).
(b) For each additional One thousand Pesos (1,000.00), or fractional part thereof in
excess of One thousand pesos (1,000.00) of such consideration or value, Fifteen
pesos (15.00).
When it appears that the amount of the documentary stamp tax payable hereunder
has been reduced by an incorrect statement of the consideration in any conveyance,
deed, instrument or writing subject to such tax the Commissioner, provincial or city
Treasurer, or other revenue officer shall, from the assessment rolls or other reliable
source of information, assess the property of its true market value and collect the
proper tax thereon.
14 Rollo, p. 70.
15 Id. at 79; the amount should be 326,508,952.00.
16 Id. at 80.
17 Id. at 70.
18 Id. at 70-71.
19 Id. at 68-82; penned by Associate Justice Erlinda P. Uy and concurred in by Associate
Justices Juanito C. Castaeda, Jr. and Olga Palanca-Enriquez.
20 Id. at 81.
21 Id. at 76.
22 SEC. 80. Effects of merger or consolidation. The merger or consolidation shall have the
following effects:
xxxx
4. The surviving or the consolidated corporation shall thereupon and thereafter
possess all the rights, privileges, immunities and franchises of each of the constituent
corporations; and all property, real or personal, and all receivables due on whatever
account, including subscriptions to shares and other choses in action, and all and
every other interest of, or belonging to, or due to each constituent corporation, shall
be taken and deemed to be transferred to and vested in such surviving or
consolidated corporation without further act or deed; x x x
23 Rollo, pp. 74-76.
24 An Act Rationalizing the Provisions on the Documentary Stamp Tax of the National Internal
Revenue Code of 1997, As Amended, And For Other Purposes; enacted and took effect on
April 27, 2004.
25 SEC. 199. Documents and Papers Not Subject to Stamp Tax. -The provisions of Section
173 to the contrary notwithstanding, the following instruments, documents and papers shall be
exempt from the documentary stamp tax:
xxxx
(m) Transfer of property pursuant to Section 40 (C)(2) of the National Internal
Revenue Code of 1997, as amended.
26 Rollo, pp. 76-78.
27 Id. at 25.
28 Id. at 29.
29 Id. at 25-29.
30 Id.
31 Id. at 32-33.
32 Id. at 13.
33
Id. at 13-14.
34
Id. at 14-16.
35 Id. at 16.
36 Id. at 47.
37 Id. at 49.
38 Supra note 1.
39 Id. at 637-640.
40 Villena v. Spouses Chavez, 460 Phil. 818, 829 (2003).
41 SEC. 204. Authority of the Commissioner to Compromise, Abate, and Refund or Credit
Taxes. The Commissioner may
xxxx
(c) Credit or refund taxes erroneously or illegally received or penalties imposed
without authority, refund the value of internal revenue stamps when they are returned
in good condition by the purchaser, and, in his discretion, redeem or change unused
stamps that have been rendered unfit for use and refund their value upon proof of
destruction.
No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in
writing with the Commissioner a claim for credit or refund within two (2) years after
the payment of the tax or penalty:
Provided, however, That a return filed showing an overpayment shall be considered
as a written claim for credit or refund.
42 SEC. 229. Recovery of Tax Erroneously or Illegally Collected. No suit or proceeding shall
be maintained in any court for the recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed
to have been collected without authority, of any sum alleged to have been excessively or in
any manner wrongfully collected, until a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained, whether or nor such tax,
penalty, or sum has been paid under protest or duress.
In any case, no such suit or proceeding shall be filed after the expiration of two (2)
years from the date of payment of the tax or penalty regardless of any supervening
cause that may arise after payment: Provided, however, That the Commissioner may,
even without a written claim therefor, refund or credit any tax, where on the face of
the return upon which payment was made, such tax appears clearly to have been
erroneously paid.
43 Supra note 1.
44 Id. at 642-643.
45 Philacor Credit Corporation v. Commissioner of Internal Revenue, G.R. No. 169899,
February 6, 2013, 690 SCRA28, 45.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-69344 April 26, 1991
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and SPOUSES ANTONIO and CLARA
PASTOR, respondents.
Roberto L. Bautista for private respondents.
GRIO-AQUINO, J.:
The legal issue presented in this petition for review is whether or not the tax amnesty payments made
by the private respondents on October 23, 1973 bar an action for recovery of deficiency income taxes
under P.D.'s Nos. 23, 213 and 370.
On April 15, 1980, the Republic of the Philippines, through the Bureau of Internal Revenue, commenced
an action in the Court of First Instance (now Regional Trial Court) of Manila, Branch XVI, to collect from
the spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes for the years 1955 to
1959 in the amount of P17,117.08 with a 5% surcharge and 1% monthly interest, and costs.
The Pastors filed a motion to dismiss the complaint, but the motion was denied.1wphi1 On August 2,
1975, they filed an answer admitting there was an assessment against them of P17,117.08 for income
tax deficiency but denying liability therefor. They contended that they had availed of the tax amnesty
under P.D.'s Nos. 23, 213 and 370 and had paid the corresponding amnesty taxes amounting to
P10,400 or 10% of their reported untaxed income under P.D. 23, P2,951.20 or 20% of the reported
untaxed income under P.D. 213, and a final payment on October 26, 1973 under P.D. 370 evidenced by
the Government's Official Receipt No. 1052388. Consequently, the Government is in estoppel to
demand and compel further payment of income taxes by them.
The parties agreed that there were no issues of fact to be litigated, hence, the case was submitted for
decision upon the pleadings and memoranda on the lone legal question of: whether or not the payment
of deficiency income tax under the tax amnesty, P.D. 23, and its acceptance by the Government
operated to divest the Government of the right to further recover from the taxpayer, even if there was an
existing assessment against the latter at the time he paid the amnesty tax.
It is not disputed that as a result of an investigation made by the Bureau of Internal Revenue in 1963, it
was found that the private respondents owed the Government P1,283,621.63 as income taxes for the
years 1955 to 1959, inclusive of the 50% surcharge and 1% monthly interest. The defendants protested
against the assessment. A reinvestigation was conducted resulting in the drastic reduction of the
assessment to only P17,117.08.
It appears that on April 27, 1978, the private respondents offered to pay the Bureau of Internal Revenue
the sum of P5,000 by way of compromise settlement of their income tax deficiency for the questioned
years, but Assistant Commissioner Bernardo Carpio, in a letter addressed to the Pastor spouses,
rejected the offer stating that there was no legal or factual justification for accepting it. The Government
filed the action against the spouses in 1980, ten (10) years after the assessment of the income tax
deficiency was made.
On a motion for judgment on the pleadings filed by the Government, which the spouses did not oppose,
the trial court rendered a decision on February 28, 1980, holding that the defendants spouses had
settled their income tax deficiency for the years 1955 to 1959, not under P.D. 23 or P.D. 370, but under
P.D. 213, as shown in the Amnesty Income Tax Returns' Summary Statement and the tax Payment
Acceptance Order for P2,951.20 with its corresponding official receipt, which returns also contain the
very assessment for the questioned years. By accepting the payment of the amnesty income taxes, the
Government, therefore, waived its right to further recover deficiency incomes taxes "from the
defendants under the existing assessment against them because:
1. the defendants' amnesty income tax returns' Summary Statement included therein the
deficiency assessment for the years 1955 to 1959;
2. tax amnesty payment was made by the defendants under Presidential Decree No. 213,
hence, it had the effect of remission of the income tax deficiency for the years 1955 to 1959;
3. P.D. No. 23 as well as P.D. No. 213 do not make any exceptions nor impose any conditions
for their application, hence, Revenue Regulation No. 7-73 which excludes certain taxpayers
from the coverage of P.D. No. 213 is null and void, and
4. the acceptance of tax amnesty payment by the plaintiff-appellant bars the recovery of
deficiency taxes. (pp. 3-4, IAC Decision, pp. 031-032, Rollo.)
The Government appealed to the Intermediate Appellant Court (AC G.R. CV No. 68371 entitled,
"Republic of the Philippines vs. Antonio Pastor, et al."), alleging that the private respondents were not
qualified to avail of the tax amnesty under P.D. 213 for the benefits of that decree are available only to
persons who had no pending assessment for unpaid taxes, as provided in Revenue Regulations Nos. 8-
72 and 7-73. Since the Pastors did in fact have a pending assessment against them, they were
precluded from availing of the amnesty granted in P.D.'s Nos. 23 and 213. The Government further
argued that "tax exemptions should be interpreted strictissimi juris against the taxpayer."
The respondent spouses, on the other hand, alleged that P.D. 213 contains no exemptions from its
coverage and that, under Letter of Instruction LOI 129 dated September 18, 1973, the immunities
granted by P.D. 213 include:
II-Immunities Granted.
Upon payment of the amounts specified in the Decree, the following shall be observed:
 1. . . . .
2. The taxpayer shall not be subject to any investigation, whether civil, criminal or
administrative, insofar as his declarations in the income tax returns are concerned nor shall the
same be used as evidence against, or to the prejudice of the declarant in any proceeding
before any court of law or body, whether judicial, quasi-judicial or administrative, in which he is
a defendant or respondent, and he shall be exempt from any liability arising from or incident to
his failure to file his income tax return and to pay the tax due thereon, as well as to any liability
for any other tax that may be due as a result of business transactions from which such income,
now voluntarily declared may have been derived. (Emphasis supplied; p. 040, Rollo.)
4, Rules of Court; e.g., where: (1) the conclusion is a finding grounded entirely on speculation, surmise
and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4)
the judgment is based on misapprehension of facts; (5) the Court of Appeals went beyond the issues of
the case and its findings are contrary to the admissions of both the appellant and the appellee; (6) the
findings of fact of the Court of Appeals are contrary to those of the trial court; (7) said findings of fact are
conclusions without citation of specific evidence in which they are based; (8) the facts set forth in the
petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and (9)
when the finding of fact of the Court of Appeals is premised on the absense of evidence and is
contradicted by the evidence on record (Thelma Fernan vs. CA, et al., 181 SCRA 546, citing Tolentino
vs. de Jesus, 56 SCRA 67; People vs. Traya, 147 SCRA 381), none of which is present in this case.

There is nothing in the LOI which can be construed as authority for the Bureau of Internal Revenue to
introduce exceptions and/or conditions to the coverage of the law.
On November 23, 1984, the Intermediate Appellate Court (now Court of Appeals) rendered a decision
dismissing the Government's appeal and holding that the payment of deficiency income taxes by the
Pastors under PD. No. 213, and the acceptance thereof by the Government, operated to divest the
latter of its right to further recover deficiency income taxes from the private respondents pursuant to the
existing deficiency tax assessment against them. The appellate court held that if Revenue Regulation
No. 7-73 did provide an exception to the coverage of P.D. 213, such provision was null and void for
being contrary to, or restrictive of, the clear mandate of P.D. No. 213 which the regulation should
implement. Said revenue regulation may not prevail over the provisions of the decree, for it would then
be an act of administrative legislation, not mere implementation, by the Bureau of Internal Revenue.
The rule is that in case of doubt, tax statutes are to be construed strictly against the Government and
liberally in favor of the taxpayer, for taxes, being burdens, are not to be presumed beyond what the
applicable statute (in this case P.D. 213) expressly and clearly declares (Commission of Internal
Revenue vs. La Tondena, Inc. and CTA, 5 SCRA 665, citing Manila Railroad Company vs. Collector of
Customs, 52 Phil, 950).
WHEREFORE, the petition for review is denied. No costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

On February 4, 1986, the Republic of the Philippines, through the Solicitor General, filed this petition for
review of the decision dated November 23, 1984 of the Intermediate Appellate Court affirming the
dismissal, by the Court of First Instance of Manila, of the Government's complaint against the
respondent spouses.

The petition is devoid of merit.

Even assuming that the deficiency tax assessment of P17,117.08 against the Pastor spouses were
correct, since the latter have already paid almost the equivalent amount to the Government by way of
amnesty taxes under P.D. No. 213, and were granted not merely an exemption, but an amnesty, for
their past tax failings, the Government is estopped from collecting the difference between the deficiency
tax assessment and the amount already paid by them as amnesty tax.

A tax amnesty, being a general pardon or intentional overlooking by the State of its authority to
impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law,
partakes of an absolute forgiveness or waiver by the Government of its right to collect what
otherwise would be due it, and in this sense, prejudicial thereto, particularly to give tax
evaders, who wish to relent and are willing to reform a chance to do so and thereby become a
part of the new society with a clean slate (Commission of Internal Revenue vs. Botelho Corp.
and Shipping Co., Inc., 20 SCRA 487).

The finding of the appellate court that the deficiency income taxes were paid by the Pastors, and
accepted by the Government, under P.D. 213, granting amnesty to persons who are required by law to
file income tax returns but who failed to do so, is entitled to the highest respect and may not be
disturbed except under exceptional circumstances which have already become familiar (Rule 45, Sec.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-23623 June 30, 1977
ACTING COMMISSIONER OF CUSTOMS, petitioner,
vs.
MANILA ELECTRIC COMPANY and COURT OF TAX APPEALS, respondents.
Solicitor General Arturo A. Alafriz Assistant Solicitor General Felicisimo R. Rosete and Solicitor
Alejandro B. Afurong for petitioner.
Ross, Selph Salcedo, Del Rosario Bito & Misa for private respondent.
FERNANDO, J.:
The reversal by respondent Court of Tax Appeals of a determination by the then Acting Commissioner
of Customs, the late Norberto Romualdez, Jr., that private respondent Manila Electric Company was not
exempt from the payment of the special import tax under Republic Act No. 1394 1 for shipment to it of
insulating oil, respondent Court entertaining the contrary view 2 led to this petition for review. The
contention pressed in support of the petition is that as a tax exemption is to be construed strictly, the
decision of the respondent Court, which assumed that insulating oil can be considered as insulators
must be reversed and set aside. The appealed decision of respondent Court in the light of applicable
authorities supplies the best refutation of such contention. It must be sustained.
The appealed decision 3 set forth that petitioner Manila Electric Co., nor private respondent, in
appealing from a determination by the then Acting Commissioner of Customs, now petitioner, "claims
that it is exempt from the special import tax not only by virtue of Section 6 of Republic Act No. 1394,
which exempts from said tax equipment and spare parts for use in industries, but also under Paragraph
9, Part Two, of its franchise, which expressly exempts is insulators from all taxes of whatever kind and
nature. 4 It then made reference to the franchise of private respondent Manila Electric Co.: "Par. 9. The
grantee shall be liable to pay the same taxes upon its real estate, buildings, plant (not including poles,
wires, transformers, and insulators), machinery and personal property as other persons are or may be
hereafter required by law to pay. In consideration of Part Two of the franchise herein granted, to wit, the
right to build and maintain in the City of Manila and its suburbs a plant for the conveying and furnishing
of electric current for light, heat, and power, and to charge for the same, the grantee shall pay to the
City of Manila two and one-half per centum of the gross earnings received from the business under this
franchise in the city and its suburbs: ... and shall be in lieu of all taxes and assessments of whatsoever
nature, and by whatsoever authority upon the privileges, earnings, income, franchise, and poles, wires,
transformers, and insulators of the grantee, from which taxes and assessments the grantee is hereby
expressly exempted." 5 It noted that the above "exempts it from all taxes of whatever nature, and by
whatever authority, with respect to its insulators in consideration for the payment of the percentage tax
on its gross earnings." 6
The question then, according to such decision of respondent Court is: "Does the insulating oil in
question come within the meaning of the term 'insulator '?" 7 Then it went on: "insulating oils are mineral
oils of high di-electrics strength and high flash point employed in circuit breakers, switches, transformers
and other electric apparatus. An oil with a flash point of 285 F and fire point of 310 F is considered
safe. A clean, well- refined oil will have a minimum dielectric of 22,00 volts, but the presence of a slow
as 0.01% water will reduce the di-electric strength drastically. The insulating oils, therefore, cannot be
stored for long periods because of the danger of absorbing moisture. Impurities such as acids or
alkalies also detract from the strength of the oil. Since insulating oils are used for cooling as well as for
insulating, the viscosity should be low enough for free circulation, and they should not gum. (Materials
Handbook by George J. Brady, 8th Edition 1956, pp. 421-423.) ... ." 8
The last portion of the appealed decision explained why the determination of the Acting Commissioner
of Customs must be reversed: "There is no question that insulating oils of the type imported by
petitioner are 'used for cooling as well as for insulating,' and when used in oil circuit breakers, they are
'required to maintain insulation between the contacts inside the tank and the tank itself.' ... The decision
appealed from not being in accordance with law, the same is hereby reversed. Respondent is ordered
to refund to petitioner the sum of P995.00 within thirty days from the date this decision becomes final,
without pronouncement as to costs." 9 It was therein made clear that private respondent was not liable
for the payment of the special import tax under Republic Act No. 1394.
As noted at the outset, the decision speaks for itself. It cannot be stigmatized as suffering from any flaw
that would call for its reversal.
1. It is to be admitted, as contended by petitioner, that this Court is committed to the principle that an
exemption from taxation must be justified by words too clear to be misread. As set forth in
Commissioner of Internal Revenue v. Guerrero: 10 "From 1906, in Catholic Church v. Hastings to 1966,
in Esso Standard Eastern, Inc. v. Acting Commissioner of Customs, it has been the constant and
uniform holding that exemption from taxation is not favored and is never presumed, so that if granted it
must be strictly construed against the taxpayer. Affirmatively put, the law frowns on exemption from
taxation, hence, an exempting provision should be construed strictissimi juris." 11 Such a ruling was
reaffirmed in subsequent decisions. 12 It does not mean, however, that petitioner should prevail, for as
was unequivocally set forth in the leading ease of Republic Flour Mills v. Commissioner of Internal
Revenue, 13 this Court speaking through Justice J.B.L. Reyes. "It is true that in the construction of tax
statutes tax exemptions (and deductions are of this nature) are not favored in the law, and are
construed strictissimi juris against the taxpayer. However, it is equally a recognized principle that where
the provision of the law is clear and unambiguous, so that there is no occasion for the court's seeking
the legislative intent, the law must be taken as it is, devoid of judicial addition or subtraction. In this
ease, we find the provision of Section 186-A -whenever a tax free product is utilized, ... all
encompassing to comprehend tax-free raw materials, even if imported. Where the law provided no
qualification for the granting of the privilege, the court is not at liberty to supply any. 14 That is what was
done by respondent Court of Tax Appeals. It showed fealty to this equally well. settled doctrine. It
construed the statutory provision as it is written. It is precluded, in the language of ;the Republic Flour
Mills opinion, considering that the law is clear and ambiguous, to look further for any legislative intent,
as "the law must be taken as it is, devoid of judicial addition or subtraction." 15 If there is an extended
discussion of this point, it is due solely to the emphasis placed on the matter by petitioner.
2. Moreover, the decision of respondent Court under review finds support in Balbas v.
Domingo. 16 Thus: "No other conclusion is possible in view of the well-settled principle that this Court is
bound by the finding of facts of the Court of Tax Appeals, only questions of law being open to it for
determination. As stated in another decision, 'only errors of law, and not rulings on the weight of
evidence, are reviewable by this Court.' The facts then as above ascertained cannot be disturbed. In our Philippine Acetylene Co., L-22443, May 29, 1971, 39 SCRA 70; Davao Light and
latest decision, there is a categorical assertion that where the question is one of fact, it is no longer Power Co. v. Commissioner of Customs, L-28739, March 29, 1972, 44 SCRA 122;
reviewable. 17 Such a doctrine is not of limited application. It is a recognition of the wide discretion Wonder Mechnical Engineering Corp. v. Court of Tax Appeals, L-22895, June 30,
enjoyed by the Court of Tax Appeals in construing tax statutes. So it was categorically held in Alhambra 1975, 64 SCRA 555; Commissioner of Internal Revenue v. P. J. Kiener Co., L-24754,
Cigar and Cigarette Manufacturing Co. v. Commissioner of Internal Revenue: 18 "Nor as a matter of July 18, 1975, 65 SCRA 142; Manila Electric Co. v. Vera, L-29987, Oct. 22, 1975, 67
principle is it advisable for this Court to set aside the conclusion reached by an agency such as the SCRA 351.
Court of Tax Appeals which is, by the very nature of its function, dedicated exclusively to the study and 13 L-25602, February 18, 1970, 31 SCRA 520.
consideration of tax problems and has necessarily developed an expertice on the subject, unless, as did 14 Ibid, 527.
not happen here, there has been an abuse or improvident exercise of its authority. 19 That same 15 Ibid.
approach was reflected in Reyes v. Commissioner of Internal Revenue, 20 Chu Hoi Horn v. Court of Tax 16 L-19804, October 23,1968,21 SCRA 444.
Appeals, 21 Vi Ve Chemical Products v. Commissioner of Customs, 22 and Nasiad v. Court of Tax 17 Ibid, 448. The opinion cited Sanchez v. Commissioner of Customs, 102 Phil. 37
Appeals. 23 The Vi Ve decision has some relevance. There the stand of the state that the Court of Tax (1957); Castro v. Collector of Internal Revenue, 114 Phil. 1032 (1962); Commissioner
Appeals could rightfully determine that '"priopionic glycine" is the same as glutamic acid" 24 was of Internal Revenue v. Priscila Estate, Inc., L-18282, May 29, 1964, 11 SCRA vs.
considered as well within the authority of respondent Court. It would be an affront to the sense of Philippine Guaranty Co., Inc. v. Commissioner of Internal Revenue, L-22074, Sept. 6,
fairness and of justice if in another case, respondent Court, in the exercise of its discretionary authority, 1965, 15 SCRA 1; and Republic v. Razon, L-17462, May 29, 1967,20 SCRA 234.
after determining that insulating oil comes within the term insulator, is not be upheld. 18 L-23226, November 28, 1967, l SCRA 1111.
19 Ibid, 1118-1119.
WHEREFORE, the petition for review is dismissed. No costs. 20 L-24020, July 29, 1968, 24 SCRA 198.
21 L-22046, October 29, 1968, 25 SCRA 809.
22 L-28693, September 30, 1974, 60 SCRA 52.
Barredo, Antonio and Concepcion, Jr., JJ., concur. 23 L-29318, November 29, 1974, 61 SCRA 238.
24 60 SCRA 52, 59.
Aquino, J., concurs in the result.

Footnotes
1 Cf. See. 9 of Rep. Act No. 1394 (1955).
2 The decision was penned by the then Judge Roman Umali.
3 Annex C, Petition.
4 Ibid, 1.
5 Ibid, 1-2
6 Ibid, 2.
7 Ibid.
8 Ibid, 2-3.
9 Ibid, 3-4. While references was made to the franchise of private respondent, the
decision was likewise made to rest on the language of Republic Act No. 1394.
10 L-20812, September 22, 1967, 21 SCRA 180.
11 Ibid, 183-184. Catholic Church v. Hastings in reported in 5 Phil. 701 (1906) and
Esso Standard Eastern, Inc. v. Acting Commissioner of Customs, L-21841, October
28,1966, in 18 SCRA 488. The opinion also cited Government v. Monte de Piedad, 35
Phil. 42 (1916). Asiatic Petroleum Go. vs. Llanes 49 Phil. 466 (1926); House v.
Posadas, 53 Phil. 338 (1929); Phil. Tel. and Tel. Co. vs. Collector, 58 Phil. 639
(1933); Greenfiled v. Meer, 77 Phil. 394 (1946); Collector of Internal Revenue v.
Manila Jockey Club, 98 Phil. 670 (1956); Phil. Guaranty Co., Inc. v. Commissioner, L-
22074, September 6, 1965, 15 SCRA 1; and Abad v. Court of Tax Appeals, L-20834,
October 19, 1966, 18 SCRA 374.
12 Cf. Commissioner of Internal Revenue v. Visayan Electric Co., L-22611, May 27,
1968, 23 SCRA 715; E. Rodriguez v. Collector of Internal Revenue, L-23041, July 31,
1969, 28 SCRA 1119; Asturias Sugar Central v. Commissioner of Customs, L-1 9337.
Sept. 30, 1969, 29 SCRA 617; Philippine Iron Mines v. Commissioner of Customs v.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 108524 November 10, 1994
MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS, INC., petitioner,
vs.
DEPARTMENT OF FINANCE SECRETARY, COMMISSIONER OF THE BUREAU OF INTERNAL
REVENUE (BIR), AND REVENUE DISTRICT OFFICER, BIR MISAMIS ORIENTAL, respondents.
Damasing Law Office for petitioner.
MENDOZA, J.:
This is a petition for prohibition and injunction seeking to nullify Revenue Memorandum Circular No. 47-
91 and enjoin the collection by respondent revenue officials of the Value Added Tax (VAT) on the sale
of copra by members of petitioner organization. 1
Petitioner Misamis Oriental Association of Coco Traders, Inc. is a domestic corporation whose
members, individually or collectively, are engaged in the buying and selling of copra in Misamis
Oriental. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on
June 11, 1991, which implemented VAT Ruling 190-90, copra was classified as agricultural food
product under $ 103(b) of the National Internal Revenue Code and, therefore, exempt from VAT at all
stages of production or distribution.
Respondents represent departments of the executive branch of government charged with the
generation of funds and the assessment, levy and collection of taxes and other imposts.
The pertinent provision of the NIRC states:
Sec. 103. Exempt Transactions. The following shall be exempt from the value-
added tax:
(a) Sale of nonfood agricultural, marine and forest products in their original state by
the primary producer or the owner of the land where the same are produced;
(b) Sale or importation in their original state of agricultural and marine food products,
livestock and poultry of a kind generally used as, or yielding or producing foods for
human consumption, and breeding stock and genetic material therefor;
Under 103(a), as above quoted, the sale of agricultural non-food products in their original state is
exempt from VAT only if the sale is made by the primary producer or owner of the land from which the
same are produced. The sale made by any other person or entity, like a trader or dealer, is not exempt
from the tax. On the other hand, under 103(b) the sale of agricultural food products in their original
state is exempt from VAT at all stages of production or distribution regardless of who the seller is.
The question is whether copra is an agricultural food or non-food product for purposes of this provision
of the NIRC. On June 11, 1991, respondent Commissioner of Internal Revenue issued the circular in
question, classifying copra as an agricultural non-food product and declaring it "exempt from VAT only if
the sale is made by the primary producer pursuant to Section 103(a) of the Tax Code, as amended." 2
The reclassification had the effect of denying to the petitioner the exemption it previously enjoyed when
copra was classified as an agricultural food product under 103(b) of the NIRC. Petitioner challenges
RMC No. 47-91 on various grounds, which will be presently discussed although not in the order raised
in the petition for prohibition.
First. Petitioner contends that the Bureau of Food and Drug of the Department of Health and not the
BIR is the competent government agency to determine the proper classification of food products.
Petitioner cites the opinion of Dr. Quintin Kintanar of the Bureau of Food and Drug to the effect that
copra should be considered "food" because it is produced from coconut which is food and 80% of
coconut products are edible.
On the other hand, the respondents argue that the opinion of the BIR, as the government agency
charged with the implementation and interpretation of the tax laws, is entitled to great respect.
We agree with respondents. In interpreting 103(a) and (b) of the NIRC, the Commissioner of Internal
Revenue gave it a strict construction consistent with the rule that tax exemptions must be strictly
construed against the taxpayer and liberally in favor of the state. Indeed, even Dr. Kintanar said that his
classification of copra as food was based on "the broader definition of food which includes agricultural
commodities and other components used in the manufacture/processing of food." The full text of his
letter reads:
10 April 1991
Mr. VICTOR A. DEOFERIO, JR.
Chairman VAT Review Committee
Bureau of Internal Revenue
Diliman, Quezon City
Dear Mr. Deoferio:
This is to clarify a previous communication made by this Office about copra in a letter
dated 05 December 1990 stating that copra is not classified as food. The statement
was made in the context of BFAD's regulatory responsibilities which focus mainly on
foods that are processed and packaged, and thereby copra is not covered.
However, in the broader definition of food which include agricultural commodities and
other components used in the manufacture/ processing of food, it is our opinion that
 copra should be classified as an agricultural food product since copra is produced
from coconut meat which is food and based on available information, more than 80%
of products derived from copra are edible products.s,
QUINTIN L. KINTANAR, M.D., Ph.D.
Director
Assistant Secretary of Health for Standards and
Regulations
Moreover, as the government agency charged with the enforcement of the law, the opinion of the
Commissioner of Internal Revenue, in the absence of any showing that it is plainly wrong, is entitled to
great weight. Indeed, the ruling was made by the Commissioner of Internal Revenue in the exercise of
his power under 245 of the NIRC to "make rulings or opinions in connection with the implementation
of the provisions of internal revenue laws, including rulings on the classification of articles for sales tax
and similar purposes."
Second. Petitioner complains that it was denied due process because it was not heard before the ruling
was made. There is a distinction in administrative law between legislative rules and interpretative
rules. 3 There would be force in petitioner's argument if the circular in question were in the nature of a
legislative rule. But it is not. It is a mere interpretative rule.
The reason for this distinction is that a legislative rule is in the nature of subordinate legislation,
designed to implement a primary legislation by providing the details thereof. In the same way that laws
must have the benefit of public hearing, it is generally required that before a legislative rule is adopted
there must be hearing. In this connection, the Administrative Code of 1987 provides:
Public Participation. If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties
the opportunity to submit their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates
shall have been published in a newspaper of general circulation at least two (2)
weeks before the first hearing thereon.
4
(3) In case of opposition, the rules on contested cases shall be observed.
In addition such rule must be published.5 On the other hand, interpretative rules are designed to provide
guidelines to the law which the administrative agency is in charge of enforcing.
Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether the rule is
within the delegated authority of the administrative agency; (ii) whether it is reasonable; and (iii) whether
it was issued pursuant to proper procedure. But the court is not free to substitute its judgment as to the
desirability or wisdom of the rule for the legislative body, by its delegation of administrative judgment,
has committed those questions to administrative judgments and not to judicial judgments. In the case of
an interpretative rule, the inquiry is not into the validity but into the correctness or propriety of the rule.
As a matter of power a court, when confronted with an interpretative rule, is free to (i) give the force of
law to the rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some intermediate
degree of authoritative weight to the interpretative rule. 6
In the case at bar, we find no reason for holding that respondent Commissioner erred in not considering
copra as an "agricultural food product" within the meaning of 103(b) of the NIRC. As the Solicitor
General contends, "copra per se is not food, that is, it is not intended for human consumption. Simply
stated, nobody eats copra for food." That previous Commissioners considered it so, is not reason for
holding that the present interpretation is wrong. The Commissioner of Internal Revenue is not bound by
the ruling of his predecessors. 7 To the contrary, the overruling of decisions is inherent in the
interpretation of laws.
Third. Petitioner likewise claims that RMC No. 47-91 is discriminatory and violative of the equal
protection clause of the Constitution because while coconut farmers and copra producers are exempt,
traders and dealers are not, although both sell copra in its original state. Petitioners add that oil millers
do not enjoy tax credit out of the VAT payment of traders and dealers.
The argument has no merit. There is a material or substantial difference between coconut farmers and
copra producers, on the one hand, and copra traders and dealers, on the other. The former produce
and sell copra, the latter merely sell copra. The Constitution does not forbid the differential treatment of
persons so long as there is a reasonable basis for classifying them differently. 8
It is not true that oil millers are exempt from VAT. Pursuant to 102 of the NIRC, they are subject to
10% VAT on the sale of services. Under 104 of the Tax Code, they are allowed to credit the input tax
on the sale of copra by traders and dealers, but there is no tax credit if the sale is made directly by the
copra producer as the sale is VAT exempt. In the same manner, copra traders and dealers are allowed
to credit the input tax on the sale of copra by other traders and dealers, but there is no tax credit if the
sale is made by the producer.
Fourth. It is finally argued that RMC No. 47-91 is counterproductive because traders and dealers would
be forced to buy copra from coconut farmers who are exempt from the VAT and that to the extent that
prices are reduced the government would lose revenues as the 10% tax base is correspondingly
diminished.
This is not so. The sale of agricultural non-food products is exempt from VAT only when made by the
primary producer or owner of the land from which the same is produced, but in the case of agricultural
food products their sale in their original state is exempt at all stages of production or distribution. At any
rate, the argument that the classification of copra as agricultural non-food product is counterproductive
is a question of wisdom or policy which should be addressed to respondent officials and to Congress.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado and Puno, JJ., concur.
#Footnotes
1 The value-added tax is a percentage tax on the sale, barter, exchange or
importation of goods or services. (NIRC, 99) Insofar as the sale, barter or exchange
of goods is concerned, the tax is equivalent to 10% of the gross selling price or gross 8 Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA
value in money of the goods sold, bartered or exchanged, such tax to be paid by the 371 (1988) (sustaining the validity of E.O. 273 adopting the VAT); Sison, Jr. v.
seller or transferor. ( 100(a)) The tax is determined as follows: Ancheta, 130 SCRA 653 (1984) (sustaining the validity of B.P. Blg. 135 providing for
taxable income taxation).
(d) Determination of the tax. (1) Tax billed as separate item in the invoice. If the tax
is billed as a separate item in the invoice, the tax shall be based on the gross selling
price, excluding the tax. "Gross selling price" means the total amount of money or its
equivalent which the purchaser pays or is obligated to pay to the seller in the
consideration of the sale, barter or exchange of the goods, excluding the value-added
tax. The excise tax, if any, on such goods shall form part of the gross selling price.

(2) Tax not billed separately or is billed erroneously in the

invoice. In case the tax is not billed separately or is billed erroneously in the
invoice, the tax shall be determined by multiplying the gross selling price, including
the amount intended by the seller to cover the tax or the tax billed erroneously, by the
factor 1/11 or such factor as may be prescribed by regulations in case of persons
partially exempt under special laws.

(3) Sales returns, allowances and sales discounts. The value of goods sold and
subsequently returned or for which allowances were granted by a VAT-registered
person may be deducted from the gross sales or receipts for the quarter in which a
refund is made or a credit memorandum or refund is issued. Sales discounts granted
and indicated in the invoice at the time of sale may be excluded from the gross sales
within the same quarter. (100(d))

2 This circular is based on VAT Ruling No. 190-90 dated August 17, 1990 which
revoked VAT Ruling No. 009-88 and VAT Ruling No. 279-88, June 30, 1988,
classifying copra as an agricultural food product.

3 See Victorias Milling Co. v. Social Security Commission, 114 Phil. 555 (1962);
Philippine Blooming Mills v. Social Security System, 124 Phil. 499 (1966).

4 Bk. VII, Ch. 2, 9.

5 Taada v. Tuvera, 146 SCRA 446 (1986). See Victorias Milling Co. v.
SSC, supra note 3.

6 K. DAVIS, Administrative Law 116 (1965).

7 Petitioner's claim that RMC No. 47-91 erroneously revoked irrelevant VAT rulings of
the BIR is not correct. RMC No. 47-91 revoked VAT Rulings No. 009-88 and No. 279-
88, which dealt with the question whether copra is an agricultural food or non-food
product. VAT ruling No. 009-88 held that "copra as an agricultural product is exempt
from VAT in all stages of distribution." On the other hand, VAT Ruling No. 279-88
treated "copra . . . as an agricultural food product in its original state" and, therefore,
"exempt from VAT under Section 103(b) of the TAX Code, as amended by EO 273
regardless of whether the sale is made by producer or subsequent sale."
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17888 October 29, 1968
RESINS, INCORPORATED, petitioner,
vs.
AUDITOR GENERAL OF THE PHILIPPINES and THE CENTRAL BANK OF THE
PHILIPPINES, respondents.
Lichauco Picazo & Agcaoili for petitioner.
Assistant Solicitor General Jose P. Alejandro, Solicitor Jorge R. Coquia and Central Bank Legal
Counsel for respondents.
FERNANDO, J.:
Petitioner here, as did petitioner in Casco Philippine Chemical Co., Inc. v. Gimenez,1 would seek a
refund2 from respondent Central Bank on the claim that it was exempt from the margin fee under
Republic Act No. 2609 for the importation of urea and formaldehyde, as separate units, used for the
production of synthetic glue of which it was a manufacturer. Since the specific language of the Act
speak of "urea formaldehyde,"3 and petitioner admittedly did import urea and formaldehyde separately,
its plea could be granted only if we could construe the above provision of law to read "urea and
formaldehyde." In the above Casco decision, we could not see our way clear to doing so. We still
cannot see it that way. Hence, this petition must fail.
Our inability to indulge petitioner in the aforecited Casco petition was made clear by the present Chief
Justice. Thus: "Hence, 'urea formaldehyde' is clearly a finished product, which is patently distinct and
different from 'urea' and 'formaldehyde', as separate articles used in the manufacture of the synthetic
resins known as 'urea formaldehyde'. Petitioner contends, however, that the bill approved in Congress
contained the copulative conjunction 'and' between the terms 'urea' and 'formaldehyde', and that the
members of Congress intended to exempt 'urea' and 'formaldehyde' separately as essential elements in
the manufacture of the synthetic resin glue called 'urea. fomaldehyde' not the latter as a finished
product, citing in support of this view the statements made on the floor of the Senate, during the
consideration of the bill before said House, by members thereof. But, said individual statements do not
necessarily reflect the view of the Senate. Much less do they indicate the intent of the House of
Representatives ... Furthermore, it is well settled that the enrolled bill which uses the term 'urea
formaldehyde' instead of 'urea and formaldehyde' is conclusive upon the courts as regards the tenor
of the measure passed by Congress and approved by the President ... If there has been any mistake in
the printing of the bill before it was certified by the officers of Congress and approved by the Executive
on which we cannot speculate, without jeopardizing the principle of separation of powers and
undermining one of the cornerstones of our democratic system the remedy is by amendment or
curative legislation, not by judicial decree."
To which we can only add that deference to the scope and implication of the function entrusted by the
Constitution to the judiciary leaves us no other alternative. For nothing is better settled than that the first
and fundamental duty of courts is to apply the law as they find it, not as they would like it to be. Fidelity
to such a task precludes construction or interpretation, unless application is impossible or inadequate
without it.4 Such is not the case in the situation presented here. So we have held in Casco Philippine
Chemical Co., Inc. v. Gimenez. We do so again.
Then, again, there is merit in the contention of the Solicitor General, as counsel for respondent Central
Bank, and the Auditor General, that as a refund undoubtedly partakes of a nature of an exemption, it
cannot be allowed unless granted in the most explicit and categorical language. As was held by us
in Commissioner of Internal Revenue vs. Guerrero:5 "From 1906, in Catholic Church vs. Hastings to
1966, in Esso Standard Eastern, Inc. vs. Acting Commissioner of Customs, it has been the constant
and uniform holding that exemption from taxation is not favored and is never presumed, so that if
granted it must be strictly construed against the taxpayer. Affirmatively put, the law frowns on exemption
from taxation, hence, an exempting provision should be construed strictissimi juris." Certainly, whatever
may be said of the statutory language found in Republic Act 2609, it would be going too far to assert
that there was such a clear and manifest intention of legislative will as to compel such a refund.
One last matter. Petitioner would assail as devoid of support in law the action taken by the respondent
Auditor General in an indorsement to the respondent Central Bank 6 causing it to overrule its previous
resolution and to adopt the view in such indorsement to the effect that the importation of urea and of
formaldehyde, as separate units, did not come within the purview of the statutory language that granted
such exemption. It does not admit of doubt that the respondent Auditor General's interpretation amounts
to a literal adherence to the statute as enacted. As such, it cannot be said to be contrary to law. As a
matter of fact, it is any other view, as is evident from the above, that is susceptible to well-founded
criticism, as lacking legal basis. Under the circumstances, the respondent Auditor General was merely
complying with his duty in thus calling the attention of respondent Central Bank.
The limit of his constitutional function was clearly set forth in Guevara v. Gimenez,7 the opinion being
rendered by the present Chief Justice. Thus: "Under our Constitution, the authority of the Auditor
General, in connection with expenditures of the Government is limited to the auditing of expenditures of
funds or property pertaining to, or held in trust by, the Government or the provinces or municipalities
thereof (Article XI, section 2, of the Constitution). Such function is limited to a determination of whether
there is a law appropriating funds for a given purpose; whether a contract, made by the property officer,
has been entered into in comformity with said appropriation law; whether the goods or services covered
by said contract have been delivered or rendered in pursuance of the provisions thereof, as attested to
by the proper officer; and whether payment therefor has been authorized by the officials of the
corresponding department or bureau. If these requirements have been fulfilled, it is the ministerial duty
of the Auditor General to approve and pass in audit the voucher and treasury warrant for said payment.
He has no discretion or authority to disapprove said payment upon the ground that the aforementioned
contract was unwise or that the amount stipulated therein is unreasonable. If he entertains such belief,
he may do no more than discharge the duty imposed upon him by the Constitution (Article XI, section
2), 'to bring to the attention of the proper administrative officer expenditures of funds or property which,
in his opinion, are irregular, unnecessary, excessive or extravagant.' This duty implies a negation of the
power to refuse and disapprove payment of such expenditures, for its disapproval, if he had authority
therefor, would bring to the attention of the aforementioned administrative officer the reasons for the
adverse action thus taken by the General Auditing office, and, hence, render the imposition of said duty
unnecessary."
In the same way that the Auditor General, by virtue of the above function, which is intended to
implement the constitutional mandate that no money can be paid out of the treasury except in the
pursuance of appropriation made by law,8 must carefully see to it that there is in fact such statutory
enactment, no refund, which likewise represents a diminution of public funds in the treasury, should be
allowed unless the law clearly so provides. The Auditor General would be sadly remiss in the discharge
of his responsibility under the Constitution if, having the statute before him, he allows such a refund
when, under the terms thereof, it cannot be done. His actuation here cannot be stigmatized as violative
of any legal precept; as a matter of fact, it is precisely in accordance with the constitutional mandate.

WHEREFORE, this petition is denied, with costs against petitioner.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro, Angeles and Capistrano,
JJ., concur.
Zaldivar, J., is on leave.

Footnotes

1 L-17931, February 28, 1963.

2 According to the Prayer in the Brief for Petitioner dated March 27, 1961, it had deposited with
respondent Central Bank the amount of P52,271.09, exclusive of further sums filed by it since
the date of the filing of this petition, representing the margin fee deposited by it on its various
importation of urea and formaldehyde as separate articles.

3 Section 2, par. XVIII, Republic Act No. 2609.

4People v. Mapa, L-22301, August 30, 1967; Pacific Oxygen & Acetylene Co. v. Central Bank,
L-21881, March 1, 1968; Dequito v. Lopez, L-27757, March 28, 1968; and Padilla v. City of
Pasay, L-24039, June 29, 1968.

5 L-20942, September 22, 1967.

6 3rd Indorsement dated July 13, 1960.

7L-17115, Nov. 30, 1962. Cf. Radiowealth, Inc. v. Agregado, 86 Phil. 429 (1950); Phil.
Operations, Inc. v. Auditor General, 94 Phil. 868 (1954); Villegas v. Auditor General, L-21352,
Nov. 29, 1966. The rather broad language in Matute v. Hernandez, 66 Phil. 68 (1938) has thus
been qualified.

8 Par. 2, Section 23, Article VI, Constitution of the Philippines.

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 168950 January 14, 2015
ROHM APOLLO SEMICONDUCTOR PHILIPPINES, Petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE, Respondents.
DECISION
SERENO, CJ:
This Rule 45 Petition1 requires this Court to address the question of timeliness with respect to
petitioner's judicial claim for refund or credit of unutilized input Value-Added Tax (VAT) under Sections
112(A) and 112(D)2 of the 1997 Tax Code. Petitioner Rohm Apollo Semiconductor Philippines., Inc.
(Rohm Apollo) assails the Decision3 and Resolution4 of the Court of Tax Appeals En Banc (CTA En
Banc) in CTA En Banc Case No. 59, affirming the Decision in CTA Case No. 6534 of the CTA First
Division.5 The latter denied the claim for the refund or issuance of a tax credit certificate filed by
petitioner Rohm Apollo in the amount of 30,359,615.40 representin& unutilized input VAT paid on
capital goods purchased for the months of July and August 2000.
FACTS
Petitioner Rohm Apollo is a domestic corporation registered with the Securities and Exchange
Commission.6 It is also registered with the Philippine Economic Zone Authority as an Ecozone Export
Enterprise.7 Rohm Apollo is in the business of manufacturing semiconductor products, particularly
microchip transistors and tantalium capacitors at the Peoples Technology Complex Special Economic
Zone, Barangay Maduya, Carmona Cavite.8 Further, it is registered with the Bureau of Internal Revenue
(BIR) as a value-added taxpayer.9
Sometime in June 2000, prior to the commencement of its operations on 1 September 2001, Rohm
Apollo engaged the services of Shimizu Philippine Contractors, Inc. (Shimizu) for the construction of a
factory.10 For services rendered by Shimizu, petitioner made initial payments of 198,551,884.28 on 7
July 2000 and 132,367,923.58 on 3 August 2000.11
It should be noted at this point that Section 112(B),12 in relation to Section 112(A)13 of the 1997 Tax
Code, allows a taxpayer to file an application for the refund or tax credit of unutilized input VAT when it
comes to the purchase of capital goods. The provision sets a time frame for the filing of the application
at two years from the close of the taxable quarter when the purchase was made.
Going back to the case, petitioner treated the payments as capital goods purchases and thus filed with
the BIR an administrative claim for the refund or credit of accumulated unutilized creditable input taxes
on 11 December 2000.14As the close of the taxable quarter when the purchases were made was 30
September 2000, the administrative claim was filed well within the two-year prescriptive period.
Pursuant to Section 112(D)15 of the 1997 Tax Code, the Commissioner of Internal Revenue (CIR) had a
period of 120 days from the filing of the application for a refund or credit on 11 December 2000, or until
10 April 2001, to act on the claim. The waiting period, however, lapsed without any action by the CIR on
the claim.
Instead of filing a judicial claim within 30 days from the lapse of the 120-day period on 10 April, or until
10 May 2001, Rohm Apollo filed a Petition for Review with the CTA docketed as CTA Case No. 6534 on
11 September 2002. It was under the belief that a judicial claim had to be filed within the two-year
prescriptive period ending on 30 September 2002. 16
On 27 May 2004, the CTA First Division rendered a Decision17 denying the judicial claim for a refund or
tax credit. In support of its ruling, the CTA First Division held, among others, that petitioner must have at
least submitted its VAT return for the third quarter of 2001, since it was in that period that it began its
business operations. The purpose was to verify if indeed petitioner did not carry over the claimed input
VAT to the third quarter or the succeeding quarters.
On 14 July 2004, petitioner RohmApollo filed a Motion for Reconsideration, but the tax court stood by its
Decision.18
On 18 January 2005, the taxpayer elevated the case to the CTA En Bancvia a Petition for Review. 19
On 22 June 2005, the CTA En Bancrendered its Decision denying Rohm Apollos Petition for
Review.20 The appellate tax court held that the failure to present the VAT returns for the subsequent
taxable year proved to be fatal to the claim for a refund/tax credit, considering that it could not be
determined whether the claimed amount to be refunded remained unutilized. Petitioner filed a Motion for
Reconsideration of the Decision, but it was denied for lack of merit.
Persistent, the taxpayer filed this Rule 45 Petition, arguing that it has satisfied all the legal requirements
for a valid claim for refund or tax credit of unutilized input VAT.
ISSUE
The threshold question to be resolved is whether the CTA acquired jurisdiction over the claim for the
refund or tax credit of unutilized input VAT.
THE COURTS RULING
We deny the Petition on the ground that the taxpayers judicial claim for a refund/tax credit was filed
beyond the prescriptive period.
The judicial claim was filed out of time.
Section 112(D) of the 1997 Tax Code states the time requirements for filing a judicial claim for the
refund or tax credit of input VAT. The legal provision speaks of two periods: the period of 120 days,
which serves as a waiting period to give time for the CIR to act on the administrative claim for a refund
or credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA. It is
the 30-day period that is at issue in this case.
The landmark case of Commissioner of Internal Revenue v. San Roque Power Corporation 21 has
interpreted Section 112 (D). The Court held that the taxpayer can file an appeal in one of two ways: (1)
file the judicial claim within 30 days after the Commissioner denies the claim within the 120-day waiting
period, or (2) file the judicial claim within 30 days from the expiration of the 120-day period if the
Commissioner does not act within that period.
In this case, the facts are not up for debate. On 11 December 2000, petitioner filed with the BIR an
application for the refund or credit of accumulated unutilized creditable input taxes. Thus, the CIR had a
period of 120 days from 11 December 2000, or until 10 April 2001, to act on the claim. It failed to do so,
however. Rohm Apollo should then have treated the CIRs inaction as a denial of its claim. Petitioner
would then have had 30 days, or until 10 May 2001, to file a judicial claim withthe CTA. But Rohm
Apollo filed a Petition for Review with the CTA only on 11 September 2002. The judicial claim was thus
filed late.
The error of the taxpayer lies in the fact that it had mistakenly believed that a judicial claim need not be
filed within 30 days from the lapse of the 120-day period. It had believed that the only requirement is
that the judicial claim must be filed withinthe two-year period under Sections 112(A) and (B) of the 1997
Tax Code. In other words, Rohm Apollo erroneously thought that the 30-day period does not apply to
cases of the CIRs inaction after the lapse of the 120-day waiting period, and that a judicial claim is
seasonably filed so long as it is done within the two year period. Thus, it filed the Petition for Review
with the CTA only on 11 September 2002.
These mistaken notions have already been dispelled by Commissioner of Internal Revenue v. Aichi
Forging Company of Asia, Inc. (Aichi)22 and San Roque. Aichi clarified that it is only the administrative
claim that must be filed within the two-year prescriptive period.23 San Roque, on the other hand, has
ruled that the 30-day period always applies, whether there is a denial or inaction on the part of the
CIR.24
Justice Antonio Carpio, writing for the Court in San Roque, explained that the 30-day period is a 1997
Tax Code innovation that does away with the old rule where the taxpayer could file a judicial claim when
there is inaction on the part of the CIR and the two-year statute of limitations is about to expire. Justice
Carpio stated:
The old rule that the taxpayer may file the judicial claim, without waiting for the Commissioner's decision
if the two-year prescriptive period is about to expire, cannot apply because that rule was adopted before
the enactment of the 30-day period. The 30-day period was adopted precisely to do away with the old
rule, so that under the VAT System the taxpayer will always have 30 days to file the judicial claim even
if the Commissioner acts only on the 120th day, or does not act at all during the 120-day period.With the
30-day period always available to the taxpayer, the taxpayer can no longer file a judicial claim for refund
or credit of input VAT without waiting for the Commissioner to decide until the expiration of the 120-day
period.25 (Emphases supplied) The 30-day period to appeal is mandatory and jurisdictional.
As a general rule, the 30-day period to appeal is both mandatory and jurisdictional. The only exception
to the general rule is when BIR Ruling No. DA-489-03 was still in force, thatis, between 10 December
2003 and 5 October 2010, The BIR Ruling excused premature filing, declaring that the taxpayer-
claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the
CTA by way of Petition for Review. In San Roque, the High Court explained boththe general rule and
the exception:
To repeat, a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against the
taxpayer.1wphi1One of the conditions for a judicial claim of refund or credit under the VAT System is
with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30 day
periods is necessary for such a claim to prosper, whether before, during, or after the effectivity of the
Atlas doctrine, except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December
2003 to 6 October 2010 when the Aichidoctrine was adopted, which again reinstated the 120+30 day
periods as mandatory and jurisdictional.26 (Emphases supplied)
San Roque likewise ruled out the application of the BIR ruling to cases of late filing. The Court held that
the BIR ruling, as an exception to the mandatory and jurisdictional nature of the 120+30 day periods, is
limited to premature filing and does not extend to the late filing of a judicial claim. 27
In sum, premature filing is allowed for cases falling during the time when BIR Ruling No. DA-489-03 was
in force; nevertheless, late filing is absolutely prohibited even for cases falling within that period.
As mentioned above, the taxpayer filed its judicial claim with the CTA on 11 September 2002. This was
before the issuance of BIR Ruling No. DA-489-03 on 10 December 2003. Thus, Rohm Apollo could not
have benefited from the BIR Ruling. Besides, its situation was not a case of premature filing of its
judicial claim but one of late filing. To repeat, its judicial claim was filed on 11 September 2002 long
after 10 May 2001, the last day of the 30-day period for appeal. The case thus falls under the general
rule the 30-day period is mandatory and jurisdictional. CONCLUSION
In fine, our finding is that the judicial claim for the refund or credit of unutilized input VAT was belatedly
filed. Hence, the CTA lost jurisdiction over Rohm Apollos claim for a refund or credit. The foregoing
considered, there is no need to go into the merits of this case.
A final note, the taxpayers are reminded that that when the 120-day period lapses and there is inaction
on the part of the CIR, they must no longer wait for it to come up with a decision thereafter. The CIRs
inaction is the decision itself. It is already a denial of the refund claim. Thus, the taxpayer must file an
appeal within 30 days from the lapse of the 120-day waiting period.
WHEREFORE, the Petition is DENIEDfor lack of merit.
SO ORDERED.
MARIA LOURDES P.A. SERENO
Chief Justice, Chairperson
WE CONCUR:
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
LUCAS P. BERSAMIN JOSE PORTUGAL PEREZ
Associate Justice Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
 CERTIFICATION (A) Zero-rated or Effectively Zero-rated Sales. Any VAT-registered person, whose sales are
zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been
creditable input tax due or paid attributable to such sales, except transitional input tax, to the
reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
extent that such input tax has not been applied against output tax: Provided, however, That in
the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108(B)(1)
MARIA LOURDES P.A. SERENO and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted
Chief Justice for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP):
Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale
and also in taxable or exempt sale of goods of properties or services, and the amount of
creditable input tax due or paid cannot be directly and entirely attributed to any one of the
transactions, it shall be allocated proportionately on the basis of the volume of sales. (Emphasis
supplied)
Footnotes
14
Rollo, p. 118.
1
Rollo, pp. 10-51.
15
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the
2 Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one
The section is numbered 112(0) under R.f.. 8424, but R.A. 9337 renumbered the section to 112(C).
hundred twenty (120) days from the date of submission of complete documents in support of the
3 application filed in accordance with Subsection (A) and (B) hereof. In case of full or partial denial of the
Id. at 252-258; CTA En Banc Decision dated 22 June 2005, penned by Presiding Justice Ernesto D. claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application
Acosta, and concurred in by Associate justices Lovell R. Bautista, Caesar A. Casanova, Juanito C. within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of
Castaneda, Jr., Olga Palanca-Enriquez, and Erlinda P. Uy. the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the
decision or the unacted claim with the Court of Tax Appeals.(Emphases supplied)
4
Id. at 274-275; CTA Resolution dated 28 July 2005.
16
Rollo, p. 253.
5
Id. at 117-129; dated 27 May 2004, penned by Associate Justice Lovell R. Bautista, and concurred in by
Pcesiding Justice Ernesto D. Aoosta and Asjoeiote fostiee Juanito C. Castaneda. 17
Id.

6
Rollo, p. 252. 18
Id. at 254.

7
Under the provisions of R. A. 7916. 19
Id. at 252.

8
Rollo, p. 253. 20
Id.

9
Id. at 252. 21
G.R. No. 187485, 12 February 2013, 690 SCRA 336, 397.

10
Id. at 253. 22
G.R. No. 184823, 6 October 2010, 632 SCRA 422, 443-444.

11
Id. 23
Id.

12
(B) Capital Goods. - A VAT-registered person may apply for the issuance of a tax credit certificate or 24
Supra note 21, at 387-388.
refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input
taxes have not been applied against output taxes. The application may be made only within two (2) years
25
after the close of the taxable quarter when the importation or purchase was made. (Emphases supplied) Id.

13 26
Section 112(A) states: Id. at 398-399.

27
SEC. 112. Refunds or Tax Credits of Input Tax. Id. at 405-406.

SECOND DIVISION
G.R. No. 127240 March 27, 2000
ONG CHIA, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.
MENDOZA, J.:
This is a petition for review of the decision1 of the Court of Appeals reversing the decision of the
Regional Trial Court, Branch 24, Koronadal, South Cotabato2 admitting petitioner Ong Chia to Philippine
citizenship.
The facts are as follows:
Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a nine-year old boy, he arrived at
the port of Manila on board the vessel "Angking." Since then, he has stayed in the Philippines where he
found employment and eventually started his own business, married a Filipina, with whom he had four
children. On July 4, 1989, at the age of 66, he filed a verified petition to be admitted as a Filipino citizen
under C.A. No. 473, otherwise known as the Revised Naturalization Law, as amended. Petitioner, after
stating his qualifications as required in 2, and lack of the disqualifications enumerated in 3 of the law,
stated
17. That he has heretofore made (a) petition for citizenship under the provisions of Letter of
Instruction No. 270 with the Special Committee on Naturalization, Office of the Solicitor
General, Manila, docketed as SCN Case No. 031776, but the same was not acted upon owing
to the fact that the said Special Committee on Naturalization was not reconstituted after the
February, 1986 revolution such that processing of petitions for naturalization by administrative
process was suspended;
During the hearings, petitioner testified as to his qualifications and presented three witnesses to
corroborate his testimony. So impressed was Prosecutor Isaac Alvero V. Moran with the testimony of
petitioner that, upon being asked by the court whether the State intended to present any witness
present any witness against him, he remarked:
Actually, Your Honor, with the testimony of the petitioner himself which is rather surprising, in
the sense that he seems to be well-versed with the major portion of the history of the
Philippines, so, on our part, we are convinced, Your Honor Please, that petitioner really
deserves to be admitted as a citizen of the Philippines. And for this reason, we do not wish to
present any evidence to counteract or refute the testimony of the witnesses for the petitioner,
as well as the petitioner himself.3
Accordingly, on August 25, 1999, the trial court granted the petition and admitted petitioner to Philippine
citizenship. The State, however, through the Office of the Solicitor General, appealed all the names by
which he is or had been known; (2) failed to state all his former placer of residence in violation of C.A.
No. 473, 7; (3) failed to conduct himself in a proper and irreproachable manner during his entire stay in
the Philippines, in violation of 2; (4) has no known lucrative trade or occupation and his previous
incomes have been insufficient or misdeclared, also in contravention of 2; and (5) failed to support his
petition with the appropriate documentary evidence.4
Annexed to the State's appellant's brief was a copy of a 1977 petition for naturalization filed by
petitioner with the Special Committee on Naturalization in SCN Case No. 031767, 5 in which petitioner
stated that in addition to his name of "Ong Chia," he had likewise been known since childhood as
"Loreto Chia Ong." As petitioner, however, failed to state this other name in his 1989 petition for
naturalization, it was contended that his petition must fail.6 The state also annexed income tax
returns7 allegedly filed by petitioner from 1973 to 1977 to show that his net income could hardly support
himself and his family. To prove that petitioner failed to conduct himself in a proper and irreproachable
manner during his stay in the Philippines, the State contended that, although petitioner claimed that he
and Ramona Villaruel had been married twice, once before a judge in 1953, and then again in church in
1977, petitioner actually lived with his wife without the benefit of marriage from 1953 until they were
married in 1977. It was alleged that petitioner failed to present his 1953 marriage contract, if there be
any. The State also annexed a copy of petitioner's 1977 marriage contract 8 and a Joint-
Affidavit9 executed by petitioner and his wife. These documents show that when petitioner married
Ramona Villaruel on February 23, 1977, no marriage license had been required in accordance with Art.
76 of the Civil Code because petitioner and Ramona Villaruel had been living together as husband and
wife since 1953 without the benefit of marriage. This, according to the State, belies his claim that when
he started living with his wife in 1953, they had already been married.
10 petitioner
The State also argued that, as shown by petitioner's Immigrant Certificate of Residence,
resided at "J.M. Basa Street, Iloilo," but he did not include said address in the petition.
On November 15, 1996, the Court of Appeals rendered its decision which, as already noted, reversed
the trial court and denied petitioner's application for naturalization. It ruled that due to the importance
naturalization cases, the State is not precluded from raising questions not presented in the lower court
and brought up for the first time on appeal. 11 The appellate court held:
As correctly observed by the Office of the Solicitor General, petitioner Ong Chia failed to state
in this present petition for naturalization his other name, "LORETO CHIA ONG," which name
appeared in his previous application under Letter of Instruction No. 270. Names and
pseudonyms must be stated in the petition for naturalization and failure to include the same
militates against a decision in his favor. . . This is a mandatory requirement to allow those
persons who know (petitioner) by those other names to come forward and inform the
authorities of any legal objection which might adversely affect his application for citizenship.
Furthermore, Ong Chia failed to disclose in his petition for naturalization that he formerly
resided in "J.M. Basa St., Iloilo" and "Alimodian, Iloilo." Section 7 of the Revised Naturalization
Law requires the applicant to state in his petition "his present and former places of residence."
 This requirement is mandatory and failure of the petitioner to comply with it is fatal to the
petition. As explained by the Court, the reason for the provision is to give the public, as well as
the investigating agencies of the government, upon the publication of the petition, an
opportunity to be informed thereof and voice their objections against the petitioner. By failing to
comply with this provision, the petitioner is depriving the public and said agencies of such
opportunity, thus defeating the purpose of the law. . .
Ong Chia had not also conducted himself in a proper and irreproachable manner when he
lived-in with his wife for several years, and sired four children out of wedlock. It has been the
consistent ruling that the "applicant's 8-year cohabitation with his wife without the benefit of
clergy and begetting by her three children out of wedlock is a conduct far from being proper
and irreproachable as required by the Revised Naturalization Law", and therefore disqualifies
him from becoming a citizen of the Philippines by naturalization . . .
Lastly, petitioner Ong Chia's alleged annual income in 1961 of P5,000.00, exclusive of
bonuses, commissions and allowances, is not lucrative income. His failure to file an income tax
return "because he is not liable for income tax yet" confirms that his income is low. . . "It is not
only that the person having the employment gets enough for his ordinary necessities in life. It
must be shown that the employment gives one an income such that there is an appreciable
margin of his income over expenses as to be able to provide for an adequate support in the
event of unemployment, sickness, or disability to work and thus avoid one's becoming the
object of charity or public charge." . . . Now that they are in their old age, petitioner Ong Chia
and his wife are living on the allowance given to them by their children. The monthly pension
given by the elder children of the applicant cannot be added to his income to make it lucrative
because like bonuses, commissions and allowances, said pensions are contingent, speculative
and precarious. . .
Hence, this petition based on the following assignment of errors:
I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN RULING THAT IN
NATURALIZATION CASES, THE APPELLATE COURT CAN DENY AN APPLICATION FOR
PHILIPPINE CITIZENSHIP ON THE BASIS OF DOCUMENTS NOT PRESENTED BEFORE
THE TRIAL COURT AND NOT FORMING PART OF THE RECORDS OF THE CASE.
II. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER HAS BEEN
KNOWN BY SOME OTHER NAME NOT STATED IN HIS PETITION IS NOT SUPPORTED
BY THE EVIDENCE ON RECORD.
III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE PETITIONER
STATED IN HIS PETITION AND ITS ANNEXES HIS PRESENT AND FORMER PLACES OF
RESIDENCE.
IV. THE FINDING OF THE COURT OF APPEALS THAT THE PETITIONER FAILED TO
CONDUCT HIMSELF IN A PROPER AND IRREPROACHABLE MANNER IS NOT
SUPPORTED BY THE EVIDENCE ON RECORD.
Petitioner's principal contention is that the appellate court erred in considering the documents which had
merely been annexed by the State to its appellant's brief and, on the basis of which, justified the
reversal of the trial court's decision. Not having been presented and formally offered as evidence, they
are mere "scrap(s) of paper devoid of any evidentiary value," 12 so it was argued, because under Rule
132, 34 of the Revised Rules on Evidence, the court shall consider no evidence which has not been
formally offered.
The contention has no merit. Petitioner failed to note Rule 143 13 of the Rules of Court which provides
that
These rules shall not apply to land registration, cadastral and election
cases, naturalization and insolvency proceedings, and other cases not herein provided
for, except by analogy or in a suppletory character and whenever practicable and convenient.
(Emphasis added).
Prescinding from the above, the rule on formal offer of evidence (Rule 132, 34) now being invoked by
petitioner is clearly not applicable to the present case involving a petition for naturalization. The only
instance when said rules may be applied by analogy or suppletorily in such cases is when it is
"practicable and convenient." That is not the case here, since reliance upon the documents presented
by the State for the first time on appeal, in fact, appears to be the more practical and convenient course
of action considering that decisions in naturalization proceedings are not covered by the rule on res
judicata. 14 Consequently, a final favorable judgment does not preclude the State from later on moving
for a revocation of the grant of naturalization on the basis of the same documents.
Petitioner claims that as a result of the failure of the State to present and formally offer its documentary
evidence before the trial court, he was denied the right to object against their authenticity, effectively
depriving him of his fundamental right to procedural due process. 15 We are not persuaded. Indeed, the
reason for the rule prohibiting the admission of evidence which has not been formally offered is to afford
the opposite party the chance to object to their admissibility. 16 Petitioner cannot claim that he was
deprived of the right to object to the authenticity of the documents submitted to the appellate court by
the State. He could have included his objections, as he, in fact, did, in the brief he filed with the Court of
Appeals. thus:
The authenticity of the alleged petition for naturalization (SCN Case No. 031767) which was
supposedly filed by Ong Chia under LOI 270 has not been established. In fact, the case
number of the alleged petition for naturalization. . . is 031767 while the case number of the
petition actually filed by the appellee is 031776. Thus, said document is totally unreliable and
should not be considered by the Honorable Court in resolving the instant appeal. 17
Indeed, the objection is flimsy as the alleged discrepancy is trivial, and, at most, can be accounted for
as a typographical error on the part of petitioner himself. That "SCN Case No. 031767," a copy of which
was annexed to the petition, is the correct case number is confirmed by the Evaluation Sheet 18 of the
Special Committee on Naturalization which was also docketed as "SCN Case No. 031767." Other than
this, petitioner offered no evidence to disprove the authenticity of the documents presented by the
State.
Furthermore, the Court notes that these documents namely, the petition in SCN Case No. 031767,
petitioner's marriage contract, the joint affidavit executed by him and his wife, and petitioner's income
tax returns are all public documents. As such, they have been executed under oath. They are thus
reliable. Since petitioner failed to make a satisfactory showing of any flaw or irregularity that may cast
doubt on the authenticity of these documents, it is our conclusion that the appellate court did not err in
relying upon them.
 9 Annex
One last point. The above discussion would have been enough to dispose of this case, but to settle all E; Id, p. 140.
the issues raised, we shall briefly discuss the effect of petitioner's failure to include the address "J.M.
Basa St., Iloilo" in his petition, in accordance with 7, C.A. No. 473. This address appears on 10 Annex A; Records, p. 16.
petitioner's Immigrant Certificate of Residence, a document which forms part of the records as Annex A
of his 1989 petition for naturalization. Petitioner admits that he failed to mention said address in his 11 CA
petition, but argues that since the Immigrant Certificate of Residence containing it had been fully Decision, p. 8; Rollo, p. 50. Citations omitted.
published, 19 with the petition and the other annexes, such publication constitutes substantial
compliance with 7. 20 This is allegedly because the publication effectively satisfied the objective sought 12 Petition, p. 21; Id., p. 29.
to be achieved by such requirement, i.e., to give investigating agencies of the government the
opportunity to check on the background of the applicant and prevent suppression of information 13 Now found under Rule 1, 4 of the 1997 Rules of Civil Procedure.
regarding any possible misbehavior on his part in any community where he may have lived at one time
or another. 21 It is settled, however, that naturalization laws should be rigidly enforced and strictly
14 Republic
construed in favor of the government and against the applicant. 22 As noted by the State, C.A. No. 473, v. Guy, 115 SCRA 244 (1982).
7 clearly provides that the applicant for naturalization shall set forth in the petition his present and
former places of residence. 23 This provision and the rule of strict application of the law in naturalization 15 Petition, p. 17; Rollo, p. 25.
cases defeat petitioner's argument of "substantial compliance" with the requirement under the Revised
Naturalization Law. On this ground alone, the instant petition ought to be denied.1wphi1.nt 16 See Peninsula Construction, Inc. v. Eisma, 194 SCRA 667 (1991).

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the instant petition is hereby 17 Appellee's Brief, p. 13; CA Rollo, p. 184.
DENIED.
18 Annex C; CA Rollo, p. 133. Said evaluation sheet recommended that the petition be
SO ORDERED.
dismissed as petitioner failed to meet the requirements under LOI 491 because his income is
insufficient for his support and that of his family and also because he failed to show that he
Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur. believes in the principles underlying the Constitution.

19 In the Official Gazette and in the Sarangani Journal.

20 Petition, p. 22; Rollo, p. 30.

Footnotes
21 Watt v. Republic, supra.
1 PerJustice Bernardo Ll. Salas, and concurred in by Justices Gloria C. Paras and Alicia
Austria Martinez. 22 Chan Chen v. Republic, 109 Phil. 940 (1960), citing Co Quing v. Republic, 104 Phil. 889
(1958) and Co. v. Republic, 108 Phil. 265 (1960).
2 Presided by the Rodolfo C. Soledad.
23 Comment, p. 23; Rollo, p. 110.
3 TSN, p. 152, June 27, 1991. (Emphasis added).

4 Appellant's Brief, pp. 21-22; CA Rollo, pp. 35-36.

5
Annex B; Id., pp. 129-138.

6 Citing Watt v. Republic, 46 SCRA 683 (1972); Id., p. 37.

7 Annexes F, F-1, F-2, F-3 and F-4; Id., pp. 144-157.

8 Annex D; Id., p. 139.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 100970 September 2, 1992
FINMAN GENERAL ASSURANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and JULIA SURPOSA, respondents.
Aquino and Associates for petitioner.
Public Attorney's Office for private respondent.
NOCON, J.:
This is a petition for certiorari with a prayer for the issuance of a restraining order and
preliminary mandatory injunction to annul and set aside the decision of the Court of Appeals
dated July 11, 1991, 1 affirming the decision dated March 20, 1990 of the Insurance
Commission 2 in ordering petitioner Finman General Assurance Corporation to pay private
respondent Julia Surposa the proceeds of the personal accident Insurance policy with
interest.
It appears on record that on October 22, 1986, deceased, Carlie Surposa was insured with
petitioner Finman General Assurance Corporation under Finman General Teachers
Protection Plan Master Policy No. 2005 and Individual Policy No. 08924 with his parents,
spouses Julia and Carlos Surposa, and brothers Christopher, Charles, Chester and Clifton,
all surnamed, Surposa, as beneficiaries. 3
While said insurance policy was in full force and effect, the insured, Carlie Surposa, died on
October 18, 1988 as a result of a stab wound inflicted by one of the three (3) unidentified men
without provocation and warning on the part of the former as he and his cousin, Winston
Surposa, were waiting for a ride on their way home along Rizal-Locsin Streets, Bacolod City
after attending the celebration of the "Maskarra Annual Festival."
Thereafter, private respondent and the other beneficiaries of said insurance policy filed a
written notice of claim with the petitioner insurance company which denied said claim
contending that murder and assault are not within the scope of the coverage of the insurance
policy.
On February 24, 1989, private respondent filed a complaint with the Insurance Commission
which subsequently rendered a decision, the pertinent portion of which reads:
In the light of the foregoing. we find respondent liable to pay complainant the
sum of P15,000.00 representing the proceeds of the policy with interest. As
no evidence was submitted to prove the claim for mortuary aid in the sum of
P1,000.00, the same cannot be entertained.
WHEREFORE, judgment is hereby rendered ordering respondent to pay
complainant the sum of P15,000.00 with legal interest from the date of the
filing of the complaint until fully satisfied. With costs. 4
On July 11, 1991, the appellate court affirmed said decision.
Hence, petitioner filed this petition alleging grove abuse of discretion on the part of the
appellate court in applying the principle of "expresso unius exclusio alterius" in a personal
accident insurance policy since death resulting from murder and/or assault are impliedly
excluded in said insurance policy considering that the cause of death of the insured was not
accidental but rather a deliberate and intentional act of the assailant in killing the former as
indicated by the location of the lone stab wound on the insured. Therefore, said death was
committed with deliberate intent which, by the very nature of a personal accident insurance
policy, cannot be indemnified.
We do not agree.
The terms "accident" and "accidental" as used in insurance contracts have
not acquired any technical meaning, and are construed by the courts in their
ordinary and common acceptation. Thus, the terms have been taken to mean
that which happen by chance or fortuitously, without intention and design,
and which is unexpected, unusual, and unforeseen. An accident is an event
that takes place without one's foresight or expectation an event that
proceeds from an unknown cause, or is an unusual effect of a known cause
and, therefore, not expected.
. . . The generally accepted rule is that, death or injury does not result from
accident or accidental means within the terms of an accident-policy if it is the
natural result of the insured's voluntary act, unaccompanied by anything
unforeseen except the death or injury. There is no accident when a
deliberate act is performed unless some additional, unexpected,
independent, and unforeseen happening occurs which produces or brings
about the result of injury or death. In other words, where the death or injury is
not the natural or probable result of the insured's voluntary act, or if
 something unforeseen occurs in the doing of the act which produces the WHEREFORE, finding no irreversible error in the decision of the respondent Court of
injury, the resulting death is within the protection of the policies insuring Appeals, the petition for certiorari with restraining order and preliminary injunction is hereby
against death or injury from accident. 5 DENIED for lack of merit.

As correctly pointed out by the respondent appellate court in its decision: SO ORDERED.

In the case at bar, it cannot be pretended that Carlie Surposa died in the Narvasa, C.J., Padilla, Regalado and Melo, JJ., concur.
course of an assault or murder as a result of his voluntary act considering the
very nature of these crimes. In the first place, the insured and his companion
were on their way home from attending a festival. They were confronted by
unidentified persons. The record is barren of any circumstance showing how Footnotes
the stab wound was inflicted. Nor can it be pretended that the malefactor
aimed at the insured precisely because the killer wanted to take his life. In
any event, while the act may not exempt the unknown perpetrator from 1 Rollo, pp. 12-17. Ponente: Justice Luis L. Victor with the concurrence of
criminal liability, the fact remains that the happening was a pure accident on Justice Santiago M. Kapunan and Justice Segundino G. Chua.
the part of the victim. The insured died from an event that took place without
his foresight or expectation, an event that proceeded from an unusual effect 2 Original Record, pp. 50-54. Penned by Insurance Commissioner Adelita A.
of a known cause and, therefore, not expected. Neither can it be said that Vergel de Dios.
where was a capricious desire on the part of the accused to expose his life to
danger considering that he was just going home after attending a festival. 6 3 Id., at pp. 2-5.

Furthermore, the personal accident insurance policy involved herein specifically enumerated 4 Id.. at p. 50.
only ten (10) circumstances wherein no liability attaches to petitioner insurance company for
any injury, disability or loss suffered by the insured as a result of any of the stimulated 5 De la Cruz vs. Capital Insurance & Surety Co., Inc., 17 SCRA 559 [1966].
causes. The principle of " expresso unius exclusio alterius" the mention of one thing
implies the exclusion of another thing is therefore applicable in the instant case since
6 Rollo, pp. 15-16.
murder and assault, not having been expressly included in the enumeration of the
circumstances that would negate liability in said insurance policy cannot be considered by
implication to discharge the petitioner insurance company from liability for, any injury, 7 National Power Corporation vs. Court of Appeals, 145 SCRA 533 [1986].
disability or loss suffered by the insured. Thus, the failure of the petitioner insurance company
to include death resulting from murder or assault among the prohibited risks leads inevitably
to the conclusion that it did not intend to limit or exempt itself from liability for such death.

Article 1377 of the Civil Code of the Philippines provides that:

The interpretation of obscure words or stipulations in a contract shall not

favor the party who caused the obscurity.

Moreover,

it is well settled that contracts of insurance are to be construed liberally in

favor of the insured and strictly against the insurer. Thus ambiguity in the
words of an insurance contract should be interpreted in favor of its
beneficiary. 7
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 176832 May 21, 2009
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
MARIAN T. VICENCIO Respondent.
DECISION
PUNO, CJ.:
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court seeking to reverse and
set aside the Decision2 of the Court of Appeals (CA) in CA-GR SP No. 74790 which set aside the
Decision3 of the Employees Compensation Commission (ECC) in ECC Case No. GM-14245-702. The
ECC denied respondent Marian T. Vicencios (Mrs. Vicencios) claim for the death benefits of her
husband, the late Judge Honorato S. Vicencio (Judge Vicencio).
The facts are established.
Judge Vicencio entered government service in 1964 as a Legal Researcher of the Development Bank of
the Philippines (DBP). In 1966, after passing the bar examinations, he became an Assistant Attorney.
He rose from the ranks until he was promoted to Senior Bank Attorney, which position he held until his
retirement from DBP in 1985.
In 1987, Judge Vicencio re-entered government service as Assistant Fiscal for the City of Manila. In
1992, he was appointed as Judge of Branch 27, Metropolitan Trial Court of Manila. In 1999, he was
appointed as Regional Trial Court (RTC) Judge of Branch 17, Manila and served as such until his death
in 2001.
Records4 show that on November 30, 2000, Judge Vicencio suffered loss of consciousness due to
pericardial effusion. He was admitted at the Makati Medical Center where he was diagnosed with
Adenocarcinoma of the Left Lung with Metastases to Pedicardium. He underwent intravenous
chemotherapy. He was confined from November 30, 2000 to May 7, 2001.
On May 31, 2001, Judge Vicencio died. Per his Death Certificate,5 the immediate cause of his death
was Cardiopulmonary Arrest, and the antecedent cause was T/C Fatal Arrythmia. No underlying cause
of death was indicated in his Death Certificate. He was survived by his wife, respondent Mrs. Vicencio,
and daughter, Mary Joy Celine Vicencio.
Respondent Mrs. Vicencio applied for the death benefits of her late husband with petitioner Government
Service Insurance System (GSIS) but her application was denied by Mr. Marcelino S. Alejo, Manager of
the GSIS Employees Compensation Department, on the ground that the illness which caused Judge
Vicencios death is not considered an occupational disease and there is no showing that his work as
RTC Judge has increased his risk of contracting said ailment.6 Respondent Mrs. Vicencio filed a motion
for reconsideration, but the same was denied.7
On June 17, 2002, respondent Mrs. Vicencio appealed to the ECC but the same was dismissed. 8
Respondent Mrs. Vicencio filed a petition for review under Rule 43 of the Rules of Court with the CA.
The CA reversed and set aside the Decision of the ECC as follows:
WHEREFORE, premises considered, this Petition is GRANTED. The Decision of the Employees
Compensation Commission, dated November 6, 2002, in ECC Case No. GM-14245-702 is hereby
REVERSED and SET ASIDE. The GSIS is ORDERED to grant the claim for the death benefits of Judge
Honorato S. Vicencio under the Employees Compensation Act. No costs.9
Petitioner GSIS filed a motion for reconsideration, but the same was denied by the CA in its Resolution
dated February 26, 2007.10
Hence, this Petition.
The sole issue is whether or not respondent Mrs. Vicencios claim for death benefits under Presidential
Decree No. 626 (P.D. No. 626), as amended, is compensable.
Petitioner GSIS argues that based on the medical records in this case, Judge Vicencios underlying
cause of death was Adenocarcinoma of the Lungs with Metastases. According to petitioner GSIS, the
cause of death stated in his Death Certificate, Cardiopulmonary Arrest T/C Fatal Arrythmia, was a mere
complication of his lung cancer. However, the attending physician did not fill up the portion on the Death
Certificate to indicate that the underlying cause (which was left in blank) was Adenocarcinoma of the
Lungs with Metastases. Adenocarcinoma of the Lungs is not an occupational disease listed under the
law. Pursuant to Annex "A" of the Amended Rules on Employees Compensation, lung cancer is
occupational only with respect to vinyl chloride workers and plastic workers. According to petitioner
GSIS, respondent Mrs. Vicencio failed to show by substantial evidence that the risk of contracting the
same was increased by his working conditions.
On the one hand, respondent Mrs. Vicencio contends that per the Death Certificate of her husband, the
cause of his death was Cardiopulmonary Arrest T/C Fatal Arrythmia. According to respondent Mrs.
Vicencio, the CA correctly found that the requisites for cardiovascular disease to be compensable under
paragraph (r) of ECC Resolution No. 43211 were satisfied; hence, the death of her husband is
compensable.
Respondent Mrs. Vicencio adds that assuming only lung cancer was the cause of death of her husband,
the same is still compensable. She argues that the CA correctly held that the nature of work and the
corresponding difficulties brought about by Judge Vicencios duties and work contributed to the
development of his illness.
We affirm the decision of the CA.
P.D. No. 626, as amended, defines compensable sickness as "any illness definitely accepted as an
occupational disease listed by the Commission, or any illness caused by employment subject to proof
by the employee that the risk of contracting the same is increased by the working conditions." Under
Section 1 (b), Rule III, of the Amended Rules on Employees' Compensation, for the sickness and the
resulting disability or death to be compensable, the same must be an "occupational disease" included in
the list provided (Annex "A"), with the conditions set therein satisfied; otherwise, the claimant must show
proof that the risk of contracting it is increased by the working conditions. Otherwise stated, for sickness
and the resulting death of an employee to be compensable, the claimant must show either: (1) that it is
a result of an occupational disease listed under Annex "A" of the Amended Rules on Employees'
Compensation with the conditions set therein satisfied; or (2) if not so listed, that the risk of contracting
the disease is increased by the working conditions.
First, we hold that the CA correctly considered Cardiopulmonary Arrest T/C Fatal Arrythmia in this case
a cardiovascular disease a listed disease under Annex "A" of the Amended Rules on Employees
Compensation.
The Death Certificate of Judge Vicencio clearly indicates that the cause of his death is Cardiopulmonary
Arrest T/C Fatal Arrythmia. Whether, however, the same was a mere complication of his lung cancer as
contended by petitioner GSIS or related to an underlying cardiovascular disease is not established by
the records of this case and, thus, remains uncertain.
It must be remembered that P.D. No. 626, as amended, is a social legislation whose primordial purpose
is to provide meaningful protection to the working class against the hazards of disability, illness and
other contingencies resulting in the loss of income. Thus, the official agents charged by law to
implement social justice guaranteed by the Constitution should adopt a liberal attitude in favor of the
employee in deciding claims for compensability especially where there is some basis in the facts for
inferring a work-connection with the illness or injury, as the case may be. It is only this kind of
interpretation that can give meaning and substance to the compassionate spirit of the law as embodied
in Article 4 of the New Labor Code which states that all doubts in the implementation and interpretation
of the provisions of the Labor Code including their implementing rules and regulations should be
resolved in favor of labor.12
Guided by this policy, we therefore hold that Cardiopulmonary Arrest T/C Fatal Arrythmia, the cause of
death stated in Judge Vicencios Death Certificate, should be considered as a cardiovascular disease -
a listed disease under Annex "A" of the Amended Rules on Employees Compensation.1avvphi1
Considering the stress and pressures of work inherent in the duties of a judge and it was established
that Judge Vicencio was doing work in his office a few days immediately before the moment of his
cardiac arrest,13 we sustain the findings of the CA that the requisites for cardiovascular disease to be
compensable under paragraph (r) of ECC Resolution No. 432 are satisfied in the case at bar.
Granting, however, that the only cause of Judge Vicencios death is lung cancer, we are still one with
the CA in its finding that the working conditions of the late Judge Vicencio contributed to the
development of his lung cancer.
It is true that under Annex "A" of the Amended Rules on Employees Compensation, lung cancer is
occupational only with respect to vinyl chloride workers and plastic workers. However, this will not bar a
claim for benefits under the law if the complainant can adduce substantial evidence that the risk of
contracting the illness is increased or aggravated by the working conditions to which the employee is
exposed to.
It is well-settled that the degree of proof required under P.D. No. 626 is merely substantial evidence,
which means, "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion." What the law requires is a reasonable work-connection and not a direct causal relation. It is
enough that the hypothesis on which the workman's claim is based is probable. Medical opinion to the
contrary can be disregarded especially where there is some basis in the facts for inferring a work-
connection. Probability, not certainty, is the touchstone. 14 It is not required that the employment be the
sole factor in the growth, development or acceleration of a claimants illness to entitle him to the benefits
provided for. It is enough that his employment contributed, even if to a small degree, to the development
of the disease.15
The late Judge Vicencio was a frontline officer in the administration of justice, being the most visible
living representation of this country's legal and judicial system. 16 It is undisputed that throughout his
noble career from Fiscal to Metropolitan Trial Court Judge, and, finally, to RTC Judge, his work dealt
with stressful daily work hours, and constant and long-term contact with voluminous and dusty records.
We also take judicial notice that Judge Vicencios workplace at the Manila City Hall had long been a
place with sub-standard offices of judges and prosecutors overflowing with records of cases covered up
in dust and are poorly ventilated. All these, taken together, necessarily contributed to the development
of his lung illness.
The case of Dator v. Employees Compensation Commission17 should be instructive:
Until now the cause of cancer is not known. Despite this fact, however, the Employees' Compensation
Commission has listed some kinds of cancer as compensable. There is no reason why cancer of the
lungs should not be considered as a compensable disease. The deceased worked as a librarian for
about 15 years. During all that period she was exposed to dusty books and other deleterious
substances in the library under unsanitary conditions. (eiomphasis added)
On a final note, it bears stressing that the late Judge Vicencio worked in the government for a total of 37
years.18 He is survived by his wife, respondent Mrs. Vicencio, and a daughter.lavvphil.net Their claim for
death benefits has been pending since 2001. As the public agency charged by law in implementing P.D.
No. 626, petitioner GSIS should not lose sight of the fact that the constitutional guarantee of social
justice towards labor demands a liberal attitude in favor of the employee in deciding claims for
compensability.
IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals is affirmed. No
costs.
SO ORDERED.
REYNATO S. PUNO
Chief Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
RENATO C. CORONA TERESITA J. LEONARDO-DE CASTRO
 Associate Justice Associate Justice r) Cardiovascular Disease- Under any of the following conditions:

LUCAS P. BERSAMIN (i) If the heart disease was known to have been present during employment, there
Associate Justice must be proof that an acute exacerbation [was] clearly precipitated by the unusual
strain by reason of the nature of [his] work.

CERTIFICATION
(ii) The strain of work that brings about an acute attack must be of sufficient severity
and must be followed within twenty-four (24) hours by the clinical signs of a cardiac
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above insult to constitute causal relationship.
decision had been reached in consultation before the case was assigned to the writer of the opinion of
the Courts Division.
(iii) If a person who was apparently [asymptomatic] before [being subjected] to strain
at work showed signs and symptoms of cardiac injury during the performance of his
REYNATO S. PUNO work and such symptoms and signs persisted, it is reasonable to claim a causal
Chief Justice relationship.

12 Buena Obra v. Social Security System, G.R. No. 147745, April 9, 2003, 401 SCRA 206, 216.

13 Supra note 2 at 62.

Footnotes
14Salalima v. Employees Compensation Commission, G.R. No. 146360, May 20, 2004, 428
1 Rollo, pp. 15-55. SCRA 715, 722-723, citing Salmone v. Employees' Compensation Commission and Social
Security System, G.R. No. 142392, 26 September 2000, 341 SCRA 150.
2Id. at 56-68; dated September 27, 2006, penned by Justice Normandie B. Pizarro and
concurred in by Justices Regalado E. Maambong and Jose Catral Mendoza. 15La O v. Employees Compensation Commission, G.R. No. L-50918, May 17, 1980, 97 SCRA
780, 790, citing Manila Railroad Co. v. Workmens Compensation Commission, G.R. No. L-
3 Id. at 72-74; dated November 6, 2002. 19773, May 30, 1964, 11 SCRA 305.

16
4 Attending Physicians Certification signed by Dr. Deogracias B. Custodio; id. at 77. Government Service Insurance System v. Vallar, G.R. No. 156023, October 18, 2007, 536
SCRA 620, 625.
5 CA rollo, p. 52.
17 197 Phil. 590, 593 (1982).
6 Letter addressed to Mrs. Vicencio dated November 27, 2001; id. at 41.
18 CA rollo, pp. 49-51.
7 Letter addressed to Mrs. Vicencio dated May 20, 2002; id. at 54.

8
Supra note 3.

9 Supra note 2 at 67-68.

10 Rollo, pp. 69-70.

11 ECC Resolution No. 432 dated July 20, 1977 states in part:

The following are deemed compensable:

xxx
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-44899 April 22, 1981
MARIA E. MANAHAN, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and GSIS (LAS PIAS MUNICIPAL HIGH
SCHOOL), respondents.
FERNANDEZ, J.:
This is a petition to review the decision of the Employees' Compensation Commission in ECC Case No.
0070 (Nazario Manahan, Jr., deceased), entitled "Maria Manahan, Appellant, versus Government
Service Insurance System, (Las Pias Municipal High School), Respondent" affirming the decision of
the Government Service Insurance System which denied the claim for death benefit. 1
The claimant, petitioner herein, Maria E. Manahan, is the widow of Nazario Manahan, Jr., who died of
"Enteric Fever" while employed as classroom teacher in Las Pias Municipal High School, Las Pias
Rizal, on May 8, 1975.
The petitioner filed a claim with the Government Service Insurance for death benefit under Presidential
Decree 626. In a letter dated June 19, 1975, the Government Service Insurance denied the claim on a
finding that the ailment of Nazario Manahan, Jr., typhoid fever, is not an occupational disease.
The petitioner filed a motion for reconsideration on the ground that the deceased, Nazario Manahan, Jr.,
was in perfect health when admitted to the service and that the ailment of said deceased was
attributable to his employment.
The Government Service Insurance System affirmed the denial of the claim on the ground that enteric
fever or paratyphoid is similar in effect to typhoid fever, in the sense that both are produced by
Salmonella organisms.
The petitioner appealed to the Employees' Compensation Commission which affirmed the decision of
the Government Service Insurance System on a finding that the ailment of the deceased, enteric fever,
was not induced by or aggravated by the nature of the duties of Nazario Manahan, Jr. as a teacher. 2
To support her theory that the disease of Nazario Manahan, Jr., enteric fever, resulted from his
employment as classroom teacher of the Las Pias Municipal High School, the petitioner cites the
following authority:
EPIDEMOLOGY AND PATHOLOGY
OF ENTERIC FEVER
THE SOURCE OF INFECTION is feces or urine from patients and carriers. Family
contacts may be transient carriers and 2 to 5% of patients become chronic carriers. In
poorly sanitized communities, water is the most frequent vehicle of transmission;
food, especially milk, is the next most important. In modern urban areas, food,
contaminated by healthy carriers who are food handlers, is the principal vehicle. Flies
may spread the organism from feces to food. Direct contact infection is infrequent.
The organism enters the body through the gastrointestinal tract, invading the blood
stream by way of the lymphatic channels. There is hyperplasia and often ulceration of
Pyeris patches, especially in the ileum and cecum. When the ulcers heals, no scar
results. The kidneys and liver usually show cloudly swelling and the latter may reveal
a patchy necrosis The spleen is enlarged and soft. Rarely, the lungs show pneumonic
changes. (Merck Manual 10th Edit., P. 842) 3
The factual findings of the respondent Commission indicate that the deceased was in perfect health
when he entered government service on July 20, 1969, and that in the course of his employment in
1974, he was treated for epigastric pain. He succumbed to enteric fever on May 8, 1975.
Enteric fever is referred to in medical books as typhoid fever (Dorlands Illustrated Medical Dictionary,
24th Ed., p. 548) or paratyphoid fever (Harrison's Principles of Internal Medicine, 6th Ed., p. 817). Its
symptoms include abdominal pain (id., p. 810). In discussing the clinical manifestations of the disease,
Mr. Harrison states that recovery (from enteric or paratyphoid fever) may be followed by continued
excretion of the causative organism in the stools for several months (id., p. 817). This lingering nature of
the species producing enteric fever points out the possibility that the illness which afflicted the deceased
in 1974 was the same as, or at least, related to, his 1975 illness.
The medical record of the deceased shows that he had a history of ulcer-like symptoms (p. 3, ECC
rec.). This butresses the claimant's claim that her husband had been suffer from ulcer several months
before his death on May 8, 1975. This is likewise sustained by the medical certificate (p. 12, ECC rec.)
issued by Dr. Aquilles Bernabe to the effect that "Nazario Manahan was treated for epigastric pain
probably due to hyper-acidity on December 10, 1974." Epigastric pain is a symptom of ulcer, and ulcer
is a common complication of typhoid fever. There is even such a thing as "typhoidal ulcer" (p.
812, supra).
Because of these circumstances, the illness that claimed the life of the deceased could have had its
onset months before December 10, 1974. Such being the case, his cause of action accrued before
December 10, 1974.
In the case of Corales vs. ECI (L-44063, Feb. 27, 1979), We ruled that:
... Article 294, Title III (Transitory and Final Provisions) of the New Labor Code
provides that all actions and claims accruing prior to the effectivity of this Code shall
be determined in accordance with the laws in force at the time of their accrual and
under the third paragraph of Article 292, Title 11 Prescription of Offenses and Claims,
workmen's compensation claims accruing prior to the effectivity of this Code and
during the period from November 1, 1974 up to December 31, 1974 shall be
processed and adjudicated in accordance with the laws and rules at the time their
 causes of action accrued. Hence, this Court applied the provisions of the Workmen's
Compensation Act, as amended, on passing upon petitioner's claim. MELENCIO-HERRERA, J., concurring:
I concur. Although enteric fever is not an occupational disease, considering the cause of said illness,
Pursuant to such doctrine and applying now the provisions of the Workmen's Compensation Act in this the risk of contracting it could have been increased by the working conditions of the deceased, a
case, the presumption of compensability subsists in favor of the claimant. teacher, who used to eat his meals at the school canteen and used the comfort room and other facilities
of the school.
In any case, We have always maintained that in case of doubt, the same should be resolved in favor of
the worker, and that social legislations like the Workmen's Compensation Act and the Labor Code
should be liberally construed to attain their laudable objective, i.e., to give relief to the workman and/or Separate Opinions
his dependents in the event that the former should die or sustain an injury.
MELENCIO-HERRERA, J., concurring:
Moreover, the constitutional guarantee of social justice and protection to labor make Us take a second I concur. Although enteric fever is not an occupational disease, considering the cause of said illness,
look at the evidence presented by the claimant. the risk of contracting it could have been increased by the working conditions of the deceased, a
teacher, who used to eat his meals at the school canteen and used the comfort room and other facilities
As a teacher of the Las Pias Municipal High School at Las Pias Rizal, the deceased used to eat his of the school.
meals at the school canteen. He also used the toilet and other facilities of the school. Said the
respondent Commission," ... it is not improbable that the deceased might have contracted the illness
Separate Opinions
during those rare moments that he was away from his family, since it is medically accepted that enteric
fever is caused by salmonella organisms which are acquired by ingestion of contaminated food or MELENCIO-HERRERA, J., concurring:
drinks. Contamination of food or water may come from the excretion of animals such as rodents flies, or I concur. Although enteric fever is not an occupational disease, considering the cause of said illness,
human beings who are sick or who are carriers, or infection in meat of animals as food. Meat, milk and the risk of contracting it could have been increased by the working conditions of the deceased, a
eggs are the foods most frequently involved in the transmission of this type of species, since the teacher, who used to eat his meals at the school canteen and used the comfort room and other facilities
organism may multiply even before ingestion. ..." These findings of the respondent Commission lead to of the school.
the conclusion that the risk of contracting the fatal illness was increased by the decedent's working Footnotes
condition. 1 Rollo, pp. 25-27.
2 Idem.
3 Rollo, p. 20.
In view of the foregoing, the petition for review is meritorious.

WHEREFORE, the decision of the Employees' Compensation Commission sought to be reviewed is

hereby set aside the Government Service Insurance System is ordered:

1. To pay the petitioner the amount of SIX THOUSAND PESOS (P6,000.00) as death compensation
benefit;

2. To pay the petitioner the amount of SIX HUNDRED PESOS (P600.00) as attorney's fees;

3. To reimburse the petitioner expenses incurred for medical services, hospitalization and medicines of
the deceased Nazario Manahan, Jr., duly supported by proper receipts; and

4. To pay administrative fees.

SO ORDERED.

Teehankee (Chairman), Makasiar, Guerrero and De Castro, JJ., concur.

Separate Opinions
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78617 June 18, 1990
SALVADOR LAZO, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT SERVICE INSURANCE SYSTEM
(CENTRAL BANK OF THE PHILIPPINES), respondents.
Oscar P. Paguinto for petitioner.
PADILLA, J.:
This is an appeal from the decision of the respondent Employees Compensation Commission (ECC) in
ECC Case No. 2883 which affirmed the dismissal of petitioner's claim for compensation against the
Government Service Insurance System (GSIS).
The petitioner, Salvador Lazo, is a security guard of the Central Bank of the Philippines assigned to its
main office in Malate, Manila. His regular tour of duty is from 2:00 o'clock in the afternoon to 10:00
o'clock in the evening. On 18 June 1986, the petitioner rendered duty from 2:00 o'clock in the afternoon
to 10:00 o'clock in the evening. But, as the security guard who was to relieve him failed to arrive, the
petitioner rendered overtime duty up to 5:00 o'clock in the morning of 19 June 1986, when he asked
permission from his superior to leave early in order to take home to Binangonan, Rizal, his sack of rice.
On his way home, at about 6:00 o'clock in the morning of 19 June 1986, the passenger jeepney the
petitioner was riding on turned turtle due to slippery road. As a result, he sustained injuries and was
taken to the Angono Emergency Hospital for treatment. He was later transferred to the National
Orthopedic Hospital where he was confined until 25 July 1986.
For the injuries he sustained, petitioner filed a claim for disability benefits under PD 626, as amended.
His claim, however, was denied by the GSIS for the reason that
It appears that after performing your regular duties as Security Guard from 2:00 P.M.
to 10:00 P.M. on June 18, 1986, you rendered overtime duty from 10:00 P.M. to 5:06
A.M. of the following day; that at about 5:06 A.M. after asking permission from your
superior you were allowed to leave the Office to do certain personal matter that of
bringing home a sack of rice and that, while on your way home, you met a vehicular
accident that resulted to (sic) your injuries. From the foregoing informations, it is
evident that you were not at your work place performing your duties when the incident
occurred.1
It was held that the condition for compensability had not been satisfied.
Upon review of the case, the respondent Employees Compensation Commission affirmed the decision
since the accident which involved the petitioner occurred far from his work place and while he was
attending to a personal matter.
Hence, the present recourse.
The petitioner contends that the injuries he sustained due to the vehicular accident on his way home
from work should be construed as "arising out of or in the course of employment" and thus,
compensable. In support of his prayer for the reversal of the decision, the petitioner cites the case
of Pedro Baldebrin vs. Workmen's Compensation Commission,2 where the Court awarded
compensation to the petitioner therein who figured in an accident on his way home from his official
station at Pagadian City to his place of residence at Aurora, Zamboanga del Sur. In the accident,
petitioner's left eye was hit by a pebble while he was riding on a bus.
Respondents claim that the Baldebrin ruling is a deviation from cases earlier decided and hence, not
applicable to the present case.
The Court has carefully considered the petition and the arguments of the parties and finds that the
petitioner's submission is meritorious. Liberally interpreting the employees compensation law to give
effect to its compassionate spirit as a social legislation 3 in Vda. de Torbela u. ECC, 4 the Court held:
It is a fact that Jose P. Torbela, Sr. died on March 3, 1975 at about 5:45 o'clock in the
morning due to injuries sustained by him in a vehicular accident while he was on his
way to school from Bacolod City, where he lived, to Hinigaran, Negros Occidental
where the school of which he was the principal was located and that at the time of the
accident he had in his possession official papers he allegedly worked on in his
residence on the eve of his death. The claim is compensable. When an employee is
accidentally injured at a point reasonably proximate to the place at work, while he is
going to and from his work, such injury is deemed to have arisen out of and in the
course of his employment.
Again in Alano v. ECC, 5 it was reiterated:
Dedicacion de Vera, a government employee during her lifetime, worked as principal
of Salinap Community School in San Carlos City, Pangasinan. Her tour of duty was
from 7:30 a.m. to 5:30 p.m. On November 29, 1976, at 7:00 A-M., while she was
waiting for a ride at Plaza Jaycee in San Carlos City on her way to the school, she
was bumped and run over by a speeding Toyota mini-bus which resulted in her
instantaneous death. ...
In this case, it is not disputed that the deceased died while going to her place of work.
She was at the place where, as the petitioner puts it, her job necessarily required her
to be if she was to reach her place of work on time. There was nothing private or
personal about the school principal's being at the place of the accident. She was
there because her employment required her to be there.
More recently, in Vano vs. GSIS & ECC, 6 this Court, applying the above quoted decisions, enunciated:
Filomeno Vano was a letter carrier of the Bureau of Posts in Tagbilaran City. On July
31, 1983, a Sunday, at around 3:30 p.m. Vano was driving his motorcycle with his son
as backrider allegedly on his way to his station in Tagbilaran for his work the following
day, Monday. As they were approaching Hinawanan Bridge in Loay, Bohol, the
motorcycle skidded, causing its passengers to be thrown overboard. Vano's head hit
the bridge's railing which rendered him unconscious. He was taken to the Engelwood
Hospital where he was declared dead on arrival due to severe hemorrhage.
We see no reason to deviate from the foregoing rulings. Like the deceased in these
two (2) aforementioned cases, it was established that petitioner's husband in the case
at bar was on his way to his place of work when he met the accident. His death,
therefore, is compensable under the law as an employment accident.
In the above cases, the employees were on their way to work. In the case at bar, petitioner had come
from work and was on his way home, just like in the Baldebrin case, where the employee "... figured in
an accident when he was ping home from his official station at Pagadian City to his place of residence
at Aurora, Zamboanga del Sur ...."7Baldebrin, the Court said:
The principal issue is whether petitioner's injury comes within the meaning of and
intendment of the phrase 'arising out of and in the course of employment.'(Section 2,
Workmen's Compensation Act). In Philippine Engineer's Syndicate, Inc. vs. Flora S.
Martin and Workmen's Compensation Commission, 4 SCRA 356, We held that 'where
an employee, after working hours, attempted to ride on the platform of a service truck
of the company near his place of work, and, while thus attempting, slipped and fell to
the ground and was run over by the truck, resulting in his death, the accident may be
said to have arisen out of or in the course of employment, for which reason his death
is compensable. The fact standing alone, that the truck was in motion when the
employee boarded, is insufficient to justify the conclusion that he had been
notoriously negligent, where it does not appear that the truck was running at a great
speed.'And, in a later case, Iloilo Dock & Engineering Co. vs. Workmen's
Compensation Commission, 26 SCRA 102, 103, We ruled that '(e)mployment
includes not only the actual doing of the work, but a reasonable margin of time and
space necessary to be used in passing to and from the place where the work is to be
done. If the employee be injured while passing, with the express or implied consent of
the employer, to or from his work by a way over the employer's premises, or over
those of another in such proximity and relation as to be in practical effect a part of the
employer's premises, the injury is one arising out of and in the course of the
employment as much as though it had happened while the employee was engaged in
his work at the place of its performance. (Emphasis supplied)
In the case at bar, it can be seen that petitioner left his station at the Central Bank several hours after
his regular time off, because the reliever did not arrive, and so petitioner was asked to go on overtime.
After permission to leave was given, he went home. There is no evidence on record that petitioner
deviated from his usual, regular homeward route or that interruptions occurred in the journey.
While the presumption of compensability and theory of aggravation under the Workmen's
Compensation Act (under which the Baldebrin case was decided) may have been abandoned under the
New Labor Code,8 it is significant that the liberality of the law in general in favor of the workingman still
subsists. As agent charged by the law to implement social justice guaranteed and secured by the
Constitution, the Employees Compensation Commission should adopt a liberal attitude in favor of the
employee in deciding claims for compensability, especially where there is some basis in the facts for
inferring a work connection to the accident.
This kind of interpretation gives meaning and substance to the compassionate spirit of the law as
embodied in Article 4 of the New Labor Code which states that 'all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules and regulations shall
be resolved in favor of labor.'
The policy then is to extend the applicability of the decree (PD 626) to as many employees who can
avail of the benefits thereunder. This is in consonance with the avowed policy of the State to give
maximum aid and protection to labor.9
There is no reason, in principle, why employees should not be protected for a reasonable period of time
prior to or after working hours and for a reasonable distance before reaching or after leaving the
employer's premises.10
If the Vano ruling awarded compensation to an employee who was on his way from home to his work
station one day before an official working day, there is no reason to deny compensation for accidental
injury occurring while he is on his way home one hour after he had left his work station.
We are constrained not to consider the defense of the street peril doctrine and instead interpret the law
liberally in favor of the employee because the Employees Compensation Act, like the Workmen's
Compensation Act, is basically a social legislation designed to afford relief to the working men and
women in our society.
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE. Let the case be remanded
to the ECC and the GSIS for disposition in accordance with this decision.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Sarmiento and Regalado, JJ., concur.
Footnotes
1 Annex "B" Rollo at p. 7.
2 G.R. No. L-43792, October 12, 1984, 132 SCRA 510.
3 CIemente v. WCC, G.R. No. L-42087, 8 April 1988, 159 SCRA 492.
4 G.R. No. 1,42627, February 21, 1980, 96 SCRA 260.
5 G.R. No. L-48594, March 16, 1988, 158 SCRA 670.
6 G.R. No. 81327, December 4, 1989.
7 See Baldebrin supra.
8 PD 626 promulgated on 1 January 1975, further amended by PD 1368 on I May
1978.
9 Carbajal v. Government Service Insurance System, G.R. No. L-46654, August 9,
1988, 164 SCRA 204.
10 Cudahy Packing Co. v. Parramore, 263 U.S. 418 [1923] and Papineau v. Industrial
Accident Commission, 187 Pac. 108.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 85024 January 23, 1991
DOMINGO VICENTE, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION, respondent.
Olandesca Law Offices for petitioner.
SARMIENTO, J.:
decision1
Central to this petition for certiorari which assails the dated August 24, 1988 of the Employees'
Compensation Commission (ECC) in ECC Case No. 3764, affirming the decision of the Government
Service Insurance System (GSIS), is the question on whether the petitioner suffers from permanent
total disability as he claims, or from permanent partial disability as held by the respondent Commission.
The undisputed facts of the case are as follows:
The petitioner, Domingo Vicente, was formerly employed as a nursing attendant at the Veterans
Memorial Medical Center in Quezon City. On August 5, 1981, at the age of forty-five, and after having
rendered more than twenty-five years of government service, he applied for optional retirement
(effective August 16, 1981) under the provisions of Section 12(c) of Republic Act No. 1616, giving as
reason therefor his inability to continue working as a result of his physical disability. 2 The petitioner
likewise filed with the Government Service Insurance System (GSIS) an application for "income benefits
claim for payment" under Presidential Decree (PD) No. 626, as amended. Both applications were
accompanied by the necessary supporting papers, among them being a "Physician's Certification"
issued by the petitioner's attending doctor at the Veterans Memorial Medical Center, Dr. Avelino A.
Lopez, M.D., F.P.C.S., ** F.I.C.S. *** (Section Chief, General, Thoracic & Peripheral Surgery, Surgical
Department, Veterans Medical Center, Hilaga Avenue, Quezon City), who had diagnosed the petitioner
as suffering from:
Osteoarthritis, multiple;
Hypertensive Cardiovascular Disease;
Cardiomegaly; and
Left Ventricular Hypertrophy;
and classified him as being under "permanent total disability." 3
The petitioner's application for income benefits claim payment was granted but only for permanent
partial disability (PPD) compensation or for a period of nineteen months starting from August 16, 1981
up to March 1983.4
On March 14, 1983, the petitioner requested the General Manager of the GSIS to reconsider the award
given him and prayed that the same be extended beyond nineteen months invoking the findings of his
attending physician, as indicated in the latter's Certification. 5 As a consequence of his motion for
reconsideration, and on the basis of the "Summary of Findings and Recommendation" 6 of the Medical
Services Center of the GSIS, the petitioner was granted the equivalent of an additional four (4) months
benefits.7 Still unsatisfied, the petitioner again sent a letter to the GSIS Disability Compensation
Department Manager on November 6, 1986, insisting that he (petitioner) should be compensated no
less than for "permanent total disability." On June 30, 1987, the said manager informed the petitioner
that his request had been denied. Undaunted, the petitioner sought reconsideration and as a result of
which, on September 10, 1987, his case was elevated to the respondent Employees Compensation
Commission (ECC). Later, or on October 1, 1987, the petitioner notified the respondent Commission
that he was confined at the Veterans Memorial Medical Center for "CVA probably thrombosis of the left
middle cerebral artery."8
There was nothing he could do but wait and hope.
Finally, on August 24, 1988, the respondent rendered a decision affirming the ruling of the GSIS
Employees' Disability Compensation and dismissed the petitioner's appeal.
Hence this recourse.
Before us, the petitioner maintains that his disability is "permanent total" and not "permanent partial" as
classified by the respondent Commission. In support of his position, the petitioner points to the clinical
evaluation and certification earlier adverted to issued by his attending physicians at the Veterans
Memorial Medical Center. He likewise contends that contrary to the respondent's ruling, his subsequent
confinement in the hospital from August 31, 1987 to September 6, 1987, when he was found suffering
from "CVA probably thrombosis," was a direct result of his other ailments as previously diagnosed
(before his retirement) by his attending physician and the Personnel Physician of the Center, Dr. Salud
C. Palattao.
On the other hand, the respondent Commission argues that the petitioner only suffers from "permanent
partial disability" and not from "permanent total disability." The findings of the petitioner's attending
physician is not binding on the GSIS, nor on the Commission, as the proper evaluation of an employee's
degree of disability exclusively belongs to the GSIS medical experts who have specialized on the
subject.
The petition is impressed with merit.
Employee's disability under the Labor Code is classified into three distinct categories: (a) temporary
total disability;9(b) permanent total disability;10 and (c) permanent partial disability.11 Likewise, in Section
2, Rule VII of the Amended Rules on Employees Compensation, it is provided that:
Sec. 2. Disability(a) A total disability is temporary if as a result of the injury or sickness the
employee is unable to perform any gainful occupation for a continuous period not exceeding
120 days, except as otherwise provided in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period exceeding 120 days except
as otherwise provided for in Rule X of these Rules.
(c) A disability is partial permanent if as a result of the injury or sickness the employee suffers
a permanent partial loss of the use of any part of his body.
Here, there is no question that the petitioner is not under "temporary total disability" as defined by law.
The respondent Commission's decision classifying the petitioner's disability as "permanent partial"
attests, albeit indirectly, to this fact. Our focus therefore, as stated earlier, is only in resolving out government agency, would issue certifications indiscriminately without even minding his own interests
whether the petitioner suffers from "permanent total disability" as he claims, or from "permanent partial and protection."17
disability" as the respondent Commission would have us believe.
The fact that the petitioner was granted benefits amounting to the equivalent of twenty-three months
On the subject of "permanent total disability," the Court has stated, on several occasions, that: shows that the petitioner was unable to perform any gainful occupation for a continuous period
exceeding 120 days. This kind of disability is precisely covered by Section 2(b), Rule VII of the
Other authoritative comments on the coverage of the term "permanent total disability" as used Amended Rules on Employees' Compensability which we again quote, to wit:
in the Workmen's Compensation Act, are (a) Comments and Annotations on the Workmen's
Compensation Act by Severo M. Pucan and Cornelio R. Besinga, that "total disability does not Sec. 2. Disability(a) . . .
mean a state of absolute helplessness, but means disablement of the employee to earn wages
in the same kind of work, or a work of similar nature, that he was trained for, or accustomed to (b) A disability is total and permanent if as a result of the injury or sickness the employee is
perform, or any kind of work which a person of his mentality and attainment could do;" (b) unable to perform any gainful occupation for a continuous period exceeding 120 days except
Philippine Labor and Social Legislation by Justice Ruperto Martin, that "permanent total as otherwise provided for in Rule X of those Rules.
disability means disablement of an employee to earn wages in the same kind of work, or work
of a similar nature that he was trained for, or accustomed to perform, or any other kind of work
which a person of his mentality and attainment could do . . .;" and (c) Labor Standards and xxx xxx xxx
Welfare Legislation by Perfecto Fernandez and Camilo Quiason that "permanent total disability
means an incapacity to perform gainful work which is expected to be permanent. This status There being no showing, as we mentioned earlier, that the petitioner's disability is "temporary total" as
does not require a condition of complete helplessness. Nor is it affected by the performance of defined by the law, the inescapable conclusion is that he suffers from permanent total disability.
occasional odd jobs" (cited in Marcelino vs. Seven-up Bottling Co. of the Philippines, 47 SCRA
343).12 The court takes this occasion to stress once more its abiding concern for the welfare of government
workers, especially the humble rank and file, whose patience, industry, and dedication to duty have
It may therefore be inferred from the Court's pronouncements that while "permanent total disability" often gone unheralded, but who, in spite of very little recognition, plod on dutifully to perform their
invariably results in an employee's loss of work or inability to perform his usual work, "permanent partial appointed tasks. It is for this reason that the sympathy of the law on social security is toward its
disability," on the other hand, occurs when an employee loses the use of any particular anatomical part beneficiaries, and the law, by its own terms,18 requires a construction of utmost liberality in their favor. It
of his body which disables him to continue with his former work. Stated otherwise, the test of whether or is likewise for this reason that the Court disposes of this case and ends a workingman's struggle for his
not an employee suffers from "permanent total disability" is a showing of the capacity of the employee just dues.
to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the
injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 WHEREFORE, the decision of the respondent Employees' Compensation Commission is SET ASIDE
days and he does not come within the coverage of Rule X of the Amended Rules on Employees and another one is hereby ENTERED declaring the petitioner to be suffering from permanent total
Compensability (which, in a more detailed manner, describes what constitutes temporary total disability. Respondent Employees' Compensation Commission is accordingly ORDERED to award the
disability), then the said employee undoubtedly suffers from "permanent total disability" regardless of petitioner the benefits corresponding to his permanent total disability.
whether or not he loses the use of any part of his body.
SO ORDERED.
In the case at bar, the petitioner's permanent total disability is established beyond doubt by several Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea
factors and circumstances.1wphi1 Noteworthy is the fact that from all available indications, it appears and Regalado, JJ., concur.
that the petitioner's application for optional retirement on the basis of his ailments had been approved.
The decision of the respondent Commission even admits that the petitioner "retired from government Footnotes
1
Penned by Executive Director Jorge B. Contreras, rollo, 38-41.
service at the age of 45."13 Considering that the petitioner was only 45 years old when he retired and 2
Rollo, id., 5-6; see also rollo, 38-39.
** Fellow Philippine College of Surgeons.
still entitled, under good behavior, to 20 more years in service, the approval of his optional retirement *** Fellow International College of Surgeons.
application proves that he was no longer fit to continue in his employment. 14 For optional retirement is
3
Id., 20.
4
Id., 22, 39.
allowed only upon proof that the employee-applicant is already physically incapacitated to render sound 5
6
Id., 6.
Id., 24.
and efficient service.15 7
Id., 39.
8
Id., 41.
9
Pres. Decree No. 442, art. 191.
10
Supra., Article 192.
Further, the appropriate physicians of the petitioner's employer, the Veterans Memorial Medical Center, 11
12
Supra., Article 193.
Evaristo Abaya, Jr. vs. Employees' Compensation Commission, G.R. No. 64255, August 16, 1989; Landicho vs. Workmen's Compensation Commission, No. L-45996,
categorically certified that the petitioner was classified under permanent total disability. On this score, March 26, 1979, 89 SCRA 147.
13
Rollo, Id., 38.
"the doctor's certification as to the nature of the claimant's disability may be given credence as he 14
Evaristo Abaya, Jr. vs. Employees' Compensation Commission, supra; Laginlin vs. Workmen's Compensation Commission, L- 45785, March 4, 1988, 159 SCRA 91;
Gonzaga vs. Employees' Compensation Commission, No. 62287, January 31, 1984, 127 SCRA 443.
normally would not make a false certification."16 And, "[N]o physician in his right mind and who is aware 15
Parages vs. Employees' Compensation Commission, No. L- 46775, January 17, 1985, 134 SCRA 73.
16
Bello vs. Workmen's Compensation Commission, No. L- 43292, March 18, 1987, 148 SCRA 619, 612-622.
of the far-reaching and serious effect that his statements would cause on a money claim filed with a 17
Marte vs. Employees' Compensation Commission, No. L- 46362, March 31, 1980, 96 SCRA 884, 890.
18
Pres. Decree No. 442, supra, art. 4, see also CONST., art. XIII, secs. 3, 12.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 96422 February 28, 1994
FRANCISCO S. TANTUICO, JR., petitioner,
vs.
HON. EUFEMIO DOMINGO, in his capacity as Chairman of the Commission on Audit, ESTELITO
SALVADOR, MARGARITO SILOT, VALENTINA EUSTAQUIO, ANICIA CHICO and GERMINIA
PASCO, respondents.
Kenny H. Tantuico for petitioner.
The Solicitor General for respondents.
QUIASON, J.:
This is a petition for certiorari, prohibition and mandamus, with prayer for temporary restraining order or
preliminary injunction, under Rule 65 of the Revised Rules of Court.
The petition mainly questions the withholding of one-half of petitioner's retirement benefits.
I selective review of post-audit transactions in the head offices and the State Accounting and Auditing
On January 26, 1980, petitioner was appointed Chairman of the Commission on Audit (COA) to serve a
term of seven years expiring on January 26, 1987. Petitioner had discharged the functions of Chairman
of the COA in an acting capacity since 1975.
On December 31, 1985, petitioner applied for clearance from all money, property and other
accountabilities in preparation for his retirement. He obtained the clearance applied for, which covered
the period from 1976 to December 31, 1985. The clearance had all the required signatures and bore a
certification that petitioner was "cleared from money, property and/or other accountabilities by this
Commission" (Rollo, p. 44).
After the EDSA Revolution, petitioner submitted his courtesy resignation to President Corazon C.
Aquino. He relinquished his office to the newly appointed Chairman, now Executive Secretary Teofisto
Guingona, Jr. on March 10, 1986. That same day, he applied for retirement effective immediately.
Petitioner sought a second clearance to cover the period from January 1, 1986 to March 9, 1986. All the
signatures necessary to complete the second clearance, except that of Chairman Guingona, were
obtained. The second clearance embodies a certificate that petitioner was "cleared from money,
property and/or accountability by this Commission" (Rollo, p. 49). Chairman Guingona, however, failed
to take any action thereon.
Chairman Guingona was replaced by respondent Chairman. A year later, respondent Chairman issued
COA Office Order No. 87-10182 (Rollo, p. 50), which created a committee to inventory all equipment
acquired during the tenure of his two predecessors.
On May 7, 1987, respondent Chairman indorsed petitioner's retirement application to the Government
Service Insurance System (GSIS), certifying, among other matters, that petitioner was cleared of money
and property accountability (Rollo, p. 52). The application was returned to the COA pursuant to R.A. No.
1568, which vests in the COA the final approval thereof.
On September 25, 1987, the inventory committee finally submitted its report, recommending petitioner's
clearance from property accountability inasmuch as there was no showing that he personally gained
from the missing property or was primarily liable for the loss thereof (Rollo, pp. 53-58).
Not satisfied with the report, respondent Chairman issued a Memorandum directing the inventory
committee to explain why no action should be filed against its members for failure to complete a
physical inventory and verification of all equipment; for exceeding their authority in recommending
clearances for petitioner and Chairman Guingona; and for recommending petitioner's clearance in total
disregard of Section 102 of P.D. No. 1445 (Government Auditing Code of the Philippines). The
members of the committee were subsequently administratively charged.
On January 2, 1988, respondent Chairman created a special audit team for the purpose of conducting a
financial and compliance audit of the COA transactions and accounts during the tenure of petitioner
from 1976 to 1984 (COA Office Order 88-10677; Rollo, pp. 66-67).
On February 28, 1989, the special audit team submitted its report stating: (i) that the audit consisted of
Center; (ii) that the audit disclosed a number of deficiencies which adversely affected the financial
condition and operation of the COA, such as violations of executive orders, presidential decrees and
related rules and regulations; and (iii) that there were some constraints in the audit, such as the
unavailability of records and documents, and personnel movements and turnover. While the report did
not make any recommendation, it instead mentioned several officials and employees, including
petitioner, who may be responsible or accountable for the questioned transactions (Rollo, pp. 73, 147-
151).
Respondent Chairman rendered a Decision dated November 20, 1989, in the administrative case filed
against the principal members of the first inventory committee. He found them guilty as charged and
issued them a reprimand. The other members were meted a stern warning, except for one who was
exonerated for not taking part in the preparation of the inventory report.
In a letter dated December 21, 1989, a copy of which was received by petitioner on December 27,
1989, respondent Chairman informed petitioner of the approval of his application for retirement under
R.A. No. 1568, effective as of March 9, 1986 (Rollo, pp. 68-69). However, respondent Chairman added:
 . . . In view, however, of the audit findings and inventory report adverted to above,
payment of only one-half () of the money value of the benefits due you by reason of
such retirement will be allowed, subject to the availability of funds and the usual
accounting and auditing rules. Payment of the balance of said retirement benefits
shall be subject to the final results of the audit concerning your fiscal responsibility
and/or accountability as former Chairman of this Commission.
In a letter dated January 22, 1990, petitioner requested full payment of his retirement benefits.
Petitioner was furnished a copy of the report of the special audit team in the letter dated December 21,
1989 of respondent Chairman on January 29, 1990, nearly a year after its completion. Attached to a
copy of the report was a letter dated November 14, 1989 from respondent Chairman, who required
petitioner to submit his comment within 30 days (Rollo, p. 153).
Petitioner submitted a letter-complaint, wherein he cited certain defects in the manner the audit was
conducted. He further claimed that the re-audit was not authorized by law since it covered closed and
settled accounts.
Upon petitioner's request, he was furnished a set of documents which he needed to prepare his
comment. He was likewise given another 30-days to submit it.
A series of correspondence between petitioner and respondent Chairman ensued. On September 10,
1990, petitioner requested a copy of the working papers on which the audit report was based. This was
denied by respondent Chairman, who claimed that under the State Audit Manual, access to the working
paper was restricted. Petitioner's reconsideration was likewise denied and he was given a non-
extendible period of five days to submit his comment.
Instead of submitting his comment, petitioner sought several clarifications and specification, and
requested for 90 days within which to submit his comment, considering that the report covered a ten-
year period of post-audited transactions. Ignoring petitioner's request, respondent Chairman demanded
an accounting of funds and a turn over of the assets of the Fiscal Administration Foundation, Inc. within
30 days.
II
Petitioner then filed the instant petition. As prayed for by petitioner, this Court issued a temporary
restraining order on January 17, 1991.
Petitioner argues that notwithstanding the two clearances previously issued, and respondent
Chairman's certification that petitioner had been cleared of money and property accountability,
respondent Chairman still refuses to release the remaining half of his retirement benefits a purely
ministerial act.
Petitioner was already issued an initial clearance during his tenure, effective December 31, 1985 (Rollo,
p. 44). All the required signatures were present "is cleared from money, property and/or accountabilities
by this commission" with the following notation:
No property accountability under the Chairman's name as the person. Final clearance
as COA Chairman subject to the completion of ongoing reconciliation of Accounting &
P(roperty) records and to complete turnover of COA property assigned to him as
agency head.
xxx xxx xxx
The responsibility of the Chairman for the disbursement and collection accounts of
this Commission for CYs Sept. '75 to Aug. '85, were completely post-audited,
however as of Dec. 31, 1985, the suspensions and disallowances in the amounts of
P36,196,962.11 and P28,762.36 respectively are still in the process of settlement
(Rollo, pp. 44-45).
Petitioner also applied for a second clearance to cover the period from January 1 to March 9, 1986,
which application had been signed by all the officials, except the Chairman (Rollo, p. 49).
Whatever infirmities or limitations existed in said clearances were cured after respondent Chairman
favorably indorsed petitioner's application for retirement to the Government Service Insurance System
and recommended its approval to take effect on March 10, 1986. In said endorsement, respondent
Chairman made it clear that there were no pending administrative and criminal cases against petitioner
(Rollo, p. 52).
Regardless of petitioner's monetary liability to the government that may be discovered from the audit
concerning his fiscal responsibility as former COA Chairman, respondent Chairman cannot withhold the
benefits due petitioner under the retirement laws.
In Romana Cruz v. Hon. Francisco Tantuico, 166 SCRA 670 (1988), the National Treasurer withheld the
retirement benefits of an employee because of his finding that she negligently allowed the anomalous
encashment of falsified treasury warrants.
In said case, where petitioner herein was one of the respondents, we found that the employee had been
cleared by the National Treasurer from all money and property responsibility, and held that the
retirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the
government.
In Tantuico, we cited Justice Laurel's essay on the rationale for the benign ruling in favor of the retired
employees, thus:
. . . Pension in this case is a bounty flowing from the graciousness of the Government
intended to reward past services and, at the same time, to provide the pensioner with
the means with which to support himself and his family. Unless otherwise clearly
provided, the pension should inure wholly to the benefit of the pensioner. It is true that
the withholding and application of the amount involved was had under Section 624 of
the Administrative Code and not by any judicial process, but if the gratuity could not
be attached or levied upon execution in view of the prohibition of Section 3 of Act No.
4051, the appropriation thereof by administrative action, if allowed, would lead to the
same prohibited result and enable the respondent to do indirectly what they can not
do directly under Section 3 of the Act No. 4051. Act No. 4051 is a later statute having
been approved on February 21, 1933, whereas the Administrative Code of 1917
 which embodies Section 624 relied upon by the respondents was approved on March But in order to prepare his comment, petitioner should be given access to the working papers used by
10 of that year. Considering Section 3 of Act No. 4051 as an exception to the general the special audit team. The audit report covered a period of ten years (1976-1985) and involved
authority granted in Section 624 of the Administrative Code, antagonism between the numerous transactions. It would be unfair to expect petitioner to comment on the COA's findings of the
two provisions is avoided (Hunt v. Hernandez, 64 Phil. 753 [1937]). report without giving him a chance to verify how those findings were arrived at.

Under Section 4 of R.A. No. 1568 (An Act to Provide Life Pension to the Auditor General and the
Chairman or Any Member of the Commission of Elections), the benefits granted by said law to the
Auditor General and the Chairman and Members of the Commission on Elections shall not be subject to
garnishment, levy or execution. Likewise, under Section 33 of P.D. No. 1146, as amended (The
Revised Government Service Insurance Act of 1977), the benefits granted thereunder "shall not be
subject, among others, to attachment, garnishment, levy or other processes."
Well-settled is the rule that retirement laws are liberally interpreted in favor of the retiree because the
intention is to provide for the retiree's sustenance and comfort, when he is no longer capable of earning
his livelihood (Profeta vs. Drilon, 216 SCRA 777 [1992]).
Petitioner also wants us to enjoin the re-audit of his fiscal responsibility or accountability, invoking the
following grounds:
It has been seven years since petitioner's retirement. Since then he was only paid half of his retirement
benefits, with the other half being withheld despite the issuance of two clearances and the approval of
his retirement application. As of the filing of this petition on December 21, 1990, no criminal or
administrative charge had been filed against petitioner in connection with his position as former Acting
Chairman and Chairman of the COA.
WHEREFORE, the petition is GRANTED insofar as it seeks to compel respondent Chairman of the
COA to pay petitioner's retirement benefits in full and his monthly pensions beginning in March 1991.
The petition is DENIED insofar as it seeks to nullify COA Office Order No. 88-10677 and the audit report
dated February 28, 1989 but petitioner should be given full access to the working papers to enable him
to prepare his comment to any adverse findings in said report. The temporary restraining order is
LIFTED.

1. The re-audit involved settled and closed accounts which under Section 52 of the SO ORDERED.
Audit Code can no longer be re-opened and reviewed;
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo,
2. The re-audit was initiated by respondent Chairman alone, and not by the Puno, Vitug and Kapunan, JJ., concur.
Commission as a collegial body;

3. The report of the special audit team that recommended the re-audit is faulty as the
team members themselves admitted several constraints in conducting the re-audit,
e.g. unavailability of the documents, frequent turn-over and movement of personnel,
etc.;

4. The re-audit covered transactions done even after petitioner's retirement;

5. He was not given prior notice of the re-audit;

6. He was not given access to the working papers; and

7. Respondents were barred by res judicata from proceeding with the re-audit (Rollo,
pp. 19-40).

The petition must fail insofar as it seeks to abort the completion of the
re-audit. While at the beginning petitioner raised objections to the manner the audit was conducted and
the authority of respondents to re-open the same, he subsequently cooperated with the examination of
his accounts and transactions as a COA official.

With respect to the legal objections raised by petitioner to the partial findings of the respondents with
respect to his accountability, such findings are still tentative. As petitioner has requested, he is entitled
to a reasonable time within which to submit his comment thereon.

EN BANC
January 19, 2016
G.R. No. 215995
VICE-MAYOR MARCELINA S. ENGLE, Petitioner,
vs.
COMMISSION ON ELECTIONS EN BANC and WINSTON B. MENZON, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Challenged in this petition for certiorari and prohibition under Rule 64 in relation to Rule 65 of the 1997
Rules of Civil Procedure is the Resolution1 of the Commission on Elections (COMELEC) En Banc dated
January 20, 2015 which upheld the Resolution2 of the COMELEC Second Division dated July 5, 2013,
denying due course to and/or cancelling petitioner's certificate of candidacy; annulling her proclamation
as the duly-elected Vice-Mayor of Babatngon, Leyte; and proclaiming private respondent in her stead.
Petitioner and private respondent vied for the position of Vice-Mayor of the Municipality of Babatngon,
Province of Leyte in the May 13, 2013 Automated Synchronized National, Local and ARMM Regional
Elections (the May 13, 2013 Elections, for brevity). Petitioners late husband, James L. Engle, was
originally a candidate for said contested position; however, he died of cardiogenic shock on February 2,
2013.3 Due to this development, petitioner filed her certificate of candidacy4 on February 22, 2013 as a
substitute candidate for her deceased spouse.
In response, private respondent filed, on February 25, 2013, a Petition to Deny Due Course and/or
Cancel the Certificate of Candidacy5 (COC) of petitioner arguing in the main that the latter
misrepresented that she is qualified to substitute her husband, who was declared an independent
candidate by the COMELEC. It would appear that James L. Engles Certificate of Nomination and
Acceptance (CONA) was signed by Lakas Christian Muslim Democrats (Lakas-CMD) Leyte Chapter
President, Ferdinand Martin G. Romualdez (Romualdez). However, Lakas-CMD failed to submit to the
COMELEC Law Department the authorization of Romualdez to sign the CONAs of Lakas-CMD
candidates in Babatngon as prescribed by Section 6(3) of COMELEC Resolution No. 9518. Thus, the
COMELEC Law Department considered all Lakas-CMD candidates whose CONAs were signed by
Romualdez as independent candidates.6 For this reason, private respondent charged petitioner with
violation of Section 15, COMELEC Resolution No. 9518 which disallows the substitution of an
independent candidate. He argued that petitioners declaration that she was a member of the political
party, Lakas-CMD, was intended to deceive the electorate that she was qualified to substitute her
husband. Additionally, private respondent claimed that [t]he false representation of the [petitioner] that
she is qualified for public office consisted of a deliberate attempt to mislead, misinform, or hide a fact
that would otherwise render a candidate ineligible. 7
In petitioners Verified Answer,8 she countered that: (1) the ground relied upon in private respondents
petition was not the ground contemplated by Section 1, Rule 23 of COMELEC Resolution No. 9523; (2)
the COMELEC did not issue an official declaration that petitioners husband was an independent
candidate; and (3) James L. Engles CONA was signed by an authorized person acting on behalf of
LAKAS-CMD.
With regard to her first counter-argument, petitioner posited that, under Section 1, Rule 23 of
COMELEC Resolution No. 9523, the exclusive ground for denial or cancellation of a COC is the falsity
of a material representation contained therein that is required by law. Private respondents assertion
that petitioners statement in her COC regarding her affiliation with a political party was such a false
representation is absurd considering that her CONA was signed by Senator Ramon Bong Revilla, Jr.
and Mr. Raul L. Lambino, President and Senior Deputy Secretary-General of Lakas-CMD, respectively.
Assuming the veracity of private respondents allegations, his contention that petitioner is disqualified to
run as a substitute is not a proper subject of a petition to deny due course or to cancel a COC. The
qualification or disqualification of a candidate is allegedly covered by Sections 12, 68, 69 and 78 of the
Omnibus Election Code. In petitioners view, the petition to cancel her COC is dismissible according to
the second paragraph of Section 1 of COMELEC Resolution No. 9523 which provides that [a] petition
to Deny Due Course to or Cancel Certificate of Candidacy invoking grounds other than those stated
above or grounds for disqualification, or combining grounds for a separate remedy, shall be summarily
dismissed.
As for petitioners counter-arguments on the substantive issues, she contended that there was no
official declaration from the COMELEC that her deceased husband was an independent candidate.
Private respondents reliance on a mere print out of the COMELEC website listing her husband as an
independent candidate was misplaced as the same cannot be considered authoritative as opposed to
official documents that showed James L. Engles nomination by Lakas-CMD and his acceptance of said
nomination to run for the position of Vice-Mayor of Babatngon, Leyte under the banner of Lakas-CMD.
Moreover, petitioner stressed that Romualdez was authorized to sign James L. Engles CONA. She
attached to her Verified Answer a copy of the Authority to Sign Certificates of Nomination and
Acceptance dated September 11, 2012 which was signed by Ramon Bong Revilla, Jr. (National
President) and Jose S. Aquino II (Secretary-General) of Lakas-CMD in favor of Romualdez.
The petition to deny due course or cancel petitioners COC was still pending with the COMELEC
Second Division when the May 13, 2013 Elections were held. James L. Engles name remained on the
ballot. On May 15, 2013, the Municipal Board of Canvassers issued a certificate of canvass of votes
and proclamation of winning candidates for Babatngon Mayor and Vice-Mayor9 wherein petitioner was
declared as the duly-elected Vice-Mayor of Babatngon, Leyte. Petitioner was credited with the Six
Thousand Six Hundred Fifty Seven (6,657) votes cast for her husband as against private respondents
Three Thousand Five Hundred Fifteen (3,515) votes.10
It was only on July 5, 2013 did the COMELEC Second Division promulgate the assailed Resolution
which denied due course to and cancelled petitioners COC resulting in the annulment of petitioners
previous proclamation as duly-elected Vice-Mayor of Babatngon, Leyte and the declaration of private
respondent as winner of the contested position. The dispositive portion of the July 5, 2013 Resolution is
reproduced here:
WHEREFORE, premises considered, this Commission hereby RESOLVES to DENY DUE COURSE to
and/or CANCEL the Certificate of Candidacy filed by Respondent MARCELINA S. ENGLE for the
position of Vice-Mayor of Babatngon, Leyte, for the 13 May 2013 National and Local Elections.
Moreover, Respondent MARCELINA S. ENGLEs proclamation as the duly-elected Vice-Mayor of
Babatngon, Leyte is hereby ANNULLED. Accordingly:
1. The Executive Director is ordered to constitute a Special Municipal Board of Canvassers for the
municipality of Babatngon, Leyte; and
2. The Special Municipal Board of Canvassers is ordered to immediately notify the parties, reconvene
and proclaim Petitioner WINSTON B. MENZON as the duly-elected Vice-Mayor of Babatngon, Leyte.
Let the Executive Director implement this Resolution.11
According to the COMELEC Second Division, the substitution of petitioner as a candidate in place of
her deceased husband for the position of Vice-Mayor of Babatngon, Leyte was not a material
misrepresentation which may be a ground for cancellation of her COC under Section 78, in relation to
Section 74, of the Omnibus Election Code (OEC). Citing jurisprudence, the COMELEC Second Division
ruled that the false representation contemplated under the law refers to a material fact affecting a
candidates qualification for office such as citizenship or residence.
Despite the foregoing finding, the COMELEC Second Division nonetheless found sufficient basis to
cancel petitioners COC on the ground that she could not have validly substituted her husband, who
was deemed an independent candidate for failure of Lakas-CMD to submit to the COMELEC Law
Department Romualdezs authority to sign CONAs for and on behalf of the party on or before October 1,
2012 in violation of Section 6 (3) of COMELEC Resolution No. 9518. The COMELEC Second Division
noted that the purported authorization of Romualdez to sign CONAs for Lakas-CMD candidates in Leyte
was belatedly submitted in connection with the proceedings on the petition to deny due course to, or
cancel petitioners COC.
Finally, on the point on who should be declared the winning candidate for the position of Vice-Mayor of
Babatngon, the COMELEC Second Division held that private respondent, the second placer, should be
declared the winner in line with jurisprudence stating that if the COC of the winning candidate is void ab
initio then the votes of the disqualified or ineligible candidate should be considered stray.
Aggrieved, petitioner moved for reconsideration of the aforementioned ruling of the COMELEC Second
Division with the COMELEC En Banc. However, the latter tribunal denied petitioners plea in the
assailed January 20, 2015 Resolution, the dispositive portion of which reads:
WHEREFORE, premises considered, the Motion for Reconsideration is DENIED for LACK OF MERIT.
The Resolution of the Commission (Second Division) is AFFIRMED.12
Appealing now to this Court for relief, petitioner offers the following arguments in support of her petition:
I
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
GRANTED THE PETITION FILED BY MENZON DESPITE ITS FINDING THAT ENGLE DID NOT
COMMIT ANY MATERIAL MISREPRESENTATION IN HER CERTIFICATE OF CANDIDACY.
II
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
GRANTED THE PETITION FILED BY MENZON EVEN THOUGH NO LEGAL GROUND EXISTS TO
DENY DUE COURSE TO OR CANCEL ENGLES CERTIFICATE OF CANDIDACY GIVEN THE
ABSENCE OF MATERIAL MISREPRESENTATION IN THIS CASE.
III
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DENIED DUE COURSE TO AND CANCELLED PETITIONERS CERTIFICATE OF CANDIDACY EVEN
THOUGH THE PETITION FILED BY MENZON IS CLEARLY THE WRONG LEGAL REMEDY TO
ASSAIL THE SUPPOSED INVALIDITY OF PETITIONERS SUBSTITUTION THUS VIOLATING
ENGLES CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW.
IV
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DECLARED THAT ROMUALDEZ HAS NO AUTHORITY TO SIGN THE CONA OF LAKAS-CMDs
CANDIDATES IN LEYTE.
V
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
GRANTED THE PETITION FILED BY MENZON AND PENALIZED THE PETITIONER FOR AN
OMISSION DONE BY ANOTHER PARTY AS THIS RUN CONTRARY TO THE PRINCIPLE OF RES
INTER ALIOS ACTA.
VI
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DECLARED THAT PETITIONER ENGLE CANNOT VALIDLY SUBSTITUTE HER DECEASED
HUSBAND, JAMES L. ENGLE, AS THE LAKAS-CMD CANDIDATE FOR THE POSITION OF
VICEMAYOR OF BABATNGON, LEYTE.
VII
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
DISREGARDED AND BYPASSED THE WILL OF THE ELECTORATE BY IGNORING THE
OVERWHELMING AND PROMINENT NUMBER OF VOTES OBTAINED BY ENGLE DURING THE
RECENTLY CONCLUDED MAY 13, 2013 NATIONAL AND LOCAL ELECTIONS.
VIII
PUBLIC RESPONDENT COMELEC EN BANC AND ITS SECOND DIVISION ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT
ORDERED THE PROCLAMATION OF MENZON, THE CANDIDATE WHO OBTAINED THE SECOND
HIGHEST NUMBER OF VOTES, FOR THE POSITION OF VICE-MAYOR OF BABATNGON, LEYTE.13
During the pendency of this petition, the COMELEC En Banc issued on February 3, 2015 a Writ of
Execution14 in SPA Case No. 13-232 (DC) (F) in response to a motion filed by private respondent which
set the stage for the immediate implementation of the assailed COMELEC Resolutions which are the
subject matter of this case.
On February 26, 2015, the COMELEC filed its Comment15 wherein it raised the following counter-
arguments:
I.
THE NAME AND SPECIMEN SIGNATURES OF THE PARTY OFFICIAL AUTHORIZED TO SIGN THE
CONA SHOULD BE TRANSMITTED TO THE COMELEC WITHIN THE PERIOD PROVIDED IN
RESOLUTION NO. [9518].
II.
POLITICAL PARTIES AND THE CANDIDATES THEMSELVES KNEW OF RESOLUTION NO. 9518 AS
IT WAS THE GUIDELINES PROMULGATED FOR THE CONDUCT OF THE MAY 2013 NATIONAL
AND LOCAL ELECTIONS.
III.
OTHER CANDIDATES WERE SIMILARLY DEEMED INDEPENDENT CANDIDATES FOR FAILURE
TO COMPLY WITH RESOLUTION NO. 9518.
IV.
THE PROSCRIPTION AGAINST THE SUBSTITUTION OF AN INDEPENDENT CANDIDATE WHO
DIES PRIOR TO THE ELECTION IS A LEGAL PRINCIPLE.
V.
PETITIONER COULD NOT BE VOTED FOR IN THE MAY 2013 NATIONAL AND LOCAL ELECTIONS.
VI.
PETITIONER WAS NOT DENIED DUE PROCESS WHEN HER COC WAS CANCELLED BY THE
COMELEC.
VII.
NO GRAVE ABUSE OF DISCRETION WAS COMMITTED BY COMELEC IN CANCELLING
PETITIONERS COC.16
Private respondent likewise filed his Comment/Opposition17 on March 17, 2015. In his pleading, private
respondent identified the following issues that should be resolved in this case:
I. Whether or not petitioner Engle can validly substitute for her late husband James Engle who
was an independent candidate for Vice-Mayor of Babatngon, Leyte;
II. Whether or not private respondent (sic) the Commission En Banc erred in ordering the
proclamation of private respondent Menzon as the candidate who obtained the second highest
number of votes, for the position of Vice-Mayor of Babatngon, Leyte;
III. Whether or not the Commission En Banc erred in granting private respondents Petition in
the absence of a finding of material misrepresentation of this case; [and]
IV. Whether or not petitioners prayer for issuance of temporary restraining order and/or status
quo ante order and/or preliminary injunction is meritorious.18
From the parties submissions, it is apparent that this case rests upon the resolution of the following
core issues:
I
WHETHER OR NOT PETITIONERS COC WAS VALIDLY CANCELLED BY THE COMELEC
II
WHETHER OR NOT PETITIONER CAN VALIDLY SUBSTITUTE HER HUSBAND JAMES L. ENGLE
AFTER HIS UNEXPECTED DEMISE
III
WHETHER OR NOT PRIVATE RESPONDENT CAN BE VALIDLY PROCLAIMED AS VICE-MAYOR
OF BABATNGON, LEYTE DESPITE HAVING PLACED ONLY SECOND IN THE MAY 13, 2013
ELECTIONS
We grant the petition.
Under Section 78 of the OEC, a petition to deny due course to, or cancel a COC may be filed on the
exclusive ground of false material representation in said COC. For reference, we quote the full provision
here:
Section 78. Petition to deny due course to or cancel a certificate of candidacy. A verified petition
seeking to deny due course or to cancel a certificate of candidacy may be filed by any person
exclusively on the ground that any material representation contained therein as required under Section
74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of
the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than
fifteen days before the election.
Section 74 of the OEC in turn enumerates the items that should be stated in a COC, to wit:
Section 74. Contents of certificate of candidacy. - The certificate of candidacy shall state that the person
filing it is announcing his candidacy for the office stated therein and that he is eligible for said office; if
for Member of the Batasang Pambansa, the province, including its component cities, highly urbanized
city or district or sector which he seeks to represent; the political party to which he belongs; civil status;
his date of birth; residence; his post office address for all election purposes; his profession or
occupation; that he will support and defend the Constitution of the Philippines and will maintain true faith
and allegiance thereto; that he will obey the laws, legal orders, and decrees promulgated by the duly
constituted authorities; that he is not a permanent resident or immigrant to a foreign country; that the
obligation imposed by his oath is assumed voluntarily, without mental reservation or purpose of evasion;
and that the facts stated in the certificate of candidacy are true to the best of his knowledge.
Unless a candidate has officially changed his name through a court approved proceeding, a [candidate]
shall use in a certificate of candidacy the name by which he has been baptized, or if has not been
baptized in any church or religion, the name registered in the office of the local civil registrar or any
other name allowed under the provisions of existing law or, in the case of a Muslim, his Hadji name after
performing the prescribed religious pilgrimage: Provided, That when there are two or more candidates
for an office with the same name and surname, each candidate, upon being made aware or such fact,
shall state his paternal and maternal surname, except the incumbent who may continue to use the
name and surname stated in his certificate of candidacy when he was elected. He may also include one
nickname or stage name by which he is generally or popularly known in the locality.
The person filing a certificate of candidacy shall also affix his latest photograph, passport size; a
statement in duplicate containing his bio-data and program of government not exceeding one hundred
words, if he so desires.
Based on the letter of the foregoing provisions, we agree with the COMELEC Second Division finding,
implicitly affirmed by the COMELEC En Banc, that there was no false material representation in
petitioners COC under Section 78, in relation to Section 74, of the OEC.
We quote with approval the following disquisition in the COMELEC Second Divisions Resolution dated
July 5, 2013:
The false representation which is a ground for a denial of due course to and/or cancellation of a
candidates COC refers to a material fact relating to the candidates qualification for office such as ones
citizenship or residence. Thus, citing Salcedo II v. COMELEC and Lluz v. COMELEC, the Supreme
Court, in the case of [Ugdoracion], Jr. v. COMELEC, et al., ruled as follows:
In case there is a material misrepresentation in the certificate of candidacy, the Comelec is authorized
to deny due course to or cancel such certificate upon the filing of a petition by any person pursuant to
Section 78. x x x.
xxxx
As stated in the law, in order to justify the cancellation of the certificate of candidacy under Section 78, it
is essential that the false representation mentioned therein pertain[s] to a material matter for the
sanction imposed by this provision would affect the substantive rights of a candidate the right to run for
the elective post for which he filed the certificate of candidacy. Although the law does not specify what
would be considered as a material representation, the court has interpreted this phrase in a line of
decisions applying Section 78 of [B.P. 881].
xxxx
Therefore, it may be concluded that the material misrepresentation contemplated by Section 78 of the
Code refer[s] to qualifications for elective office.1avvphi1 This conclusion is strengthened by the
fact that the consequences imposed upon a candidate guilty of having made a false representation in
[the] certificate of candidacy are grave to prevent the candidate from running or, if elected, from serving,
or to prosecute him for violation of the election laws. It could not have been the intention of the law to
deprive a person of such a basic and substantive political right to be voted for a public office upon just
any innocuous mistake.19
Undeniably, private respondent failed to demonstrate that petitioner made a false statement regarding
her qualifications or concealed any disqualification for the office to which she sought to be elected in her
COC to warrant its cancellation under Section 78.
The records also show that when petitioners husband filed his certificate of candidacy on October 4,
2012 with the Office of the Election Officer in Babatngon, Leyte he clearly indicated therein that he was
a nominee of Lakas-CMD and attached thereto not only the CONA signed by Romualdez but also the
Authority to Sign Certificates of Nomination and Acceptance dated September 12, 2012 in favor of
Romualdez signed by Lakas-CMD President Revilla and Lakas-CMD Secretary-General Aquino.
In Sinaca v. Mula,20 we held:
A certificate of candidacy is in the nature of a formal manifestation to the whole world of the candidate's
political creed or lack of political creed. It is a statement of a person seeking to run for a public office
certifying that he announces his candidacy for the office mentioned and that he is eligible for the office,
the name of the political party to which he belongs, if he belongs to any, and his post-office address for
all election purposes being as well stated.
Verily, it was publicly known that James L. Engle was a member of Lakas-CMD. As far as the party and
his wife were concerned, James L. Engle, as a member of Lakas-CMD, may be substituted as a
candidate upon his death. There was no evidence on record that the party or petitioner had notice or
knowledge of the COMELECs classification of James L. Engle as an independent candidate prior to
February 22, 2013 when petitioner filed her COC as a substitute for her deceased husband. The only
document in the record indicating that Lakas-CMD had been notified of James L. Engles designation as
an independent candidate is the Letter dated March 21, 2013 sent by the COMELEC Law Department
to Romualdez21 stating that James L. Engle was declared an independent candidate due to the failure
of Lakas-CMD to submit the authority of Romualdez to sign James L. Engles CONA to the Law
Department as required under Section 6(3) of COMELEC Resolution No. 9518 and in view thereof
petitioners COC as her husbands substitute was denied due course.
First, the COMELEC Law Departments ruling was issued only after the filing of petitioners COC.
Second, with respect to the denial of due course to James L. Engles COC as a nominee of Lakas-CMD
and to petitioners COC as his substitute, the COMELEC Law Departments letter is not binding and at
most, recommendatory. It is settled in jurisprudence that the denial of due course or cancellation of
ones COC is not within the administrative powers of the COMELEC, but rather calls for the exercise of
its quasi-judicial functions.22 We have also previously held that the COMELEC, in the exercise of its
adjudicatory or quasi-judicial powers, is mandated by the Constitution to hear and decide such cases
first by Division and, upon motion for reconsideration, by the En Banc.23 In resolving cases to deny due
course to or cancel certificates of candidacy, the COMELEC cannot merely rely on the
recommendations of its Law Department but must conduct due proceedings through one of its
divisions.24 Returning to the case at bar, the COMELEC Second Division only formally ruled on the
status of James L. Engle as an independent candidate and the invalidity of petitioners substitution on
July 5, 2013, months after the May 13, 2013 Elections.
Under these premises, the COMELEC correctly did not cancel petitioners COC on the ground of false
material representation as there was none.
This brings us to the second issue. Despite finding that there was no false material representation in
petitioners COC, the COMELEC nonetheless cancelled the same on the ground of invalidity of
petitioners substitution for her husband as candidate for Vice-Mayor of Babatngon, Leyte. The
COMELEC anchored its action on the fact that Romualdezs authority to sign James L. Engles CONA
was belatedly submitted and thus, the latter should be considered an independent candidate who
cannot be substituted under Section 7725 of the OEC and Section 15 of COMELEC Resolution No.
9518.26
It is on this point that the Court sees fit to overturn the COMELECs disposition of the present case.
The COMELEC relies heavily on Section 6 of COMELEC Resolution No. 9518, which reads:
Section 6. Filing of Certificate of Nomination and Acceptance of Official Candidates of a Political
Party / Coalition of Political Parties. - The Certificate of Nomination and Acceptance (CONA) of the
official candidates of the duly registered political party or coalition of political parties shall be, in five (5)
legible copies, attached to and filed simultaneously with the Certificate of Candidacy. The CONA shall
also be stamped received in the same manner as the Certificate of Candidacy.
The CONA, sample form attached, shall be duly signed and attested to under oath, either by the
Party President, Chairman, Secretary-General or any other duly authorized officer of the
nominating party and shall bear the acceptance of the nominee as shown by his signature in the
space provided therein.
For this purpose, all duly registered political parties or coalition of political parties shall, not
later than October 1, 2012, submit to the Law Department, the names and specimen signatures
of the authorized signatories of their official party nominations.
No duly registered political party or coalition of political parties shall be allowed to nominate more than
the number of candidates required to be voted for in a particular elective position; otherwise, in such a
situation, all of the nominations shall be denied due course by the Commission. (Emphases supplied.)
The Commission stressed that the belated filing of Romualdezs authority to sign James L. Engles COC
only in connection with the proceedings for cancellation of petitioners own COC is fatal to petitioners
cause in view of the categorical directive in the above provision that said authority must be submitted to
its Law Department on or before October 1, 2012.
This Court recognizes that the COMELEC is empowered by law to prescribe such rules so as to make
efficacious and successful the conduct of elections.27 However, it is a long standing principle in
jurisprudence that rules and regulations for the conduct of elections are mandatory before the election,
but when they are sought to be enforced after the election they are held to be directory only, if that is
possible, especially where, if they are held to be mandatory, innocent voters will be deprived of their
votes without any fault on their part.28 Over time, we have qualified this doctrine to refer only to matters
of form and cannot be applied to the substantial qualifications of candidates. This was discussed at
length in Mitra v. Commission on Elections,29 thus:
We have applied in past cases the principle that the manifest will of the people as expressed through
the ballot must be given fullest effect; in case of doubt, political laws must be interpreted to give life and
spirit to the popular mandate. Thus, we have held that while provisions relating to certificates of
candidacy are in mandatory terms, it is an established rule of interpretation as regards election laws,
that mandatory provisions, requiring certain steps before elections, will be construed as directory after
the elections, to give effect to the will of the people.
Quite recently, however, we warned against a blanket and unqualified reading and application of this
ruling, as it may carry dangerous significance to the rule of law and the integrity of our elections. For
one, such blanket/unqualified reading may provide a way around the law that effectively negates
election requirements aimed at providing the electorate with the basic information for an informed
choice about a candidates eligibility and fitness for office. Short of adopting a clear cut standard, we
thus made the following clarification:
We distinguish our ruling in this case from others that we have made in the past by the clarification that
COC defects beyond matters of form and that involve material misrepresentations cannot avail of the
benefit of our ruling that COC mandatory requirements before elections are considered merely directory
after the people shall have spoken. A mandatory and material election law requirement involves more
than the will of the people in any given locality. Where a material COC misrepresentation under oath is
made, thereby violating both our election and criminal laws, we are faced as well with an assault on the
will of the people of the Philippines as expressed in our laws. In a choice between provisions on
material qualifications of elected officials, on the one hand, and the will of the electorate in any given
locality, on the other, we believe and so hold that we cannot choose the electorate will.
Earlier, Frivaldo v. COMELEC provided the following test:
[T]his Court has repeatedly stressed the importance of giving effect to the sovereign will in order to
ensure the survival of our democracy. In any action involving the possibility of a reversal of the popular
electoral choice, this Court must exert utmost effort to resolve the issues in a manner that would give
effect to the will of the majority, for it is merely sound public policy to cause elective offices to be filled
by those who are the choice of the majority. To successfully challenge a winning candidate's
qualifications, the petitioner must clearly demonstrate that the ineligibility is so patently
antagonistic to constitutional and legal principles that overriding such ineligibility and thereby
giving effect to the apparent will of the people would ultimately create greater prejudice to the
very democratic institutions and juristic traditions that our Constitution and laws so zealously
protect and promote. (Citations omitted, underscoring supplied.)
As may be recalled, petitioners deceased husbands name remained on the ballot notwithstanding his
death even before the campaign period for the local elections began on March 29, 2013.30 Yet, he
received almost twice the number of votes as the second placer, private respondent, in a decisive
victory. Since the people of Babatngon, Leyte could not have possibly meant to waste their votes on a
deceased candidate, we conclude that petitioner was the undisputed choice of the electorate as Vice-
Mayor on the apparent belief that she may validly substitute her husband. That belief was not
contradicted by any official or formal ruling by the COMELEC prior to the elections.
We held in Rulloda v. Commission on Elections31 that:
Technicalities and procedural niceties in election cases should not be made to stand in the way of the
true will of the electorate. Laws governing election contests must be liberally construed to the end that
the will of the people in the choice of public officials may not be defeated by mere technical objections.
Election contests involve public interest, and technicalities and procedural barriers must yield if they
constitute an obstacle to the determination of the true will of the electorate in the choice of their elective
officials. The Court frowns upon any interpretation of the law that would hinder in any way not only the
free and intelligent casting of the votes in an election but also the correct ascertainment of the results.
We had the occasion to rule in Sinaca that an election in which the voters have fully, fairly, and
honestly expressed their will is not invalid even though an improper method is followed in the
nomination of candidates.32 In the same case, we proceeded to enumerate examples of formal defects
in a COC that may be treated with liberality once the electorate has spoken in an election, to wit:
It has been held that the provisions of the election law regarding certificates of candidacy, such as
signing and swearing on the same, as well as the information required to be stated therein, are
considered mandatory prior to the elections. Thereafter, they are regarded as merely directory. With
respect to election laws, it is an established rule of interpretation that mandatory provisions requiring
certain steps before election will be construed as directory after the elections, to give effect to the will of
the electorate. Thus, even if the certificate of candidacy was not duly signed or if it does not contain the
required data, the proclamation of the candidate as winner may not be nullified on such ground. The
defects in the certificate should have been questioned before the election; they may not be questioned
after the election without invalidating the will of the electorate, which should not be done. In Guzman
v. Board of Canvassers, the Court held that the will of the people cannot be frustrated by a technicality
that the certificate of candidacy had not been properly sworn to. This legal provision is mandatory and
non-compliance therewith before the election would be fatal to the status of the candidate before the
[election], but after the people have expressed their will, the result of the election cannot be defeated by
the fact that the candidate has not sworn to his certificate of candidacy. 33
Applying these jurisprudential precedents, we find that the late submission of Romualdezs authority to
sign the CONA of James L. Engle to the COMELEC was a mere technicality that cannot be used to
defeat the will of the electorate in a fair and honest election.
The Court has likewise ruled in the past that non-compliance with formal requirements laid down in
election laws when not used as a means for fraudulent practice will be considered a harmless
irregularity.34 Allowing the belated submission of Romualdezs authority to sign CONAs will not result in
the situation proscribed by Section 77 of the OEC that an independent candidate will be invalidly
substituted. In the case at bar, neither the COMELEC nor private respondent contended that James L.
Engle was not in fact a bona fide member of Lakas-CMD. The record is bereft of any allegation that the
authority in favor of Romualdez was inexistent, forged or in any way defective. The only issue was that
it was not submitted within the prescribed deadline. Nonetheless, said authority was submitted as early
as October 4, 2012 to the local election officer and subsequently to the COMELEC itself in the course of
the proceedings on private respondents petition to deny due course to, or cancel petitioners COC,
thereby putting election officials on notice that such authority exists even before the conduct of the May
13, 2013 Elections.
We distinguish this case from Federico v. Commission on Elections,35 wherein we strictly applied
election rules on substitution, particularly the deadline to file certificates of candidacy for substitutes of
candidates who voluntarily withdraw from the electoral race. In Federico, a liberal interpretation of the
rule would have led to a violation of the clear policy that no substitution for a voluntarily withdrawing
candidate can be made beyond the mandated deadline. In the case at bar, the intention behind setting
a deadline for the filing by political parties of an authority to sign CONAs was to give the COMELEC
reasonable opportunity to determine who are members of political parties and who are independent
candidates. This is so the COMELEC may prevent a violation of Section 77 of the OEC which reserves
the right to field a substitute candidate to duly registered political parties. A relaxation of the rules in the
present case would not result in the evil sought to be prevented. On the contrary, it is the strict
application of the rules that would lead to the iniquitous situation that a candidate who was in fact a
member of a political party would be considered an independent, thus infringing the right of the
nominating political party to replace him in the event of death, withdrawal or disqualification pursuant to
election laws.
To be sure, we have held that a political party has the right to identify who its members are. 36 From the
evidence it can be concluded that James L. Engle was not an independent candidate but indeed a
nominee of Lakas-CMD and he may be validly substituted by his wife, who was nominated by the same
political party, in light of his unexpected demise prior to the elections.
The COMELEC En Banc in its Resolution dated January 20, 2015 asserted that it cannot ignore Lakas-
CMD's non-compliance with Section 6 of COMELEC Resolution No. 9518 since the COMELEC En
Banc issued Minute Resolution No. 12-1133 dated December 11, 2012 applying said provision strictly
against the Liberal Party in the case of its local candidates for Camiguin who were similarly declared
independent candidates for failure to submit the authority to sign CONAs before October 1, 2012. While
we laud the COMELEC's attempt to apply the rule equally among the political parties, it has only itself to
blame for the present situation. It bears stressing here that election rules regarding formal matters are
deemed mandatory before the elections and only directory after the elections. In the case of the Liberal
Party candidates in Camiguin, the COMELEC En Banc rendered a formal ruling on their status as
independent candidates, months before the election, such that the Liberal Party was officially notified
that its candidates in Camiguin can no longer be substituted in the event of their death, withdrawal or
disqualification. Thus, the mandatory application of the rules was justified. In petitioner's case, no official
pronouncement was made by the COMELEC regarding her husband's status as an independent
candidate and the validity of her filing a COC as his substitute until July 5, 2013, long after the elections
were held. Indeed, it behooved the COMELEC to similarly resolve petitioner's case prior to the elections
had it wanted to treat all political parties equally.
In light of the foregoing discussion that petitioner may validly substitute her husband in the May 13, MARIA LOURDES P.A. SERENO
2013 Elections, it is no longer necessary to resolve the third issue on whether the COMELEC properly Chief Justice
proclaimed private respondent, the second-placer in the vice-mayoral race of Babatngon, in place of
petitioner, as well as the rest of the issues raised in the pleadings. CERTIFIED XEROX COPY
FELIPA B. ANAMA
WHEREFORE, premises considered, the petition is GRANTED. The assailed Resolution dated July 5, CLERK OF COURT, EN BANC
2013 of the COMELEC Second Division and the Resolution dated January 20, 2015 of the SUPREME COURT
COMELEC En Banc in SPA 13-232 (DC) (F) are REVERSED and SET ASIDE. Petitioner Marcelina S.
Engle is declared the duly-elected Vice-Mayor of Babatngon, Leyte during the May 13, 2013 Elections.

SO ORDERED.
Footnotes
TERESITA J. LEONARDO-DE CASTRO
Associate Justice * On leave.

WE CONCUR: 1 Rollo, pp. 42-54.

MARIA LOURDES P.A. SERENO 2 Id. at 55-68.

Chief Justice
3 Id. at 78-79.
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.
4
Associate Justice Associate Justice Id. at 81.

5
On leave Id. at 69-76.
DIOSDADO M. PERALTA
ARTURO D. BRION*
Associate Justice 6 Id. at 145-146.
Associate Justice

7
LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO Id. at 72.
Associate Justice Associate Justice
8 Id. at 86-96.
JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
9
Associate Justice Associate Justice Records, p. 134.

10
BIENVENIDO L. REYES ESTELA M. PERLAS-BERNABE Rollo, p. 44.
Associate Justice Associate Justice
11 Id. at 63-64.
MARVIC M.V.F. LEONEN FRANCIS H. JARDELEZA 12
Associate Justice Associate Justice Id. at 53.

13 Id. at 14-16.
CERTIFICATION
14 Id. at 190-193.
Pursuant to Article VIII, Section 13 of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of 15 Id. at 207-225.
the Court.
16 Id. at 212-213. The substitute of a candidate who has withdrawn on or before December 21, 2012
may file his Certificate of Candidacy for the office affected not later than December
17 Id. at 228-244. 21, 2012, so that the name of the substitute will be reflected on the official ballots.

18 Id. at 232. No substitution due to withdrawal shall be allowed after December 21, 2012.

19 Id. at 59. The substitute for a candidate who died or is disqualified by final judgment, may file
his Certificate of Candidacy up to mid-day of election day, provided that the substitute
20
and the substituted have the same surnames.
373 Phil. 896, 908 (1999).

21
Romualdez had previously sent a letter to the Municipal Election Officer of Babatngon, Leyte
informing the latter of the death of James L. Engle and submitting the certificate of candidacy
of petitioner as a substitute candidate. Romualdezs letter was forwarded by the Municipal
Election Officer to the COMELEC Law Department.
22 Cipriano v. Commission on Elections, 479 Phil. 677, 690 (2004).
23
Cerafica v. Commission on Elections, G.R. No. 205136, December 2, 2014.
If the death or disqualification should occur between the day before the election and
mid-day of election day, the substitute candidate may file his Certificate of Candidacy
with any Board of Election Inspectors in the political subdivision where he is a
candidate, or in the case of a candidate for Senator, with the Law Department of the
Commission on Elections in Manila, provided that the substitute and the substituted
candidate have the same surnames. (Emphasis supplied.)
27Federico v. Commission on Elections, G.R. No. 199612, January 22, 2013, 689 SCRA 134,
148.

24 28
Id. Luna v. Rodriguez, 39 Phil. 208, 214 (1918).

25 29
Section 77 provides: 636 Phil. 753, 792-793 (2010); reiterated in Jalover v. Osmea, G.R. No. 209286,
September 23, 2014, 736 SCRA 267, 288.
Sec. 77. Candidates in case of death, disqualification or withdrawal of another. If
30
after the last day for the filing of certificates of candidacy, an official candidate of a COMELEC Resolution No. 9385 issued on April 3, 2012.
registered or accredited political party dies, withdraws or is disqualified for any
cause, only a person belonging to, and certified by, the same political party may 31 443 Phil. 649, 655-656 (2003).
file a certificate of candidacy to replace the candidate who died, withdrew or was
disqualified. The substitute candidate nominated by the political party concerned may 32
file his certificate of candidacy for the office affected in accordance with the preceding Sinaca v. Mula, supra note 20 at 912.
sections not later than mid-day of the day of the election. If the death, withdrawal or
33
disqualification should occur between the day before the election and mid-day of Id. at 913-914.
election day, said certificate may be filed with any board of election inspectors in the
political subdivision where he is a candidate, or, in the case of candidates to be voted 34 See, for example, Alialy v. Commission on Elections, 112 Phil. 856, 860 (1961).
for by the entire electorate of the country, with the Commission. (Emphasis supplied.)
35
26
Supra note 27.
Section 15 of COMELEC Resolution No. 9518 provides:
36 Sinaca v. Mula, supra note 20 at 912.
Sec. 15. Substitution of Candidates in case of death, disqualification or withdrawal of
another. - If after the last day for the filing of Certificates of Candidacy, an official
candidate of a duly registered political party or coalition of political parties dies,
withdraws or is disqualified for any cause, he may be substituted by a candidate
belonging to, and nominated by, the same political party. No substitute shall be
allowed for any independent candidate.
 Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 166993 December 19, 2005
DSM CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,
vs.
COURT OF APPEALS and MEGAWORLD GLOBUS, Respondents.
DECISION
Tinga, J.:
This case springs from this Courts Decision dated 2 March 2004 in G.R. No. 153310, Megaworld
Globus Asia Inc. v. DSM Construction and Development Corp. (Megaworld), decided in favor of herein
petitioner DSM Construction. Said Decision having become final and executory, the corresponding entry
of judgment was made on 12 August 2004. This petition centers on attempts, regrettably entertained by
respondent Court of Appeals, to thwart the execution of a final and executory decision of this Court.
The Petition for Certiorari1 assails the Resolution2 dated 21 February 2005 of the Court of Appeals in
CA-G.R. SP No. 88314.3 Said Resolution ordered the issuance of a temporary restraining order
(TRO)4 enjoining the enforcement of an Alias Writ of Execution5 issued by the Construction Industry
Arbitration Commission (CIAC)6 in CIAC Case No. 22-2000 and ordering them to cease and desist from
proceeding with the scheduled execution sale on 1 March 2005 of levied condominium units of the
Salcedo Park condominium project owned by Megaworld Globus Asia, Inc. (respondent).
The antecedent facts follow.
As can be gleaned from Megaworld, petitioner and respondent entered into agreements for the
construction of a condominium project owned by respondent called "The Salcedo Park", with petitioner
as contractor. In the course of the projects construction, differences with respect to billings arose
between the parties. Petitioner thus filed a complaint for compulsory arbitration before the CIAC
claiming payment for approximately 97 Million as the outstanding balance due from respondent
pursuant to the agreements. On 19 October 2001, the CIAC rendered a decision partially granting both
petitioners and respondents claims, with a net award of Sixty Two Million Seven Hundred Sixty
Thousand Five Hundred Fifty Eight Pesos and Forty Nine Centavos (62,760,558.49) in favor of
petitioner.
This award was affirmed by the Court of Appeals, which however permanently enjoined petitioner from
registering its contractors lien on all except six (6) units of the condominium project. 7 This step was in
line with respondents manifestation that the principal award of 62,760,558.49 in petitioners favor can
be covered by the value of six (6) condominium units. Seven (7) condominium units, however, were
eventually levied upon as a result of respondents act of substituting two (2) units for the one already
paid for by the buyer-spouses, Shaul and Rina Golan.8 The execution sale of the levied properties did
not push through after this Court issued a TRO dated 12 July 2002 upon respondents filing of a petition
in G.R. No. 153310.
Thereafter, the Court promulgated its Decision9 dated 2 March 2004 affirming the judgment of the Court
of Appeals and lifting the TRO that was then still in effect. Finding no merit in respondents motions for
reconsideration,10 the Court subsequently issued an entry of judgment dated 12 August 2004.
Its judgment having become final and executory, the CIAC issued an Order11 dated 3 November 2004
giving the parties ten (10) working days within which to agree on the satisfaction of the arbitral award,
otherwise a writ of execution will be issued. As the parties could not come to terms, the CIAC issued an
alias writ of execution on 22 November 2004. The alias writ of execution provides in part:
You are hereby commanded, that of the goods and chattels of the MEGAWORLD GLOBUS ASIA, INC.,
Respondent, you cause to be made the amount of 62,760,558.49 with interest of 6% due on any
balance remaining until the award becomes executory. Thereafter, interest of 12% per annum
shall be applied on any balance remaining until the full amount is paid; which Claimant recovered
pursuant to the Award promulgated by this Arbitral Tribunal on 19 October 2001 in Case No. 22-2000 of
the Construction Instrusty Arbitration Commission, together with your lawful fees for the services of this
execution, all in Philippine currency, and that you render the same to said Claimant, aside from your
own fees on this execution, and that you likewise return this Writ unto this Commission within fifteen
(15) days from date of receipt hereof, with your proceedings endorsed thereon. But if sufficient personal
property cannot be found whereof to satisfy this execution and lawful fees thereon, then you are
commanded that of the lands and buildings of the said Respondent you make the said sum of money in
the manner required by the Rules of Court, and make return of your proceedings with this Writ within
thirty (30) days from receipt hereof.12 (Emphasis in the original.)
On 26 November 2004, respondent sought to clarify if the writ of execution shall be limited to six
condominium units in consonance with the Court of Appeals observation in its decision in the first case
that the petitioners claims can be satisfied by the value of only six units. The CIAC replied in the
negative. In an Order13 dated 3 December 2003, it stated that nowhere in its Decision or in
its Order dated 3 November 2004 did it provide that the payment of the judgment debt should be made
in the form of six condominium units. It expounded that the mention of the six units was only brought up
by the appellate court in relation to the provisional remedy of securing the judgment debt which is
interim/temporary in nature.
In addition to the initial levy of seven units, which transpired during the pendency of G.R. No
153310,14 three additional units were levied upon on 20 December 2004 by Sheriffs Villamor R. Villegas
and Norberto R. Magsajo of the Regional Trial Court (RTC) of Makati. Subsequently, a Notice of
Sheriffs Sale was published, setting the auction sale of all ten units on 1 March 2005.
On 25 January 2005, respondent filed a Petition15 with the Court of Appeals to restrain the scheduled
execution sale and to nullify the orders of the CIAC issued pursuant thereto.16 In said Petition,
respondent claimed that the sheriffs exceeded their authority when they included in the notice of
execution sale five condominium units fully paid for by its buyers. Respondent also asserted that the
inclusion of three additional units in the levy on execution was excessive, thereby rendering the same
void.
On 21 February 2005, the Court of Appeals issued the questioned Resolution restraining the
implementation of the alias writ, as well as the holding of the auction sale for a period of sixty days from
notice thereof. Petitioner filed the instant petition imputing grave abuse of discretion on the part of the
Court of Appeals in taking cognizance of respondents petition and in issuing the assailed Resolution.
Petitioner prayed for the issuance of a temporary restraining order and/or a writ of preliminary injunction
to enjoin the Court of Appeals from acting on respondents petition.
The Court of Appeals rendered a Decision17 granting respondents petition and declaring the CIACs
assailed order null and void. This decision was rendered on 19 April 2005, three days before the
expiration of the TRO. Such Decision of the Court of Appeals was brought to the attention of this Court
only on 23 May 2005.18
On 27 April 2005, we issued a Resolution19 directing the parties to maintain the status quo effective 22
April 2005, the date of the expiration of the TRO issued by the Court of Appeals and continuing until
further orders from this Court. Since the main case had already been resolved, however, the Court of
Appeals merely held in abeyance the resolution of respondents motion for clarification20 as well as
petitioners motion for reconsideration21 of its decision.
In its Comment [to petitioners] Supplemental Petition,22 respondent contends that since the main case
had already been resolved by the Court of Appeals, petitioners remedy is to file a petition for review
under Rule 45 of the Revised Rules of Civil Procedure. Respondent further asserts that prematurity,
multiplicity of suit and lack of respect for the hierarchy of courts afflict this petition, thereby necessitating
its dismissal.23
We need not dwell on this peripheral issue. Petitioner filed the instant case precisely to question the
Court of Appeals very jurisdiction over respondents petition. In evoking this Courts authority by means
of the special civil action for certiorari, petitioner asserts that respondent court committed a patently
unlawful act amounting to lack or excess of jurisdiction when it (i) entertained a petition which was
obviously dilatory and amounted to an obstruction of justice, and (ii) restrained the CIAC without any
valid ground.24 Obviously, if the Court of Appeals has no jurisdiction over respondents petition in the
first place, it would not have the capacity to render judgment on the petition.
Even assuming that the rules of procedure had somehow not been observed in this case, the Court
finds that these objections can be quelled in the higher ends of justice. Rule 1, Section 6 of the Rules of
Court provides that the Rules shall be liberally construed in order to promote their objective of securing
a just, speedy and inexpensive disposition of every action and proceeding. We have at times relaxed
procedural rules in the interest of substantial justice and in so doing, we have pronounced that:
A rigid adherence to the technical rules of procedure disregards the fundamental aim of procedure to
serve as an aid to justice, not as a means for its frustration, and the objective of the Rules of Court to
afford litigants just, speedy and inexpensive determination of their controversy. Thus, excusable
imperfections of form and technicalities of procedure or lapses in the literal or rigid observance of a
procedural rule or non-jurisdictional deadline provided therein should be overlooked and brushed aside
as trivial and indecisive in the interest of fair play and justice when public policy is not involved, no
prejudice has been caused the adverse party and the court has not been deprived of its authority or
jurisdiction. (Citations omitted)25
Respondent itself admits that the issues in CA-G.R. SP. No. 88314 and in the present case are the
same.26 The suit is already before us under Rule 65.27 To dismiss this petition on technical grounds and
wait for it to be elevated anew under the same grounds and arguments would be to sanction a
circuitous procedure that would serve no purpose except prolong its resolution.
The disposition of the case on the merits is now in order. Generally, the main question for resolution
pertains to the validity of the Alias Writ of Execution dated 22 November 2004. The particular issues
are: (i) whether the alias writ should have been expressly qualified in limiting the execution to just six
condominium units; (ii) whether the alias writ conformed to the requirement under Section 8(e), Rule 39
of the Rules of Civil Procedure that the specific amount due must be stated; (iii) whether the 6% interest
as specified in the alias writ should be applied on a per annum basis, or on a flat rate. The Court shall
also resolve whether the Makati City RTC sheriffs acted correctly in levying the 10 condominium units,
pursuant to such writ of execution.
From the outset, it bears stressing that the subject of petitioner and respondents petitions is the
execution of a final judgment affirmed by no less than this Court. This being so, the appellate court
should have been doubly careful about entertaining an obviously dilatory petition intended merely to
delay the satisfaction of the judgment. Any lower court or tribunal that trifles with the execution of a final
and executory judgment of the Supreme Court flirts with insulting the highest court of the land. While we
do not diminish the availability of judicial remedies to the execution of final judgments of this Court, as
may be sanctioned under the Rules of Court, such actions could only prosper if they have basis in fact
and in law. Any court or tribunal that entertains such baseless actions designed to thwart the execution
of final judgments acts with grave abuse of discretion tantamount to lack of jurisdiction. 28 It is the
positive duty of every court of the land to give full recognition and effect to final and executory decisions,
much less those rendered by the Supreme Court.
The abuse of discretion amounting to lack or excess of jurisdiction in this case was made manifest by
the fact that the appellate court not only took cognizance of the case and issued the assailed restraining
order. It eventually decided the case in petitioners (respondent herein) favor as well notwithstanding the
dearth of any basis for doing so.
We first examine the Alias Writ of Execution dated 22 November 2004. As stated earlier, the said writ
made no qualification as to specific classes of property, such as condominium units, which should be
executed upon, much less any denominated quantity of properties. For this, respondent imputed grave
abuse of discretion on the part of the CIAC. It contends that the Decision dated 14 February 2004 of the
Court of Appeals as affirmed by this Court limited petitioner to six condominium units for the purpose of
satisfying the arbitral award rendered by the CIAC. The CIAC, in issuing the alias writ which enabled the
sheriffs to levy upon three additional units, was said to have committed grave abuse of discretion it
varied its own judgment as against that affirmed by the Court of Appeals.
Respondents argument is absurd. It anchors its proposition on the last sentence of the Decision dated
14 February 2002 of the Court of Appeals which provides:
WHEREFORE, the herein petition is DISMISSED for lack of merit and the appealed decision of the
Construction Industry Arbitration Commission is hereby AFFIRMED. The writ of preliminary injunction
issued against the enforcement of the September 28, 2001 decision of the Construction Industry
Arbitration Commission (CIAC) is hereby LIFTED. The writ of preliminary mandatory injunction ordering
private respondent to withdraw its contractors lien on all, except six of private respondents
condominium units is hereby made permanent.29 (Emphasis supplied.)
By concentrating on the last sentence of the above dispositive portion, respondent ignored the
paragraph which precedes it where the Court of Appeals stated:
However, justice and fair play dictate that the annotation of private respondents lien should be limited to
six (6) units of its choice and not to all of the condominium units. As we noted in our January 17, 2002
Resolution, as clarified by the January 18, 2002 Resolution, private respondents claim against
petitioner in the amount of 62 Million can be covered by the value of six (6) units of the condominium
project.30
As petitioner correctly argues, there is no ambiguity in the Court of Appeals pronouncement, that is,
that the principal award of 62 million can be covered by six condominium units. However, such
pronouncement did not make allowances for the interests of 6% and 12% imposed by the CIAC
because the alleged limit related merely to the provisional remedy, not the eventual execution of the
judgment. The six unit limit was never intended by the Court of Appeals to operate in perpetuity as to
sanction recovery of the principal award sans legal interest.
The reason for the imposition of the six unit limit can be better understood when viewed in the context of
the circumstances which led the Court of Appeals to make such pronouncement. In fact, respondent
itself supplied the rationale when it narrated in its Comment,31 thus:
DSM, through its counsel, caused the publication in the November 20, 2001 issue of the Philippine Daily
Inquirer a paid advertisement announcing that all units of the Salcedo Park Towers Condominium are
subject to its contractors lien.
In addition, DSM also caused to be annotated on all condominium certificates of title of the Salcedo
Park Towers Condominium Entry No. 62921/T denominated as a "contractors lien."
Reacting on this adverse and damaging publicity, causes (sic) by DSM, private respondent filed a
Supplemental Petition with the Court of Appeals for the cancellation of said entry.
One of petitioners [respondent herein] argument in the Supplemental Petition was that the price range
of its units is from 11 million to 13 million. Thus, just five or six units would suffice to cover payment
of the 62.7 million award.
The Court of Appeals granted the application for preliminary mandatory injunction and noted in its
Resolution dated January 17, 2002 that:
"x x x petitioner manifested that respondents claim of 62 million can be covered by the sale of six (6)
units. It is also worth noting that petitioner was in fact willing to allow respondent to choose the units
upon which to effect the annotation of its lien." 32
In making the writ of preliminary mandatory injunction permanent, the Court of Appeals was protecting
respondents business standing from damage caused by petitioners act of annotating its lien on all 209
condominium units. There is therefore no justification for respondents claim that in satisfying the award
in favor of petitioner, the latter and the CIAC are limited to only six units.
Moreover, as correctly pointed out by petitioner, if there was indeed a six unit limit, respondent itself
breached the same. In a letter33 to the Register of Deeds of Makati City dated 6 May 2004, respondent
asked that the Notice of Levy/Attachment with Entry No. 70814/T-65317 as well as the Decision with
Entry No. 74154/65317 annotated at the back of Condominium Certificate of Title No. 65320 (Unit 25A)
of the Salcedo Park condominium project be transferred to Condominium Certificates of Title Nos.
65389 and 65395 (Units 14C and 16C, respectively) of the same project. The substitution was made so
that the unit already paid for by its buyers can be transferred in the latters name free from all liens and
encumbrances.
The replacement increased the number of units levied upon from six (6) to seven (7). This weakens
respondents reliance on the purported six (6)-unit limit since its own act renders it in estoppel.
By estoppel is meant that an admission or representation is rendered conclusive upon the person
making it and cannot be denied or disproved as against the person relying thereon. 34 Since respondent
instigated the resultant increase of the units levied upon, both petitioner and the CIAC cannot be faulted
for assuming that the rest of the condominium units may also be levied upon on execution.
Next, respondent ascribes to the alias writ35 is the supposed failure to state the specific amount due.
This allegedly vests the sheriffs the judicial function of determining the total amount ought to be satisfied
by the judgment.
We reiterate the questioned portion of the alias writ of execution:
You are hereby commanded, that of the goods and chattels of the MEGAWORLD GLOBUS ASIA, INC.,
Respondent, you cause to be made the amount of 62,760,558.49 with interest of 6% due on any
balance remaining until the award becomes executory. Thereafter, interest of 12% per annum
shall be applied on any balance remaining until the full amount is paid; . . . .
Your lawful fees for the services of this execution shall not exceed four per centum (4%) on the first
4,000.00 of the amount recovered and two per centum (2%) in excess of 4,000.00 in accordance
with Section 9(10), Rule 141 of the revised Rules of Court. (Emphasis in the original.)
The validity of the alias writ of execution hinges on its conformity to Section 8(e), Rule 39 of the Revised
Rules of Civil Procedure which states, relative to the amount that should be specified in the writ of
execution:
Sec. 8 (e). In all cases, the writ of execution shall specifically state the amount of the interest, costs,
damages, rents or profits due as of the date of the issuance of the writ, aside from the principal
obligation under the judgment. For this purpose, the motion for execution shall specify the amounts of
the foregoing reliefs sought by the movant.
A perusal of the alias writ convinces this Court that it complies substantially with the requirements of
law. It states the principal award sought to be satisfied, as well as the percentage to be imposed
thereon as interest. It even specifies the lawful fees that are due to the sheriffs for the satisfaction of the
judgment.36 Respondent makes much of the fact that petitioner made its own computation of the amount
to be satisfied which the sheriffs allegedly followed.
Rule 39, Sec. 8(e) cited above precisely requires the movant to specify the amount sought to be
satisfied so the Court fails to see why petitioner should be faulted for doing so. If the objection hinges on
the fact that the exact mathematical computation did not appear in the alias writ itself, respondent could
easily have moved that said computation be incorporated by the CIAC thereon. Such perceived
deficiency is certainly not sufficient to justify recourse to a special civil action for certiorari to have the
alias writ declared null and void in its entirety.
As to the controversy on the application of the 6% rate of interest, the proper forum for clarifying the
same is the CIAC, not the Court of Appeals. After all, the CIAC imposed said rate so it puzzles this
Court why respondent did not seek enlightenment therefrom when it filed its Motion for Clarification
relative to the purported six-unit limit. Be that as it may, this Court herein notes that nowhere in any of
its jurisprudence had a legal rate of interest been imposed as a flat rate rather than on a per annum
basis.
Our conclusions on the validity of the Alias Writ of Execution stand utterly apart from those propounded
by the Court of Appeals in its 19 April 2005 Decision. Its rationale, briefly explained in 4 pages, does not
appear to consider the flip side of the arguments raised by respondent. It does not even bother to cite,
much less contest, the arguments raised therein by respondents.
The 19 April 2005 Decision did not dwell on the other arguments posited by respondent in support of its
petition before the Court of Appeals relative to the acts of the sheriffs in levying particular condominium
units in preparation to the auction sale. To give full resolution to this case, these arguments should be
disposed with at this juncture.
Respondents claimed before the Court of Appeals is that the sheriffs exceeded their authority when
they included five condominium units fully paid for by buyers in the notice of execution sale. 37 According
to respondent, the unrecorded contracts to buy and sell take precedence over the recorded levy of
execution by virtue of the Subdivision and Condominium Buyers Protective Decree (PD 957).
One last point. The Court has noted the various dilatory tactics employed by lawyers to resist the
execution of judgments which had already attained finality. In fact, the Court has been all too willing to
discipline counsels who engage in such behavior, either through penalization for contempt 39 or referral
for administrative investigation with the Integrated Bar of the Philippines 40 . Lawyers must be reminded
that in their zeal to protect the interests of their clients, they must not overreach their commitment to the
extent of frustrating the ends of justice. The Court does not regard with favor lawyers who try to delay
the execution of cases which are already final and executory.
WHEREFORE, premises considered, the petition is GRANTED. The Resolution dated 21 February
2005 and the Decision of the Court of Appeals dated 19 April 2005 are VOIDED and SET ASIDE. Costs
against respondent.
The Construction Industry Arbitration Commission is ordered to proceed with the execution of
its Decision dated 19 October 2001 in CIAC Case No. 22-2000.

The Court is baffled why respondent is raising this issue and not the purported buyers themselves. Rule SO ORDERED.
39, Section 1638 of the Revised Rules of Civil Procedure lays down the procedure in cases where
properties levied upon are claimed by third persons. It is the third person claiming the property who has DANTE O. TINGA
to make an affidavit of his title or right to possession thereof. Nowhere is it stated in said section that the Associate Justice
judgment obligor (respondent in this case) has to make the claim on the third persons behalf. It is
peculiar that respondent is belaboring the point when the supposed buyers themselves did not even
appear to lay claim to the levied properties. WE CONCUR:

Moreover, respondents contention that the unregistered buyers right over the property is superior to REYNATO S. PUNO
that of the judgment obligor has no basis. The fact that the contracts to buy and sell are unregistered
and the properties in question are still in the name of respondent underlines the fact that the sales are Associate Justice
not absolute. The units are clearly still owned by respondent and not by the alleged buyers. Under
Section 51 of the Property Registration Decree (PD 1529), the act of registration is the operative act Chairman
which conveys or affects the land in so far as third persons are concerned. As provided by said law:

MA. ALICIA AUSTRIA-MARTINEZ, ROMEO J. CALLEJO, SR.

Sec. 51. . . . no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey
or affect registered land, shall take effect as a conveyance or bind the land but shall operate only as a
contract between the parties and as evidence of authority to the Register of Deeds to make registration. Associate Justice Associate Justice

... MINITA V. CHICO-NAZARIO

Respondents reliance on jurisprudence holding that buyers rights of ownership over condominium Associate Justice
units even if unregistered are superior over registered encumbrances is misplaced. The cases cited
clearly indicated that the parties involved were the condominium buyers and mortgage creditors. A ATTESTATION
mortgage creditor is not synonymous to a judgment creditor contrary to what respondent asserts. While
the law expects a mortgage creditor to inquire as a reasonably prudent man would regarding the
I attest that the conclusions in the above Decision had been in consultation before the case was
encumbrances on the property in question, no such knowledge is imputed to a judgment creditor who
assigned to the writer of the opinion of the Courts Division.
merely seeks the satisfaction of the judgment awarded in his favor.

REYNATO S. PUNO
Based on the foregoing, the appellate court clearly had no authority to take cognizance of the petition
filed by respondent. By acting on the petition rather than dismissing the case outright, it committed
grave abuse of discretion amounting to lack of jurisdiction. Associate Justice
Chairman, Second Division
 CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairmans Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
25 Maqui v. Court of Appeals, G.R. No. L-41609, 24 February 1976, 69 SCRA 368, 374.
26 Rollo, p.627.
27 Petitioner filed a Supplemental Petition [With Leave of Court] dated 7 July 2005 which
enumerated the transactions, occurrences and events that transpired since the filing of the
petition; Id. at 593-614.
28 By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is

HILARIO G. DAVIDE, JR.
Chief Justice
Footnotes
1 The relief prayed for included an Extremely Urgent Application for a Temporary Restraining
Order (TRO) and/or Writ of Preliminary Injunction; dated 23 February 2005; Rollo, pp. 3-23.
2 Penned by Associate Justice Vicente S.E. Veloso, concurred in by Associate Justices
Roberto A. Barrios and Amelita G. Tolentino; Id. at 118-121.
3 Megaworld Globus Asia Inc., v. Construction Industry Arbitration Commission, et al.
4 Effective for sixty days unless sooner lifted by the Court of Appeals.
5 Dated 22 November 2004; Rollo, pp. 74-75.
6 The Arbitral Tribunal composed of Ernesto S. De Castro as Chairman with Regulus E.
equivalent to lack of jurisdiction. Mere abuse is not enough. It must be grave abuse of
discretion as when the power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility and must be so patent and so gross as to amount to an evasion of
a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.See e.g., PNB v. Timbol, G.R. No. 157535, 11 February 2005.
29 Id. at 41-42.
30 Id. at 41.
31 Id. at 265-297; dated 21 March 2005.
32 Id. at 289-290.
33 Id. at 45.
34 Art. 1431, Civil Code.
35 Sustained by the appellate court in its decision.
36 Now increased to 2.5% in excess of 4,000.00 in accordance with Supreme Court
Administrative Circular No. 99-8-01-SC dated 14 September 1999.
37 Rollo, p. 84.
38 Sec. 16. Proceedings where property claimed by third person.If the property levied on is

Cabote and Lauro M. Cruz as members. claimed by any person other than the judgment obligor or his agent, and such person makes an affidavit
7 Rollo, p. 42. of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves
8 Id. at 6, 45. the same upon the officer making the levy and a copy thereof upon the judgment obligee, the officer
9 Rollo, pp. 47-71. shall not be bound to keep the property, unless such judgment obligee, on demand of the officer, files a
10 Respondents first motion for reconsideration was denied with finality by this Courts Second bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the
Division in a Resolution dated 19 May 2004. Its second motion for reconsideration property levied on. In case of disagreement as to such value, the same shall be determined by the court
denominated as a "Motion to Suspend Procedural Rules in the Higher Interest of Substantial issuing the writ of execution. No claim for damages for the taking or keeping of the property may be
Justice and to Refer the Case En Banc" was again denied in a Resolution dated 2 August enforced against the bond unless the action therefor is filed within one hundred twenty (120) days from
2004. Its third motion for reconsideration dated 7 August 2004 was "Note[d] Without Action" in the date of the filing of the bond.
view of the resolution dated 2 August 2004 which ordered that the entry of judgment be made The officer shall not be liable for damages for the taking or keeping of the property, to any third
forthwith. party claimant if such bond is filed. Nothing herein contained shall prevent such claimant or
11 Rollo, pp. 72-73. any third person from vindicating his claim to the property in a separate action, or prevent the
12 Id. at 74. judgment obligee from claiming damages in the same or a separate action against a third-party
13 Id. at 76-77. claimant who filed a frivolous or plainly spurious claim.
14 Supra note 8. ...
39 See e.g., Siy v. NLRC, G.R. No. 158971, 25 August 2005.
15 Docketed as CA-G.R. Sp. No. 88314; the complaint is denominated as a Petition
40 See e.g., Natalia Realty v. Hon. Rivera, G.R. No. 164914, 5 October 2005.
for certiorari and prohibition with prayer for preliminary injunction and temporary restraining
order.
16 The orders of the CIAC sought to be nullified are the following: (1) Order dated 3 November

2004 as clarified in the Order dated 3 December 2004; (2) Alias Writ of Execution dated 22
November 2004; and (3) Order dated 11 January 2005.
17 Rollo, pp. 467-479.
18 Id. at 464.
19 Id. at 352-354.
20 Id. at 617.
21 Id. at 618.
22 Id. at 626-664.
23 Id. at 626-630.
24 Id. at 3.