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PEDRO T.

ACOSTA, plaintiff-appellant, action is brought at the request of and upon the relation of another person, the officer bringing it may require an
vs. indemnity for expenses and costs of the action, to be given to him by the party at whose request and upon
DAVID FLOR, defendant-appellee. whose relation the same is brought, before commencing it."
Finally, section 201, under the heading "An individual may commence such action," provides as follows: "A
It is alleged in the complaint that at the municipal elections held on the 1st day of December, 1903, in the town person claiming to be entitled to a public office, unlawfully held and exercised by another, may bring an action
of Laoag, Province of Ilocos Norte, the plaintiff and the defendant were candidates for the office of municipal therefor."
president of the said town; that as a result of the said election the plaintiff was elected to the said office by a
majority of 100 votes, and that notwithstanding this fact the defendant has usurped said office and unlawfully If the legislator had intended to give to all citizens alike the right to maintain an action for usurpation of public
held the same since the plaintiff was the person entitled to the exercise of said office. The complaint further sets office, he would have plainly said so in order to avoid doubt on a subject of such far-reaching importance. A
out other acts in regard to illegalities alleged to have been committed during the election. The prayer of the simple provision would have sufficed for this purpose. Far from it, the legislator has on the contrary especially
complaint is to the effect that judgment be entered against the defendant, excluding him from the exercise of and specifically provided in sections 199, 200, and 201 who must and who may bring such actions; and it is
such office and that the plaintiff be declared to be entitled to the same and that he be given possession thereof, very clear that it was his intention to give such right to those expressly mentioned in the above-cited sections
and for such other and further relief as the facts in the case would warrant in favor of the plaintiff. and to no other, following the well-known rule of law "inclusio unius est exclusio alterius." It has been noticed
that the above referred to three sections only mention the Attorney-General, the provincial fiscal, and the
The case having proceeded to trial, the plaintiff introduced various witnesses, all and each of whom testified to individual claiming to be entitled to the office unlawfully held and exercised by another. It is to be inferred from
facts which, if true, would more or less gravely affect the legality of the election. Not a single witness, however, this last provision that the individual who does not claim to have such a right can not bring an action for
confirmed the allegations contained in the complaint, to the effect that the plaintiff had obtained a majority of usurpation of public office.
100 votes at the said election, nor can it be inferred from the evidence introduced by the plaintiff that he, as a
result of the said election, or for any other reason, was entitled to the office of municipal president of Laoag, This inference is supported by the provisions of section 202 which says that when the action is against a person
now held by the defendant. for usurping an office, the complaint shall set forth the name of the person who claims to be entitled thereto,
with an averment of his right to the same. Why should this be required as an essential requisite if it were not
In view of the evidence introduced at the trial by the plaintiff, and before the defendant had presented his, the necessary that the individual bringing the action should claim the right to exercise the office in question?
court, on the latter's motion, acquitted the defendant, imposing the costs upon the plaintiff. The court based its
action upon the following grounds: (1) That the plaintiff could not maintain the action brought by him because he Our opinion is that the law has reserved to the Attorney-General and to the provincial fiscals, as the case may
had failed to establish his alleged right to the exercise of the office in question; and (2) that there was no be, the right to bring such action, an in but one case does the law authorize an individual to bring such an
necessity to inquire into the right of the defendant to hold the said office for the reason that this question had action, to wit, when that person claims to have the right to the exercise of the office unlawfully held and
already been determined by the provincial board after a consideration of the various protests presented to it in exercised by another. Aside from this case an individual can not maintain such action. The law, in our opinion,
regard to irregularities committed during the last election held at Laoag for the office of municipal president and does not allow of any other construction. If an individual, whether or not he has the right to the office alleged to
other municipal officials, and for the further reason that the presumption is that a person holding a public office have been usurped by another were to be permitted to maintain such an action, it would serve no purpose and
was duly appointed or elected thereto. section 201 would be evidently superfluous. It would be a useless and redundant provision of the code.

The plaintiff excepted to his ruling of the court, moved for a new trial, and thereafter brought the case to this As a consequence of what has been said no individual can bring a civil action relating to the usurpation of a
court for review. An examination of the evidence of record supports the finding of the court below to the effect public office without averring that he has a right to the same; and at any stage of the proceedings, if it be shown
that the plaintiff has failed to prove in any way, shape, or form that he was entitled to the office in question, as that such individual has no such right, the action may be dismissed because there is no legal ground upon
alleged by him in his complaint. There is no dispute upon this question. The appellant, himself, when the motion which it may proceed when the fundamental basis of such action is destroyed as is the case here. This is what
of the defendant to dismiss was argued, and from the decision of which he appealed to this court, clearly actually happened in this case. After all of the evidence presented by the plaintiff had been introduced, it was
admitted that he had failed to establish his right to the exercise of the office in question. (Page 17 of the bill of found, and he himself so admitted that he had failed to establish in any way, shape, or form that he had any
exceptions.) And on page 52 of his brief, he also assumes that he had been unable to establish his alleged right right to the office of municipal president of the town of Laoag as he had alleged in his complaint without
to the office in question. foundation for such allegation. Consequently the judge very properly acquitted the defendant of the complaint.

The question that we have to decide, therefore, is whether, notwithstanding what has already been said, and The appellant contends that the court below should have first inquired into the right of the defendant to the
notwithstanding the fact that the plaintiff has failed to show that he had any right to the office of municipal office in question and that no other question can be raised or investigated until this point has been determined,
president of Laoag, he can maintain an action such as this for the purpose of excluding the defendant from the and alleges that the question of the right of the plaintiff to the said office does not arise until it has been
exercise of said office on account of illegalities alleged to have been committed in the elections. determined that the defendant is not entitled to the exercise of such office. In support of his contention he relies
upon the provisions of section 202 of the Code of Civil Procedure.
The right to maintain such an action is especially and expressly governed by the provisions of sections 197 to
216 of the Code of Civil Procedure. This section provides as follows: "When the action is against a person for usurping an office, the complaint shall
set forth the name of the person who claims to be entitled thereto, with an averment of his right to the same;
The code, after enumerating in sections 197 and 198 the cases in which such an action may be brought and the and that the defendant is unlawfully in possession of the same; and judgment may be rendered upon the right
persons against whom they may be brought, goes on to determine with careful distinction those who have the of the defendant, and also upon the right of the person so averred to be entitled, or only upon the right of the
right to maintain such action. defendant, as justice requires."
Section 199 provides that "the Attorney-General of the Islands, or the fiscal of any province, when directed by From the words above italicized the appellant infers that the court below should have first passed upon the right
the Chief Executive of the Islands, must commence any such action; and when upon the complaint or otherwise of the defendant and afterwards upon the right of the plaintiff. In our opinion this should be done at the same
he has good reason to believe that any case specified in the two preceding sections can be established by time and in the same judgment. It is immaterial what method the court may follow in the statement and
proof, he must commence such action." determination of the questions in the rendition of his judgment because even though the court may pass upon
the right of the plaintiff first, and the right of the defendant afterwards, or vice versa, this procedure would not
Section 200 provides that "the Attorney-General of the Islands or the fiscal for a province, may, at his own vitiate the judgment, provided the court does not fail to state therein what the rights of the contending parties to
instance, bring such an action, or he may, on leave of the court in which the action is to be commenced, or a the office are. But all of this, of course, presupposes that the action has been properly brought and duly
judge thereof in vacation, bring the action upon the relation of and at the request of another person; but, if the prosecuted to a judgment. This, at the same time, presupposes that the plaintiff had a right to maintain his
action upon the evidence submitted by him at the trial. It is impossible to prosecute a suit without a cause of GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,
action. Therefore, whenever before judgment it is conclusively proven that the plaintiff has no right to maintain vs.
the action since he has not the essential conditions required by law in order to bring and maintain such action, NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.
his complaint should be dismissed and it becomes unnecessary to pass upon the right of the defendant who
has a perfect right to the undisturbed possession of his office, unless action is brought by a person having a
right to maintain the same under the law. For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners Green Star
Express, Inc. and Fruto Sayson, Jr. brought before the Court, assailing the Decision 1 of the Court of Appeals
It may be said that under section 202 the court may only pass upon the right of the defendant when the justice (CA) dated September 17, 2007 and its Resolution2 dated January 22, 2008 in CA-G.R. SP No. 86824. The CA
of the case so demands. This is true, but this only refers to cases where the action is brought by the Attorney- nullified the Resolution dated May 5, 2004 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31,
General or by the provincial fiscal, as the case may be. In such cases it is not necessary that there be a person in Civil Case No. SPL-0969, and dismissed the complaint for lack of jurisdiction.
claiming to be entitled to the office alleged to have been usurped, because although there be no such person,
as in the case of a vacant office, for instance, the fiscal could and even should bring such action against the The following are the antecedents of the case:
person usurping the office in accordance with the provisions of sections 200 and 199, respectively, as the case On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC) owned figured in a
may be. The manner in which judgment should be rendered according to section 202 perfectly meets the vehicular accident with petitioner Green Star Express, Inc.' s (Green Star) passenger bus, resulting in the death
various cases provided for in the three preceding sections; and it becomes the duty of the court to pass upon of the van's driver. Thus, the bus driver, petitioner Fruto Sayson, Jr., was charged with the crime of reckless
the rights of the defendants only whenever it is not an essential requisite for the due prosecution of the action imprudence resulting in homicide.
that there be a person claiming to be entitled to the office thus usurped, something which only happens where
the Attorney-General or the fiscal of any province brings the action against the usurper. Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation (NURC) for the
repair of its passenger bus amounting to ₱567, 070.68. NURC denied any liability therefore and argued that the
As a result of the foregoing, we can not here pass upon the validity or nullity of the election of the defendant, for criminal case shall determine the ultimate liabilities of the parties. Thereafter, the criminal case was dismissed
the reason, among others which it is not necessary to state here, that the defendant has no right to maintain without prejudice, due to insufficiency of evidence.
such an action as this.
Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San Pedro,
The order of the court below appealed from, is hereby affirmed. After the expiration of twenty days let judgment Laguna. Francis Tinio, one of NURC's employees, was the one who received the summons. On February 6,
be entered in accordance herewith and let the case be remanded to the court from whence it came for further 2004, NURC filed a Motion to Dismiss claiming lack of jurisdiction due to improper service.
proceedings in accordance with the law. So ordered.
On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that there was
substantial compliance because there was actual receipt of the summons by NURC. The dispositive portion of
said Resolution thus reads:
WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3

Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a Petition for Certiorari.
On September 17, 2007, the CA reversed the RTC ruling, hence:
WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated May 5, 2004
and dated July 26, 2004, of the Regional Trial Court of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-
0969, are hereby NULLIFIED and a new one rendered granting Petitioner's Motion to Dismiss, dated February
3, 2004. Private Respondents' Amended Complaint for Damages filed against Petitioner Nissin-Universal
Robina Corporation is accordingly dismissed for lack of jurisdiction.

SO ORDERED.4

Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied. Hence, this petition.
The lone issue is whether or not the summons was properly served on NURC, vesting the trial court with
jurisdiction.
The petition is benefit of merit.
It is a well-established rule that the rules on service of summons upon a domestic private juridical entity must be
strictly complied with. Otherwise, the court cannot be said to have acquired jurisdiction over the person of the
defendant.5
NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received by its cost
accountant, Francis Tinio.1âwphi1 It argues that under Section 11, Rule 14 of the 1997 Rules of Court, which
provides the rule on service of summons upon a juridical entity, in cases where the defendant is a domestic
corporation like NURC, summons may be served only through its officers.6 Thus:
Section 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), Petitioner,
association organized under the laws of the Philippines with a juridical personality, service may be made on the vs.
president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.7 THE BUREAU OF INTERNAL REVENUE (BIR), represented herein by HON. JOSE MARIO BUÑAG, in his
official capacity as COMMISSIONER OF INTERNAL REVENUE, Public Respondent,
JOHN DOE and JANE DOE, who are persons acting for, in behalf, or under the authority of
This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:
Respondent.Public and Private Respondents.
Section 13. Service upon private domestic corporation or partnership. - If the defendant is a corporation
DECISION
organized under the laws of the Philippines or a partnership duly registered, service may be made on the
president, manager, secretary, cashier, agent, or any of its directors.8 For resolution of this Court is the Petition for Certiorari and Prohibition1 with prayer for the issuance of a
Temporary Restraining Order and/or Preliminary Injunction, dated April 17, 2006, of petitioner Philippine
In the past, the Court upheld service of summons upon a construction project manager, a corporation’s Amusement and Gaming Corporation (PAGCOR), seeking the declaration of nullity of Section 1 of Republic Act
assistant manager, and ordinary clerk of a corporation, private secretary of corporate executives, retained (R.A.) No. 9337 insofar as it amends Section 27 (c) of the National Internal Revenue Code of 1997, by
counsel, and officials who had control over the operations of the corporation like the assistant general manager excluding petitioner from exemption from corporate income tax for being repugnant to Sections 1 and 10 of
or the corporation’s Chief Finance and Administrative Officer. The Court then considered said persons as Article III of the Constitution. Petitioner further seeks to prohibit the implementation of Bureau of Internal
"agent" within the contemplation of the old rule. Notably, under the new Rules, service of summons upon an Revenue (BIR) Revenue Regulations No. 16-2005 for being contrary to law.
agent of the corporation is no longer authorized,9 The rule now likewise states "general manager" instead of The undisputed facts follow.
"manager"; "corporate secretary" instead of merely "secretary"; and "treasure" instead of "cashier."10 It has now
become restricted, limited, and exclusive only to the persons enumerated in the aforementioned provision, PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067-A2 on January 1, 1977. Simultaneous to
following the rule in statutory construction that the express mention of one person excludes all others, or its creation, P.D. No. 1067-B3 (supplementing P.D. No. 1067-A) was issued exempting PAGCOR from the
expression unions est exclusion alterius. Service must, therefore, be made only on the person expressly listed payment of any type of tax, except a franchise tax of five percent (5%) of the gross revenue. 4 Thereafter, on
in the rules.11 If the revision committee intended to liberalize the rule on service of summons, it could have June 2, 1978, P.D. No. 1399 was issued expanding the scope of PAGCOR's exemption.5
easily done so by clear and concise language.12
To consolidate the laws pertaining to the franchise and powers of PAGCOR, P.D. No. 18696 was issued.
Here, Tinio, a, member of NURC’s accounting staff, received the summons on January 22, 2004. Green star Section 13 thereof reads as follows:
claims that it was received upon instruction of Junadette Avedillo. The general manager of the corporation.
Sec. 13. Exemptions. — x x x
Such fact, however, does not appear in the Sheriff’s Return.13 The Return did not even state whether Avedillo
was present at the time the summons was received by Tinio, the supposed assistant manager. Green Star
further avers that the sheriff tendered the summons, but Avedillo simply refused to sign and receive the same. (1) Customs Duties, taxes and other imposts on importations. - All importations of
She then allegedly instructed Tinio to just receive it in her behalf. However, Green Star never presented said equipment, vehicles, automobiles, boats, ships, barges, aircraft and such other
sheriff as witness during the hearing of NURC’s motion to dismiss to attest to said claim. And while the sheriff gambling paraphernalia, including accessories or related facilities, for the sole and
executed an affidavit which appears to support such allegation, the same was likewise not presented as exclusive use of the casinos, the proper and efficient management and administration
evidence. It was only when the case was already before the CA that said affidavit first surfaced. Since the thereof and such other clubs, recreation or amusement places to be established
service of summons was made on a cost accountant, which is not one of the designated persons under Section under and by virtue of this Franchise shall be exempt from the payment of duties,
11 of Rule 14, the trial court did not vadily acquire jurisdiction over NURC,14 although the corporation may have taxes and other imposts, including all kinds of fees, levies, or charges of any kind or
actually received the summons.15 To rule otherwise will be an outright circumvention of the rules, aggravating nature.
further the delay in the administration of justice.16
At this juncture, it is worth emphasizing that notice to enable the other party to be heard and to present Vessels and/or accessory ferry boats imported or to be imported by any corporation
evidence is not a mere technicality or a trivial matter in any administrative or judicial proceedings. The service of having existing contractual arrangements with the Corporation, for the sole and
summons is a vital and indispensable ingredient of due process. Corporations would be easily deprived of their exclusive use of the casino or to be used to service the operations and requirements
right to present their defense in a multi-million peso suit, if the Court would disregard the mandate of the Rules of the casino, shall likewise be totally exempt from the payment of all customs duties,
on the service of summons.17 taxes and other imposts, including all kinds of fees, levies, assessments or charges of
any kind or nature, whether National or Local.
WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated September 17, 2007 and
Resolution dated January 22, 2008 in CA-G.R. SP No. 86824 are hereby AFFIRMED.
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form,
income or otherwise, as well as fees, charges, or levies of whatever nature, whether
National or Local, shall be assessed and collected under this Franchise from the
Corporation; nor shall any form of tax or charge attach in any way to the earnings of
the Corporation, except a Franchise Tax of five percent (5%)of the gross revenue or
earnings derived by the Corporation from its operation under this Franchise. Such tax
shall be due and payable quarterly to the National Government and shall be in lieu of
all kinds of taxes, levies, fees or assessments of any kind, nature or description,
levied, established, or collected by any municipal, provincial or national government
authority.

(b) Others: The exemption herein granted for earnings derived from the
operations conducted under the franchise, specifically from the payment of
any tax, income or otherwise, as well as any form of charges, fees or levies, Security System (SSS), the Philippine Health Insurance Corporation (PHIC), and the Philippine Charity
shall inure to the benefit of and extend to corporation(s), association(s), Sweepstakes Office (PCSO), shall pay such rate of tax upon their taxable income as are imposed by this
agency(ies), or individual(s) with whom the Corporation or operator has any Section upon corporations or associations engaged in similar business, industry, or activity.
contractual relationship in connection with the operations of the casino(s)
authorized to be conducted under this Franchise and to those receiving Different groups came to this Court via petitions for certiorari and prohibition11 assailing the validity and
compensation or other remuneration from the Corporation as a result of constitutionality of R.A. No. 9337, in particular:
essential facilities furnished and/or technical services rendered to 1) Section 4, which imposes a 10% Value Added Tax (VAT) on sale of goods and properties; Section
the Corporation or operator. 5, which imposes a 10% VAT on importation of goods; and Section 6, which imposes a 10% VAT on
sale of services and use or lease of properties, all contain a uniform proviso authorizing the President,
The fee or remuneration of foreign entertainers contracted by the Corporation or upon the recommendation of the Secretary of Finance, to raise the VAT rate to 12%. The said
operator in pursuance of this provision shall be free of any tax. provisions were alleged to be violative of Section 28 (2), Article VI of the Constitution, which section
vests in Congress the exclusive authority to fix the rate of taxes, and of Section 1, Article III of the
Constitution on due process, as well as of Section 26 (2), Article VI of the Constitution, which section
(3) Dividend Income. − Notwithstanding any provision of law to the contrary, in the provides for the "no amendment rule" upon the last reading of a bill;
event the Corporation should declare a cash dividend income corresponding to the
participation of the private sector shall, as an incentive to the beneficiaries, be subject 2) Sections 8 and 12 were alleged to be violative of Section 1, Article III of the Constitution, or the
only to a final flat income rate of ten percent (10%) of the regular income tax rates. guarantee of equal protection of the laws, and Section 28 (1), Article VI of the Constitution; and
The dividend income shall not in such case be considered as part of the beneficiaries'
3) other technical aspects of the passage of the law, questioning the manner it was passed.
taxable income; provided, however, that such dividend income shall be totally
exempted from income or other form of taxes if invested within six (6) months from On September 1, 2005, the Court dismissed all the petitions and upheld the constitutionality of R.A. No.
the date the dividend income is received in the following: 9337.12
On the same date, respondent BIR issued Revenue Regulations (RR) No. 16-2005,13 specifically identifying
(a) operation of the casino(s) or investments in any affiliate activity that will PAGCOR as one of the franchisees subject to 10% VAT imposed under Section 108 of the National Internal
ultimately redound to the benefit of the Corporation; or any other Revenue Code of 1997, as amended by R.A. No. 9337. The said revenue regulation, in part, reads:
corporation with whom the Corporation has any existing arrangements in
connection with or related to the operations of the casino(s); Sec. 4. 108-3. Definitions and Specific Rules on Selected Services. —
xxxx
(b) Government bonds, securities, treasury notes, or government
debentures; or (h) x x x
Gross Receipts of all other franchisees, other than those covered by Sec. 119 of the Tax Code, regardless of
(c) BOI-registered or export-oriented corporation(s).7 how their franchisees may have been granted, shall be subject to the 10% VAT imposed under Sec.108 of the
Tax Code. This includes, among others, the Philippine Amusement and Gaming Corporation (PAGCOR), and its
licensees or franchisees.
PAGCOR's tax exemption was removed in June 1984 through P.D. No. 1931, but it was later restored by Letter
of Instruction No. 1430, which was issued in September 1984. Hence, the present petition for certiorari.
On January 1, 1998, R.A. No. 8424,8 otherwise known as the National Internal Revenue Code of 1997, took PAGCOR raises the following issues:
effect. Section 27 (c) of R.A. No. 8424 provides that government-owned and controlled corporations (GOCCs)
shall pay corporate income tax, except petitioner PAGCOR, the Government Service and Insurance I
Corporation, the Social Security System, the Philippine Health Insurance Corporation, and the Philippine
Charity Sweepstakes Office, thus: WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING
REPUGNANT TO THE EQUAL PROTECTION [CLAUSE] EMBODIED IN SECTION 1,
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing
ARTICLE III OF THE 1987 CONSTITUTION.
special general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned and
controlled by the Government, except the Government Service and Insurance Corporation (GSIS), the Social
Security System (SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity II
Sweepstakes Office (PCSO), and the Philippine Amusement and Gaming Corporation (PAGCOR), shall pay
such rate of tax upon their taxable income as are imposed by this Section upon corporations or associations
WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING
engaged in similar business, industry, or activity.9
REPUGNANT TO THE NON-IMPAIRMENT [CLAUSE] EMBODIED IN SECTION 10, ARTICLE
With the enactment of R.A. No. 933710 on May 24, 2005, certain sections of the National Internal Revenue III OF THE 1987 CONSTITUTION.
Code of 1997 were amended. The particular amendment that is at issue in this case is Section 1 of R.A. No.
9337, which amended Section 27 (c) of the National Internal Revenue Code of 1997 by excluding PAGCOR
III
from the enumeration of GOCCs that are exempt from payment of corporate income tax, thus:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing WHETHER OR NOT RR 16-2005, SECTION 4.108-3, PARAGRAPH (H) IS NULL AND
special general laws to the contrary notwithstanding, all corporations, agencies, or instrumentalities owned and VOID AB INITIO FOR BEING BEYOND THE SCOPE OF THE BASIC LAW, RA 8424,
controlled by the Government, except the Government Service and Insurance Corporation (GSIS), the Social SECTION 108, INSOFAR AS THE SAID REGULATION IMPOSED VAT ON THE SERVICES
OF THE PETITIONER AS WELL AS PETITIONER’S LICENSEES OR FRANCHISEES WHEN classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following
THE BASIC LAW, AS INTERPRETED BY APPLICABLE JURISPRUDENCE, DOES NOT requirements:
IMPOSE VAT ON PETITIONER OR ON PETITIONER’S LICENSEES OR FRANCHISEES.14
1) It must be based on substantial distinctions.

The BIR, in its Comment15 dated December 29, 2006, counters: 2) It must be germane to the purposes of the law.

I 3) It must not be limited to existing conditions only.


4) It must apply equally to all members of the class.18
SECTION 1 OF R.A. NO. 9337 AND SECTION 13 (2) OF P.D. 1869 ARE BOTH VALID AND
It is not contested that before the enactment of R.A. No. 9337, petitioner was one of the five GOCCs exempted
CONSTITUTIONAL PROVISIONS OF LAWS THAT SHOULD BE HARMONIOUSLY
from payment of corporate income tax as shown in R.A. No. 8424, Section 27 (c) of which, reads:
CONSTRUED TOGETHER SO AS TO GIVE EFFECT TO ALL OF THEIR PROVISIONS
WHENEVER POSSIBLE. (c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing
special or general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned
II and controlled by the Government, except the Government Service and Insurance Corporation (GSIS), the
Social Security System (SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity
Sweepstakes Office (PCSO), and the Philippine Amusement and Gaming Corporation (PAGCOR), shall pay
SECTION 1 OF R.A. NO. 9337 IS NOT VIOLATIVE OF SECTION 1 AND SECTION 10, such rate of tax upon their taxable income as are imposed by this Section upon corporations or associations
ARTICLE III OF THE 1987 CONSTITUTION. engaged in similar business, industry, or activity.19
A perusal of the legislative records of the Bicameral Conference Meeting of the Committee on Ways on Means
III dated October 27, 1997 would show that the exemption of PAGCOR from the payment of corporate income tax
was due to the acquiescence of the Committee on Ways on Means to the request of PAGCOR that it be exempt
BIR REVENUE REGULATIONS ARE PRESUMED VALID AND CONSTITUTIONAL UNTIL from such tax.20 The records of the Bicameral Conference Meeting reveal:
STRICKEN DOWN BY LAWFUL AUTHORITIES. HON. R. DIAZ. The other thing, sir, is we --- I noticed we imposed a tax on lotto winnings.
CHAIRMAN ENRILE. Wala na, tinanggal na namin yon.
The Office of the Solicitor General (OSG), by way of Manifestation In Lieu of Comment,16 concurred with the
arguments of the petitioner. It added that although the State is free to select the subjects of taxation and that the HON. R. DIAZ. Tinanggal na ba natin yon?
inequity resulting from singling out a particular class for taxation or exemption is not an infringement of the
constitutional limitation, a tax law must operate with the same force and effect to all persons, firms and CHAIRMAN ENRILE. Oo.
corporations placed in a similar situation. Furthermore, according to the OSG, public respondent BIR exceeded HON. R. DIAZ. Because I was wondering whether we covered the tax on --- Whether on a universal basis, we
its statutory authority when it enacted RR No. 16-2005, because the latter's provisions are contrary to the included a tax on cockfighting winnings.
mandates of P.D. No. 1869 in relation to R.A. No. 9337.
CHAIRMAN ENRILE. No, we removed the ---
The main issue is whether or not PAGCOR is still exempt from corporate income tax and VAT with the
enactment of R.A. No. 9337. HON. R. DIAZ. I . . . (inaudible) natin yong lotto?
After a careful study of the positions presented by the parties, this Court finds the petition partly meritorious. CHAIRMAN ENRILE. Pati PAGCOR tinanggal upon request.
Under Section 1 of R.A. No. 9337, amending Section 27 (c) of the National Internal Revenue Code of 1977, CHAIRMAN JAVIER. Yeah, Philippine Insurance Commission.
petitioner is no longer exempt from corporate income tax as it has been effectively omitted from the list of
GOCCs that are exempt from it. Petitioner argues that such omission is unconstitutional, as it is violative of its CHAIRMAN ENRILE. Philippine Insurance --- Health, health ba. Yon ang request ng Chairman, I will accept.
right to equal protection of the laws under Section 1, Article III of the Constitution: (laughter) Pag-Pag-ibig yon, maliliit na sa tao yon.

Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person HON. ROXAS. Mr. Chairman, I wonder if in the revenue gainers if we factored in an amount that would reflect
be denied the equal protection of the laws. the VAT and other sales taxes---

In City of Manila v. Laguio, Jr.,17 this Court expounded the meaning and scope of equal protection, thus: CHAIRMAN ENRILE. No, we’re talking of this measure only. We will not --- (discontinued)

Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights HON. ROXAS. No, no, no, no, from the --- arising from the exemption. Assuming that when we release the
conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as money into the hands of the public, they will not use that to --- for wallpaper. They will spend that eh, Mr.
to give undue favor to some and unjustly discriminate against others. The guarantee means that no person or Chairman. So when they spend that---
class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes CHAIRMAN ENRILE. There’s a VAT.
in like circumstances. The "equal protection of the laws is a pledge of the protection of equal laws." It limits
governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their HON. ROXAS. There will be a VAT and there will be other sales taxes no. Is there a quantification? Is there an
property is concerned. approximation?
xxxx CHAIRMAN JAVIER. Not anything.
Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law HON. ROXAS. So, in effect, we have sterilized that entire seven billion. In effect, it is not circulating in the
may operate only on some and not all of the people without violating the equal protection clause. The economy which is unrealistic.
CHAIRMAN ENRILE. It does, it does, because this is taken and spent by government, somebody receives it in REP. TEVES. Mr. Chair, please.
the form of wages and supplies and other services and other goods. They are not being taken from the public
and stored in a vault. THE CHAIRMAN (REP. LAPUS). Can we ask the DOF to respond to those before we call Congressman Teves?

CHAIRMAN JAVIER. That 7.7 loss because of tax exemption. That will be extra income for the taxpayers. MR. PURISIMA. Thank you, Mr. Chair.

HON. ROXAS. Precisely, so they will be spending it.21 Yes, from definitely improving the collection, it will help us because it will then enter as an official
revenue although when dividends declare it also goes in as other income. (sic)
The discussion above bears out that under R.A. No. 8424, the exemption of PAGCOR from paying corporate
income tax was not based on a classification showing substantial distinctions which make for real differences, xxxx
but to reiterate, the exemption was granted upon the request of PAGCOR that it be exempt from the payment of REP. TEVES. Mr. Chairman.
corporate income tax.
xxxx
With the subsequent enactment of R.A. No. 9337, amending R.A. No. 8424, PAGCOR has been excluded from
the enumeration of GOCCs that are exempt from paying corporate income tax. The records of the Bicameral THE CHAIRMAN (REP. LAPUS). Congressman Teves.
Conference Meeting dated April 18, 2005, of the Committee on the Disagreeing Provisions of Senate Bill No.
1950 and House Bill No. 3555, show that it is the legislative intent that PAGCOR be subject to the payment of REP. TEVES. Yeah. Pagcor is controlled under Section 27, that is on income tax. Now, we are talking
corporate income tax, thus: here on value-added tax. Do you mean to say we are going to amend it from income tax to value-added
tax, as far as Pagcor is concerned?
THE CHAIRMAN (SEN. RECTO). Yes, Osmeña, the proponent of the amendment.
THE CHAIRMAN (SEN. RECTO). No. We are just amending that section with regard to the exemption
SEN. OSMEÑA. Yeah. Mr. Chairman, one of the reasons why we're even considering this VAT bill is we want to from income tax of Pagcor.
show the world who our creditors, that we are increasing official revenues that go to the national budget.
Unfortunately today, Pagcor is unofficial. xxxx

Now, in 2003, I took a quick look this morning, Pagcor had a net income of 9.7 billion after paying some small REP. NOGRALES. Mr. Chairman, Mr. Chairman. Mr. Chairman.
taxes that they are subjected to. Of the 9.7 billion, they claim they remitted to national government seven billion. THE CHAIRMAN (REP. LAPUS). Congressman Nograles.
Pagkatapos, there are other specific remittances like to the Philippine Sports Commission, etc., as mandated by
various laws, and then about 400 million to the President's Social Fund. But all in all, their net profit today REP. NOGRALES. Just a point of inquiry from the Chair. What exactly are the functions of Pagcor that are
should be about 12 billion. That's why I am questioning this two billion. Because while essentially they claim VATable? What will we VAT in Pagcor?
that the money goes to government, and I will accept that just for the sake of argument. It does not pass
THE CHAIRMAN (REP. LAPUS). This is on own income tax. This is Pagcor income tax.
through the appropriation process. And I think that at least if we can capture 35 percent or 32 percent
through the budgetary process, first, it is reflected in our official income of government which is REP. NOGRALES. No, that's why. Anong i-va-Vat natin sa kanya. Sale of what?
applied to the national budget, and secondly, it goes through what is constitutionally mandated as
Congress appropriating and defining where the money is spent and not through a board of directors xxxx
that has absolutely no accountability.
REP. VILLAFUERTE. Mr. Chairman, my question is, what are we VATing Pagcor with, is it the . . .
REP. PUENTEBELLA. Well, with all due respect, Mr. Chairman, follow up lang.
REP. NOGRALES. Mr. Chairman, this is a secret agreement or the way they craft their contract, which basis?
There is wisdom in the comments of my good friend from Cebu, Senator Osmeña.
THE CHAIRMAN (SEN. RECTO). Congressman Nograles, the Senate version does not discuss a VAT on
SEN. OSMEÑA. And Negros. Pagcor but it just takes away their exemption from non-payment of income tax.22

REP. PUENTEBELLA. And Negros at the same time ay Kasimanwa. But I would not want to put my friends from Taxation is the rule and exemption is the exception.23 The burden of proof rests upon the party claiming
the Department of Finance in a difficult position, but may we know your comments on this knowing that as exemption to prove that it is, in fact, covered by the exemption so claimed. 24 As a rule, tax exemptions are
Senator Osmeña just mentioned, he said, "I accept that that a lot of it is going to spending for basic services," construed strongly against the claimant.25 Exemptions must be shown to exist clearly and categorically, and
you know, going to most, I think, supposedly a lot or most of it should go to government spending, social supported by clear legal provision.26
services and the like. What is your comment on this? This is going to affect a lot of services on the government
In this case, PAGCOR failed to prove that it is still exempt from the payment of corporate income tax,
side.
considering that Section 1 of R.A. No. 9337 amended Section 27 (c) of the National Internal Revenue Code of
THE CHAIRMAN (REP. LAPUS). Mr. Chair, Mr. Chair. 1997 by omitting PAGCOR from the exemption. The legislative intent, as shown by the discussions in the
Bicameral Conference Meeting, is to require PAGCOR to pay corporate income tax; hence, the omission or
SEN. OSMEÑA. It goes from pocket to the other, Monico. removal of PAGCOR from exemption from the payment of corporate income tax. It is a basic precept of
statutory construction that the express mention of one person, thing, act, or consequence excludes all others as
REP. PUENTEBELLA. I know that. But I wanted to ask them, Mr. Senator, because you may have your own
expressed in the familiar maxim expressio unius est exclusio alterius.27 Thus, the express mention of the
pre-judgment on this and I don't blame you. I don't blame you. And I know you have your own research. But will
GOCCs exempted from payment of corporate income tax excludes all others. Not being excepted, petitioner
this not affect a lot, the disbursements on social services and other?
PAGCOR must be regarded as coming within the purview of the general rule that GOCCs shall pay corporate
REP. LOCSIN. Mr. Chairman. Mr. Chairman, if I can add to that question also. Wouldn't it be easier for you to income tax, expressed in the maxim: exceptio firmat regulam in casibus non exceptis.28
explain to, say, foreign creditors, how do you explain to them that if there is a fiscal gap some of our richest
PAGCOR cannot find support in the equal protection clause of the Constitution, as the legislative records of the
corporations has [been] spared [from] taxation by the government which is one rich source of revenues. Now,
Bicameral Conference Meeting dated October 27, 1997, of the Committee on Ways and Means, show that
why do you save, why do you spare certain government corporations on that, like Pagcor? So, would it be
PAGCOR’s exemption from payment of corporate income tax, as provided in Section 27 (c) of R.A. No. 8424, or
easier for you to make an argument if everything was exposed to taxation?
the National Internal Revenue Code of 1997, was not made pursuant to a valid classification based on
substantial distinctions and the other requirements of a reasonable classification by legislative bodies, so that Sec. 7. Section 109 of the same Code, as amended, is hereby further amended to read as follows:
the law may operate only on some, and not all, without violating the equal protection clause. The legislative
records show that the basis of the grant of exemption to PAGCOR from corporate income tax was PAGCOR’s Section 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following
own request to be exempted. transactions shall be exempt from the value-added tax:

Petitioner further contends that Section 1 (c) of R.A. No. 9337 is null and void ab initio for violating the non- xxxx
impairment clause of the Constitution. Petitioner avers that laws form part of, and is read into, the contract even (k) Transactions which are exempt under international agreements to which the Philippines is a signatory
without the parties expressly saying so. Petitioner states that the private parties/investors transacting with it or under special laws, except Presidential Decree No. 529.37
considered the tax exemptions, which inure to their benefit, as the main consideration and inducement for their
decision to transact/invest with it. Petitioner argues that the withdrawal of its exemption from corporate income Petitioner is exempt from the payment of VAT, because PAGCOR’s charter, P.D. No. 1869, is a special law that
tax by R.A. No. 9337 has the effect of changing the main consideration and inducement for the transactions of grants petitioner exemption from taxes.
private parties with it; thus, the amendatory provision is violative of the non-impairment clause of the
Constitution. Moreover, the exemption of PAGCOR from VAT is supported by Section 6 of R.A. No. 9337, which retained
Section 108 (B) (3) of R.A. No. 8424, thus:
Petitioner’s contention lacks merit.
[R.A. No. 9337], SEC. 6. Section 108 of the same Code (R.A. No. 8424), as amended, is hereby further
The non-impairment clause is contained in Section 10, Article III of the Constitution, which provides that no law amended to read as follows:
impairing the obligation of contracts shall be passed. The non-impairment clause is limited in application to laws
that derogate from prior acts or contracts by enlarging, abridging or in any manner changing the intention of the SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. —
parties.29 There is impairment if a subsequent law changes the terms of a contract between the parties, (A) Rate and Base of Tax. — There shall be levied, assessed and collected, a value-added tax equivalent to ten
imposes new conditions, dispenses with those agreed upon or withdraws remedies for the enforcement of the percent (10%) of gross receipts derived from the sale or exchange of services, including the use or lease of
rights of the parties.30 properties: x x x
As regards franchises, Section 11, Article XII of the Constitution31 provides that no franchise or right shall be xxxx
granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress
when the common good so requires.32 (B) Transactions Subject to Zero Percent (0%) Rate. — The following services performed in the Philippines by
VAT-registered persons shall be subject to zero percent (0%) rate;
In Manila Electric Company v. Province of Laguna,33 the Court held that a franchise partakes the nature of a
grant, which is beyond the purview of the non-impairment clause of the Constitution.34 The pertinent portion of xxxx
the case states:
(3) Services rendered to persons or entities whose exemption under special laws or international agreements to
While the Court has, not too infrequently, referred to tax exemptions contained in special franchises as being in which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;
the nature of contracts and a part of the inducement for carrying on the franchise, these exemptions,
x x x x38
nevertheless, are far from being strictly contractual in nature. Contractual tax exemptions, in the real sense of
the term and where the non-impairment clause of the Constitution can rightly be invoked, are those agreed to As pointed out by petitioner, although R.A. No. 9337 introduced amendments to Section 108 of R.A. No. 8424
by the taxing authority in contracts, such as those contained in government bonds or debentures, lawfully by imposing VAT on other services not previously covered, it did not amend the portion of Section 108 (B) (3)
entered into by them under enabling laws in which the government, acting in its private capacity, sheds its cloak that subjects to zero percent rate services performed by VAT-registered persons to persons or entities whose
of authority and waives its governmental immunity. Truly, tax exemptions of this kind may not be revoked exemption under special laws or international agreements to which the Philippines is a signatory effectively
without impairing the obligations of contracts. These contractual tax exemptions, however, are not to be subjects the supply of such services to 0% rate.
confused with tax exemptions granted under franchises. A franchise partakes the nature of a grant which is
beyond the purview of the non-impairment clause of the Constitution. Indeed, Article XII, Section 11, of the 1987 Petitioner's exemption from VAT under Section 108 (B) (3) of R.A. No. 8424 has been thoroughly and
Constitution, like its precursor provisions in the 1935 and the 1973 Constitutions, is explicit that no franchise for extensively discussed in Commissioner of Internal Revenue v. Acesite (Philippines) Hotel
the operation of a public utility shall be granted except under the condition that such privilege shall be subject to Corporation.39 Acesite was the owner and operator of the Holiday Inn Manila Pavilion Hotel. It leased a portion
amendment, alteration or repeal by Congress as and when the common good so requires.35 of the hotel’s premises to PAGCOR. It incurred VAT amounting to ₱30,152,892.02 from its rental income and
sale of food and beverages to PAGCOR from January 1996 to April 1997. Acesite tried to shift the said taxes to
In this case, PAGCOR was granted a franchise to operate and maintain gambling casinos, clubs and other PAGCOR by incorporating it in the amount assessed to PAGCOR. However, PAGCOR refused to pay the taxes
recreation or amusement places, sports, gaming pools, i.e., basketball, football, lotteries, etc., whether on land because of its tax-exempt status. PAGCOR paid only the amount due to Acesite minus VAT in the sum of
or sea, within the territorial jurisdiction of the Republic of the Philippines. 36 Under Section 11, Article XII of the ₱30,152,892.02. Acesite paid VAT in the amount of ₱30,152,892.02 to the Commissioner of Internal Revenue,
Constitution, PAGCOR’s franchise is subject to amendment, alteration or repeal by Congress such as the fearing the legal consequences of its non-payment. In May 1998, Acesite sought the refund of the amount it
amendment under Section 1 of R.A. No. 9377. Hence, the provision in Section 1 of R.A. No. 9337, amending paid as VAT on the ground that its transaction with PAGCOR was subject to zero rate as it was rendered to a
Section 27 (c) of R.A. No. 8424 by withdrawing the exemption of PAGCOR from corporate income tax, which tax-exempt entity. The Court ruled that PAGCOR and Acesite were both exempt from paying VAT, thus:
may affect any benefits to PAGCOR’s transactions with private parties, is not violative of the non-impairment
clause of the Constitution. xxxx

Anent the validity of RR No. 16-2005, the Court holds that the provision subjecting PAGCOR to 10% VAT is PAGCOR is exempt from payment of indirect taxes
invalid for being contrary to R.A. No. 9337. Nowhere in R.A. No. 9337 is it provided that petitioner can be
It is undisputed that P.D. 1869, the charter creating PAGCOR, grants the latter an exemption from the
subjected to VAT. R.A. No. 9337 is clear only as to the removal of petitioner's exemption from the payment of
payment of taxes. Section 13 of P.D. 1869 pertinently provides:
corporate income tax, which was already addressed above by this Court.
Sec. 13. Exemptions. —
As pointed out by the OSG, R.A. No. 9337 itself exempts petitioner from VAT pursuant to Section 7 (k) thereof,
which reads: xxxx
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form, income or otherwise, as well as (3) Services rendered to persons or entities whose exemption under special laws or international agreements to
fees, charges or levies of whatever nature, whether National or Local, shall be assessed and collected under which the Philippines is a signatory effectively subjects the supply of such services to zero (0%) rate (emphasis
this Franchise from the Corporation; nor shall any form of tax or charge attach in any way to the earnings of the supplied).
Corporation, except a Franchise Tax of five (5%) percent of the gross revenue or earnings derived by the
Corporation from its operation under this Franchise. Such tax shall be due and payable quarterly to the National The rationale for the exemption from indirect taxes provided for in P.D. 1869 and the extension of such
Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or exemption to entities or individuals dealing with PAGCOR in casino operations are best elucidated from the
description, levied, established or collected by any municipal, provincial, or national government authority. 1987 case of Commissioner of Internal Revenue v. John Gotamco & Sons, Inc., where the absolute tax
exemption of the World Health Organization (WHO) upon an international agreement was upheld. We held in
(b) Others: The exemptions herein granted for earnings derived from the operations conducted under the said case that the exemption of contractee WHO should be implemented to mean that the entity or person
franchise specifically from the payment of any tax, income or otherwise, as well as any form of charges, fees or exempt is the contractor itself who constructed the building owned by contractee WHO, and such does not
levies, shall inure to the benefit of and extend to corporation(s), association(s), agency(ies), or individual(s) with violate the rule that tax exemptions are personal because the manifest intention of the agreement is to exempt
whom the Corporation or operator has any contractual relationship in connection with the operations of the the contractor so that no contractor's tax may be shifted to the contractee WHO. Thus, the proviso in P.D. 1869,
casino(s) authorized to be conducted under this Franchise and to those receiving compensation or other extending the exemption to entities or individuals dealing with PAGCOR in casino operations, is clearly to
remuneration from the Corporation or operator as a result of essential facilities furnished and/or technical proscribe any indirect tax, like VAT, that may be shifted to PAGCOR.40
services rendered to the Corporation or operator.
Although the basis of the exemption of PAGCOR and Acesite from VAT in the case of The Commissioner of
Petitioner contends that the above tax exemption refers only to PAGCOR's direct tax liability and not to indirect Internal Revenue v. Acesite (Philippines) Hotel Corporation was Section 102 (b) of the 1977 Tax Code, as
taxes, like the VAT. amended, which section was retained as Section 108 (B) (3) in R.A. No. 8424, 41 it is still applicable to this
case, since the provision relied upon has been retained in R.A. No. 9337.421avvphi1
We disagree.
It is settled rule that in case of discrepancy between the basic law and a rule or regulation issued to implement
A close scrutiny of the above provisos clearly gives PAGCOR a blanket exemption to taxes with no distinction said law, the basic law prevails, because the said rule or regulation cannot go beyond the terms and provisions
on whether the taxes are direct or indirect. We are one with the CA ruling that PAGCOR is also exempt from of the basic law.43 RR No. 16-2005, therefore, cannot go beyond the provisions of R.A. No. 9337. Since
indirect taxes, like VAT, as follows: PAGCOR is exempt from VAT under R.A. No. 9337, the BIR exceeded its authority in subjecting PAGCOR to
Under the above provision [Section 13 (2) (b) of P.D. 1869], the term "Corporation" or operator refers to 10% VAT under RR No. 16-2005; hence, the said regulatory provision is hereby nullified.
PAGCOR. Although the law does not specifically mention PAGCOR's exemption from indirect taxes, PAGCOR WHEREFORE, the petition is PARTLY GRANTED. Section 1 of Republic Act No. 9337, amending Section 27
is undoubtedly exempt from such taxes because the law exempts from taxes persons or entities contracting (c) of the National Internal Revenue Code of 1997, by excluding petitioner Philippine Amusement and Gaming
with PAGCOR in casino operations. Although, differently worded, the provision clearly exempts PAGCOR from Corporation from the enumeration of government-owned and controlled corporations exempted from corporate
indirect taxes. In fact, it goes one step further by granting tax exempt status to persons dealing with PAGCOR in income tax is valid and constitutional, while BIR Revenue Regulations No. 16-2005 insofar as it subjects
casino operations. The unmistakable conclusion is that PAGCOR is not liable for the P30, 152,892.02 VAT and PAGCOR to 10% VAT is null and void for being contrary to the National Internal Revenue Code of 1997, as
neither is Acesite as the latter is effectively subject to zero percent rate under Sec. 108 B (3), R.A. 8424. amended by Republic Act No. 9337.
(Emphasis supplied.)
No costs.
Indeed, by extending the exemption to entities or individuals dealing with PAGCOR, the legislature clearly
granted exemption also from indirect taxes. It must be noted that the indirect tax of VAT, as in the instant case,
can be shifted or passed to the buyer, transferee, or lessee of the goods, properties, or services subject to VAT.
Thus, by extending the tax exemption to entities or individuals dealing with PAGCOR in casino
operations, it is exempting PAGCOR from being liable to indirect taxes.
The manner of charging VAT does not make PAGCOR liable to said tax.
It is true that VAT can either be incorporated in the value of the goods, properties, or services sold or leased, in
which case it is computed as 1/11 of such value, or charged as an additional 10% to the value. Verily, the seller
or lessor has the option to follow either way in charging its clients and customer. In the instant case, Acesite
followed the latter method, that is, charging an additional 10% of the gross sales and rentals. Be that as it may,
the use of either method, and in particular, the first method, does not denigrate the fact that PAGCOR is exempt
from an indirect tax, like VAT.
VAT exemption extends to Acesite
Thus, while it was proper for PAGCOR not to pay the 10% VAT charged by Acesite, the latter is not liable for the
payment of it as it is exempt in this particular transaction by operation of law to pay the indirect tax. Such
exemption falls within the former Section 102 (b) (3) of the 1977 Tax Code, as amended (now Sec. 108 [b] [3] of
R.A. 8424), which provides:
Section 102. Value-added tax on sale of services.- (a) Rate and base of tax - There shall be levied, assessed
and collected, a value-added tax equivalent to 10% of gross receipts derived by any person engaged in the sale
of services x x x; Provided, that the following services performed in the Philippines by VAT registered persons
shall be subject to 0%.
xxxx
PEOPLE OF THE PHILIPPINES, plaintiff-appellant, RUFINO LOPEZ & SONS, INC., petitioner,
vs. vs.
GUILLERMO MANANTAN, defendant-appellee. THE COURT OF TAX APPEALS, respondent.
This resolution refers to a motion for reconsideration filed by the counsel for defendant-appellee, Guillermo Petitioner appellant Rufino Lopez & Sons, Inc. is appealing from a resolution of the Court of Tax Appeals
Manantan. dismissing its appeal from a decision of the Collector of Customs for the Port of Manila, assessing additional
fees on petitioner for a certain importation of wire netting. The facts are simple and undisputed. Lopez & Sons
Defendant-appellee does not dispute the correctness of this Court's ruling in the main case. He concedes that a imported hexagonal wire netting from Hamburg, Germany. The Manila Collector of Customs assessed the
justice of the peace is covered by the prohibition of Section 54, Revised Election Code. However, he takes corresponding customs duties on the importation on the basis of consular and supplies invoices. Said customs
exception to the dispositive portion of this Court's ruling promulgated on July 31, 1962, which reads: duties were paid and the shipments were released. Subsequently, however, and freight of said wire netting and
For the above reasons, the order of dismissal entered by the trial court should be set aside and this as a result of the reassessment, additional customs duties in the amount of P1,966.59 were levied and imposed
case is remanded for trial on the merits. upon petitioner. Failing to secure a reconsideration of the reassessment and levy of additional customs duties,
Lopez & Sons appealed to the Court of Tax Appeals. Acting upon a motion to dismiss the appeal, filed by the
It is now urged by the defendant-appellee that the ultimate effect of remanding the case to the lower court for Solicitor General on the ground of lack of jurisdiction, the Tax Court, by its resolution of May 23, 1955,
trial on the merits is to place him twice in jeopardy of being tried for the same offense. He calls the attention of dismissed the appeal on the ground that it had no jurisdiction to review decisions of the Collector of Customs of
this Court to the fact that when the charge against him was dismissed by the lower court, jeopardy had already Manila, citing section 7 of Republic Act No. 1125, creating said tax court. From said resolution of dismissal,
attached to his person. To support his claim, he cites the case of People vs. Labatete, G.R. No. L-12917, April Lopez & Sons appealed to us, seeking a reversal of said resolution of dismissal.
27, 1960.
For purposes of reference, we are reproducing section 7 of Republic Act No. 1125 relied upon by the Tax Court
Defendant-appellee's plea of double jeopardy should be rejected. The accused cannot now invoke the defense and the Solicitor General, as well as Section 11 of the same Act invoked by the petitioner:
of double jeopardy. When the government appealed to this Court the order of dismissal, defendant Manantan
could have raised that issue by way of resisting the appeal of the state. Then again, when defendant-appellee Sec. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to
filed his brief, he could have argued therein his present plea of double jeopardy. Yet, on neither occasion did he review by appeal, as herein provided —
do so. He must, therefore, be deemed to have waived his constitutional right thereunder. This is in accord with (1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds
this Court's ruling in the cases of People vs. Rosalina Casiano, G.R. No. L-15309, February 16, 1961 of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other
and People vs. Pinuila, G.R. No. L-11374, May 30, 1958, hereunder quoted: matters arising under the National Internal Revenue Code or other law or part of law administered by
. . . defendant herein has filed a brief in which she limited herself to a discussion of the merits of the the Bureau of Internal Revenue;
appeal. Thus, she not only failed to question, in her brief, either expressly or impliedly, the right of the (2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or
prosecution to interpose the present appeal, but also, conceded in effect the existence of such other money charges, seizure, detention or release of property affected; fines, forfeitures or other
right. She should be deemed, therefore, to have waived her aforementioned constitutional penalties imposed in relation thereto, or other matters arising under the Customs Law or other law or
immunity.1äwphï1.ñët part of law administered by the Bureau of Customs; and
It is true that in People vs. Hernandez (49 O.G. 5342), People vs. Ferrer, L-9072 (October 23, (3) Decisions of provincial or city Board of Assessment Appeals in case involving the assessment and
1956), People vs. Bao, L-12102 (September 29, 1959) and People vs. Golez, L-14160, we dismissed taxation of real property or other matters arising under the assessment Law, including rules and
the appeal taken by the Government from a decision or order of a lower court, despite defendant's regulations relative thereto.
failure to object thereto. However, the defendants in those cases, unlike the defendant herein, did not
file any brief. Hence, they had performed no affirmative act from which a waiver could be implied. xxx xxx xxx
(People vs. Casiano, supra).
SEC. 11. Who may appeal; effect of appeal. — Any person, association or corporation adversely by a
In his appeal brief, appellant's counsel does not raise this question of double jeopardy, confining decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or
himself as he does, to the discussion of the evidence in the record, contending that the guilt of the city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days
appellant has not been proven beyond reasonable doubt. One aspect of this case as regards double after the receipt of such decision or ruling.
jeopardy is that defense may be waived, and, that failure to urge it in the appeal may be regarded as
a waiver of said defense of double jeopardy.(People vs. Pinuila, supra). No appeal taken to the Court of Tax Appeals from the decision of the Collector of Internal Revenue or
the Collector of the Customs shall suspend the payment, levy, distraint, and/or sale of any property of
There are other grounds raised by the defendant-appellee in this motion for reconsideration. The Court, the taxpayer for the satisfaction of his tax liability as provided by existing law: Provided, however, that
however, does not believe that they were well taken. when in the opinion of the Court the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interests of the Government and/or the taxpayer the
FOR THE ABOVE REASONS, the motion for reconsideration filed in this case, is, as it is hereby, denied. Court at any stage of the proceeding may suspend the said collection and require the taxpayer either
to deposit the amount claimed or to file a surety bond for not more than double the amount with the
Court. (Emphasis supplied.)
There is really a discrepancy between Sections 7 and 11 above reproduced. Section 7 provides that the Court
of Tax Appeals has exclusive appellate jurisdiction to review by appeal decisions of the Collector of Internal
Revenue, decisions of the Commissioner of Customs and decisions of provincial or city Board of Assessment
Appeals on cases mentioned in said section. On the other hand, section 11 of the same Republic Act in listing
and enumerating the persons and entities who may appeal as well as the effect of said appeal, mentions those
affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial
or City Board of Assessment Appeals, and fails to mention the Commissioner of Customs. Taken literally, a
person affected by a decision of the Collector of Customs may appeal to the Court of Tax Appeals; and since no
mention is made about decisions of the Commissioner of Customs, a person affected by said decision may not rendering said decisions that may be appealed, it erroneously listed the Collector instead of the Commissioner,
appeal to the Court of Tax Appeals. However, section 7 of the Act above reproduced specially provides that the of Customs. The error is plain.
Court of Tax Appeals has appellate jurisdiction to review decisions of the Commissioner of Customs. That legal
provision conferring appellate jurisdiction on the Court of Tax Appeals to review decisions of the Commissioner As a matter of fact, the Court of Tax Appeals in its resolution of dismissal of May 23, 1955 cites in support
of Customs would be empty, meaningless, and unenforceable because under Section 11, no person affected by thereof a resolution promulgated by it on January 22, 1955 in C.T.A. Case No. 17, entitled "Acting Collector of
the decision of the Commissioner of customs may appeal to the Tax Court. These two meaningless, and Customs vs.Acting Commissioner of Customs", wherein it said:
unenforceable because under Section 11, should be harmonized and reconciled if possible, in order to give The phrase "Collector of Customs" appearing in the above-mentioned provision (section 11) of
effect to the whole Act. Republic Act No. 1125 is clearly an oversight on the part of Congress. It should read "Commissioner
We are in entire accord with the Tax Court and the Solicitor General that a clerical error was committed in of Customs" to make the provision conform with section 7 of the said Republic Act section 1380 of the
section 11, mentioning therein the Collector of Customs. It should be, as it was meant to be, the Commissioner Revised Administrative Code.
of Customs. There are several reasons in support of this view. Under the Customs Law, found in sections 1137 Petitioner contends that the literal meaning of Section 11 of Republic Act No. 1125 should be adopted in the
to 1419 of the Revised Administrative Code, the Commissioner of Customs (Insular Collector of Customs) is the sense that the Court of Tax Appeals has concurrent jurisdiction with the Commissioner of Customs over Appeals
Chief of the Bureau of Customs and has jurisdiction over the whole country as regards the enforcement of the from decisions of Collectors of Customs, so that a person adversely affected by a decision of a Collector of
Customs Law, whereas, there are about sixteen Collectors of Customs for the sixteen collection districts and Customs is given the choice of appealing the said decision either to the Commissioner of Customs or to the
principal parts of entry into which the Philippines has been divided. These Collectors of Customs are Courts of Tax Appeals. We find contention unteable. In the first place, the two remedies suggested are entirely
subordinates of the Commissioner of Customs over whom he has supervision and control (section 1152, different, one from the other; an appeal to the Commissioner of Customs is purely administrative, whereas,
Revised Administrative Code). Pursuant to said supervision and control, under section 1405 of the Revised appeal to the Court of Tax Appeal is manifestly judicial. And it is a sound rule that before one resorts to the
Administrative Code, when any new or unsettled question shall be determined by the Collector of Customs, he Courts, the administrative remedy provided by law should first be exhausted. In the second place, the two
shall, if matter is not otherwise carried upon for review in ordinary course, notify the Commissioner of his remedies suggested by the petitioner would result in confusion because a person adversely affected by a
decision, submitting an adequate statement of acts involved. What is more important is the provision of section decision of a Collector of Customs could not be sure where to seek the remedy, whether with the Commissioner
1380, which reproduce below: of Customs or with the Court of Tax Appeals, and it might even be difficult for him to decide because, if he took
SEC. 1380. Review by Commissioner. — The person aggrieved by the decision of the Collector of the appeal directly to the Tax Court, that would ordinarily cut off his remedy before the Commissioner of
Customs in any matter presented upon protest or by his action in any case of seizure may, within Customs for the reason that, should the Court of Tax Appeals decide against him, he may not appeal said
fifteen days after notification in writing by the collector of his action or decision, give written notice to decision to the Commissioner of Customs because the Commissioner as an administrative officer may not
the collector signifying his desore to have the matter reviewed by the Commissioner. review the decision of the Court. On the other hand, if the person affected by a decision of a Collector of
Customs took his appeal to the Commissioner of Customs, and there receives an adverse decision, he may yet
Thereupon, the Collector of Customs shall forthwith transmit all the papers in the cause to the appeal therefrom to the Court of Tax Appeals. In the third place, even if the person affected by an adverse ruling
Commissioner, who shall approve, modify, or reverse the action of his subordinate and shall take such of the Collector of Customs took his appeal to the Court of Tax Appeals, as advocated by counsel for the
steps and make such order or orders as may be necessary to give effect to his decision. petitioner, under the literal meaning of section 11, the Tax Court may refuse to entertain said appeal, as was
done in the present case, on the ground that under section 7 of Republic Act No. 1125, it had no jurisdiction to
Under this section, any person affected or aggrieved by the decision of the Collector of Customs may appeal review a decision of the Collector of Customs, section 7 clearly limiting its appellate jurisdiction to review
the decision to the Commissioner of Customs. From all this, it is clear if we followed the literal meaning and decisions of the Commissioner of Customs.
wording of section 11 of Republic Act No. 1125, in the sense that persons affected by a decision of the Collector
of Customs may appeal directly tot he Court of Tax Appeals, then the supervision and control of the In view of the foregoing, we hold that under the law, particularly, the Customs Law and Republic Act No. 1125,
Commissioner of Customs over his Collector of Customs, and his right to review their decisions upon appeal to the Court of Tax Appeals has no jurisdiction to review by appeal, decisions of the Collector of Customs. The
him by the persons affected by said decision would, not only be gravely affected, but even destroyed. We appealed order of dismissal is hereby affirmed, with costs.
cannot believe that was the intention of the Legislature in passing Republic Act No. 1125. It is more reasonable
and logical to hold that in Section 11 of the Act, the Legislature meant and intended to say, the Commissioner of
Customs, instead of Collector of Customs in the first paragraph and the first part of the second paragraph of
said section. In thus holding, the Court are not exactly indulging in judicial legislation. They are merely
endeavoring to rectify and correct a clearly clerical error in the wording of a statute, in order to give due course
and carry out the evident intention of the Legislature. This the Courts should and can validly do. Under the rules
of statutory construction, it is not the letter but rather the spirit of the law and intention of the Legislature that is
important and which matters. When the interpretation of a statute according to the exact and literal import of its
words would lead to absurd or mischievous results, or would contravene the clear purposes of the Legislature, it
should be construed according to its spirit and reason, disregarding as far as necessary, the latter of the law.
Statutes may be extended to cover cases not within the literal meaning of the terms, for that which is clearly
within the intention of the Legislature in enacting the law is as much within the statute as if it were within the
latter. Here the error (clerical and misprint) is plain and obvious. It is within the province of the courts to correct
said error. This is not to correct the act of the Legislature, but rather to carry out and give due course to the true
intention of said Legislature. (Black on Interpretation of Laws, 2nd edition, pp. 66-67; 157-158.).
Furthermore, section 11 of Republic Act 1125 may well be regarded as a mere complement or implementation
of section 7. Since section 7 provides that the Tax Court has jurisdiction to review by appeal, decisions of the
Collector of Internal Revenue. decisions of the Commissioner of Customs, and decisions of provincial or city
Boards of Assessment Appeals, so section 11 naturally provides that persons adversely affected by said
decisions may appeal to the Tax Court. However, in enumerating the governmental bodies or agencies
NAPOLEON E. SANCIANGCO, petitioner, president (Prime Minister) whenever, as determined by the sangguniang panglungsod, said
vs. sectors are of sufficient number in the city to warrant representation. (emphasis supplied)
THE HONORABLE JOSE A. ROÑO Minister, Ministry of Local Government; THE SANGGUNIANG
PANLUNGSOD OF OZAMIZ CITY; THE HONORABLE BENJAMIN A. FUENTES, Vice Mayor of Ozamiz City The appointive character of petitioner's position was reiterated in Section 173 of the Local Government Code
and Presiding Officer of the Sangguniang Panlungsod of Ozamiz City; THE HONORABLE ANTONIO G. (B.P. Blg. 337), reading as follows:
CABALLERO, JESUS S. ANONAT, MANUEL T. CORTES, IRENE S. LUANSING, REMEDIOS J. RAMIRO, Sec 173. Composition and Compensation. — (1) the sangguniang panlungsod, as the
DOMINADOR B. BORJE, FILOMENO L. ROMERO, FLORENCIO L. GARCIA, and HARRY S. OAMINAL legislative body of the city, shall be composed of the vice-mayor, as presiding officer, the
Members, Sangguniang Panlungsod of Ozamiz City, respondents. elected sangguniang panlungsod members, and the members who may be appointed by
The sole issue for determination in this Petition for Certiorari, Prohibition and mandamus with Preliminary the President of the Philippines consisting of the presidents of the Katipunan panglungsod
Injunction and/or Restraining Order is whether or not an appointive member of the Sangguniang Panlungsod, ng mga barangay and the Kabataang barangay, city federation. (Emphasis supplied)
who ran for the position of Mambabatas Pambansa in the elections of May 14, 1984, should be considered as Since petitioner is unquestionably an appointive member of the Sangguniang Panlungsod of Ozamiz City, he is
resigned or on forced leave of absence upon the filing of his Certificate of Candidacy. The resolution of the deemed to have ipso facto ceased to be such member when he filed his certificate of candidacy for the May 14,
controversy hinges on the construction to be given to Section 13 of Batas Pambansa Blg, 697, which provides 1984 Batasan elections.
as follows:
Petitioner avers, however, that the fact that he is merely an appointive member of the Sangguniang Panlungsod
Sec. 13. Effects of filing of certificate of candidacy. of Ozamiz City "is really of no moment since subsection 2, Section 13. B.P. 697, makes no distinction between
(1) Any person holding a public appointive office or position, including active officers and elective and appointive officials, and at any rate, legislative intent makes clear that appointive officials are
members of the Armed Forces of the Philippines and the Integrated National Police, as well deemed covered by the provision.
as officials and employees of government-owned and government-controlled corporations Although it may be that Section 13(2), B.P. Blg. 697, admits of more than one construction, taking into
and their subsidiaries, shall ipso facto cease in office or position as of the time he filed his consideration the nature of the positions of the officials enumerated therein, namely, governors, mayors,
certificate of candidacy: Provided, however, that the Prime Minister, the Deputy Prime members of the various sanggunians or barangay officials, the legislative intent to distinguish between elective
Minister, the Members of the Cabinet, and the Deputy Ministers shall continue in the offices positions in section 13(2), as contrasted to appointive positions in section 13(l) under the all-encompassing
they presently hold notwithstanding the filing of their certificates of candidacy. clause reading "any person holding public appointive office or position," is clear. It is a rule of statutory
(2) Governors, mayors, members of the various sanggunians or barangay officials shall, construction that "when the language of a particular section of a statute admits of more than one construction,
upon filing certificate of candidacy be considered on forced leave of absence from office. that construction which gives effect to the evident purpose and object sought to be attained by the enactment of
(Emphasis supplied) the statute as a whole, must be followed." 1
Petitioner was elected Barangay Captain of Barangay Sta. Cruz, Ozamiz City, in the May 17, 1982 Barangay A statute's clauses and phrases should not be taken as detached and isolated expressions,
elections. Later, he was elected President of the Association of Barangay Councils (ABC) of Ozamiz City by the but the whole and every part thereof must be considered in fixing the meaning of any of its
Board of Directors of the said Association. As the President of the Association, petitioner was appointed by the
parts. 2
President of the Philippines as a member of the City's Sangguniang Panlungsod.
On March 27, 1984, petitioner filed his Certificate of Candidacy for the May 14, 1984 Batasan Pambansa The legislative intent to cover public appointive officials in subsection (1), and officials mentioned in subsection
elections for Misamis Occidental under the banner of the Mindanao Alliance. He was not successful in the said (2) which should be construed to refer to local elective officials, can be gleaned from the proceedings of the
election. Batasan Pambansa recorded as follows:

Invoking Section 13(2), Article 5 of Batas Pambansa Blg. 697 (supra), petitioner informed respondent Vice- Mr. Valdez: ... May I go to paragraph 2 of Sec. 16, Mr. Speaker which
Mayor Benjamin A. Fuentes, Presiding Officer of the Sangguniang Panlungsod, that he was resuming his duties says:
as member of that body. The matter was elevated to respondent Minister of Local Government Jose A. Rono Any local elective officials, including an elected barangay official shall
who ruled that since petitioner is an appointive official, he is deemed to have resigned from his appointive ipso facto cease in his office or position as at the time he filed his
position upon the filing of his Certificate of Candidacy. certificate of candidacy, unless otherwise provided by law. (later
Petitioner impugns said ruling on the ground that since Section 13(2) of Batasan Pambansa Blg. 697 makes no amended and is now Subsection 2 of sec. 13)
distinction between elective and appointive officials, the legislative intent is clear that even appointive Barangay Now, do the words 'local elective official' refer to the
officials are deemed also covered by the said provision. office or to an incumbent who has been elected, not
There is no question that petitioner holds a public appointive position. He was appointed by the President as a appointed?
member of the City's Sangguniang Panlungsod by virtue of his having been elected President of the Association Mr. Albano. Paragraph 2 covers elective official; paragraph I covers
of Barangay Councils. This was pursuant to Section 3, paragraph 1 of Batas Pambansa Blg. 51 (An Act appointive officials. So, if he is an appointive local official he would fall
Providing for the elective or Appointive Positions in Various Local Governments and for Other Purposes), which under paragraph (1) because it says: 'Any person holding appointive
provides that: office or position.' It does not distinguish if it is appointive or elective
Sec. 3. Cities. —There shall be in each city such elective local officials as provided in their position.
respective charters, including the city mayor, the city vice-mayor, and the elective members Mr. Valdez. In other words, Mr. Speaker, do I get the distinguished
of the sangguniang panglungsod, all of whom shall be elected by the qualified voters in the sponsor correctly that an appointed mayor but holding an elective
city. In addition thereto, there shall be appointive sangguniang panglungsod position is not within the comprehension of this section or this
members consisting of the president of the city association of barangay councils, the paragraph?
president of the city federation of the kabataang barangay, and one representative each
from the agricultural and industrial labor sectors who shall be appointed by, the
Mr. Albano. No, Mr. Speaker, that would refer to paragraph 2. What MAPALAD AISPORNA, petitioner,
maybe the Gentleman's contemplation is: Suppose a person is vs.
appointed to the position of a mayor, will he be covered under THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.
paragraph 1 and should be cease to hold office upon filing his
Certificate of Candidacy? In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14,
1974 1in CA-G.R. No. 13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna,
Mr. Valdez. Yes. defendant-appellant" of respondent Court of Appeals affirming the judgment of the City Court of
Cabanatuan 2 rendered on August 2, 1971 which found the petitioner guilty for having violated Section 189 of
Mr. Albano. I would say, yes, he would fall under paragraph 1. But if he the Insurance Act (Act No. 2427, as amended) and sentenced her to pay a fine of P500.00 with subsidiary
is an elective local official he would fall under paragraph 2. imprisonment in case of insolvency, and to pay the costs.
Mr. Valdez. In other words, this is a description of the mode and manner Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance
by which the occupant is brought to the office. Act on November 21, 1970 in an information 3 which reads as follows:
Mr. Albano. Yes. That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the
Mr. Valdez. ... not the description of the office itself. Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
did then and there, wilfully, unlawfully and feloniously act as agent in the solicitation or
Mr. Albano. No, Mr. Speaker. procurement of an application for insurance by soliciting therefor the application of one
Eugenio S. Isidro, for and in behalf of Perla Compania de Seguros, Inc., a duly organized
Mr. Valdez. I see. Now we come to the other portion which refers to insurance company, registered under the laws of the Republic of the Philippines, resulting in
elected barangay official. Why is it that the provision isolates the nature the issuance of a Broad Personal Accident Policy No. 28PI-RSA 0001 in the amount not
of the official of the barangay who had been elected, not appointed, is exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without said
he supposed to be within the purview of paragraph 2? accused having first secured a certificate of authority to act as such agent from the office of
Mr. Albano. No. Mr. Speaker, I will call the Gentleman's attention to the Insurance Commissioner, Republic of the Philippines.
paragraph 1: Any person holding a public appointive office or position ... CONTRARY TO LAW.
I presume and I assume that the office in the barangay council is still
contemplated in the words 'appointive office.' The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:
Mr. Valdez. Under paragraph l? IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969,
appellant's husband, Rodolfo S. Aisporna was duly licensed by Insurance Commission as
Mr. Albano. Yes, Mr. Speaker. 3 (Emphasis supplied) agent to Perla Compania de Seguros, with license to expire on 30 June, 1970, Exh. C; on
that date, at Cabanatuan City, Personal Accident Policy, Exh. D was issued by Perla thru its
Nor do we perceive any violation of the equal protection clause, as petitioner contends, since Section 13 of B.P. author representative, Rodolfo S. Aisporna, for a period of twelve (12) months with
Blg. 697 applies alike to all persons subject to such legislation under like circumstances and conditions. Neither beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured died by violence during
can petitioner justifiably contend that he was removed from office without due process of law since it was of his lifetime of policy, and for reasons not explained in record, present information was filed by
own choice that he ran for a seat in the Batasan Pambansa. The consequence that followed his unsuccessful Fiscal, with assistance of private prosecutor, charging wife of Rodolfo with violation of Sec.
attempt at the elections arose from law. 189 of Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as agent in the
It goes without saying that although petitioner, by filing his certificate of candidacy for the Batasan Pambansa solicitation for insurance by soliciting therefore the application of one Eugenio S. Isidro for
ceased, ipso facto, to be an appointive member of the Sangguniang Panlungsod, he remains an elective and in behalf of Perla Compaña de Seguros, ... without said accused having first secured a
Barangay Captain from which position he may be considered as having been on "forced leave of absence." He certificate of authority to act as such agent from the office of the Insurance Commission,
also continues as President of the Association of Barangay Councils but will need a reappointment by the Republic of the Philippines."
President, as member of the Sangguniang Panlungsod of Ozamiz City as the law speaks of "members who and in the trial, People presented evidence that was hardly disputed, that aforementioned
may be appointed by the President." policy was issued with active participation of appellant wife of Rodolfo, against which
WHEREFORE, finding no grave abuse of discretion on the part of respondent officials, the Writs prayed for are appellant in her defense sought to show that being the wife of true agent, Rodolfo, she
denied, and this Petition is hereby ordered dismissed. No costs. naturally helped him in his work, as clerk, and that policy was merely a renewal and was
issued because Isidro had called by telephone to renew, and at that time, her husband,
Rodolfo, was absent and so she left a note on top of her husband's desk to renew ...
Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was
affirmed by the respondent appellate court finding the petitioner guilty of a violation of the first paragraph of
Section 189 of the Insurance Act. Hence, this present recourse was filed on October 22, 1974. 5
In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant petition, to
require the respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the
respondent, represented by the Office of the Solicitor General, submitted that petitioner may not be considered
as having violated Section 189 of the Insurance Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the
Solicitor General, on behalf of the respondent, filed a manifestation 10 in lieu of a Brief on May 3, 1975
reiterating his stand that the petitioner has not violated Section 189 of the Insurance Act.
In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11 allegedly committed The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of
by the appellate court: Section 189 of the aforesaid Act but under its first paragraph. Thus —
1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF ... it can no longer be denied that it was appellant's most active endeavors that resulted in
COMPENSATION IS NOT AN ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE issuance of policy to Isidro, she was there and then acting as agent, and received the pay
FIRST PARAGRAPH OF SECTION 189 OF THE INSURANCE ACT. thereof — her defense that she was only acting as helper of her husband can no longer be
sustained, neither her point that she received no compensation for issuance of the policy
2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO because
EXHIBITS F, F-1, TO F-17, INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S
GUILT BEYOND REASONABLE DOUBT. any person who for compensation solicits or obtains insurance on
behalf of any insurance company or transmits for a person other than
3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN himself an application for a policy of insurance to or from such company
PETITIONER. or offers or assumes to act in the negotiating of such insurance, shall
We find the petition meritorious. be an insurance agent within the intent of this section, and shall thereby
become liable to all the duties, requirements, liabilities, and penalties, to
The main issue raised is whether or not a person can be convicted of having violated the first paragraph of which an agent of such company is subject. paragraph 2, Sec. 189,
Section 189 of the Insurance Act without reference to the second paragraph of the same section. In other Insurance Law,
words, it is necessary to determine whether or not the agent mentioned in the first paragraph of the aforesaid
section is governed by the definition of an insurance agent found on its second paragraph. now it is true that information does not even allege that she had obtained the insurance,

The pertinent provision of Section 189 of the Insurance Act reads as follows: for compensation

No insurance company doing business within the Philippine Islands, nor any agent thereof, which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but
shall pay any commission or other compensation to any person for services in obtaining what appellant apparently overlooks is that she is prosecuted not under the 2nd but under
new insurance, unless such person shall have first procured from the Insurance the 1st paragraph of Sec. 189 wherein it is provided that,
Commissioner a certificate of authority to act as an agent of such company as hereinafter No person shall act as agent, sub-agent, or broker, in the solicitation or
provided. No person shall act as agent, sub-agent, or broker in the solicitation of procurement of applications for insurance, or receive for services in
procurement of applications for insurance, or receive for services in obtaining new obtaining new insurance any commission or other compensation from
insurance, any commission or other compensation from any insurance company doing any insurance company doing business in the Philippine Island, or
business in the Philippine Islands, or agent thereof, without first procuring a certificate of agent thereof, without first procuring a certificate of authority to act from
authority so to act from the Insurance Commissioner, which must be renewed annually on the insurance commissioner, which must be renewed annually on the
the first day of January, or within six months thereafter. Such certificate shall be issued by first day of January, or within six months thereafter.
the Insurance Commissioner only upon the written application of persons desiring such
authority, such application being approved and countersigned by the company such person therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4
desires to represent, and shall be upon a form approved by the Insurance Commissioner, must be overruled. 12
giving such information as he may require. The Insurance Commissioner shall have the
right to refuse to issue or renew and to revoke any such certificate in his discretion. No such From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an
certificate shall be valid, however, in any event after the first day of July of the year following insurance agent under the second paragraph of Section 189 is not applicable to the insurance agent mentioned
the issuing of such certificate. Renewal certificates may be issued upon the application of in the first paragraph. Parenthetically, the respondent court concludes that under the second paragraph of
the company. Section 189, a person is an insurance agent if he solicits and obtains an insurance for compensation, but, in its
first paragraph, there is no necessity that a person solicits an insurance for compensation in order to be called
Any person who for compensation solicits or obtains insurance on behalf of any insurance an insurance agent.
company, or transmits for a person other than himself an application for a policy of
insurance to or from such company or offers or assumes to act in the negotiating of such We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an
insurance, shall be an insurance agent within the intent of this section, and shall thereby insurance agent as found in the second paragraph of Section 189 is intended to define the word "agent"
become liable to all the duties, requirements, liabilities, and penalties to which an agent of mentioned in the first and second paragraphs of the aforesaid section. More significantly, in its second
such company is subject. paragraph, it is explicitly provided that the definition of an insurance agent is within the intent of Section 189.
Hence —
Any person or company violating the provisions of this section shall be fined in the sum of
five hundred pesos. On the conviction of any person acting as agent, sub-agent, or broker, Any person who for compensation ... shall be an insurance agent within the intent of this
of the commission of any offense connected with the business of insurance, the Insurance section, ...
Commissioner shall immediately revoke the certificate of authority issued to him and no Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent
such certificate shall thereafter be issued to such convicted person. mentioned in the other two paragraphs of the said section. The second paragraph of Section 189 is a definition
A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from and interpretative clause intended to qualify the term "agent" mentioned in both the first and third paragraphs of
acting as agent, sub-agent or broker in the solicitation or procurement of applications for insurance without first the aforesaid section.
procuring a certificate of authority so to act from the Insurance Commissioner, while its second paragraph Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and
defines who is an insurance agent within the intent of this section and, finally, the third paragraph thereof second paragraphs would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent
prescribes the penalty to be imposed for its violation. must be ascertained from a consideration of the statute as a whole. The particular words, clauses and phrases
should not be studied as detached and isolated expressions, but the whole and every part of the statute must
be considered in fixing the meaning of any of its parts and in order to produce harmonious whole. 13 A statute ALEJANDRA PABLO, petitioner, vs. HON. SILVERIO Q. CASTILLO, Presiding Judge, Branch 43,
must be so construed as to harmonize and give effect to all its provisions whenever possible. 14 The meaning Regional Trial Court, First Judicial Region, Dagupan City and PEOPLE of the
of the law, it must be borne in mind, is not to be extracted from any single part, portion or section or from PHILIPPINES, respondents.
isolated words and phrases, clauses or sentences but from a general consideration or view of the act as a
whole. 15 Every part of the statute must be interpreted with reference to the context. This means that every part At bar is an original petition for certiorari under Rule 65 of the Rules of Court imputing grave abuse of
of the statute must be considered together with the other parts, and kept subservient to the general intent of the discretion amounting to lack or excess of jurisdiction to the Regional Trial Court, Branch 43, Dagupan
whole enactment, not separately and independently. 16 More importantly, the doctrine of associated words City, for denying petitioners application for probation and the motion for reconsideration of two Orders
(Noscitur a Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself or is dated March 25, 1996 and April 29, 1996, respectively.
equally susceptible of various meanings, its true meaning may be made clear and specific by considering the The antecedent facts are as follows:
company in which it is found or with which it is associated. 17
On January 12, 1994, petitioner Alejandra Pablo was charged with a violation of Batas Pambansa
Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the Bilang 22, otherwise known as the Bouncing Checks Law, in three separate Informations, for issuing
agent mentioned in the first paragraph, to receive a compensation by the agent is an essential element for a three bad checks in the total amount of P2,334.00 each to complainant Nelson Mandap.
violation of the first paragraph of the aforesaid section. The appellate court has established ultimately that the
petitioner-accused did not receive any compensation for the issuance of the insurance policy of Eugenio Isidro. All three Informations alleged that on or about the 25th of May, 1993, petitioner did then and there
Nevertheless, the accused was convicted by the appellate court for, according to the latter, the receipt of willfully, unlawfully and criminally draw, issue and deliver various checks to Nelson Mandap, in partial
payment of a loan she obtained from him, knowing that at the time of the issuance of such checks,
compensation for issuing an insurance policy is not an essential element for a violation of the first paragraph of she did not have sufficient funds in or credit with the bank. Subject checks were dishonored by the
Section 189 of the Insurance Act. drawee bank upon presentment for payment, it appearing that the current account of petitioner had
We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for been closed, and she failed to pay the amount or make arrangements for the payment thereof,
direct or indirect compensation to solicit insurance without a certificate of authority to act as an insurance agent, despite notice of dishonor.
an information, failing to allege that the solicitor was to receive compensation either directly or indirectly, Docketed as Criminal Cases Nos. 94-00197-D, 94-00198-D and 94-00199-D, respectively, the three
charges no offense. 18 In the case of Bolen vs. Stake, 19 the provision of Section 3750, Snyder's Compiled cases were not consolidated. The first two were raffled and assigned to Branch 43 while the third
Laws of Oklahoma 1909 is intended to penalize persons only who acted as insurance solicitors without license, case to Branch 41 of the Regional Trial Court in Dagupan City.
and while acting in such capacity negotiated and concluded insurance contracts for compensation. It must be
noted that the information, in the case at bar, does not allege that the negotiation of an insurance contracts by On June 21, 1995, Branch 41 of the said lower court rendered judgment in Criminal Case No. 94-
the accused with Eugenio Isidro was one for compensation. This allegation is essential, and having been 0199-D, convicting petitioner of the crime charged and imposing upon her a fine of P4, 648.00.
omitted, a conviction of the accused could not be sustained. It is well-settled in Our jurisprudence that to
warrant conviction, every element of the crime must be alleged and proved. 20 On November 28, 1995, Branch 43 promulgated its decision in Criminal Cases Nos. 94-00197-D and
94-00198-D, finding petitioner guilty of violating B.P. Blg. 22, and sentencing her to pay the amount
After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that of P4, 668.00 and to serve a prison term of thirty (30) days in each case.
accused did not violate Section 189 of the Insurance Act.
Petitioner applied for probation in Criminal Cases Nos. 94-00197-D and 94-00198-D. Her application
WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with was given due course and the probation office was required to submit a post-sentence investigation
costs de oficio. report.
On March 25, 1996, the probation office arrived at a favorable evaluation on the suitability of
petitioner for probation. However, the recommendation of the local probation office was overruled by
the National Probation Office. It denied petitioners application for probation on the ground that the
petitioner is disqualified under Section 9 of P.D. 968 (Probation Law). Respondent judge denied
petitioners application for probation in the Order dated March 25, 1996. Petitioner moved for
reconsideration but to no avail. The same was denied on April 29, 1996.
Undaunted, petitioner brought the present petition.
The sole issue for resolution here is whether or not the respondent court acted with grave abuse of
discretion in denying petitioners application for probation on the ground of disqualification from
probation under Section 9 of P.D. 968.
Under Section 9 of the Probation Law, P.D. 968, the following offenders cannot avail of the benefits of
probation:
a) those sentenced to serve a maximum term of imprisonment of more than six years;
b) those convicted of subversion or any crime against the national security or the public
order;
c) those who have previously been convicted by final judgment of an offense punished by
imprisonment of not less than one month and one day and/or fine of not less than two
hundred pesos;
d) those who have been once on probation under the provisions of this Decree; and
e) those who are already serving sentence at the time the substantive provisions of this VIRGILIO CAPATI, plaintiff-appellant,
Decree became applicable pursuant to Section 33 hereof. vs.
DR. JESUS P. OCAMPO, defendant-appellee.
The National Probation Office denied petitioners application for probation under Section 9 paragraph
(c) P.D. 968 because a prior conviction was entered against the petitioner on June 21, 1995 in We set aside the order of the Court of First Instance of Pampanga in Civil Case No. 3188 which dismissed the
Criminal Case No. 94-0199, penalizing her with a fine of P4,648.00; thereby placing her within the plaintiff's complaint on ground of improper venue.
ambit of disqualification from probation under Section 9 paragraph (c) of P.D. 968.
Plaintiff Virgilio Capati a resident of Bacolor, Pampanga, was the contractor of the Feati Bank for the
Petitioner assails the denial of her application for probation; invoking the ruling of this Court in several construction of its building in Iriga, Camarines Sur. On May 23, 1967, plaintiff entered into a sub-contract with
cases favoring liberal interpretation of the provisions of P.D. 968 so as to afford first offenders a the defendant Dr. Jesus Ocampo, a resident of Naga City, whereby the latter, in consideration of the amount of
second chance to reform in consonance with the avowed purpose and objective of the Probation Law. P2,200.00, undertook to construct the vault walls, exterior walls and columns of the said Feati building in
She theorized that "previous conviction" under Section 9 paragraph (c) should not be literally and accordance with the specifications indicated therein. Defendant further bound himself to complete said
strictly interpreted but should rather be understood as referring to a situation wherein the accused construction on or before June 5, 1967 and, to emphasize this time frame for the completion of the construction
was previously convicted of a crime that arose differently, or was done on a different date, from the job, defendant affixed his signature below the following stipulation written in bold letters in the sub-contract:
conviction of a crime for which probation is applied for. It is contended by petitioner that Section 9 "TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE' 67."
paragraph (c) should not refer, as in her particular case, where several crimes arose out of a single
act or transaction. Claiming that defendant finished the construction in question only on June 20, 1967, plaintiff filed in the Court of
First Instance of Pampanga an action for recovery of consequential damages in the sum of P85,000.00 with
To buttress her stance, petitioner placed reliance on this Courts ruling in Rura vs. Lopea[1]. In the interest, plus attorney's fees and costs. The complaint alleged inter alia that "due to the long unjustified delay
said case, the accused was convicted of five counts of estafa committed on different dates. He was committed by defendant, in open violation of his express written agreement with plaintiff, the latter has suffered
able to consolidate the five cases in a single sala such that the judgment of conviction against him in great irreparable loss and damage ... "
all the five cases was embodied in a single decision entered on the same date. When the accused
applied for probation, the same was denied but on appeal, this Court granted the application for Defendant filed a motion to dismiss the complaint on the ground that venue of action was improperly laid. The
probation; ratiocinating thus: motion was premised on the stipulation printed at the back of the contract which reads:

"xxx applied for probation he had no previous conviction by final judgment. When he 14. That all actions arising out, or relating to this contract may be instituted in the Court of
applied for probation the only conviction against him was the judgment which was the First Instance of the City of Naga.
subject of his application. The statute relates "previous" to the date of conviction, not the Plaintiff filed an opposition to the motion, claiming that their agreement to hold the venue in the Court of First
date of the commission of the crime." (emphasis ours) Instance of Naga City was merely optional to both contracting parties. In support thereof, plaintiff cited the use
Precisely because of the aforecited ruling in Rura vs. Lopea the petition under scrutiny cannot of the word "may " in relation with the institution of any action arising out of the contract.
prosper. The lower court, in resolving the motion to dismiss, ruled that "there was no sense in providing the aforequoted
It is a basic rule of statutory construction that if a statute is clear, plain and free from ambiguity, it must stipulation, pursuant to Sec. 3 of Rule 4 of the Revised Rules of Court, if after all, the parties are given the
discretion or option of filing the action in their respective residences," and thereby ordered the dismissal of the
be given its literal meaning and applied without any interpretation.[2] Not only that; in the matter of complaint.
interpretation of laws on probation, the Court has pronounced that "the policy of liberality of probation
Hence, this appeal.
statutes cannot prevail against the categorical provisions of the law."[3]
The rule on venue of personal actions cognizable by the courts of first instance is found in Section 2 (b), Rule 4
Section 9 paragraph (c) is in clear and plain language, to the effect that a person who was previously of the Rules of Court, which provides that such "actions may be commenced and tried where the defendant or
convicted by final judgment of an offense punishable by imprisonment of not less than one month and any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the
one day and/or a fine of not less than two hundred pesos, is disqualified from applying for probation. election of the plaintiff." The said section is qualified by the following provisions of Section 3 of the same rule:
This provision of law is definitive and unqualified. There is nothing in Section 9, paragraph (c) which
qualifies "previous conviction" as referring to a conviction for a crime which is entirely different from By written agreement of the parties the venue of an action may be changed or transferred
that for which the offender is applying for probation or a crime which arose out of a single act or from one province to another.
transaction as petitioner would have the court to understand.
Defendant stands firm on his contention that because of the aforequoted covenant
In the case of Rura vs. Lopea relied upon by petitioner, the Court declared that "previous" refers to contained in par. 14 of the contract, he cannot be sued in any court except the Court of First
conviction, and not to commission of a crime. At the time Rura was convicted of the crime for which Instance of Naga City. We are thus called upon to rule on the issue as to whether the
he was applying for probation, he had no prior conviction. In the present case of petitioner, when she stipulation of the parties on venue is restrictive in the sense that any litigation arising from
applied for probation in Criminal Cases Nos. 94-00197-D and 94-00198-D, she had a previous the contract can be filed only in the court of Naga City, or merely permissive in that the
conviction in Criminal Case No. 94-00199-D, which thereby disqualified her from the benefits of parties may submit their disputes not only in Naga City but also in the court where the
probation. defendant or the plaintiff resides, at the election of the plaintiff, as provided for by Section 2
(b) Rule 4 of the Rules of Court.
It is well-settled that the probation law is not a penal statute; [4] and therefore, the principle of liberal
It is well settled that the word "may" is merely permissive and operates to confer discretion
interpretation is inapplicable. And when the meaning is clearly discernible from the language of the
upon a party. Under ordinary circumstances, the term "may be" connotes possibility; it does
statute, there is no room for construction or interpretation.
not connote certainty. "May" is an auxillary verb indicating liberty, opportunity, permission or
WHEREFORE, for want of merit, the petition is hereby DISMISSED. No pronouncement as to costs. possibility. 1
In Nicolas vs. Reparations Commission 2, a case involving the interpretation of a stipulation as to venue along
lines similar to the present one, it was held that the agreement of the parties which provided that "all legal
actions arising out of this contract ... may be brought in and submitted to the jurisdiction of the proper courts in ANTONIO BASIANA, SR., ROSA NOVINA BASIANA, WILHERMINA BASIANA KELLY, ANTONIO BASIANA,
the City of Manila," is not mandatory. JR., and ROMEO BASIANA, petitioners-appellants,
vs.
We hold that the stipulation as to venue in the contract in question is simply permissive. By the said stipulation, CIPRIANO LUNA, FELIX LUNA, THE HONORABLE DIRECTOR OR MINES, and THE HONORABLE
the parties did not agree to file their suits solely and exclusively with the Court of First Instance of Naga. They SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, respondents-appellees.
merely agreed to submit their disputes to the said court, without waiving their right to seek recourse in the court
specifically indicated in Section 2 (b), Rule 4 of the Rules of Court. This is a petition for review pursuant to Commonwealth Act No. 137, Mining Act, as amended of the decision of
the Secretary of Agricultural and Natural Resources in DANR Case No. 3614 and DANR Case No. 3614-A
Since the complaint has been filed in the Court of First Instance of Pampanga, where the plaintiff resides, the involving conflicting or overlapping mining claims, the dispositive part of which reads:
venue of action is properly laid in accordance with Section 2 (b), Rule 4 of the Rules of Court.
IN VIEW OF ALL THE FOREGOING, the order of the Director of Mines, dated November
WHEREFORE, the order appealed from is hereby set aside. Let the records be returned to the court of origin 18, 1970, should be, as hereby it is, AFFIRMED with the modification that the mining claim
for further proceedings. Costs against defendant-appellee. "Romeo 1" and the lease agreement covering the same should be, as hereby it is, declared
valid, mining claims "Ester 1" and "Ester 2" together with the lease agreement covering the
same, should be, as hereby they are, declared null and void.
SO ORDERED.

Quezon City, Philippines, August 3, 1971. 1

Both cases originated from the Bureau of Mines as protests filed by petitioners-appellants against the private
respondents-appellees, The first case was docketed in the Bureau of Mines as Administrative Case No. V-457,
and the second case as Mines Administrative Case No. V-477. The two cases were jointly heard. After the
petitioners-appellants had closed their evidence, the private respondents-appellees moved to dismiss the
protests. Acting on this motion, the Director of Mines dismissed the protests in an order dated November 18,
1970.
The protestants appealed to the Secretary of Agriculture and Natural Resources, assigning the following errors
allegedly committed by the Directors of Mines:
1. The Bureau of Mines erred in holding that the Initial Post No. 1 of a neighboring or
adjacent claim is not one of the valid tie points referred to by Section 47 of the Mining Act,
considering the manner in which the Luna-Basiana Mining Property, particularly the mining
claims of appellants are being tied;
2. The Bureau of Mines erred in holding that Romeo l, registered on March 9, 1966 is the
Mother Claim or sole tie point of all the adjacent or the rest of appellant's mining claims;
3. The Bureau of Mines erred in holding that Romeo 1 which is tied to a Cliff (Exhibit C) and
registered on March 9, 1966 is not a valid tie point;
4. The Bureau of Mines erred in holding that appellant's mining claims are without tie points
considering that they are tied to the Initial Post No. 1 of he adjacent or adjoining or
neighboring claims with proper bearings and distances, and that three (3) of these claims
out of the ninety-five (95) claims registered and assigned to appellants are granted lease
contracts, namely:
a. Romeo 1 — xxx Lode Lease Contract No. V-737 xxx;
b. Ester 1 — xxx Lode Lease Contract No. V-739 xxx;
c. Ester 2 — xxx Lode Lease Contract No. V-739 xxx;
and considering that thirty seven (37) mining claims of appellants were amended, and out of
these thirty-seven (37) amended claims, the Corner Post No. 1 of the thirty amended claims
are tied to the BLLM No. 2 Jagupit, Cabadbaran, Agusan, with their corresponding bearings
and distances ...;
5. The Bureau of Mines erred in holding that the proper remedy which appellants should
have adopted is to make new locations, and not by amendments;
6. The Bureau of Mines erred in not appreciating in favor of appellants the following exhibits
and testimonies of witness, to wit:
xxx xxx xxx original 183 claims. They filed a protest on April 22, 1969, with the Bureau of Mines,
alleging that the Luna mining claim murder the original 183 claims) are valid at their
7. The Bureau of Mines erred in holding that appellant Antonio J. Basiana, Sr., needed a inception but are deemed abandoned for failure of the recorded locators to pay the
special power of attorney to prospect and locate mining claims for appellees; occupation fees required by Section 241 of the National Internal Revenue Code and for
8. The Bureau of Mines erred in deciding MAC-V-477 without allowing appellants the failure to file the application for lease and/or survey in accordance with Section 68 of the
chance to present their evidence in support of the same considering that reservation to that Mining Act, as amended. It was further alleged that appellees' "Cicafe" and "Mirador" claims
effect was made; are null and void in accordance with Sections 60 and 68 of the Mining Act, as amended.
This protest, praying that the "ABA" claims be given preference over the 'Cicafe' and
9. The Bureau of Mines erred in not considering the lease areas of Romeo 1 (Exhibit H-1 'Mirador' claims, gave rise to MAC No. V-477.
and 1), Ester 1 and Ester 2 (Exhibit H-2 and J and Almanzor 1 (Exhibit U, U-1 to U-2) as
proper reference points or the tie points for the other adjacent or neighboring mining The two cases were jointly heard. After the protestants-appellants closed their evidence,
protestees-appellees moved to dismiss the protests.
claims. 2
The Director of Mines, in dismissing the protests in the order appealed from, relied on his
On August 3, 1971, the Secretary of Agriculture and Natural Resources rendered a decision affirming the order finding that the 183 claims prospected by appellant Antonio J. Basiana, Sr., and recorded in
of the Director of Mines with the only modification that the mining claim "Romeo 1" and the lease agreement the names of different persons including himself, were null and void because: (1) Appellant
covering the same should be declared valid and mining claims "Ester 1" and "Ester 2" together with the lease Basiana did not have a power of attorney for whom he prospected the said claims; and (2)
agreement covering the same should be declared null and void on the following factual findings and legal these claims did not have such tie points as authorized under Section 47 of the Mining Act.
conclusions:
Going into the 1st, 2nd, 3rd, 4th, 5th and 9th alleged errors which are closely related to
It appears that appellant Antonio Basiana, Sr., prospected in the vicinity of Upper Asiga, each other, we find that the discussion revolves around the mining claim "Romeo 1"
Santiago (Paypay), Cabadbaran, Agusan sometime in the early part of February, 1966, for recorded in the name of appellant Antonio J. Basiana, Jr. This was the other claim to which
possible mining claims. On February 21, 1966, said appellant entered into an agreement all the lining claims were directly or indirectly tied to, as admitted by appellant Basiana.
with appellee Cipriano Luna, the terms and conditions of which were contained in a private
document. In a nutshell, the agreement provides that of all the mining claims that could be There were three (3) declarations of location covering this particular claim. The first or
prospected and registered in the name of Asiga Copper Mines, Luna would receive a share original one was recorded on March 11, 1966 with the Mining Recorder. According to this
of 60 % thereof in consideration of his assumption of all expenses for prospecting and declaration, the claim was discovered by appellant Antonio Basiana, Sr., on February 3,
registering the claims, and the balance thereof would go to Basiana. 1966, and located on February 3-5, 1966; its location post No. 1 was tied to a point
described as "a cliff on Asiga River intersection of Soogon Creek and marked X."
It also appears that Basiana prospected 183 claims However, of these 183 claims, 93 were Apparently, this mining claim is null and void pursuant to Section 34 of the Mining Act, which
recorded in the Office of the Mining Recorder in the name of appellant Basiana and reads as follows:
members of his family, respectively; and the rest, in the name of appellees and the other
members of the latter's family, Sec. 34. Within thirty days after the completion of the acts of location of
a mining claim, as hereinafter provided, the locator thereof shall record
Evidently realizing that there was something wrong in the declarations of location records, the same with the mining recorder of the province or district within
appellee Cipriano Luna, with the knowledge and consent of Basiana, filed on December 18, which the claim is situated. A claim recorded after the prescribed period
1967, amended declarations with the end in view of correcting claim names and the points. shall be null and void (Emphasis supplied)
However, appellant Basiana disclaimed knowledge of an consent to the amended claims in
his letter dated August 14, 1968, addressed to the Mining Recorder, which reads in part as The acts of location were completed on February 5, 1966, but the recording of the claim
follows: was made on March 11, 1966, or beyond the thirty-day period prescribed by the above-
quoted provision of law.
I am therefore giving notice that any amendments to my original
declarations of locations filed in your office is without my knowledge The second declaration was an amended one. According to this particular declaration, the
and consent and that the same be not given due course or any amendment of the claim took place from April 1-30, 1966, with a tie point described as
declaration of location filed in your office that may or in any manner "BLLM No. 2, Jagupit, Cabadbaran, Agusan." The reason given for the amendment was "to
overlap my claims, I am requesting your good Office that I be notified of orient the Bureau of Mines, Manila, with the actual location of the above mineral claim in
the same so that I can make my protest. (Exhibit "CC") connection with the application for order of survey this claim." This declaration was
recorded with the mining recorder on July 29, 1966, We find the mining claim under this
Consequently, appellee Cipriano Luna executed an affidavit of cancellation of the declaration to be null and void.
registration of mining claims and filed the same with the Mining Reporter. (Exh. "GG")
An amendment presupposes a valid claim. Since the amendment purports to effect a
In July, 1968, and thereabouts, appellees located the area covered by the original 183 correction of a null and void claim necessarily the amended claim must also be null and
claims, to the exclusion of appellants. These claims of appellees are what is now known as void. Furthermore, this was filed beyond the thirty-day period prescribed for the recording of
the Cicafe' and the "Mirador" groups of claims. On learning of these locations by appellees, the same; its illegality was even admitted by appellant Basiana himself.
appellants filed a protest with the Director of Mines against appellees' claims which
allegedly overlapped his and his family's claims, or the Basiana portion of the original 183 The third declaration was in fact a declaration of relocation. According to this particular
claims. From this protest, filed on December 2, 1968 and amended on December 23, 1968, declaration, the claim was discovered on October 5, 1966, and located on October 6-8,
arose Mines Administrative Case (MAC) No. V-457. 1966 with a tie point described as "BLLM No. 2, Jagupit, Cabadbaran, Agusan." It was
recorded on October 20, 1966. Apparently, this is a valid declaration; hence, the mining
In March, 1969, or thereabouts, and during the pendency of MAC No. V-457, appellants claim is likewise valid, contrary to the findings of the Bureau of Mines, because it was
Antonio J. Basiana, Sr., and his wife, Rosa Basiana, allegedly located and claimed 73 recorded within the prescribed period and with a permanent or prominent tie point, BLLM
mining claims, known as the "ABA" group of claims, covering the Luna portion of the
No. 2, within the definition of the term as stated in Section 47 of the Mining Act. However, holding the opinion that the 183 claims as covered by their respective original declarations,
the validity and the legal existence of the mining claim commenced only upon the recording are null and void for lack of authorized tie points, except "Romeo 1" the original declaration
of the same, or on October 20, 1966 . of which is null and void pursuant to Section 34 of the Mining Act. The validity of a claim
must be determined as of its inception, and it cannot be affected by subsequent acts
The rest of the mining claims, or the 182 others, when they were recorded originally, did not unrelated directly to their status. The subsequent and valid relocation of "Romeo !", or the
have their individual tie points such as authorized by Section 47 of the Mining Act, because grant of lease contracts over the said claim, "Ester 1" and "Ester 2" mining claims, did not in
"Romeo 1" then did not still exist. As admitted by appellant Basiana himself, , "Romeo 1" any way create the existence or validity of the rest of the claims. In the light of this thinking,
was the mother claim to which the other claims were directly or indirectly tied. 'These 182 we concur with the Director of Mines in his belief that the proper remedy would be
claims were not amended or relocated As recorded, those were null and void. relocation in order to give existence to the null and void claims.
It is a fact that amended declarations of locations were filed with the end in view of typing With respect to the 7th alleged error, the pertinent provision of law is stated as follows:
the claims to some authorized tie points. 'these were filed by appellee Cipriano Luna on
December 18, 1967; but due to the letter dated August 14, 1968 of appellant Basiana to the Prospectors may prospect for themselves, or for other persons,
Mining Recorder, disclaiming knowledge of, or consent to, said amendments, said appellee associations, corporations, or other entities qualified to locate mining
filed with the same Mining Recorder an affidavit cancelling the registration of the amended claims and to acquire leases of mineral lands under the provisions of
claims. So, the original declarations of the 182 claims (discounting "Romeo 1") after the this Act. A proper power of attorney in writing shall, in each case, be
filing of the affidavit of cancellation of the amended declarations, stood as they were at the given by the employer to his prospector which power of attorney shall
time they were originally registered. Included in these claims are the thirty-seven claims of be duly acknowledged and shall be recorded in the office of the mining
the appellants which appellee Cipriano Luna sought to have amended but disclaimed by recorder concerned on or before the recording this declaration of
appellant Basiana as earlier stated. location. A power of attorney not registered on or before the recording
this declaration of location shall make the mining claim or claims null
Our attention is also called to the fact that the mining claims in question, three (3) are and void. ... (Section 24, C.A. No. 137, as amended. Emphasis
granted lease agreements, namely: supplied).
Romeo 1 — Lode Contract No. V-737 It is an admitted fact that appellant Antonio Basiana, Sr., prospected not only for himself, but
Ester 1 — Lode Lease Contract No. V-739 also for the members of his family and for the appellees and other members of the latter's
family. Certainly, in prospecting for claims which were to be recorded in somebody else's
Ester 2 — Lode Lease Contract No. V-739 name, he was acting as an agent of the registered locators other than himself. The
relationship as co-locators alleged by appellants to be existing between Basiana and the
so that the Director of Mines was in error in finding that the claims have no the points. appellees is negated by the fact that out of the 183 claims prospected and discovered by
The contract covering "Romeo 1" was issued on the basis of the declaration of location him, only 75 of them were registered in his own name, while 18 were in the name of the
recorded on October 20, 1966 and not of that as originally registered on March 11, 1966, members of his family, and the remaining were in the name of Cipriano Luna and some of
The basic declaration, or the one recorded on October 20, 1966, was a valid declaration; the members of his family. Each one, therefore, appears to be the sole and exclusive
but this fact has no relevance whatsoever to the declaration filed prior thereto, or to be locator of his individual claims. Under these circumstances, a written power of attorney duly
validity or invalidity of the claims covered thereby. recorded with the office of the mining recorder concerned during the prescribed period, was
necessary for the validity of the claims appearing to be located by the persons other than
The contract covering "Ester 1" and "Ester 2" was based on the declarations of locations himself. Inasmuch as there was no such power of attorney, these claims (registered as
filed on March 9, 1966, in the name of Ester A. Luna, who assigned those claims in favor of located by others) are null and void, under the provision of the law above-quoted.
appellant Basiana in a deed of assignment executed on October 1, 1967. As earlier stated,
all the claims covered by the original declarations of locations were null and void. The It is argued, however, that the authority to prospect for appellee is made somehow with the
issuance of the lease contract over "Ester 1" and "Ester 2" which are null and void mining execution of the agreements by and between appellant Antonio Basiana, Sr., and Cipriano
claims, are necessarily null and void also. Legally, there has never been such mining claims Luna but then these agreements were not in the nature of a written power of attorney; and
as "Ester 1" and "Ester 2" so the lease contract covers nothing. even granting for the sake of argument that they are, the fact that those were not registered
with the Office of the Mining Recorder concerned on or before the registration of the
It also appears that appellants rely on the evaluation reports and the antecedents to its declarations, Made the claims null and void, also under the provisions of the abovequoted
submission. This report, it should be borne in mind, was merely for the purpose of law.
ascertaining the probable mineral contents of the area, but does not in any way establish
with certainty the metes and bounds of the area. These claims were not reached by the Furthermore, not one of the 183 original claims was in the name of Asiga Copper Mines;
mining engineers of the Bureau of Mines, who were to take the evaluation survey, by and less than 60% of the said 183 claims were recorded in the name of Cipriano Luna and
conducting a relocation survey of the tie line leading from the cliff which was the tie point to of the members of his family, while more than 49% thereof were recorded in the name of
the location post No. 1 of "Romeo 1", and thence to the other claims. Engineer Jazareno, Antonio Basiana, Sr., and of the members of the family, all in utter disregard of the terms
one of those who conducted the evaluation survey, stated in the hearings that he did not and conditions set forth in the agreement which appellant Basiana alleged to be his source
know the relative positions of the mining claims. of authority to prospect for the appellees. We are at a loss as to how this agreement, which
the parties have chosen to completely disregard could be a source of anything — much
In view of the foregoing, we find that the 1st, 2nd, 4th and 9th alleged errors are without less, of an authority to prospect for mining claims, To our mind, the parties thereto, by their
merit; and the 3rd, well taken but only insofar as "Romeo 1" as relocated, is concerned. subsequent acts, considered the agreement a mere scrap of paper; it would not make
sense at all therefore, for us to give more consideration to this agreement than what the
as to the 5th alleged error, we believe that the same is academic. However, for clarification, parties themselves had given it.
it is position of this Office that a mining claim which is null and void, could not be a subject
of an amendment, because a null and void claim is no claim. In the instant case, we are We find, therefore, that the 7th alleged error is without merit.
With respect to the 8th assigned error — that the Bureau of Mines erred in deciding MAC-V- mining grants, patents, locations, etc. would be considered to have lapsed, and the area covered thereby would
477 without allowing appellants the chance to present their evidence in support of the same be open to relocation: that private Respondents-appellees have duly complied with the requirements provided in
considering that a reservation to that effect was made - we find the same to be also without Section 100 of the said Decree and Section 176 of the Implementing Regulations thereof; that, as disclosed by
merit. the records of the Bureau of Mines, the petitioner-appellants have failed to file with the said Bureau the required
application on or before May 17, 1976; and that granting without admitting that the petitioners-appellants have
MAC-V-477, it is to be recalled, relates to the locations by appellants Antonio Basiana, Sr.,
and his wife, Rosa Basiana, of the area registered in the name of the appellees and the any rights on the mining claims under controversy, the same were considered to have lapsed. 5
other members of the latter's family, out of the 183 claims prospected by appellant Basiana.
In their Comment dated January 18, 1977. the petitioners-appellants contend that Section 180 of the
It could be the belief of the appellees that the 183 original claim in the name of appellants
Implementing Regulations of PD No. 463 is null and void insofar as it purports to destroy vested or acquired
and the members of his family, and appellees and the members of his family, were null and
substantive rights under mining laws previously in force; and that, assuming arguendo that Section 180 of said
void, so much so that appellee Cipriano Luna wanted to amend the declarations of
Implementing Regulations is a valid implementation of P.D. No. 463, the same does not apply to 'Tinning claims
locations; but having failed to achieve this for reason of appellants' objection, he and
appellee Felix Luna located and recorded the mining claims in their respective names under subject matter of a pending litigation. 6
the "Cicafe" and "Mirador" groups of claims. Subsequently, appellants located the same
area under their "ABA" group of claims. Subsequently, however, P.D. No. 1214 was promulgated effective on October 14, 1977. The petitioners-
appellants thus filed a Supplemental Manifestation dated December 21, 1977 wherein they contend that P.D.
On the basis of the protest filed by appellants in MAC-V-477, it appears that their alleged No. 1214 clearly and unmistakably indicates that the application under Section 100 of P.D. No. 463 to avail of
preferential right to the area is based on their contention that the original claims (as the rights and privileges granted under P.D. No. 463 is optional and not mandatory; hence, even after the lapse
prospected by Basiana in 1966) were valid; but by appellees' failure to pay the of the 2-year period on May 17, 1976 under Section 100 of P.D. No. 463 without any application having been
corresponding occupation fees therefor, as required by the National Internal Revenue Code, filed thereunder, the claims are still valid and not forfeited. 7
and also by their failure to file the corresponding applications for lease and/or survey within
the prescribed period, these claims are deemed abandoned and junior location can be In behalf of the public respondents-appellees, the Solicitor General submitted a comment stating, among
legally made on the area by qualified parties other than the original locators, their heirs or others:
assigns, directly or indirectly, pursuant to Section 68 of the Mining Act. Under this
contention of appellants, the "Cicafe" and "Mirador" claims are null and void, being in ... for purposes of the resolution of these appealed cases, that the questions as to whether
violation of not only Section 68, but also Section 60 of the Mining Act. the filing of application under Section 100 of P.D. No. 463 in relation to P.D. No. 1214 is
mandatory or not is not important, nor is it imperative that said issue be resolved by this
It is therefore apparent that the main basis of the protest in MAC-V-477 and the main basis Honorable Court in these appealed cases, for the following reasons:
of the protest in MAC-V-457 are the same and Identical — the alleged validity of the 183
claims propagated by Basiana for himself, the members of his family, the appellees and the (a) The mining claims in these cases have not yet ripened into ownership rights, in view of
members of the latter's family — premised on the same and Identical act of facts. Further the pendency of the appealed cases before this Honorable Court. Therefore, either parties
proceedings as that contemplated by appellants, would certainly be an exercise in futility for cannot consider themselves legal holders of valid and subsisting mining locations and other
want of basis, as it was found and held that the original 183 claims are null and void. rights whether considered as mining patents under the Act of U.S. Congress of July 1, 1902
or as leasehold mining claims under Commonwealth Act No. 13-1. Consequently, insofar as
As the said claims are null and void, the registered locators thereof are not and cannot be the mining claims, subject of the appealed cases, are concerned, they cannot be
required to pay the occupation fees, or to file the corresponding applications for lease considered old valid mining rights which are required to be the subject of application
and/or survey. As we have earlier stated, a null and void claim is no claim at all, so the therefor and approval thereof by the Director of Mines within a period of two (2) years which
provisions of Section 68 of the Mining Act, as amended, and Section 241 of the National expired on May 17, 1976.
Internal Revenue Code, do not apply. There could be no abandoment where there is
nothing to abandon. (b) Since the decision of the respondent Secretary of Natural Resources over the said
mining claims controversy has not become final, which is now the subject of the appealed
Also, as the said claims were null and void, they were open to inspection by any party who cases, this Honorable Court may either affirm. modify or reverse the said decision.
were qualified. Section 68 of the Mining Act, which declares as null and void the junior Accordingly, either parties cannot claim any vested rights over said mining claims which
locations by the original locators, their heirs or assigns, of the abandoned claims, does not cannot be impaired by the requirement of application under Section 100 of P.D. No. 463;
also apply here, because there was no abandonment such as that contemplated by the law. and
Section 60 of the Mining Act, which prohibits locations by others on existing claims when
the first locators valid claim existed on the area. (c) Considering that the mining claims under controversy were initially decided under the old
mining laws, which decision is now subject of these appealed cases, and still pending
In the light of the foregoing, we also find the 8th alleged error without merit. 3 resolution by this Honorable Court, then, being the subject of a pending litigation or appeal,
only the prevailing party may take advantage of Section 100 of P.D. No. 463 after the
The petitioners-appellants have appealed to this Court by filing a petition for review. 4 decision awarding him the mining claims in question shall have become final. Until these
appealed cases shall have been decided finally by this Honorable Court, any application by
On May 17, 1974, almost two years after tile briefs of the parties had been filed, the President of the Philippines either parties over the mining claims under litigation or appeal with the Bureau of Mines
promulgated Presidential Decree No. 463, otherwise known as The Mineral Resources Development Decree of pursuant to Section 100 of P.D. No. 463 may serve only as notices, but may have no legal
1974. The private respondents- appellee, then filed a Manifestation and Motion dated November 24, 1976 effect.
alleging that under Sections 100 and 101 of said Decree and Sections 176 and 180 of the Implementing
WHEREFORE, premises considered, it is respectfully submitted that there is no immediate
Regulations thereof, it is mandatory that holders of valid and subsisting mining locations and other rights under
and important reason for this honorable Court to pass upon the issues raised by either
other mining laws should file or make the necessary application therefor praying approval thereof by the
parties in connection with the application of P.D. No. 463 and P.D. No. 1214 to the mining
Director of Mines within a period of two (2) years from the date of approval of said Decree, or on or before May
17, 1976; that in case of failure to file the application to avail of the rights and privileges under said Decree, said
claims, subject of these appealed cases, and that these cases be resolved by this a description of the claims as staked and monumented, showing the length and
Honorable Court on the merits. 8 approximate compass bearing, as near as may be, of each side or course thereof, and
stating in what manner the respective corners are marked, whether by standing tree, rock in
The foregoing comment of the Solicitor General appears to be well founded. place, post, or stone, and giving in detail the distinguishing markes that are written or cut on
each, and also stating as accurately as possible the bearing and distance of corner post
The cases subject to the instant petition having arisen under Commonwealth Act No. 137, otherwise known as number one to the tie point, which shall be a permanent and prominent object: Provided,
the Mining Act, as amended, the same have to be decided in accordance therewith. Under that law, findings of That in the location of contiguous claims by the same locator, the tying of corner post
fact in the decision or order of the Director of Mines, when affirmed by the Secretary of Agriculture and Natural number one of nay of the said claims will constitute substantial compliance with this
Resources, were final and conclusive, the party appealing therefrom being allowed to raise only questions of provision. The declaration of location that has no bearing and distance to a tie point as
law in a petition for review filed with the Supreme Court. CA No. 137, Sec. 61, as amended by R.A. No. 4388, herein described shall be null and void.
approved June 19, 1965). As what has been set forth above will show, the decision of the Secretary of
Agriculture and Natural Resources in the cases subject of the present petition affirmed all the factual findings For the purpose of this section, a permanent and prominent object used as a tie point may
contained in the order of the Director of Mines, except that with respect to mining claim "Romeo 1" it reached a be an intersection of known roads; a junction of known rivers or creeks, a known public or
different legal conclusion, namely, that it and the lease agreement covering it are valid. private structure; a corner of approved public; private or mineral land survey; a kilometer
post of public road; or location monument or triangulation station established by the Bureau
This Court is bound by such factual findings. The findings of fact made in the decision of the Secretary of of Lands, Bureau of Mines, Army Corps of Engineers, Bureau of Cost and Geodetic Survey,
Agriculture and Natural Resources appealed from will not be reviewed by this Court unless there has been a or other government agencies.
grave abuse of discretion in making said findings by reason of the total absence of competent evidence in
Relying on the fact that the second paragraph of this section uses the word "may" in enumerating what may be
support thereof. 9 The findings of fact in the decision appealed from are supported by substantial evidence.
used as a tie point, they argue that such enumeration is not exclusive and admits of other objects as tie points
The petitioners-respondents assign the following errors: provided these are permanent and prominent objects. They then proceed to argue that Sections 40 and 43 of
the Mining Act make the initial post No. 1 of a staked claim permanent because the former requires "Initial lost"
1. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES ERRED IN to be written thereon and the latter makes it "unlawful to move number one post of a lode mineral claim", while
HOLDING THAT THE MINING CLAIMS OF PETITIONER-APPELLANTS ARE WITHOUT Section 42 makes it prominent because it provides that:
TIE POINTS AS REQUIRED BY THE MINING LAW AS AMENDED.
When a post is used, it must be at least fifteen centimeters in diameter or twelve
2. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES ERRED IN centimeters on each side by one hundred forty centimeters in length, where practicable, set
HOLDING THAT THE FILING OF THE 'AFFIDAVIT OF CANCELLATION OF APPELLEE forty centimeters in the ground and surrounded by a mound of earth or stone one hundred
CIPRIANO LUNA IN THE MINING RECORDER OF AGUSAN DEL NORTE AFFECT twenty-five centimeters in diameter by sixty-five centimeters in height ...
AND/OR CANCEL THE MINING CLAIMS OF PETITIONER-APPELLANTS.
This argument is not tenable. Both the purpose and language of Section 47 as amended by Republic Act No.
3. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES ERRED IN NOT 4:388 indicate that the enumeration of permanent and prominent objects that may be used as tie points is
DETERMINING THE VALIDITY OF THE INDIVIDUAL DECLARATIONS OF LOCATION OF exclusive. According to the explanatory note of 11. No. 2522 (which became R.A. No. 4388), its purpose in
THE MINING CLAIMS INVOLVED AS THEY EXIST IN THE LIGHT OF THE LAW amending Section 47 by making it mandatory for the locator to indicate the tie points of his claim is to eliminate
GOVERNING DISCOVERY, TAKING AND LOCATION. claim jumpers and Minimize overlapping of claims." (Cong. Rec., H.R., May 13, 1963, pp. 1345-1346). In order
to achieve this Purpose it was deemed necessary to specify what permanent and prominent objects may be
4. THE SECRETARY- OF AGRICULTURE AND NATURAL RESOURCES ERRED IN HOT used as tie points: hence the enumeration in the second paragraph of Section 47 is significant that this
DING THAT THE LEASE CONTRACT (V-739) COVERING ESTER 1 AND ESTER 2 paragraph did not originally exist: it was introduced By No. 4388. If the intention were not to make its
MINING CLAIMS IS NULL AND VOID. enumeration exclusive, there would have been no necessity for adding it to Section 47. Besides, the last
5. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES ERRED IN sentence of Section 4 as amended also by the states that The declaration of location that has no bearing and
HOLDING THAT THE RELATION BY PETITIONER-APPELLANT, ANTONIO BASIANA, distance to a tie point us herein described shall be null and void." The phrase as herein described" obviously,
SR., AND RESPONDENT-APPELLEE CIPRIANO LUNA IS ONE OF AGENCY AND NOT refers to the descriptions contained in the second paragraph: therefore if the tie point does not correspond to
ONE OF PARTNERSHIP. any such descriptions. it would not Be a valid tie point under Section 47 as amended. An initial post number 1
such as any of those pointed out by petitioners-appellants does not answer to any of such descriptions. While
6. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES ERRED IN petitioners-appellants seem to capitalize on the term "location monument" used in the second paragraph of
AFFIRMING THE ORDER OF 'THE DIRECTOR OF MINES. 10 Section 47, that term refers to a location monument established by the Bureau of Lands, Bureau of Mines, Army
Corps of Engineers, Bureau of Coast and Geodetic Survey or other government agencies, not to a post placed
In connection with the first error assigned, it must be noted that both the Director of Mines and the Secretary of by a mere mining claim locator. All of these considerations make it manifest that the word "may" is used in the
Agriculture and Natural Resources found that the 183 claims in question were locate in rows or columns and second paragraph of Section 47, not to suggest non-exclusiveness of its enumeration, but to state that any
that it was admitted by the protestants (now petitioners-appellants) that the mother claim of these claim is one of the permanent and prominent objects enumerated therein may be used as a tie point.
"Romeo 1" tied to a cliff with the remaining 182 claims tied to the location post No. 1 of the adjoining or adjacent
claim in the rows or columns. Petitioners-appellants contend that the initial post No. 1 of such adjoining or But even granting, arguendo, that the enumeration of the second paragraph of Section 47 is not exclusive, any
adjacent claim is a permanent and prominent object which constitutes a valid tie point under Section 47 of the of the initial posts No. I used by the petitioners-appellants in their original declarations cannot in the nature of
Mining Act, as amended, which provides: things be regarded as a permanent object under said section, Section 43, which makes it unlawful to move
number one post of a lode mineral claim, refers to a valid claim. If the claim is invalid, such post may be
The record of a lode or placer claim shall consist of a declaration of location which shall removed by anyone since it marks the boundary and location of nothing; if so, it cannot be said to be invested
contain, among others, the name of the claim , the name of each locator, the date of with a permanent character.
location, the names of the sition, barrio, municipality, province and island, in which the claim
is situated, the words written on the number one and number two posts placer claim ad It must be noted further that Section 47, as amended, speaks of "the bearing and distance of corner post
shall recite all the facts necessary to the Identification of the lode or placer claim, as well as number one to the tie point, which shall be a permanent and prominent object." The "corner post number one" is
distinguished from "the tie point" to which it must be related, and the clear import of this is that any such post IN THE MATTER OF THE PETITION FOR CHANGE OF NAME OF MARIA ESTRELLA VERONICA
cannot be used as a tie point. PRIMITIVA DUTERTE, ESTRELLA S. ALFON, petitioner,
vs.
Since an initial post number I cannot be a valid tie point and the tie point of each of the 182 directly or indirectly REPUBLIC OF THE PHILIPPINES, respondent.
tied to claim "Romeo I " is such an initial post, it follows that, as correctly found by the Director of Mines and the
Secretary of Agriculture, the said 182 claims are null and void. This is a petition filed pursuant to Republic Act No. 5440 to review an Order of the Court of First Instance of
Rizal, Branch XXIII, dated December 29, 1978, which partially denied petitioner's prayer for a change of name.
Even on the assumption that such an initial post may be utilized as a tie point, the ones utilized in the original Only a question of law is involved and there is no controversy over the facts which are well-stated in the
claims in question are invalid because of the invalidity of "Romeo 1 ", the claim to whose initial post number 1 questioned Order as follows: têñ.£îhqwâ£
all these other 182 claims were directly or indirectly tied. As correctly held by both the Director of Mines and the
Secretary of Agriculture and Natural Resources, this claim, as originally beyond the 30 day period prescribed by This is verified petition filed on April 28, 1978 by petitioner Maria Estrella Veronica Primitiva
Section 34. The provision of this section as to effect of non-compliance therewith is mandatory. This is a feature Duterte through her counsel, Atty. Rosauro Alvarez, praying that her name be changed from
that was also introduced by PA No. 4,388. In this regard, the explanatory note of the bill which became R.A. No. Maria Estrella Veronica Primitiva Duterte to Estrella S. Alfon.
4388 states:
The notice setting the petition for hearing on December 14, 1978 at 8:30 o'clock in the
And to clarify the effect of failure to comply with this requirement, mining claims shall be null morning was published in the Times Journal in its issues of July 28, August 5 and 11, 1978
and void, not merely abandoned, which is interpreted sometimes as a matter of intention. and a copy thereof together with a copy of the petition was furnished the Office of the
and not a penalty. (Cong. Rec., HR May 13, 1963, pp. 1345-1346) Solicitor General (Exhibits C, C-1, C-2 and C-3).
The purpose and language of the law being plain and unambiguous, the petitioners-appellants' claim of At the hearing of the petition on December 14, 1978, Atty. Rosauro Alvarez appeared for the
substantial complaince with the law's requirements are unavailing. In addition, when Section 47 speaks of petitioner and Fiscal Donato Sor. Suyat, Jr. represented the office of the Solicitor General,
'substantial compliance with its provision", it refers only to the sufficiency of "trying the corner post number one Upon motion of counsel for the petitioner, without objection on the part of Fiscal Suyat, the
of any of contiguous claims by the same locator." In this particular case, not only is there no valid tie point Deputy Clerk of Court was appointed commissioner to receive the evidence and to submit
whatsoever, what are tied to invalid tie points and no, corner posts, and the contiguous claims are registered in the same for resolution of the Court.
the name of several, not just one and same, claim-owner. That portion of this section, therefore. does not apply.
From the testimonial and document evidence presented, it appears that petitioner Maria
Neither will the subsequent amendment of all the claims by changing their number and tying each of them to Estrella Veronica Primitiva Duterte was born on May 15, 1952 at the U.S.T. Hospital (Exhibit
BLLM No. 2 of Jagupit, Cabadbaran, Agusan help petitioners-appellants. It is settled that a void location of a A). She was registered at the local Civil Registrar's Office as Maria Estrella Veronica
mining claim is not amendable. (Crame vs. Church, 340 P. 2d 1116). Both the Director of Mines and the Primitiva Duterte On June 15, 1952, she was baptized as Maria Estrella Veronica Primitiva
Secretary of Agriculture and Natural Resources committed no error when they refused to give any effect to said Duterte at the St. Anthony de Padua Church Singalong, Manila (Exhibit B). Her parents are
amended claims and recognized as valid only the declaration of relocation of claim "Romeo 1" registered on Filomeno Duterte and Estrella Veronica Primitiva Duterte has been taken cared of by Mr.
October 20, 1966. and Mrs. Hector Alfon. Petitioner and her uncle, Hector Alfon, have been residing at 728
J.R. Yulo Street corner Ideal Street, Mandaluyong, Metro Manila for twenty-three (23) years.
As the said claims were null and void despite the amendments, no duty attached to any of the registered claim- When petitioner started schooling, she used the name Estrella S. Alfon. She attended her
owners to pay taxes thereon and apply for lease and/or survey therefor; accordingly, they could not be charged first grade up to fourth year high school at Stella Maris College using the name Estrella S.
with abandonment for having failed to do so. At the same time, by virtue of the same nullity and avoidness of Alfon (Exhibits E, E-1, E-2 and E-3). After graduating from high school she enrolled at the
the claims, the areas covered by them — except that covered by "Romeo 1" of petitioners-appellants which was Arellano University and finished Bachelor of Science in Nursing (Exhibit E-4). Her scholastic
registered on October 20, 1966 were open to relocation by anyone, as in fact the respondents- appellees herein records from elementary to college show that she was registered by the name of Estrella S.
relocated and registered them in their names. Alfon. Petitioner has exercised her right of suffrage under the same name (Exhibit D). She
Having reached these conclusions, this Court deems it unnecessary to discuss the other assignments of error. has not committed any felony or misdemeanor (Exhibits G, G-1, G-2, G-3 and G-4).
At any rate, there is no error in the other findings and conclusions of the Secretary of Agriculture and Natural Petitioner has advanced the following reasons for filing the petition:
Resources.
1. She has been using the name Estrella Alfon since her childhood;
WHEREFORE, the decision of the Secretary of Agriculture and Natural Resources is affirmed, without
pronouncement as to costs. 2. She has been enrolled in the grade school and in college using the same name;
3. She has continuously used the name Estrella S. Alfon since her infancy and all her
friends and acquaintances know her by this name;
4. She has exercised her right of suffrage under the same name.
Section 5, Rule 103 of the Rules of Court provides:
Upon satisfactory proof in open court on the date fixed in the order that such order has
been published as directed and that the allegations of the petition are true, the court shall if
proper and reasonable cause appears for changing the name of the petitioner adjudge that
such name be changed in accordance with the prayer of the petition.
The evidence submitted shows that the change of name from Maria Estrella Veronica
Primitiva Duterte to Estrella Alfon is not proper and reasonable with respect to the surname.
The fact that petitioner has been using a different surname and has become known with
such surname does not constitute proper and reasonable cause to legally authorize and
change her surname to Alfon. The birth certificate clearly shows that the father of petitioner TEODULO RURA, petitioner,
is Filomeno Duterte. Petitioner likewise admitted this fact in her testimony. To allow vs.
petitioner to change her surname from Duterte to Alfon is equivalent to allowing her to use THE HON. GERVACIO A. LEOPENA, Presiding Judge of the 2nd Municipal Circuit Trial Court of Tubigon-
her mother's surname. Article 364 of the Civil Code provides: Clarin, Tubigon, Bohol and PEOPLE OF THE PHILIPPINES, respondents.
Legitimate and legitimated children shall principally use the surname of the father.
If another purpose of the petitioner is to carry the surname of Alfon because her uncle who This case involves the application of the Probation Law (P.D. No. 968, as amended), more specifically Section 9
reared her since childhood has the surname "Alfon" then the remedy is not a petition for thereof which disqualifies from probation those persons:
change of name.
(c) who have previously been convicted by final judgment of an offense punished by
WHEREFORE, the petition insofar as the first name is granted but denied with respect to imprisonment of not less than one month and one day and or a fine of not less than Two
the surname. Petitioner is authorized to change her name from Maria Estrella Veronica Hundred Pesos.
Primitiva Duterte to Estrella Alfon Duterte.
Petitioner Teodulo Rura was accused, tried and convicted of five (5) counts of estafa committed on different
Let copy of this order be furnished the Local Civil Registrar of Pasig, Metro Manila pursuant dates in the Municipal Circuit Trial Court of Tubigon-Clarin, Tubigon, Bohol, denominated as Criminal Case Nos.
to Section 3, Rule 103 of the Rules of Court. 523, 524, 525, 526 and 527.
The lower court should have fully granted the petition. The five cases were jointly tried and a single decision was rendered on August 18, 1983. Rura was sentenced
to a total prison term of seventeen (17) months and twenty-five (25) days. In each criminal case the sentence
The only reason why the lower court denied the petitioner's prayer to change her surname is that as legitimate was three (3) months and fifteen (15) days.
child of Filomeno Duterte and Estrella Alfon she should principally use the surname of her father invoking Art.
364 of the Civil Code. But the word "principally" as used in the codal provision is not equivalent to "exclusively" Rura appealed to the Regional Trial Court of Bohol but said court affirmed the decision of the lower court. When
so that there is no legal obstacle if a legitimate or legitimated child should choose to use the surname of its the case was remanded to the court of origin for execution of judgment, Rura applied for probation. The
mother to which it is equally entitled. Moreover, this Court in Haw Liong vs. Republic, G.R. No. L-21194. April application was opposed by a probation officer of Bohol on the ground Chat Rura is disqualified for probation
29, 1966, 16 SCRA 677, 679, said: têñ.£îhqw⣠under Sec. 9 (c) of the Probation law quoted above. The court denied the application for probation. A motion for
reconsideration was likewise denied. Hence the instant petition.
The following may be considered, among others, as proper or reasonable causes that may
warrant the grant of a petitioner for change of name; (1) when the name is ridiculous, The question which is raised is whether or not the petitioner is disqualified for probation.
tainted with dishonor, or is extremely difficult to write or pronounce; (2) when the request for
change is a consequence of a change of' status, such as when a natural child is In denying the application for probation, the respondent judge said:
acknowledged or legitimated; and (3) when the change is necessary to avoid confusion Though the five estafa cases were jointly tried and decided by the court convicting the
Tolentino, Civil Code of the Philippines, 1953 ed., Vol. 1, p. 660). accused thereof, yet the dates of commission are different. Upon conviction he was guilty of
In the case at bar, it has been shown that petitioner has, since childhood, borne the name Estrella S. Alfon said offenses as of the dates of commission of the acts complained of. (Rollo, p, 58.)
although her birth records and baptismal certificate show otherwise; she was enrolled in the schools from the Upon the other hand, the petitioner argues:
grades up to college under the name Estrella S. Alfon; all her friends call her by this name; she finished her
course in Nursing in college and was graduated and given a diploma under this name; and she exercised the We beg to disagree. There is no previous conviction by final judgment to speak of. The five
right of suffrage likewise under this name. There is therefore ample justification to grant fully her petition which (5) cases of Estafa were tried jointly and there is only one decision rendered on the same
is not whimsical but on the contrary is based on a solid and reasonable ground, i.e. to avoid confusion. date—August 18. 1983. It could not be presumed that accused-petitioner had been
convicted one after the other for the five cases of Estafa because the conviction in these
WHEREFORE, the Order appealed from is hereby modified in that, the petitioner is allowed to change not only cases took place within the same day, August 18, 1983 by means of a Joint Decision, and
her first name but also her surname so as to be known as ESTRELLA S. ALFON. No costs. not in a separate decision.
Previous conviction, we submit, presupposes that there is a prior sentence or that there was
already a decision rendered which convicted the accused. In this instant cases, however,
there is only one decision rendered on the five (5) counts of Estafa which was promulgated
on the same date. In other words the effects of conviction does not retract to the date of the
commission of the offense as the trial court held. (Id., pp, 8-9.)
We hold for the petitioner. When he applied for probation he had no previous conviction by final judgment.
When he applied for probation the only conviction against him was the judgment which was the subject of his
application. The statute relates "previous" to the date of conviction, not to the date of the commission of the
crime.
WHEREFORE, the petition is granted and the respondent judge is directed to give due course to the petitioner's
application for probation. No costs.
SO ORDERED.
NATIONAL HOUSING CORPORATION, petitioner, proportion to the increased capital stock. The NHC has never had any private stockholders. The government
vs. has been the only stockholder from its creation to the present.
BENJAMIN JUCO AND THE NATIONAL LABOR RELATIONS COMMISSION, respondents.
There should no longer be any question at this time that employees of government-owned or controlled
Are employees of the National Housing Corporation (NHC) covered by the Labor Code or by laws and corporations are governed by the civil service law and civil service rules and regulations.
regulations governing the civil service?
Section 1, Article XII-B of the Constitution specifically provides:
The background facts of this case are stated in the respondent-appellee's brief as follows:
The Civil Service embraces every branch, agency, subdivision, and instrumentality of the
The records reveal that private respondent (Benjamin C. Juco) was a project engineer of Government, including every government-owned or controlled corporation. ...
the National Housing Corporation (NHC) from November 16, 1970 to May 14, 1975. For
having been implicated in a crime of theft and/or malversation of public funds involving 214 The 1935 Constitution had a similar provision in its Section 1, Article XI I which stated:
pieces of scrap G.I. pipes owned by the corporation which was allegedly committed on A Civil Service embracing all branches and subdivisions of the Government shall be
March 5, 1975. Juco's services were terminated by (NHC) effective as of the close of provided by law.
working hours on May 14, 1975. On March 25, 1977 he filed a complaint for illegal dismissal
against petitioner (NHC) with Regional Office No. 4, Department of Labor (now Ministry of The inclusion of "government-owned or controlled corporations" within the embrace of the civil service shows a
Labor and Employment) docketed as R04-3-3309-77 (Annex A, Petition). The said deliberate effort of the framers to plug an earlier loophole which allowed government-owned or controlled
complaint was certified by Regional Branch No. IV of the NLRC for compulsory arbitration corporations to avoid the full consequences of the an encompassing coverage of the civil service system. The
where it was docketed as Case No. RB-IV-12038-77 and assigned to Labor Arbiter Ernilo V. same explicit intent is shown by the addition of "agency" and "instrumentality" to branches and subdivisions of
Peñalosa. The latter conducted the hearing. By agreement of the parties, the case was the Government. All offices and firms of the government are covered.
submitted for resolution upon submission of their respective position papers. Private
respondent (Juco) submitted his position paper on July 15, 1977. He professed innocence The amendments introduced in 1973 are not Idle exercises or a meaningless gestures. They carry the strong
of the criminal acts imputed against him contending "that he was dismissed based on purely message that t civil service coverage is broad and an- embracing insofar as employment in the government in
fabricated charges purposely to harass him because he stood as a witness in the theft case any of its governmental or corporate arms is concerned.
filed against certain high officials of the respondent's establishment" (NHC) and prayed for The constitutional provision has been implemented by statute. Presidential Decree No. 807 is unequivocal that
'his immediate reinstatement to his former position in the (NHC) without loss of seniority personnel of government-owned or controlled corporations belong to the civil service and are subject to civil
rights and the consequent payment of his will back wages plus all the benefits appertaining service requirements.
thereto. On July 28, 1977, the NHC also filed its position paper alleging that the Regional
Office Branch IV, Manila, NLRC, "is without authority to entertain the case for lack of It provides:
jurisdiction, considering that the NHC is a government owned and controlled corporation;
SEC. 56. Government-owned or Controlled Corporations Personnel. — All permanent
that even assuming that this case falls within the jurisdiction of this Office, respondent firm
personnel of government-owned or controlled corporations whose positions are now
(now petitioner) maintains that respondent (Juco), now private respondent, was separated
embraced in the civil service shall continue in the service until they have been given a
from the service for valid and justified reasons, i.e., for having sold company properties
chance to qualify in an appropriate examination, but in the meantime, those who do not
consisting of 214 pieces of scrap G.I. pipes at a junk shop in Alabang, Muntinlupa, Metro
possess the appropriate civil service eligibility shag not be promoted until they qualify in an
Manila, and thereafter appropriating the proceeds thereof to his own benefit."
appropriate civil service examination. Services of temporary personnel may be terminated
The pertinent portion of the decision of respondent National Labor Relations Commission (NLRC) reads: any time.

The fact that in the early case of Fernandez v. Cedro (NLRC Case No. 201165-74, May 19, The very Labor Code, P. D. No. 442 as amended, which the respondent NLRC wants to apply in its entirety to
1975) the Commission, (Second Division) ruled that the respondent National Housing the private respondent provides:
Corporation is a government-owned or controlled corporation does not preclude us from
ART. 277. Government employees. — The terms and conditions of employment of all
later taking a contrary stand if by doing so the ends of justice could better be served.
government employees, including employees of government-owned and controlled
For although adherence to precedents (stare decisis) is a sum formula for achieving corporations shall be governed by the Civil Service Law, rules and regulations. Their
uniformity of action and conducive to the smooth operation of an office, Idolatrous salaries shall be standardized by the National Assembly as provided for in the New
reverence for precedents which have outlived their validity and usefulness retards progress Constitution. However, there shall be reduction of existing wages, benefits and other terms
and should therefore be avoided. In fact, even courts do reverse themselves for reasons of and conditions of employment being enjoyed by them at the time of the adoption of the
justice and equity. This Commission as an Administrative body performing quasi judicial Code.
function is no exception.
Our decision in Alliance of Government Workers, et al v. Honorable Minister of Labor and Employment et
WHEREFORE, in the light of the foregoing, the decision appealed from is hereby, set aside. all. (124 SCRA 1) gives the background of the amendment which includes government-owned or controlled
In view, however, of the fact that the Labor Arbiter did not resolve the issue of illegal corporations in the embrace of the civil service.
dismissal we have opted to remand this case to the Labor Arbiter a quo for resolution of the
We stated:
aforementioned issue.
Records of the 1971 Constitutional Convention show that in the deliberation held relative to
The NHC is a one hundred percent (100%) government-owned corporation organized in accordance with
what is now Section 1(1), Article XII-B, supra, the issue of the inclusion of government-
Executive Order No. 399, the Uniform Charter of Government Corporations, dated January 5, 1951. Its shares
owned or controlled corporations figured prominently.
of stock are owned by the Government Service Insurance System the Social Security System, the Development
Bank of the Philippines, the National Investment and Development Corporation, and the People's Homesite and The late delegate Roberto S. Oca, a recognized labor leader, vehemently objected to the
Housing Corporation. Pursuant to Letter of Instruction No. 118, the capital stock of NHC was increased from inclusion of government-owned or controlled corporations in the Civil Service. He argued
P100 million to P250 million with the five government institutions above mentioned subscribing in equal that such inclusion would put asunder the right of workers in government corporations,
recognized in jurisprudence under the 1935 Constitution, to form and join labor unions for National Housing Corporation comes under the jurisdiction of the Civil Service Commission, not the Ministry of
purposes of collective bargaining with their employers in the same manner as in the private Labor and Employment.
section (see: records of 1971 Constitutional Convention).
This becomes more apparent if we consider the fact that the NHC performs governmental functions and not
In contrast, other labor experts and delegates to the 1971 Constitutional Convention proprietary ones.
enlightened the members of the Committee on Labor on the divergent situation of
government workers under the 1935 Constitution, and called for its rectification. Thus, in a The NHC was organized for the governmental objectives stated in its amended articles of incorporation as
Position Paper dated November 22, 197 1, submitted to the Committee on Labor, 1971 follows:
Constitutional Convention, then Acting Commissioner of Civil Service Epi Rey SECOND: That the purpose for which the corporation is organized is to assist and carry out
Pangramuyen declared: the coordinated massive housing program of the government, principally but not limited to
It is the stand, therefore, of this Commission that by reason of the low-cost housing with the integration cooperation and assistance of all governmental
nature of the public employer and the peculiar character of the public agencies concerned, through the carrying on of any or all the following activities:
service, it must necessary regard the right to strike given to unions in l) The acquisition, development or reclamation of lands for the purpose of construction and
private industry as not applying to public employees and civil service building therein preferably low-cost housing so as to provide decent and durable dwelling
employees. It has been stated that the Government, in contrast to the for the greatest number of inhabitants in the country;
private employer, protects the interests of all people in the public
service, and that accordingly, such conflicting interests as are present in 2) The promotion and development of physical social and economic community growth
private labor relations could not exist in the relations between through the establishment of general physical plans for urban, suburban and metropolitan
government and those whom they employ. areas to be characterized by efficient land use patterns;
Moreover, determination of employment conditions as well as 3) The coordination and implementation of all projects of the government for the
supervision of the management of the public service is in the hands of establishment of nationwide and massive low cost housing;
legislative bodies. It is further emphasized that government agencies in
the performance of their duties have a right to demand undivided 4) The undertaking and conducting of research and technical studies of the development
allegiance from their workers and must always maintain a pronounced and promotion of construction of houses and buildings of sound standards of design liability,
esprit de corps or firm discipline among their staff members. It would be durability, safety, comfort and size for improvement of the architectural and engineering
highly incompatible with these requirements of the public service, if designs and utility of houses and buildings with the utilization of new and/or native materials
personnel took orders from union leaders or put solidarity with members economics in material and construction, distribution, assembly and construction and of
of the working class above solidarity with the Government. This would applying advanced housing and building technology.
be inimical to the public interest. 5) Construction and installation in these projects of low-cost housing privately or
Moreover, it is asserted that public employees by joining labor unions cooperatively owned water and sewerage system or waste disposal facilities, and the
may be compelled to support objectives which are political in nature formulations of a unified or officially coordinated urban transportation system as a part of a
and thus jeopardize the fundamental principle that the governmental comprehensive development plan in these areas.
machinery must be impartial and non-political in the sense of party The petitioner points out that it was established as an instrumentality of the government to accomplish
politics. (See: Records of 1971 Constitutional Convention). governmental policies and objectives and extend essential services to the people. It would be incongruous if
Similar, Delegate Leandro P. Garcia, expressing for the inclusion of government-owned or employees discharging essentially governmental functions are not covered by the same law and rules which
controlled corporations in the Civil Service, argued: govern those performing other governmental functions. If government corporations discharging proprietary
functions now belong to the civil service with more reason should those performing governmental functions be
It is meretricious to contend that because Government-owned or governed by civil service law.
controlled corporations yield profits, their employees are entitled to
better wages and fringe benefits than employees of Government other The respondent NLRC cites a 1976 opinion of the Secretary of Justice which holds that the phrase
than Government-owned and controlled corporations which are not "government-owned or controlled corporations" in Section 1, Article XII-B of the Constitution contemplates only
making profits. There is no gainsaying the fact that the capital they use those government-owned or controlled corporations created by special law. The opinion states that since the
is the people's money. (see: Records of the 1971 Constitutional Constitution provides for the organization or regulation of private corporations only by "general law", expressly
Convention). excluding government-owned or controlled corporations, it follows that whenever the Constitution mentions
government-owned or controlled corporations, it must refer to those created by special law. P.D. No. 868 which
Summarizing the deliberations of the 1971 Constitutional Convention on the inclusion of repeals all charters, laws, decrees, rules, and provisions exempting any branch, agency, subdivision, or
Government-owned or controlled corporation Dean Joaquin G. Bernas, SJ., of the Ateneo instrumentality of the government, including government- owned or controlled corporations from the civil service
de Manila University Professional School of Law, stated that government-owned law and rules is also cited to show that corporations not governed by special charters or laws are not to be
corporations came under attack as g cows of a privileged few enjoying salaries far higher brought within civil service coverage. The discussions in the Constitutional Convention are also mentioned. It
than their counterparts in the various branches of government, while the capital of these appears that at the time the Convention discussed government-owned or controlled corporations, all such
corporations belongs to the Government and government money is pumped into them corporations were organized only under special laws or charters.
whenever on the brink of disaster, and they should therefore come under the strict
surveillance of the Civil Service System. (Bernas, The 1973 Philippine Constitution, Notes The fact that "private" corporations owned or controlled by the government may be created by special charter
and Cases, 1974 ed., p. 524). does not mean that such corporations not created by special law are not covered by the civil service. Nor does
the decree repealing all charters and special laws granting exemption from the civil service law imply that
Applying the pertinent provisions of the Constitution, the Labor Code as amended, and the Civil Service Decree government corporations not created by special law are exempt from civil service coverage. These charters and
as amended and the precedent in the Alliance of Government Workers decision, it is clear that the petitioner statutes are the only laws granting such exemption and, therefore, they are the only ones which could be
repealed. There was no similar exempting provision in the general law which called for repeal. And finally, the ARABAY, INC., petitioner,
fact that the Constitutional Convention discussed only corporations created by special law or charter cannot be vs.
an argument to exclude petitioner NHC from civil service coverage. As stated in the cited speech delivered THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL NORTE, BRANCH II, THE CITY OF DIPOLOG
during the convention sessions of March 9, 1972, all government corporations then in existence were organized and EMILIO L. TAGAILO, in his capacity as City Treasurer of the City of Dipolog, et al., respondents.
under special laws or charters. The convention delegates could not possibly discuss government-owned or
controlled corporations which were still non-existent or about whose existence they were unaware. Before us is a petition for review of the decision of the Court of First Instance of Zamboanga del Norte, Branch
II, dismissing the complaint of the herein petitioner Arabay, Inc., for annulment of a tax ordinance of the
Section I of Article XII-B, Constitution uses the word "every" to modify the phrase "government-owned or Municipal Council of Dipolog, Zamboanga del Norte, and for refund of the taxes it had paid thereunder. On
controlled corporation." December 17, 1965 the Municipal Council of Dipolog enacted Ordinance No. 19 amending Section I of
Ordinance No. 53 series of 1964. As thus amended the said Section I reads as follows:
"Every" means each one of a group, without exception It means all possible and all taken one by one. Of
course, our decision in this case refers to a corporation created as a government-owned or controlled entity. It Section 1. There shall be charged for the selling and distribution of refined and
does not cover cases involving private firms taken over by the government in foreclosure or similar proceedings. manufactured mineral oils, motor and diesel fuels, and petroleum based on the monthly
We reserve judgment on these latter cases when the appropriate controversy is brought to this Court. allocation actually delivered and distributed and intended for sale, in any manner
whatsoever, by the Company or supplier to any person, firm, entity, or corporation, whether
The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, as dealer of such refined and manufactured mineral oils, motor and diesel fuels, and
Article XII-B of the Constitution It would be possible for a regular ministry of government to create a host of petroleum or as operator of any station thereof, the following tax payable monthly:
subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned
corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of Gasoline — P0.01 per liter
two worlds. Their officials and employees would be privileged individuals, free from the strict accountability Lubricating oils — P0.01 per liter
required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not Diesel Fuel oils ¼ centavo per liter
be subject to the competitive restraints of the open market nor to the terms and conditions of civil service Petroleum or P0.05 per gallon can
employment. Conceivably, all government-owned or controlled corporations could be created, no longer by kerosene or
special charters, but through incorporation under the general law. The constitutional amendment including such — P0.02 per half gallon tin
corporations in the embrace of the civil service would cease to have application. Certainly, such a situation
cannot be allowed to exist. Provided, however, that retail seller of not more than 5 gallon cans or its equivalent shall be
exempted from the provisions of this ordinance.
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the respondent National Labor
Relations Commission is SET ASIDE. The decision of the Labor Arbiter dismissing the case before it for lack of Section 2. This Ordinance shall take effect on January 1, 1966.
jurisdiction is REINSTATED. On June 21, 1969 Republic Act No. 5520 was approved. It provided for the creation of the City of Dipolog from
the then of the Municipality of Dipolog, to take effect on January 1, 1970.
On July 28, 1971 the Arabay, Inc., a distributor of gas, oil and other petroleum products, filed with the Court of
First Instance of Zamboanga del Norte a complaint against the City of Dipolog contesting the validity of the
above-mentioned Section 1 of Ordinance No. 53 on the ground that the same imposed a sales tax which is
beyond the power of a municipality to levy under Section 2 of Republic Act No. 2264, otherwise known as the
Local Autonomy Act of 1959. Said Section 2 provides:
SEC. 2 Taxation — Any provision of law to the contrary notwithstanding, all chartered cities,
municipalities and municipal districts shall have authority to impose municipal license taxes
or fees upon persons engaged in any occupation or business, or exercising privileges in
chartered cities, municipalities or municipal districts by requiring them to secure licenses at
rates fixed by the municipal board or city council of the city, the municipal council of the
municipality, or the municipal district council of the municipal district; to collect fees and
charges for service rendered by the city, municipality or municipal district; to regulate and
impose reasonable fees for services rendered in connection with any business, profession
or occupation being conducted within the city, municipality or municipal district and
otherwise to levy for public purposes, just and uniform taxes, licenses or fees: Provided,
That municipalities and municipal districts shall, in no case, impose any percentage tax on
sales or other taxes in any form based thereon nor impose taxes on articles subject to
specific tax, except gasoline, under the provisions of the National Internal Revenue:
Provided, however, That no city, municipality or municipal district may levy or impose any of
the following: ... (emphasis supplied)
On August 30, 1972 the Arabay, Inc. filed a supplemental complaint which prayed, among others, for a refund of
the taxes it had paid under the ordinance in question.
On October 30, 1972 the parties entered into a stipulation of facts which, inter alia, states:
2. That plaintiff, pursuant to the above ordinance, paid sales taxes for the sale of Diesel fuel
oils, lubricating oils, petroleum, kerosene and other related petroleum products, to the
defendant City of Dipolog, from December, 1969 to July, 1972 in the total amount of FIVE xxx xxx xxx (Emphasis supplied)
THOUSAND FOUR HUNDRED PESOS (P5,400.00). A schedule of the payments made by
plaintiff is hereto attached as Annex "A" and is made an integral part hereof. However, the Under the foregoing proviso of Section 2 of R.A. 2264, two courses of action in the exercise of their taxing
payments made from April, 1972 to July, 1972, in the total amount of P69.80 have been powers are denied to municipalities and municipal districts, to wit, (1) to levy any sales tax in whatever form;
refunded by defendant City of Dipolog to plaintiff. and (2) to levy any tax on articles subject to specific tax under the National Internal Revenue Code. It is not
difficult to see that these two prohibitions overlap in the sense that while the first clause of the
WHEREFORE, on the basis of the foregoing stipulation of facts and of the Memorandum of said proviso forbids the levying of sales taxes of whatever form or guise, the second clause of the
Arguments to be submitted by the parties, the latter, through, their respective counsels, same proviso forbids the levying of "taxes" without any distinction as to the kind of tax, i.e.' whether percentage
hereby submit the case for the determination of this Honor. tax, sales tax, specific tax or license tax, although this latter prohibition applies only to a limited class of
articles, viz., those subject to the specific tax under the Tax Code.
On January 16, 1973 the court a quo rendered judgment upholding the validity of the questioned provision of
Ordinance No. 53, as amended, essentially on the grounds that the Arabay, Inc. failed to present evidence that Such an overlap would probably carry or connote no legal significance but for the exclusion of gasoline from the
the tax provision in question imposed a sales tax, and the tax prescribed therein was, moreover, not a specific prohibition contained in the second clause of the mentioned proviso. For, with the exemption of gasoline from
tax on the products themselves but on the privilege of selling them. the coverage of the same, it becomes relevant to determine the effect which such exclusion has on the previous
prohibition against the levying of the sales tax.
The basic issues in the case at bar are: (1) whether or not the questioned tax provision imposes a sales tax;
and (2) if it imposes a sales tax, whether the Arabay, Inc. is entitled to a tax refund, considering that Dipolog is In our opinion, a reasonable and practical interpretation of the terms of the proviso in question results in the
now a city. conclusion that Congress, in excluding gasoline from the general disability imposed on municipalities and
municipal districts to exact any kind of taxes on articles subject to specified tax under the Tax Code, deliberately
1. It is settled rule in this jurisdiction that for purposes of Section 2 of the Local Autonomy Act, supra, a and intentionally meant to put it within the power of such local governments to impose whatever type or form of
municipal tax ordinance which prescribes a set ratio between the amount of the tax and the volume of sales of taxes the latter may deem proper to levy on gasoline including a sales tax or one in that form. There is after all
the taxpayer imposes a sales tax and is null and void for being beyond the power of a municipality to enact. 1 no clearly demonstrable and convincing reason why the law would allow municipal imposition of taxes on
gasoline and yet withhold such power if the imposition is in the form of a sales tax, when it was a known fact at
In our view, the questioned section of Ordinance No. 53 of the Municipal Council of Dipolog levies a sales tax, the time of the enactment of the Local Autonomy Act in 1959 — and this still is true to this day — that gasoline
not only because the character of the ordinance as a sales tax ordinance was admitted by the parties below, but is of no profitable use to the companies which own it unless turned over to the consuming public which,
as well because the phraseology of the said provision reveals in clear terms the intention to impose a tax on the perforce, must pay for the right to obtain that commodity.
sale of oil, gasoline and other petroleum products. Thus, the ordinance provides: "There shall be charged for
the selling and distribution of refined and manufactured oils ... based on the monthly allocation actually ACCORDINGLY, the judgment a quo is set aside. The City of Dipolog is hereby ordered to refund to the Arabay,
delivered and distributed and intended for sale ... by the Company or supplier to any person ... whether as Inc. the taxes the latter has paid under Section 1 of Ordinance No. 53, series of 1964, as amended, deducting
dealer ... or as operator of any station ... the following tax payable monthly: ..." It is quite evident from these therefrom the amount representing the taxes paid by the Arabay, Inc. on its gasoline sales. No costs.
terms that the amount of the tax that may be collected is directly dependent upon or bears a direct relationship
to the volume of sales which the owner or supplier of the itemized products generates every month. The
ordinance in question therefore exacts a tax based on sales; it follows that the Municipality of Dipolog was not
authorized to enact such an ordinance under the local Autonomy Act.
2. The obligation of the City of Dipolog to refund the sum collected under the void provisions of an ordinance
enacted while it was still a municipality, is not open to doubt. In San Miguel Corporation vs. The Municipal
Council of Mandaue, Cebu, supra, the Court ordered, the return to the taxpayer of the sums paid under an
ordinance enacted under circumstances similar to the case at bar, and rejected the argument that the
municipality of Mandaue had in the meantime been converted into a city. The Court said:
Respondent however claim that with the conversion of Mandaue into a city pursuant to
Republic Act No. 5519, which was approved on June 21, 1969, the issue has already
become moot, since the prohibition contained in section 2 of Republic Act 2264 applies only
to municipalities and not to chartered cities. The same contention has been rejected in City
of Naga v. Court of Appeals, and Laoag Producers' Cooperative Marketing Association, Inc.
vs. Municipality of Laoag, where We ruled that the legality of an ordinance depends upon
the power of the municipality at the time of the enactment of the challenged ordinance.
Since the municipality of Mandaue had no authority to enact the said ordinance, the
subsequent approval of Republic Act No. 5519 which became effective on June 21, 1969,
did not remove the original infirmity of the ordinance. Indeed there is no provision in the
aforecited statute which invests a curative effect upon the ordinances of the municipality
which when enacted were beyond its statutory authority.
The right of the Arabay, Inc. to a refund of the local sales taxes it had paid under the questioned ordinance may
not, however, include those levied on its gasoline sales. The relevant proviso of Section 2 of the Local
Autonomy Act states:
... Provided, That municipalities and municipal districts shall, in no case, impose any
percentage tax on sales or other taxes on articles subject to specific tax, except gasoline,
under the provisions of the National Internal Revenue Code:
AGRIPINO DEMAFILES, petitioner, In our view, the last portion of the provision — "and shall have qualified" — is devoid of any meaning, is
vs. unmitigated jargon in or out of context, and does not warrant the respondent's reading that the term of office of
COMMISSION ON ELECTIONS, PROVINCIAL BOARD OF ANTIQUE, in its capacity as Board of the first municipal officials of Sebaste begins immediately after their proclamation. It is quite probable that that is
Canvassers for the newly created Municipality of Sebaste of the Province of Antique, and BENITO B. what the legislature meant. But here is a clear case of a failure to express a meaning, and a becoming sense of
GALIDO,respondents. judicial modesty forbids the courts from assuming and, consequently, from supplying.itc-alf "If there is no
meaning in it," said the King in Alice in Wonderland, "that saves a world of trouble, you know, as we needn't try
The new municipality of Sebaste1 in Antique province held its first election of officers in the general elections of to find any." Frankfurter, who himself was fond of quoting this passage, admonishes that "a judge must not
November 14, 1967, with the petitioner Agripino Demafiles and the respondent Benito B. Galido vying for the rewrite a statute, neither to enlarge nor to contract it. Whatever temptations the statesmanship of policy-making
mayoralty. might wisely suggest, construction must eschew interpolation and evisceration."2 Accordingly, we have to go by
On November 21 the respondent Galido asked the provincial board, acting as municipal board of canvassers the general rule that the term of office of municipal officials shall begin on the first day of January following their
pursuant to section 167 (b) of the Revised Election Code, to disregard, as "obviously manufactured", the election,3 and so the assumption of office by the respondent Galido in no way affected the basic issues in this
election return from precinct 7 on the ground that the said return shows that 195 voters were registered (of case, which we need not reach and resolve.
whom 188 voted), when, according to a certificate of the municipal election registrar only 182 had registered in First, a canvassing board performs a purely ministerial function — that of compiling and adding the results they
that precinct as of October 30, 1997. At its session on the following day, November 22, the board, over the appear in the returns, transmitted to it. This is the teaching in Nacionalista Party v. Commission on
objection of one member, voted to reject the return from precinct 7 and then proceeded with the canvass of the Elections:4 "the canvassers are to be satisfied of the, genuineness of the returns — namely, that the papers
returns from the other precints. The resulting tally gave Galido 888 votes as against 844 for Demafiles. presented to them are not forged and spurious, that they are returns, and that they are signed by the proper
Accordingly, Galido was proclaimed mayor-elect of the municipality of Sebaste. officers. When so satisfied, . . . they may not reject any returns because of informalities in them or because of
On November 24 Demafiles wired the Commission on Elections, protesting the board's action of rejection of the illegal and fraudulent practices in the elections."5 Thus, they cannot pass upon the validity of an election return,
return from precinct 7 and the subsequent proclamation of Galido, and challenging the right of two board much less exclude it from the canvass on the ground that the votes cast in the precinct from whence it came are
members, Julito Moscoso and Quirico Escaño, to sit, considering that they were reelectionists. Acting on the illegal.6
protest, the COMELEC resolved on November 28, 1967: But the exclusion of the return in this case is sought to be justified on the ground that it is "obviously
To annul the canvass and proclamation of the local officials of the new municipality of Sebaste, manufactured" because, contrary to the statement therein that there were 195 registered voters, of whom 188
Antique, which was made by the Provincial Board of Antique; voted, the certificate of the local election registrar states that only 182 voters had registered on October 30,
1967. Lagumbay v. Commission on Elections7 is cited in support of this view. In Lagumbay the returns were
To constitute the Board of Canvassers by appointing the substitutes pursuant to the provisions of Sec. palpably false as it was indeed statistically improbable that "all the eight candidates of one party garnered all
167 (a) of the Revised Election Code, which shall canvass anew the results of the election for local the votes, each of them receiving exactly the same number, whereas all the eight candidates of the other party
offices of Sebaste, Antique, in accordance with the Instructions to Boards of Canvassers contained in got precisely nothing.itc-alf" In other words, the aid of evidence aliunde was not needed, as "the fraud [being] so
the Resolution of the Commission No. RR-544, particularly No. 5-K thereof, and thereafter to proclaim palpable from the return itself (res ipsa loquitur — the thing speaks for itself), there is no reason to accept it and
the winning candidates for local offices of said municipality. give it prima facie value.
In turn, Galido asked for a reconsideration on the ground that the two members of the provincial board who On the other hand, the return in this case shows nothing on its face from which the canvassers might conclude
were reelectionists were disqualified from sitting only when the board was acting as a provincial, but not as a that it does not speak the truth. It is only when it is compared in the certificate of the election registrar that a
municipal, board of canvassers and that the COMELEC resolution annulling the canvass and proclamation of discrepancy appears as to the number of registered voters. The return therefore is by no means "obviously
officials was issued without giving him an opportunity to be heard. In its resolution of December 4, 1967 the manufactured" so as to justify its exclusion.
respondent Commission reconsidered its previous order and held "that the canvass and proclamation already
made of the local officials . . . stands". This is not to belittle the respondent's claim that more people than registered voters were allowed to vote in
precinct 7. Perhaps that is true, although the petitioner claims that after October 30, 1967 eight more voters
Failing to secure a reconsideration of this latter resolution, Demafiles filed the present petition were allowed to register (making a total of 190, voters), and on the day of the election 5 voters erroneously
for mandamus and certiorari to set aside the aforesaid resolution of the COMELEC, to annull the proclamation assigned to precinct 6 were allowed to vote in precinct 7 because that was where they were really assigned.
of Galido, and to secure an order directing the COMELEC to appoint substitute members of the provincial board The point is simply that this question should be threshed out in an election contest. itc-alf Lagumbay itself
and to order a new canvass of the returns, including that from precinct 7. explicitly says —
The three principal issues tendered for resolution in this case are: (1) whether the respondent board of Of course we agree that fraud in the holding of the election should be handled — and finally settled —
canvassers was within the periphery of its power in rejecting the return from precinct 7 on the strength of an by the corresponding courts or electoral tribunals. That is the general rule, where testimonial or
election registrar's certificate that a less number of voters than that shown in the return had registered; (2) documentary evidence is necessary. . . .
whether the provincial board members, who were candidates for reelection, were disqualified from sitting in the
board in its capacity as a municipal board of canvassers; and (3) whether the Commission on Elections can Consequently, the canvass made and proclamation had should be annulled.8
order the board of canvassers to count a return from a given precinct. Second, the canvass and proclamation should be annulled because two of the four members of the board of
These issues, together with the arguments of the parties, will be discussed seriatim, but we must first proceed canvassers were disqualified from sitting in it, they being candidates for reelection. As this Court held
to dispose of the preliminary question raised by the respondent Galido, namely, that this case is moot because in Salcedo v. Commission on Elections:9
he had taken his oath and assumed office on November 22, pursuant to Republic Act 4870. And added reason for the nullification of the actuation of the Provincial Board of Oriental Mindoro is
Obviously, the frame of reference is section 2 of the statute which reads: the fact that its members were disqualified to act it appearing that they were all candidates for
reelection. This is clear from Section 28 of the Revised Election Code which provides that any
The first mayor, vice-mayor and councilors of the Municipality of Sebaste shall be elected in the next member of the provincial board who is a candidate for an elective office shall be incompetent to act in
general elections for local officials and shall have qualified [sic]. said board in the performance of its duties in connection with the election.
Branding the above statement as obiter dictum, the respondent Galido argues that reelectionist members of the CENTRAL CAPIZ, a corporation, petitioner,
provincial board are disqualified under section 28 only when the board acts as a provincial board of canvassers, vs.
to prevent them fro canvassing their own votes, and not when they sit as a municipal board of canvassers. ANA RAMIREZ, respondent.
With respect to the canvass and proclamation made the provincial board of Oriental Mindoro, three issues This is an original action brought in the Supreme Court. Its purpose is to obtain an interpretation and application
raised in Salcedo, in resolving which this Court held (1) that a provincial board cannot act as a municipal board of the intent, purpose and scope of Act No. 2874 of the Philippine Legislature, known as the "Public Land Act,"
of canvassers where a municipal council has been formed; (2) that provincial board members who are so far as it affects agricultural lands, privately owned.
candidates for reelection are disqualified to sit in the board and (3) that a board of canvassers which excludes
from canvass the return from a precinct acts "in contravention of law." The only question presented is, whether or not said Act No. 2874 is applicable to agricultural lands, in the
Philippine Islands which are privately owned.
At any rate the language of section 28 is all-inclusive Thus:
There is not dispute about the facts. They are admitted. The petitioner alleges and respondent admits that on or
Any member of a provincial board or of a municipal council who is a candidate for office in any about July 1, 1919, the latter contracted with the petitioner to supply to it for a term of thirty years all sugar cane
election, shall be incompetent to act on said body in the performance of the duties the of relative to produced upon her plantation, which said contract, by agreement, was to be converted later into a right in
said election . . . . rem and recorded in the Registry of Property as an encumbrance upon the land, and to be binding upon all
future owners of the same. In the interim the execution of said contract and its conversion into a right in
The statute draws no distinction between the provincial board acting as a provincial board of canvassers and rem upon the respondent's property, said Act No. 2874 became effective. The respondent, while admitting said
the same board acting as a municipal canvassing body new municipalities, and so we make none, in line with contract and her obligation thereunder to execute a deed pursuant thereto, bases her refusal so to do upon the
the maxim ubi lex non distinguit, nec nos distinguere debemos. fact that more than 61 per cent of the capital stock of the petitioner is held and owned by persons who are not
Third, it is now settled doctrine that the COMELEC has the power to annul an illegal canvass and an illegal citizens of the Philippine Islands or of the United States.
proclamation as when they are based on incomplete returns, and order a new canvass to be made by counting It is conceded by the parties that the land involved is private agricultural land, that is, land which is held and
the returns wrongfully excluded.10 If it has power to direct that certain copies of election returns be used in owned by the respondent, for which she holds a Torrens title.
preference to other copies of the same returns,11 there is no reason why it cannot direct canvassing bodies to
count all turns which are otherwise regular.itc-alf Indeed, it is its duty to do so, failing which it may be compelled The defendant answered the petition. To the defendant's answer the petitioner demurred. From an examination
by mandamus. As earlier pointed out, it is the ministerial function a board of canvassers to count the results as of the petition, the answer and the demurrer, it appears that the real issue presented is, whether the said Act
they appeal in the returns which on their face do not reveal any irregularities or falsities. (No. 2874) is limited in its application to agricultural lands of the public domain, or whether its provisions also
extend to agricultural lands held in private ownership.
ACCORDINGLY, the resolutions dated December 4 and 8, 1967 of the Commission on Elections are set aside,
and the canvass of returns made and the subsequent proclamation of the respondent Benito B. Galido are Inasmuch as the wording of certain sections of said Act (secs. 23, 24, 121 and 122) give rise to a possible
annulled. The respondent Commission on Elections is hereby directed. (1) to appoint new members of the construction that private lands are included within its terms, and inasmuch as said Act specifically provides that
board of canvassers in substitution of Julito Moscoso and Quirico Escaño, and (2) immediately thereafter to any land coming within its purview cannot be encumbered, alienated or transferred to corporations in which at
order the board of canvassers as reconstituted to convene, canvass all votes including those appearing in the least 61 per cent of the capital stock does not belong wholly to citizens of the Philippine Islands or of the United
return from precinct 7, and, in accordance with the results of such canvass, proclaim the winning candidates. States, the respondent, while not desiring to evade her contract, fears to assume the risk of giving effect to her
Costs against the private respondent Galido. said contract in view of the drastic penalty prescribed, should her action prove unlawful. The penalty provided in
section 122 of said Act includes not only a nullity of the contract but also a reversion of the property and its
improvements to the Government.
On behalf of the plaintiff it is argued, first, that the intent of the Legislature, gathered from a reading of Act No.
2874 in its entirety, is to provide simply for the sale, lease and other disposition of lands of the public domain;
that lands held in private ownership are not affected thereby; and, second, that even had the Legislature
intended to include private as well as public land within the scope of the Act, this intent fails because under the
Act as entitled such attempt would be in direct violation of section three of the Act of Congress of August 29,
1916, which provides that: "No bill which may be enacted into law shall embrace more than one subject, and
that subject shall be expressed in the title of the bill."
Examining Act No. 2874 in detail, there can be little question but that it was intended to apply to and regulate
the sale, lease and other disposition of public lands only. The title of the Act, always indicative of legislative
intent, reads: "an Act to amend and compile the laws relating to lands of the public domain, and for other
purposes." Section one of such act provides: "That short title of this Act shall be 'The public Land Act.' " Section
two, wherein the purpose of the Act is expressly stated, reads: " The provisions of this Act shall apply to lands of
the public domain." Section three provides:
While title to lands of the public domain remains in the Government, the Secretary of Agriculture and
Natural Resources shall be the executive officer charged with carrying out the provisions of this Act,
through the Director of Lands, who shall act under his immediate control.
It cannot be contemplated that these officers, charged "with carrying out the provisions of the Act," were
intended to exercise authority and control over the sale or other disposition of lands hold in private ownership.
To the same effect are sections four, five, and eighty-seven of the Act, wherein executive control is vested in the
Director of Lands with respect to the survey, appraisal, classification, etc., of lands of the public domain, with
authority to prepare rules and regulations for carrying into effect the provisions of the Act, and to receive all We hold, therefore, that the purpose of the Legislature in adopting Act No. 2874 was and is to limit its
applications filed pursuant thereto, etc. application to lands of the public domain, and that lands held in private ownership are not included therein and
are not affected in any manner whatsoever thereby.
Sections 105 contains another indication that said Act does not apply to privately owned agricultural lands. Said
section provides: "All patents or certificates for lands granted under this Act . . . shall issue in the name of the Even should the holding of the court upon this question of intent be different, it would not affect the final
Government of the Philippine Islands, under the signature of the Governor-General, countersigned by the outcome of the case. Under the Act as entitled, any attempt by the Legislature to insert provisions in the body
Secretary of Agriculture and Natural Resources." The Legislature certainly did not intend that all sales, leases, thereof relating to lands of private ownership would be in violation of the provisions of the Jones Law and
etc. of privately owned agricultural lands should hereafter be "issued in the name of the Government of the therefore, null and void.
Philippine Islands, under the signature of the Government of the Philippine Islands, under the signature of the
Governor-General," etc. It is provided in section 3 of the Jones Law (Act of Congress of August 29, 1916): "That no bill which may be
enacted into law shall embrace more than one subject, and that subject shall be expressed in the title of the
Section 23, after describing the persons and corporations authorized to purchase any tract of public agricultural bill."
lands "disposable under this Act," proceeds:
Identical provisions to the above are contained in most of the State Constitutions, and have been repeatedly
Provided, further, That citizens of countries the laws of which grant to citizens of the Philippine Islands construed. In the States of Alabama, California, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
the same right to acquire public lands as to their own citizens, may, while such laws are in force, but Louisiana, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York,
not thereafter . . . purchase any parcel of agricultural land . . . available under this Act. Ohio, Oregon, Pennsylvania, South Carolina, Texas, Tennessee, Virginia, West Virginia, Wisconsin and
Wyoming, identical provisions are found in the Constitution.
In other words, it is only necessary for other countries to grant to citizens of the Philippine Islands the right to
acquire "public lands," in order that their citizens may have the right to acquire any land available under this Act. The purpose of this legislative restriction, and the evils sought to be remedied thereby, are clearly stated by
This provision would be altogether anomalous had it been the intent to apply Act No. 2874 to lands held in Surtherland in his valuable work on Statutory Construction. In Section 111 he says that:
private ownership.
In the construction and application of this constitutional restriction the courts have kept steadily in
Referring again to section two of said Act, we find the following: view the correction of the mischief against which it was aimed. The object is to prevent the practice,
which was common in all legislative bodies where no such restrictions existed, of embracing in the
That nothing in this Act provided shall be understood or construed to change or modify the same bill incongruous matters having no relation to each other or to the subject specified in the title,
government and disposition of the lands commonly known as "friar lands" and those which, being by which measures were often adopted without attracting attention. Such distinct subjects
privately owned, have reverted to or become the property of the Philippine Government, which represented diverse interests, and were combined in order to unite the members of the legislature
administration and disposition shall be governed by the laws at present in force or which may who favor either in support of all. These combinations were corruptive of the legislature and
hereafter be enacted by the Legislature. dangerous to the State. Such omnibus bills sometimes included more than a hundred sections on as
The purpose of said provision is obvious. Inasmuch as these friar estates and other real property purchased or many different subjects, with a title appropriate to the first section, "and for other purposes."
owned by the Government are subject to its control and disposition equally with lands of the public domain, it The failure to indicate in the title of the bill the object intended to be accomplished by the legislation
could be reasonably argued that they should be subject to and governed by the laws applicable to public lands. often resulted in members voting ignorantly for measures which they would not knowingly have
Through the insertion of the provision above quoted, however, this construction of the Act is avoided. If said Act, approved; and not only were legislators thus misled, but the public also; so that legislative provisions
by express provisions, does not apply to lands privately owned by the Government, it could hardly have been were steadily pushed through in the closing hours of a session, which, having no merit to commend
the intent of the Legislature to make the Act applicable to lands held in private ownership by individuals. them, would have been made odious by popular discussion and remonstrance if their pendency had
The Act nowhere contains any direct or express provision applying its terms to privately owned lands. The been seasonably announced. The constitutional clause under discussion is intended to correct these
doubts of defendant in that regard are caused by inferences drawn from the language used in sections 24 and evils; to prevent such corrupting aggregations of incongruous measures, by confining each act to one
121 of the Act. The first paragraph of section 24 provides: subject or object; to prevent surprise and inadvertence by requiring that subject or object to be
expressed in the title.
No . . . corporation . . . other than those mentioned in the last preceding section may acquire or
own agricultural public land or land of any other denomination or classification, not used for industrial In the case of Walker vs. State (49 Ala., 329), the Supreme Court of Alabama stated the proposition as follows
or residence purposes, that is at the time or was originally, really or presumptively, of the public — citing and quoting from Cooley's Constitutional Limitations; p. 143:
domain, or any permanent improvement thereon, or any real right on such land and improvement. The object sought to be accomplished and the mischief proposed to be remedied by this provision are
Said section as worded, and standing alone, presents come question as to the character of land sought to be well known. Legislative assemblies, for the dispatch of business, often pass bills by their titles only
included therein. This doubt is dispelled, however, when its provisions are read in connection with other without requiring them to be read. A specious title sometimes covers legislation which, if real
sections of the same chapter. Chapter five, in which section 24 is found, deals with "Sales," and section 25 character had been disclosed, would not have commanded assent. To prevent surprise and fraud on
thereof specifically provides that: "Lands sold under the provisions of this chapter must be appraised in the legislature is one of the purposes this provision was intended to accomplish. Before the adoption
accordance with section 114 of this Act." Section 114 confers authority upon the Director of Lands, with the of this provision the title of a statute was often no indication of its subject or contents.
approval of the Secretary of Agriculture and Natural Resources, to appraise lands or improvements subject to An evil this constitutional requirement was intended to correct was the blending in one and the same
concession or disposition under the provisions of this Act. Inasmuch as the Legislature cannot vest authority in statute of such things as were diverse in their nature, and were connected only to combine in favor of
the Director of Lands to "appraise" or "sell" lands held in private ownership, it is not presumed it was the all the advocates of each, thus often securing the passage of several measures no one of which could
intention to include private lands in the Act or subject them in the manner indicated to any such authority. The have succeeded on its own merits. Mr. Cooley thus sums up in his review of the authorities defining
same observations and the same conclusions apply to section 121 of the Act, where much the same language the objects of this provision: "It may therefore be assumed as settled that the purpose of this provision
is used as found in section 24 above quoted. was: First, to prevent hodge-podge or log-rolling legislation; second, to prevent surprise or fraud upon
Whatever interpretation said sections 24 and 121 might receive if standing alone, it is clear they cannot prevail the legislature by means of provisions in bills of which the titles gave no information, and which might
against the general intent of the Act, derived not only from the language used but from the machinery adopted therefore be overlooked and carelessly and unintentionally adopted; and , third, to fairly apprise the
for giving effect to its provisions. (See secs. 87, 88, 90, 93, 94, 99, 103, 105, and 115.) people, through such publication of legislative proceedings as is usually made, of the subjects of
legislation that are being considered, in order that they may have opportunity of being heard thereon Justice Cooley, in his work on Constitutional Limitations (pp. 179-180) states that our courts have held, without
by petition or otherwise if they shall so desire.' (Cooley's Constitutional Limitations, p. 143.) exception, that such constitutional provision is mandatory.
To the same effect, in the case of Lindsay vs. U. S. Say. & Loan Ass'n. (120 Ala., 156 [42 L. R. A., N. S., 783]), As heretofore noted, the title of Act 2874, here under constructions, reads: "An Act to amend and compile laws
the court said: relative to lands of the public domain, and for other purposes."
The purposes of the constitutional requirement must be borne steadily in mind when it becomes In our interpretation of said Act, the words "and for other purposes" contained in its title, must be treated as non-
necessary to determine whether there has been legislative observance of it. The exposition of these existent. Under all the authorities wherein the requirement — "That no bill shall embrace more than one subject,
purposes by Judge Cooley is accepted, we believe, in all the states in which alike limitation prevails. which subject shall be expressed in the title of the bill" — has been considered, the words "and for other
(Then follows quotation from Cooley, supra.) purposes" when found in the title, have been held to be without force or effect whatsoever and have been
altogether discarded in construing the Act.
In the case of People vs. Parks (58 Cal., 624) where, in the body of an act, provision was made for something
not included in the title, the Supreme Court of California said: Upon this point, Justice Cooley in his Constitutional Limitations, 6th ed., pp. 173 - 173, states as follows:
At least, then, two heterogeneous subjects are embraced in the act, one of which is not expressed in One thing, however, is very plain: That the use of the words "other purposes," which has heretofore
the title, and they cannot be segregated. The title does not express the objects of legislation been so common in the title to acts, with a view to cover any and everything whether connect with the
embodied in the provisions of the act. It is, therefore, narrower than the body of the act, and fails to main purpose indicated by the title or not, can no longer be of any avail where these provisions exist.
impart that notice of the measures enacted, which the Constitution requires. To prohibit such As was said by the Supreme Court of New York in a case where these words had been made use of
legislation was the sole end and aim of the constitutional requirement. 'The practice,' says the in the title to a local bill: "The words "for other purposes" must be laid out of consideration. They
Supreme Court of Missouri, 'of comprising in one bill subjects of a diverse and antogonistic nature, in express nothing and amount to nothing as a compliance with this constitutional requirement. Nothing
order to combine in their support members who were in favor of particular measures, but neither of which the act could not embrace without them can be brought in by their aid."
which could command the requisite majority on its own merits, was found to be not a corruptive
influence in the Legislature itself, but destructive of the best interests of the State. But this was not Sutherland on Statutory Construction, section 122 says:
more detrimental than that other pernicious practice, by which, through dexterous and unscrupulous The phrase "and for other purposes" expresses no specific purpose and imports indefinitely
management, designing men inserted clauses in the bodies of bills, of the true meaning of which the something different from that which precedes it in the title. It is, therefore, universally rejected as
titles gave no indication, and by skillful maneuvering urged them on to their passage. These things led having no force or effect wherever this constitutional restriction operates. (Citing numerous cases).
to fraud and injury, and it was found necessary to apply a corrective in the shape of a constitutional
provision.' (City of St. Louis vs. Tiefel, 42 Mo., 590.) This provision has been framed in the In the case of Ryerson vs. Utley (16 Mich., 269), an Act was construed by the court reading: "An Act to provide
constitutions of may of the States of the Union; and courts, whenever it has come before the, have for the preservation of the Muskegon river improvements, and for other purposes." Cooley, C. J., who wrote the
liberally construed it as the will of the people in the interests of honest legislation. opinion, said:
The authorities are to all intents uniform that this constitutional requirement is mandatory and not directory. The Constitution (of Michigan) provides that no law shall embrace more than one subject, which shall
Sutherland on Statutory Construction, section 112, states the rule correctly as follows: be expressed in its title. We have heretofore had occasion to consider this section, and have said of it
that it ought to be construed reasonably and not in so narrow and technical a sense as unnecessarily
The efficiency of this constitutional remedy to cure the evil and mischief which has been pointed out, to embarrass legislation. But the only object mentioned in the title of this Act is the preservation of the
depends on judicial enforcement; on this constitutional injunction being regarded as mandatory, and Muskegon River Improvements, for which purpose the act authorizes tools to be levied and
compliance with it essential to the validity of legislation. The mischief existed notwithstanding the expended.
sworn official obligation of legislators; it might be expected to continue notwithstanding that that
obligation is formulated and emphasized in this constitutional injunction if it be construed as The payment of Beard's claim is in no way connected with this object and the title to the act would
addressed exclusively to them and only directory. It would in a general sense be a dangerous doctrine apprise neither the legislature nor the public that it covered provisions under which a large sum was
to announce that any of the provisions of the constitution may be obeyed or disregarded at the mere to be collected and disbursed to pay for the original construction of the work. The words "other
will or pleasure of the legislature unless it is clear beyond all question that such was the intention of purposes" in the title can have no force whatever under the constitutional provision which has been
the framers of that instrument. It would seem to be a lowering of the proper dignity of the fundamental quoted.
law to say that it descends to prescribing rules of order in unessential matters which may be followed
or disregarded at pleasure. The fact is this: That whatever constitutional provision can be looked upon In the case of Board of Education vs. Barlow (49 Ga., 232) the title of the Act under consideration read: "An Act
as directory merely is very likely to be treated by the legislature as if it was devoid of moral obligation, to establish a permanent Board of Education for the City of Americus and to incorporate the same, and for other
and to be therefore habitually disregarded. purposes." The State constitution prohibited any law which referred to more than one subject, or contained
matter different from that expressed in the title of the act. The court said:
In the case of Cannon vs. Mathes (8 Heisk. [Tenn.], 504) Nicholson, C. J., referring to the provision that "No bill
shall become a law which embraces more than one subject," said: Does this not close the door to any force and effect being given the words "for other purposes?" If
these words were once necessary to permit the introduction of matter in the bill, different from what
This is a direct, positive and imperative limitation upon the power of the legislature. It matters not that was expressed in the order portion of the title, would not that every thing show now that the bill would
a bill has passed through three readings in each house on three different days and has received the thereby become obnoxious to the other clause prohibiting more than one subject matter? The
approval of the governor, still it is not a law of the State if it embraces more than one subject. necessity of such words under the provision as it formerly stood to prevent the bill from containing
matter different from the title could only arise because such matter is something different from what
In the case of Walker vs. State (49 Ala., 329) supra, the court said: had already been expressed. It shows that something more than one subject-matter is intended. If so,
It is the settled law of this court, founded on reasoning which seems to us unanswerable that this although it was allowed under the clause as it was formerly, it cannot now be done.
provision of the constitution is not a mere rule of legislative procedure, directory to the general Equally may it be said of the Act of the Philippine Legislature here involved, the addition of the words "and for
assembly, but that it is mandatory, and it is the duty of courts to declare void any statute not other purposes," contained in its title, can only be explained on the theory that something different was to be
conforming to it. included therein from that previously expressed, i. e., "lands of the public domain."
Another case where the same conclusion is forcibly expressed is that of Spier vs. Baker, (120 Ca., 370). There . . . It has long been settled . . . that all land to which any claims or rights of others have attached
the court construed an Act reading: "An Act providing for general primary elections within the State of California does not fall within the designation of public lands.
and to promote the purity thereof by regulating the conduct thereof, and to support the privileges of free suffrage
thereat, by prohibiting certain acts and practices in relation thereto, and providing for the punishment The Attorney-General of the Philippine Islands, in a very elucidated opinion in which the Attorney-General of the
thereof, and for other purposes." the California State Constitution provides: "Every Act shall embrace but one United States agreed, held that "friar lands" purchased by the Insular Government formed no part of the "public
subject, which shall be expressed in its title; but, if any subject shall be embraced in an act which shall not be domain" and were not affected by nor subject to the restrictions of the Act relating to public lands.
expressed in its title, such act shall be void only as to so much thereof as shall not be expressed in its title." The Section 2 of the Act before us exempts not only "friar lands" from its operation but also all lands which have
court, after citing this constitutional provision, said: reverted to, or become the property of, the Philippine Government.
Let us test the title of this act in the crucible furnished by the foregoing provision of the constitution. It is clearly evident, therefore, that under no possible construction of the law can the words "lands of the public
The legislature, in framing this title, was above all things candid. Upon its very face the law-making domain," used in the title of Act No. 2874, be held to include, or be authorized to include, lands held in freehold.
power challenged the sound policy of this provision of the constitution, and avowedly disregarding it, While this is true generally, it is peculiarly applicable to lands held and owned under Torrens title — as are the
declared that the purpose of the act was the creation of a primary election law and "other purposes." lands of the defendant herein — in which all interest of the Government is expressly eliminated. Section 38 of
Under the cloak of "other purposes," all and every conceivable kind of legislation could hide and thrive the Land Registration Act (No. 496) provides that such registered title "shall be conclusive upon and against all
in the body of the act, and thus the constitutional provision be set at naught. In this state, when these persons, including the Insular Government and all branches thereof, whether mentioned by name in the
words "for other purposes" are found in the title of an act of the state legislature they accomplish application, notice or citation, or included in the general description 'To all whom it may concern.' "
nothing, and in reading the title our eyes are closed to them. We then have before us, tested by its
title, an act dealing solely with general primary elections, and providing penalties for violating the law The judicial department of the government hesitates to pronounce invalid the Acts of the legislative department,
relating thereto. Any matters of legislation contained in the body of the act not bearing upon primary and will not do so until and unless it is shown that the same exceed the authority conferred upon said
elections must go out; the constitutional provision quoted so declares. Weighing and measuring the department or contravene some express or necessarily implied provision of the Organic Law of the state.
legislation found in the act by this test, very many provisions have no place there. It would seem that (Case vs. Board of Health, and Heiser, 24 Phil., 250; U. S. vs. Joson, 26 Phil., 1, 64; U. S. vs. Gomez Jesus, 31
the legislature, in using the words "for other purposes" in the title, used those words advisedly, and in Phil., 218, 225, 228; Tajanlangit vs. Peñaranda, 37 Phil., 155.)
good faith lived up to them fully. For the legislation found in section after section of the act can find no
justification in its title, save under these words of boundless meaning, "for other purposes." In the interpretation and construction of statutes the court should give them the meaning and effect which the
legislature intended, unless that meaning and effect is in conflict with the organic law of the land. The question
The court, after referring to various matters included in the bill but not specified in the title, said: of the validity of the statutes is first determined by the legislative department of the government, and the courts
will resolved every presumption in its favor. The wisdom or advisability of a particular statute is within the
Many of these things are totally foreign to any question relating to primary elections, and others are constitutional powers of the legislature, it will be sustained, whether the courts agree or not in the wisdom of its
so remotely connected with that subject as to clearly come within the prohibition of the constitutional enactment. If the statute covers a subject not authorized by the fundamental laws of the state, or by the
provision. These matters of legislation, not being embraced within the purview of the title, are void constitution, then the courts are not only authorized but are justified in pronouncing the same illegal and void,
and fall to the ground. no matter how wise and beneficent such legislation may seem to be. The courts are not justified in measuring
Applying the doctrine of the above cases to the Act before us for interpretation, its title must be considered and their opinion with the opinion of the legislative department of the government, as expressed in statutes, upon
treated as though reading: "An Act to amend and compile the laws relative to lands of the public domain." the question of the wisdom, justice and advisability of a particular law. The courts have no right to dictate what
law shall be adopted by the legislative department of the government, so long as a well defined public policy or
Inasmuch as agricultural lands in the Philippine Islands held in private ownership, under fee title, constitute no an organic act is not violated. (Case vs.Board of Health, and Heiser, 24 Phil., 250; U. S. vs. Gomez Jesus, 31
part of "the public domain." they cannot come within the purview of Act No. 2874 as it is entitled. Phil., 218.)
The words "public land" are habitually used in our legislation to described such as are subject to sale or other Our conclusions, therefore, from all of the foregoing are:
disposal under general laws.
1. That it was the purpose and intent of the legislature to comply with the provisions of the Jones Law and to
In the case of Wilcox vs. Jackson (13 Peters, 498 [10 L. ed., 264]) the court, in dealing with the matter of public limit the application of Act No. 2874 to lands of the public domain;
lands, stated:
2. That the phrase "and for other purposes," found in the title of said Act (No. 2874), by virtue of the provisions
Whensoever a tract of land shall have once been legally appropriated to any purpose, from that of section 3 of the Act of Congress of August 29, 1916 (the Jones Law), cannot be interpreted to include, nor be
moment the land thus appropriated becomes severed from the mass of public lands; and no made applicable to any lands not public;
subsequent law, or proclamation, or sale, would be construed to embrace it, or to operate upon it,
although no reservation were made of it. 3. That eliminating the phrase 'and for other purposes" from the title of said Act, the same must be considered
and treated as though reading: "An Act to amend and compile the laws relative to lands of the public domain;"
The above case is quoted and applied in the case of United States vs. Blendoner (122 Feb. Rep., 703, 708). In
U. S. vs. Garreston (42 Feb., 22), the court said: 4. That lands held in freehold or fee title, or private ownership, constitute no part of the public domain and
cannot possibly come within the purview of said Act No. 2874, inasmuch as the "subject" of such freehold or
Such lands comprise the general public domain; unappropriated lands; lands not held back or private land is not embraced in nay manner in the title of the Act.
reserved for any special governmental or public purpose.
5. That it is the uniform holding of the United States Supreme Court, and of other courts interpreting the phrase
In the case of Yakima County vs. Tuller (3 Wash., T., 393), the court said that the term "public lands" in a grant "public lands," that once such lands have been "legally appropriated" by the Government or by individuals, they
of public lands for roads, etc., shall be construed to mean strictly public lands, such as are open to entry and become segregated from the mass of public lands, and no law or proclamation thereafter made or issued
settlement, and not those in which the rights of the public have passed and which have become subject to some relating to "public lands" operate upon them.
individual right of a settler.
6. That whatever right or authority the Government of the Philippine Islands may have had at any time to assert
In the case of Bardon vs. Nor. Pac. R. R. Co. (145 U. S., 535), the court said: any right, title, or interest in and to the lands involved in this proceeding, whether as a part of the "public
domain" or otherwise, was absolutely divested by virtue of the provisions of section 38 of Act No. 496, after
such lands were registered in the court of land registration under the Torrens system.
7. That under said Act (No. 2874) as entitled any provisions or provisions in the body thereof applicable to lands
held under fee title is null and void and of no effect.
8. That inasmuch as said Act (No. 2874) cannot be interpreted to apply to, nor include, lands held in fee title, the
penal provisions thereof cannot be held to apply to leases, sales, concessions, nor any other transaction by the
holders.
9. That by virtue of the provisions of section 127, as well as the general jurisprudence upon that subject our
conclusions herein shall not be held to affect any of the provisions of said Act No. 2874 except those provisions
which relate to private agricultural lands, or lands held in private ownership, in contradistinction to lands of the
public domain.
Therefore, having demonstrated that said Act No. 2874 does not apply to lands of the respondent, and there
being no objection to the form of the remedy prayed for, the same is hereby granted, without any finding as to
costs. So ordered.

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