his dismissal or separation or, at the option of the employer, merely reinstated in the payroll.
The posting
G.R. No. 90501. August 5, 1991.*
ARIS (PHIL.) INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FELIPE
GARDUQUE III, LEODEGARIO DE GUZMAN, LILIA PEREZ, ROBERTO BESTAMONTE, AIDA OPENA, REYNALDO
TORIADO, APOLINARIO GAGAHINA, RUFINO DE CASTRO, FLORDELIZA RAYOS DEL SOL, STEVE SANCHO,
ESTER CAIRO, MARIETA MAGALAD, and MARY B. NADALA, respondents.
Labor Law; Dismissal of Laborers; Police Power; Provision concerning the mandatory and automatic
reinstatement of an employee whose dismissal is found unjustified by the labor arbiter is a valid exercise
of the police power of the state and the contested provision “is then a police legislation.”—Respondent
NLRC, through the Office of the Solicitor General, filed its Comment on 20 November 1989. Meeting
squarely the issues raised by petitioner, it submits that the provision concerning the mandatory and
automatic reinstatement of an employee whose dismissal is found unjustified by the labor arbiter is a valid
exercise of the police power of the state and the contested provision “is then a police legislation.”
Remedial Law; Execution Pending Appeal; Appeal; The right to appeal is not a constitutional,
natural or inherent right. It is a statutory privilege of statutory origin and, therefore, available only if
granted or provided by statute.—Execution pending appeal is interlinked with the right to appeal. One
cannot be divorced from the other. The latter may be availed of by the losing party or a party who is not
satisfied with a judgment, while the former may be applied for by the prevailing party during the pendency
of the appeal. The right to appeal, however, is not a constitutional, natural or inherent right. It is a statutory
privilege of statutory origin and, therefore, available only if granted or provided by statute. The law may
then validly provide limitations or qualifications thereto or relief to the prevailing party in the event an
appeal is interposed by the losing party. Execution pending appeal is one such relief long recognized in this
jurisdiction. The Revised Rules of Court allows execution pending appeal and the grant thereof is left to
the discretion of the court upon good reasons to be stated in a special order.
Statutory Construction; Constitution; Laws are presumed consti-tutional.—To justify nullification of
a law, there must be a clear and unequivocal breach of the constitution, not a doubtful and argumentative
implication; a law shall not be declared invalid unless the conflict with the constitution is clear beyond
reasonable doubt.
PETITION to review the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
Cesar C. Cruz & Partners for petitioner.
Zosimo Morillo for respondent Rayos del Sol.
Banzuela, Flores, Miralles, Raneses, Sy & Associates for private respondents.
DAVIDE, JR., J.:
Petitioner assails the constitutionality of the amendment introduced by Section 12 of Republic Act No.
6715 to Article 223 of the Labor Code of the Philippines (PD. No. 442, as amended) allowing execution
pending appeal of the reinstatement aspect of a decision of a labor arbiter reinstating a dismissed or
separated employee and of Section 2 of the NLRC Interim Rules on Appeals under R.A. No. 6715
implementing the same. It also questions the validity of the Transitory Provision (Section 17) of the said
Interim Rules.
The challenged portion of Section 12 of Republic Act No. 6715, which took effect on 21 March 1989,
reads as follows:
“SEC. 12. Article 223 of the same code is amended to read as follows:
‘ART. 223. Appeal.
xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, in so
far as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to
of a bond by the employer shall not stay the execution for reinstatement provided therein.’ ”
248
248 SUPREME COURT REPORTS ANNOTATED
Aris (Phil.) Inc. vs. NLRC
This is a new paragraph ingrafted into the Article.
Sections 2 and 17 of the “NLRC Interim Rules On Appeals Under R.A. No. 6715, Amending the Labor
Code”, which the National Labor Relations Commission (NLRC) promulgated on 8 August 1989, provide as
follows:
“Section 2. Order of Reinstatement and Effect of Bond.—In so far as the reinstatement aspect is concerned,
the decision of the Labor Arbiter reinstating a dismissed or separated employee shall immediately be
executory even pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation, or, at the option of the employer, merely be
reinstated in the payroll.
The posting of a bond by the employer shall not stay the execution for reinstatement.
xxx
Section 17. Transitory provision.—Appeals filed on or after March 21, 1989, but prior to the effectivity
of these Interim Rules must conform to the requirements as herein set forth or as may be directed by the
Commission.”
The antecedent facts and proceedings which gave rise to this petition are not disputed:
On 11 April 1988, private respondents, who were employees of petitioner, aggrieved by
management’s failure to attend to their complaints concerning their working surroundings which had
become detrimental and hazardous, requested for a grievance conference. As none was arranged, and
believing that their appeal would be fruitless, they grouped together after the end of their work that day
with other employees and marched directly to the management’s office to protest its long silence and
inaction on their complaints.
On 12 April 1988, the management issued a memorandum to each of the private respondents, who
were identified by the petitioner’s supervisors as the most active participants in the “rally”, requiring them
to explain why they should not be terminated from the service for their conduct. Despite their explanation,
private respondents were dismissed for violation of company rules and regulations, more specifically of
the provisions on security and public order and on inciting or participating in illegal strikes or concerted
actions.
249
VOL. 200, AUGUST 5, 1991 249
Aris (Phil.) Inc. vs. NLRC
Private respondents lost no time in filing a complaint for illegal dismissal against petitioner and Mr. Gavino
Bayan with the regional office of the NLRC at the National Capital Region, Manila, which was docketed
therein as NLRC-NCR-00-04-01630-88.
After due trial, Labor Arbiter Felipe Garduque III handed down on 22 June 1989 a decision1 the
dispositive portion of which reads:
“ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered to reinstate within ten (10) days from
receipt hereof, herein complainants Leodegario de Guzman, Rufino de Castro, Lilia M. Perez, Marieta
Magalad, Flordeliza Rayos del Sol, Reynaldo Toriado, Roberto Be-smonte, Apolinario Gagahina, Aidam (sic)
Opena, Steve C. Sancho, Ester Cairo, and Mary B. Nadala to their former respective positions or any
substantial equivalent positions if already filled up, without loss of seniority right and privileges but with
limited backwages of six (6) months except complainant Leodegario de Guzman. All other claims and
prayers are hereby denied for lack of merit.
SO ORDERED.”
On 19 July 1989, complainants (herein private respondents) filed a Motion For Issuance of a Writ of
Execution2 pursuant to the above-quoted Section 12 of R.A. No. 6715.
On 21 July 1989, petitioner filed its Appeal.3
On 26 July 1989, the complainants, except Flor Rayos del Sol, filed a Partial Appeal.4
On 10 August 1989, complainant Flor Rayos del Sol filed a Partial Appeal.5
 On 29 August 1989, petitioner filed an Opposition6 to the motion for execution alleging that Section
12 of R.A. No. 6715 on execution pending appeal cannot be applied retroactively to cases pending at the
time of its effectivity because it does not
_______________
1 Annex “C” of Petition; Rollo, 35-43.
2
Annex “G” of Petition; Id., 69.
3 Annex “D” of Petition; Id., 44-57.
4
Annex “E” of Petition; Id., 58-61.
5 Annex “F” of Petition; Id., 62-68.
6
Annex “H” of Petition; Rollo, 71-75.
250
250 SUPREME COURT REPORTS ANNOTATED
Aris (Phil.) Inc. vs. NLRC
expressly provide that it shall be given retroactive effect7 and to give retroactive effect to Section 12
thereof to pending cases would not only result in the imposition of an additional obligation on petitioner
but would also dilute its right to appeal since it would be burdened with the consequences of
reinstatement without the benefit of a final judgment. In their Reply8 filed on 1 September 1989,
complainants argued that R.A. No. 6715 is not sought to be given retroactive effect in this case since the
decision to be executed pursuant to it was rendered after the effectivity of the Act. The said law took effect
on 21 March 1989, while the decision was rendered on 22 June 1989.
Petitioner submitted a Rejoinder to the Reply on 5 September 1989.9
On 5 October 1989, the Labor Arbiter issued an Order10granting the motion for execution and the
issuance of a partial writ of execution “as far as reinstatement of herein complainants is concerned in
consonance with the provision of Section 2 of the rules particularly the last sentence thereof.”
In this Order, the Labor Arbiter also made reference to Section 17 of the NLRC Interim Rules in this
wise:
“Since Section 17 of the said rules made mention of appeals filed on or after March 21, 1989, but prior to
the effectivity of these interim rules which must conform with the requirements as therein set forth
(Section 2) or as may be directed by the Commission, it obviously treats of decisions of Labor Arbiters
before March 21, 1989. With more reason these interim rules be made to apply to the instant case since
the decision hereof (sic) was rendered thereafter.11
Unable to accept the above Order, petitioner filed the instant petition on 26 October 1989 12 raising the
issues adverted to in the introductory portion of this decision under the following assignment of errors:
“A.THE LABOR ARBITER A QUO AND THE NLRC, IN ORDERING THE REINSTATEMENT OF THE
PRIVATE RESPONDENTS PENDING APPEAL AND IN PROVIDING FOR SECTION 2 OF THE
INTERIM RULES, RESPECTIVELY, ACTED WITHOUT AND IN EXCESS OF JURISDICTION SINCE THE
BASIS FOR SAID ORDER AND INTERIM RULE, i.e., SECTION 12 OF R.A. 6715 IS VIOLATIVE OF
THE CONSTITUTIONAL GUARANTY OF DUE PROCESS—IT BEING OPPRESSIVE AND
UNREASONABLE.
B.GRANTING ARGUENDO THAT THE PROVISION IN (SIC) REINSTATEMENT PENDING APPEAL IS
VALID, NONETHELESS, THE LABOR ARBITER A QUO AND THE NLRC STILL ACTED IN EXCESS
AND WITHOUT JURISDICTION IN RETROACTIVELY APPLYING SAID PROVISION TO PENDING
LABOR CASES.”
In Our resolution of 7 March 1989, We required the respondents to comment on the petition.
Respondent NLRC, through the Office of the Solicitor General, filed its Comment on 20 November
1989.13 Meeting squarely the issues raised by petitioner, it submits that the provision concerning the
mandatory and automatic reinstatement of an employee whose dismissal is found unjustified by the labor
arbiter is a valid exercise of the police power of the state and the contested provision “is then a police
legislation.”
As regards the retroactive application thereof, it maintains that being merely procedural in nature, it
can apply to cases pending at the time of its effectivity on the theory that no one can claim a vested right
in a rule of procedure. Moreover, such a law is compatible with the constitutional provision on protection
to labor.
On 11 December 1989, private respondents filed a Manifestation14 informing the Court that they are
adopting the Comment filed by the Solicitor General and stressing that petitioner failed to comply with the
requisites for a valid petition for certiorari under Rule 65 of the Rules of Court.
On 20 December 1989, petitioner filed a Rejoinder15 to the Comment of the Solicitor General.
In the resolution of 11 January 1990,16 We considered the Comments as respondents’ Answers, gave due
course to the petition, and directed that the case be calendared for deliberation.
In urging Us to declare as unconstitutional that portion of Section 223 of the Labor Code introduced
by Section 12 of R.A. No. 6715, as well as the implementing provision covered by Section 2 of the NLRC
Interim Rules, allowing immediate execution, even pending appeal, of the reinstatement aspect of a
decision of a labor arbiter reinstating a dismissed or separated employee, petitioner submits that said
portion violates the due process clause of the Constitution in that it is oppressive and unreasonable. It
argues that a reinstatement pending appeal negates the right of the employer to self-protection for it has
been ruled that an employer cannot be compelled to continue in employment an employee guilty of acts
inimical to the interest of the employer; the right of an employer to dismiss is consistent with the legal
truism that the law, in protecting the rights of the laborer, authorizes neither the oppression nor the
destruction of the employer. For, social justice should be implemented not through mistaken sympathy
for or misplaced antipathy against any group, but evenhandedly and fairly. 17
To clinch its case, petitioner tries to demonstrate the oppressiveness of reinstatement pending appeal
by portraying the following consequences: (a) the employer would be compelled to hire additional
employees or adjust the duties of other employees simply to have someone watch over the reinstated
employee to prevent the commission of further acts prejudicial to the employer, (b) reinstatement of an
undeserving, if not undesirable, employee may demoralize the rank and file, and (c) it may encourage and
embolden not only the reinstated employees but also other employees to commit similar, if not graver
infractions.
These rationalizations and portrayals are misplaced and are purely conjectural which, unfortunately,
proceed from a misunderstanding of the nature and scope of the relief of execution pending appeal.
Execution pending appeal is interlinked with the right to appeal. One cannot be divorced from the
other. The latter may be availed of by the losing party or a party who is not satisfied with a judgment, while
the former may be applied for by the prevailing party during the pendency of the appeal. The right to
appeal, however, is not a constitutional, natural or inherent right. It is a statutory privilege of statutory
origin18 and, therefore, available only if granted or provided by statute. The law may then validly provide
limitations or qualifications thereto or relief to the prevailing party in the event an appeal is interposed by
the losing party. Execution pending appeal is one such relief long recognized in this jurisdiction. The
Revised Rules of Court allows execution pending appeal and the grant thereof is left to the discretion of
the court upon good reasons to be stated in a special order.19
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the Labor Code already allowed
execution of decisions of the NLRC pending their appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter
reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy which,
once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the workingman.
These provisions are the quintessence of the aspirations of the workingman for recognition of his role
in the social and economic life of the nation, for the protection of his rights, and the
_______________
18 Aragon vs. Araullo, et al., 11 Phil. 7; U.S. vs. Gomez Jesus, 31 Phil. 218; Layda vs. Legaspi, 39 Phil.
93; Aguilar vs. Navarro, 55 Phil. 898; Santiago vs. Valenzuela, 78 Phil. 397; Abesames vs. Garcia, 98 Phil.
769; Gonzalez vs. CA, 3 SCRA 465; Bello vs. Fernando, 4 SCRA 138; United CMC Textile Workers Union vs.
Clave, 137 SCRA 346; Tropical Homes Inc. vs. NHA, 152 SCRA 540; Municipal Gov’t. of Coron vs. Carino, 154
SCRA 216; and Ozaeta vs. CA, 179 SCRA 800.
 19Section 2, Rule 39.
254
254 SUPREME COURT REPORTS ANNOTATED
Aris (Phil.) Inc. vs. NLRC
promotion of his welfare. Thus, in the Article on Social Justice and Human Rights of the
Constitution,20 which principally directs Congress to give highest priority to the enactment of measures
that protect and enhance the right of all people to human dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the
common good, the State is mandated to afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all; to
guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law, security of tenure,
human conditions of work, and a living wage, to participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law; and to promote the principle of shared
responsibility between workers and employers and the preferential use of voluntary modes in settling
disputes. Incidentally, a study of the Constitutions of various nations readily reveals that it is only our
Constitution which devotes a separate article on Social Justice and Human Rights. Thus, by no less than its
fundamental law, the Philippines has laid down the strong foundations of a truly just and humane society.
This Article addresses itself to specified areas of concern—labor, agrarian and natural resources reform,
urban land reform and housing, health, working women, and people’s organizations—and reaches out to
the underprivileged sector of society, for which reason the President of the Constitutional Commission of
1986, former Associate Justice of this Court Cecilia Muñoz-Palma, aptly describes this Article as the “heart
of the new Charter.”21
These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms with equal intensity.22 Labor is an indispensable partner for
the nation’s progress and stability.
If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, We find no plausible reason to
withhold it in cases of decisions reinstating dismissed or separated employees. In such cases, the poor
employees had been deprived of their only source of livelihood, their only means of support for their
family—their very lifeblood. To Us, this special circumstance is far better than any other which a judge, in
his sound discretion, may determine. In short, with respect to decisions reinstating employees, the law
itself has determined a sufficiently overwhelming reason for its execution pending appeal.
The validity of the questioned law is not only supported and sustained by the foregoing
considerations. As contended by the Solicitor General, it is a valid exercise of the police power of the State.
Certainly, if the right of an employer to freely discharge his employees is subject to regulation by the State,
basically in the exercise of its permanent police power on the theory that the preservation of the lives of
the citizens is a basic duty of the State, that is more vital than the preservation of corporate profits. 23Then,
by and pursuant to the same power, the State may authorize an immediate implementation, pending
appeal, of a decision reinstating a dismissed or separated employee since that saving act is designed to
stop, although temporarily since the appeal may be decided in favor of the appellant, a continuing threat
or danger to the survival or even the life of the dismissed or separated employee and his family.
The charge then that the challenged law as well as the implementing rule are unconstitutional is
absolutely baseless. Laws are presumed constitutional.24 To justify nullification of a law, there must be a
clear and unequivocal breach of the Constitution, not a doubtful and argumentative implication; a law
shall not be declared invalid unless the conflict with the constitution is
_______________
256 SUPREME COURT REPORTS ANNOTATED
Aris (Phil.) Inc. vs. NLRC
clear beyond reasonable doubt.25 In Paredes, et al. vs. Executive Secretary,26 We stated:
“2. For one thing, it is in accordance with the settled doctrine that between two possible constructions,
one avoiding a finding of unconstitutionality and the other yielding such a result, the former is to be
preferred. That which will save, not that which will destroy, commends itself for acceptance. After all, the
basic presumption all these years is one of validity. The onerous task of proving otherwise is on the party
seeking to nullify a statute. It must be proved by clear and convincing evidence that there is an
infringement of a constitutional provision, save in those cases where the challenged act is void on its face.
Absent such a showing, there can be no finding of unconstitutionality. A doubt, even if well-founded, does
not suffice. Justice Malcolm’s aphorism is apropos:‘To doubt is to sustain.’ ”27
The reason for this:
“x x x can be traced to the doctrine of separation of powers which enjoins on each department a proper
respect for the acts of the other departments. x x x The theory is that, as the joint act of the legislative and
executive authorities, a law is supposed to have been carefully studied and determined to be constitutional
before it was finally enacted. Hence, as long as there is some other basis that can be used by the courts
for its decision, the constitutionality of the challenged law will not be touched upon and the case will be
decided on other available grounds.”28
The issue concerning Section 17 of the NLRC Interim Rules does not deserve a measure of attention. The
reference to it in the Order of the Labor Arbiter of 5 October 1989 was unnecessary since the procedure
of the appeal proper is not involved in this case. Moreover, the questioned interim rules of the NLRC,
promulgated on 8 August 1989, can validly be given retroactive effect. They are procedural or remedial in
character, promulgated pursuant to the authority vested upon it under Article 218(a) of the Labor Code of
the Philippines, as amended. Settled is the rule that procedural laws may be given retroactive
effect.29 There are no vested rights in rules of procedure.30 A remedial statute may be made applicable to
cases pending at the time of its enactment.31
WHEREFORE, the petition is hereby DISMISSED for lack of merit.
Costs against petitioner.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez,
Jr.,Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,Griño-Aquino, Medialdea and Regalado,
JJ., concur.
Petition dismissed.

23
Manila Electric Co. vs. NLRC, supra, citing Euro-Linea, Phil. Inc. vs. NLRC, 156 SCRA 78. See also PAL,
Inc. vs. PALEA, 57 SCRA 498; Phil. Apparel Workers Union vs. NLRC, 106 SCRA 444.
24 La Union Electric Cooperative, Inc. vs. Yaranon, 179 SCRA 828; People vs. Permskul, 173 SCRA 324.

256
 G.R. No. 115044. January 27, 1995.*
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, petitioner, vs. HON. FELIPE G. PACQUING, as
Judge, Branch 40, Regional Trial Court of Manila and ASSOCIATED DEVELOPMENT CORPORATION,
respondents.
G.R. No. 117263. January 27, 1995.*
TEOFISTO GUINGONA, JR. and DOMINADOR R. CEPEDA, JR., petitioners, vs. HON. VETINO REYES and
ASSOCIATED DEVELOPMENT CORPORATION, respondents.
Constitutional Law; Validity of Statutes; PD No. 771; All laws (PD No. 771 included) are presumed
valid and constitutional until or unless otherwise ruled by the Court.—The time-honored doctrine is that all
laws (PD No. 771 included) are presumed valid and constitutional until or unless otherwise ruled by this
Court. Not only this; Article XVIII, Section 3 of the Constitution states: “Section 3. All existing laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with
this Constitution shall remain operative until amended, repealed or revoked.”
Same; Same; Same.—There is nothing on record to show or even suggest that PD No. 771 has been
repealed, altered or amended by any subsequent law or presidential issuance (when the executive still
exercised legislative powers).
_______________
*EN BANC.
650
650 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
Same; Constitution; Article VIII, Section 4(2); Only the Court En Banc can declare a law
unconstitutional under Article VIII, Section 4(2) of the Constitution.—Neither can it be tenably stated that
the issue of the continued existence of ADC’s franchise by reason of the unconstitutionality of PD No. 771
was settled in G.R. No. 115044, for the decision of the Court’s First Division in said case, aside from not
being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the Court En
Banc has that power under Article VIII, Section 4(2) of the Constitution.
Same; Estoppel; The well-settled rule is that the State cannot be put in estoppel by the mistakes or
errors, if any, of its officials or agents.—And on the question of whether or not the government
is estopped from contesting ADC’s possession of a valid franchise, the well-settled rule is that the State
cannot be put in estoppel by the mistakes or errors, if any, of its officials or agents (Republic v. Intermediate
Appellate Court, 209 SCRA 90).
Same; Intervention; The Republic is intervening in G.R. No. 115044 in the exercise of its
governmental functions to protect public morals and promote the general welfare.—Consequently, in the
light of the foregoing expostulation, we conclude that the Republic (in contra distinction to the City of
Manila) may be allowed to intervene in G.R. No. 115044. The Republic is intervening in G.R. No. 115044 in
the exercise, not of its business or proprietary functions, but in the exercise of its governmental functions
to protect public morals and promote the general welfare.
Same; Delegation of Power; Rep. Act No. 409; What Congress delegated to the City of Manila in
Rep. Act No. 409, with respect to wagers or betting, was the power to “license, permit, or regulate” which
would not amount to something meaningful unless the holder of the permit or license was also franchised
by the national government to so operate.—It is clear from the foregoing that Congress did not delegate
to the City of Manila the power “to franchise” wagers or betting, including the jai-alai, but retained for
itself such power “to franchise.” What Congress delegated to the City of Manila in Rep. Act No. 409, with
respect to wagers or betting. was the power to ‘license, permit. or regulate” which therefore means that
a license or permit issued by the City of Manila to operate a wager or betting activity, such as the jai-alai
where bets are accepted, would not amount to something meaningful UNLESS the holder of the permit or
license was also FRANCHISED by the national government to so operate. Moreover, even this power to
license, permit, or regulate wagers or betting on jai-alai was removed
651
VOL. 240, JANUARY 27, 1995 651
Lim vs. Pacquing
from local governments, including the City of Manila, and transferred to the GAB on 1 January 1951
by Executive Order No. 392. The net result is that the authority to grant franchises for the operation of
jaialai frontons is in Congress, while the regulatory function is vested in the GAB.
Same; Same; Same; Legislative Franchise; ADC has no franchise from Congress to operate the jai-
alai.—In relation, therefore, to the facts of this case, since ADC has no franchise from Congress to operate
the jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate the jai-
alai in the City of Manila.
Same; Same; Same; Legislative Enactment; Gambling is generally prohibited by law, unless another
law is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law.—It cannot be overlooked, in this connection, that the Revised Penal Code punishes gambling
and betting under Articles 195 to 199 thereof. Gambling is thus generally prohibited by law, unless another
law is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law. Among these forms of gambling allowed by special law are the horse races authorized by
Republic Acts Nos. 309 and 983 and gambling casinos authorized under Presidential Decree No. 1869.
Same; Same; Same; Same.—While jai-alai as a sport is not illegal per se, the accepting of bets or
wagers on the results of jai-alai games is undoubtedly gambling and, therefore, a criminal offense
punishable under Articles 195–199 of the Revised Penal Code, unless it is shown that a later or special law
had been passed allowing it. ADC has not shown any such special law.
Same; Same; Same; Republic Act No. 409 (the Revised Charter of the City of Manila) enacted by
Congress on 18 June 1949 gave the Municipal Board powers that are basically regulatory in nature.—
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by Congress on 18 June
1949 gave the Municipal Board certain delegated legislative powers under Section 18. A perusal of the
powers enumerated under Section 18 shows that these powers are basically regulatory in nature. The
regulatory nature of these powers finds support not only in the plain words of the enumerations under
Section 18 but also in this Court’s ruling in People v. Vera (65 Phil. 56).
Same; Same; Same; A law which gives the Provincial Board the discretion to determine whether or
not a law of general application
652
652 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
would be operative within the province is unconstitutional for being an undue delegation of
legislative power.—ln Vera, this Court declared that a law which gives the Provincial Board the discretion
to determine whether or not a law of general application (such as, the Probation Law-Act No. 4221) would
or would not be operative within the province, is unconstitutional for being an undue delegation of
legislative power.
Same; Same; Same.—From the ruling in Vera, it would be logical to conclude that, if ADC’s
arguments were to prevail, this Court would likewise declare Section 18(jj) of the Revised Charter of Manila
unconstitutional for the power it would delegate to the Municipal Board of Manila would give the latter
the absolute and unlimited discretion to render the penal code provisions on gambling inapplicable or
inoperative to persons or entities issued permits to operate gambling establishments in the City of Manila.
Same; Same; Same; Presumption of Validity; The rule is that laws must be presumed valid,
constitutional and in harmony with other laws.—We need not go to this extent, however, since the rule is
that laws must be presumed valid, constitutional and in harmony with other laws. Thus, the relevant
provisions of Rep. Acts Nos. 409 and 954 and Ordinance No. 7065 should be taken together and it should
then be clear that the legislative powers of the Municipal Board should be understood to be regulatory in
nature and that Republic Act No. 954 should be understood to refer to congressional franchises, as a
necessity for the operation of jai-alais.
Same; Same; Same; Legislative Franchise; Franchises to operate jai-alais are for the national
government (not local governments) to consider and approve.—On the other hand, it is noteworthy that
while then President Aquino issued Executive Order No. 169 revoking PD No. 810 (which granted a
franchise to a Marcos-crony to operate the jaialai), she did not scrap or repeal PD No. 771 which had
revoked all franchises to operate jai-alais issued by local governments, thereby reaffirming the
government policy that franchises to operate jai-alais are for the national government (not local
governments) to consider and approve.
Same; Same; Same; Same; Police Power; A gambling franchise is always subject to the exercise of
police power for the public welfare.—Onthe alleged violation of the non-impairment and equal protection
clauses of the Constitution, it should be remembered that a franchise is not in the strict sense a simple
contract but rather it is, more importantly, a mere privilege specially in matters which are within the
government’s
653
VOL. 240, JANUARY 27, 1995 653
Lim vs. Pacquing
power to regulate and even prohibit through the exercise of the police power. Thus, a gambling
franchise is always subject to the exercise of police power for the public welfare.
Same; Same; PD No. 771; Legislative Franchise; Gambling; The purpose of PD No. 771 is to give to
the national government the exclusive power to grant gambling franchises.—As earlier noted, ADC has not
alleged ever applying for a franchise under the provisions of PD No. 771. And yet, the purpose of PD No.
771 is quite clear from its provisions, i.e., to give to the national government the exclusive power to grant
gambling franchises. Thus, all franchises ‘then existing were revoked but were made subject to reissuance
by the national government upon compliance by the applicant with government-set qualifications and
requirements.
Same; Same; Same; Same; PD No. 771 did not violate the equal protection clause since the decree
revoked all franchises issued by the local governments without qualification or exception.—There was no
violation by PD No. 771 of the equal protection clause since the decree revoked all franchises issued by
local governments without qualification or exception. ADC cannot allege violation of the equal protection
clause simply because it was the only one affected by the decree, for as correctly pointed out by the
government, ADC was not singled out when all jai-alai franchises were revoked. Besides, it is too late in
the day for ADC to seek redress for alleged violation of its constitutional rights for it could have raised
these issues as early as 1975, almost twenty (20) years ago.
Same; Statutory Construction; Validity of Statute; Requirement that all laws should embrace only
one subject which shall be expressed in the title is sufficiently met if the title is comprehensive enough to
include the general object which the statute seeks to effect.—Finally, we do not agree that Section 3 of PD
No. 771 and the requirement of a legislative franchise in Republic Act No. 954 are “riders” to the two (2)
laws and are violative of the rule that laws should embrace one subject which shall be expressed in the
title, as argued by ADC. In Cordero v. Cabatuando (6 SCRA 418), this Court ruled that the requirement
under the Constitution that all laws should embrace only one subject which shall be expressed in the title
is sufficiently met if the title is comprehensive enough reasonably to include the general object which the
statute seeks to effect, without expressing each and every end and means necessary or convenient for the
accomplishing of the objective.
654
654 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
DAVIDE, JR., J., Separate Opinion:
Remedial Law; Intervention; Pleadings and Practice; Intervention could not be allowed after the
trial had been concluded or after the trial and decision of the original case.—The phrase “at any period of
a trial” in Section 1, Rule 13 of the old Rules of Court has been construed to mean the period for the
presentation of evidence by both parties. And the phrase “before or during the trial” in Section 2, Rule 12
of the present Rules of Court “simply means anytime before the rendition of the final judgment.”
Accordingly, intervention could not be allowed after the trial had been concluded or after the trial and
decision of the original case.
Same; Same; Same; Fundamentally, intervention is never an independent action but is ancillary and
supplemental to an existing litigation.—Fundamentally then, intervention is never an independent action
but is ancillary and supplemental to an existing litigation. Its purpose is not to obstruct nor unnecessarily
delay the placid operation of the machinery of trial, but merely to afford one not an original party, yet
having a certain right or interest in the pending case, the opportunity to appear and be joined so he could
assert or protect such right or interest.
Same; Same; Same; Intervention may be properly filed only before or during the trial of the case—
The grant of an intervention is left to the discretion of the court. Paragraph (b), Section 2, Rule 12 of the
Rules of Court provides: (b) Discretion of court.—In allowing or disallowing a motion for intervention, the
court, in the exercise of discretion, shall consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties and whether or not the intervenor’s rights
may be fully protected in a separate proceeding. It is thus clear that, by its very nature, intervention
presupposes an existing litigation or a pending case, and by the opening paragraph of Section 2, Rule 12
of the Rules of Court, it may be properly filed only before or during the trial of the said case. Even if it is
filed before or during the trial, it should be denied if it will unduly delay or prejudice the adjudication of
the rights of the original parties and if the intervenor’s rights may be fully protected in a separate
proceeding.
Same; Same; Same; The motion to intervene was filed on the 15th day after the First Division had
promulgated the decision. Consequently, intervention herein is impermissible under the rules.—lt is not
disputed that the motion to intervene was filed only on 16 September 1994, or on the fifteenth (15th) day
after the First Division had
655
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Lim vs. Pacquing
promulgated the decision, and after petitioner Mayor Alfredo Lim complied with or voluntarily
satisfied the judgment. The latter act brought to a definite end or effectively terminated G.R. No. 115044.
Consequently, intervention herein is impermissible under the rules. To grant it would be a capricious
exercise of discretion. The decision of this Court in Director of Lands vs. Court of Appeals cannot be used
to sanction such capriciousness for such decision cannot be expanded further to justify a new doctrine on
intervention. In the first place, the motions to intervene in the said case were filed before the rendition by
this Court of its decision therein. In the second place, there were unusual and peculiar circumstances in
the said case which this Court took into account. Of paramount importance was the fact that the
prospective intervenors were indispensable parties.
Same; Same; Same.—Considering then that the intervention in the case at bar was commenced
only after the decision had been executed, a suspension of the Rules to accommodate the motion for
intervention and the intervention itself would be arbitrary. The Government is not without any other
recourse to protect any right or interest which the decision might have impaired.
Criminal Law; Illegal Gambling; Administrative Law; City Ordinance; Betting an the results of jai-alai
games whether within or offfronton is illegal and the City of Manila cannot, under the present state of the
law, license such betting.—Pursuant to Section 2 of P.D. No. 483, which was not repealed by P.D. No. 1602
since the former is not inconsistent with the latter in that respect, betting in jai-alai is illegal unless allowed
by law. There was such a law, P.D. No. 810, which authorized the Philippine Jai-Alai and Amusement
Corporation. However, as stated in the ponencia, P.D. No. 810 was repealed by E.O. No. 169 issued by then
President Corazon C. Aquino. I am not aware of any other law which authorizes betting in jai-alai. It follows
then that while the private respondent may operate the jai-alai fronton and conduct jai-alai games, it can
do so solely as a sports contest. Betting on the results thereof. whether within or off-fronton, is illegal and
the City of Manila cannot, under the present state of the law, license such betting. The dismissal of the
petition in this case sustaining the challenged orders of the trial court does not legalize betting, for this
Court is not the legislature under our system of government.
KAPUNAN, J., Separate Opinion:
 Constitutional Law; Legislative Franchise; Administrative Law;City Ordinance; While the City of
Manila granted a permit to operate under Ordinance No. 7065, this permit or authority was at best only a
656
656 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
local permit to operate and could be exercised by the ADC only after it shall have obtained a
legislative franchise.—I find no incompatibility therefore, between P.D. 771, which revoked all authority
by local governments to issue franchises for gambling and gaming establishments on one hand, and the
municipal ordinance of the City of Manila, granting a permit or license to operate subject to compliance
with the provisions found therein, on the other hand, a legislative franchise may be required by the
government as a condition for certain gambling operations. After obtaining such franchise, the franchisee
may establish operations in any city or municipality allowed under the terms of the legislative franchise,
subject to local licensing requirements. While the City of Manila granted a permit to operate under
Ordinance No. 7065, this permit or authority was at best only a local permit to operate and could be
exercised by the ADC only after it shall have obtained a legislative franchise.
Same; Same; Constitutional Adjudication; Where a controversy may be settled on a platform other
than one involving constitutional adjudication, the court should exercise becoming modesty and avoid the
constitutional question.—This skirts the constitutional issue. Both P.D. 771 and Ordinance 7065 can stand
alongside each other if one looks at the authority granted by the charter of the City of Manila together
with Ordinance No. 7065 merely as an authority to “allow” and “permit” the operation of jai-alai
facilities within the City of Manila. While the constitutional issue was raised by the respondent corporation
in the case at bench, I see no valid reason why we should jump into the fray of constitutional adjudication
in this case, or on every other opportunity where a constitutional issue is raised by parties before us. It is
a settled rule of avoidance, judiciously framed by the United States Supreme Court in Ashwander v.
TVA that where a controversy may be settled on a platform other than one involving constitutional
adjudication, the court should exercise becoming modesty and avoid the constitutional question.
Same; Same; Police Power; The State has every legitimate right, under the police power, to regulate
gambling operations by requiring legislative franchises for such operations.—The State has every
legitimate right, under the police power, to regulate gambling operations by requiring legislative franchises
for such operations. Gambling, in all its forms, unless specifically authorized by law and carefully regulated
pursuant to such law, is generally proscribed as offensive to the public morals and the public good. In
maintaining a “state policy” on various forms of gambling, the political branches of government are best
equipped to regulate and control such activities and therefore assume
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Lim vs. Pacquing
full responsibility to the people for such policy. Parenthetically, gambling, in all its forms, is
generally immoral.
Same; Same; Same; The police power to establish all manner of regulation of otherwise illicit,
immoral and illegal activities is full, virtually illimitable and plenary.—The disturbing implications of a grant
of a “franchise,” in perpetuity, to the ADC militates against its posture that the government’s insistence
that the ADC first obtain a legislative franchise violates the equal protection and impairment of contracts
clauses of the Constitution. By their very nature, franchises are subject to amendment, alteration or
revocation by the State whenever appropriate. Under the exercise of its police power, the State, through
its requirement for permits, licenses and franchises to operate, undertakes to regulate what would
otherwise be an illegal activity punished by existing penal laws. The police power to establish all manner
of regulation of otherwise illicit, immoral and illegal activities is full, virtually illimitable and plenary.
Same; Same; Same; In its exercise of police power, the State may impose appropriate impositions
or restraints upon liberty or property in order to foster the common good.—ln Edu v. Ericta we defined the
police power as “the state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare.” In its exercise, the State may impose appropriate
impositions or restraints upon liberty or property in order to foster the common good. Such imposition or
restraint neither violates the impairment of contracts nor the equal protection clauses of the Constitution
if the purpose is ultimately the public good.
Same; Same; Same; Franchise and licensing regulations aimed at protecting the public from the
pernicious effects of gambling are extensions of the police power addressed to a legitimate public need.—
Restraints on property are not examined with the same microscopic scrutiny as restrictions on liberty. Such
restraints, sometimes bordering on outright violations of the impairments of contract principle have been
made by this Court for the general welfare of the people. Justice Holmes in Noble State Bank v. Haskel once
expansively described the police power as “extending to all public needs.” Franchise and licensing
regulations aimed at protecting the public from the pernicious effects of gambling are extensions of the
police power addressed to a legitimate public need.
Same; Same; Same; Administrative Law; City Ordinance; ADC, while possessing a permit to operate
pursuant to Ordinance 7065 of the
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658 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
City of Manila, still has to obtain a legislative franchise, PD No. 771 being valid and constitutional.—
In Lim vs. Pacquing, I voted to sustain the ADC’s position on issues almost purely procedural. A thorough
analysis of the new issues raised this time, compels a different result since it is plainly obvious that the
ADC, while possessing a permit to operate pursuant to Ordinance 7065 of the City of Manila, still has to
obtain a legislative franchise, P.D. 771 being valid and constitutional.
QUIASON, J., Dissenting Opinion:
Constitutional Law; Non-Impairment Clause; A law may be voided when it does not relate to a
legitimate end and when it reasonably infringes on contractual and property rights.—Under the
“substantive due process” doctrine, a law may be voided when it does not relate to a legitimate end and
when it unreasonably infringes on contractual and property rights. The doctrine as enunciated in Allgeyer
v. Louisiana, 165 U.S. 578 (1897) can be easily stated, thus: the government has to employ means
(legislation) which bear some reasonable relation to a legitimate end (Nowak, Rotunda and Young,
Constitutional Law 436, 443 [2d ed]).
Same; Same; The grant of franchise to PJAC exposed PD No. 771 as exercise of arbitrary power to
divest ADC of its property rights.—Themotivation behind its issuance notwithstanding, there can be no
constitutional objection to P.D. No. 771 insofar as it removed the power to grant jai-alai franchises from
the local governments. We said so in Basco v. Pagcor, 197 SCRA 52 (1991). The constitutional objection
arises, however, when P.D. No. 771 cancelled all the existing franchises. We search in vain to find any
reasonable relation between Section 3 of P.D. No. 771 and any legitimate ends of government intended to
be achieved by its issuance. Besides, the grant of a franchise to PJAC exposed P.D. No. 771 as an exercise
of arbitrary power to divest ADC of its property rights.
Section 3 of PD No. 771 is violative of Article VIII of the 1973 Constitution.—Section 3 also violated
Section 1 of Article VIII of the 1973 Constitution, which provided: “Every bill shall embrace only one subject
which shall be expressed in the title thereof.” The title of P.D. No. 771 reads as follows: “Revoking all
powers and authority of local government to grant franchise, license or permit and regulate wagers or
betting by the public on horse and dog races, jai-alai or basque pelota, and other forms of gaming.”
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Lim vs. Pacquing
Same; Same; PD No. 771; Any law which enlarges, abridges, or in any manner changes the intention
of the parties, necessarily impairs the contract itself.—Any law which enlarges, abridges, or in any manner
changes the intention of the parties, necessarily impairs the contract itself (U.S. v. Conde, 42 Phil. 766
[1922]; Clemons v. Nolting, 42 Phil. 702 .[1922]). A franchise constitutes a contract between the grantor
and the grantee. Once granted, it may not be invoked unless there are valid reasons for doing so (Papa v.
Santiago, 105 Phil. 253 [1959]). A franchise is not revocable at the will of the grantor after contractual or
property rights thereunder have become vested in the grantee, in the absence of any provision therefor
in the grant or in the general law (Grand Trunk Western R. Co. v. South Bend, 227 U.S. 544). D. The Republic
hypothesized that the said Constitutional guarantees presuppose the existence of a contract or property
right in favor of ADC. It claims that Ordinance No. 7065 is not a franchise nor is it a contract but merely a
privilege for the purpose of regulation.
Ordinance No. 7065 is a franchise that is protected by the Constitution.—Ordinance No. 7065 is not
merely a personal privilege that can be withdrawn at any time. It is a franchise that is protected by the
Constitution.
Same; Legislative Franchise; A privilege 18 bestowed out of pure beneficence on the part of the
government. In a franchise, there are certain obligations assumed by the grantee which make up the
valuable consideration for the contract.—The distinction between the two is that a privilege is bestowed
out of pure beneficence on the part of the government. There is no obligation or burden imposed on the
grantee except maybe to pay the ordinary license and permit fees. In a franchise, there are certain
obligations assumed by the grantee which make up the valuable consideration for the contract. That is
why the grantee is first required to signify his acceptance of the terms and conditions of the grant. Once
the grantee accepts the terms and conditions thereof, the grant becomes a binding contract between the
grantor and the grantee.
Same; Same; A franchise in which money has been expended assumes the character of a vested
right.—Another test used to distinguish a franchise from a privilege is the big investment risked by the
grantee. In Papa v. Santiago, supra, we held that this factor should be considered in favor of the grantee.
A franchise in which money has been expended assumes the character of a vested right (Brazosport
Savings and Loan Association v. American Savings and Loan Association, 161 Tex. 543, 342 S.W. 2d. 747).
660
660 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
Same; Statutes; Construction and Interpretation; Republic Act No. 938 as amended by Republic Act
No. 1224 provides that night clubs, cabarets, pavilions, or other similar places are covered by the 200-lineal
meter radius.—The operative law on the siting of jai-alai establishments is no longer E.O. No. 135 of
President Quirino but R.A. No. 938 as amended by R.A. No. 1224. Under said law only night clubs, cabarets,
pavilions, or other similar places are covered by the 200-lineal meter radius. In the case of all other places
of amusements except cockpits, the proscribed radial distance has been reduced to 50 meters. With
respect to cockpits, the determination of the radial distance is left to the discretion of the municipal council
or city board (Sec. 1).
Remedial Law; Raffle of Cases; Assignment of Cases; Assignment of cases to the different branches
of the trial court need not always be by raffle.—At the outset, it should be made clear that Section 7 of
Rule 22 of the Revised Rules of Court does not require that the assignment of cases to the different
branches of a trial court should always be by raffle. The Rule talks of assignment “whether by raffle or
otherwise.” What it requires is the giving of written notice to counsel or the parties “so that they may be
present therein if they so desire.” Section 7 of Rule 22 provides: “Assignment of cases. In the assignment
of cases to the different branches of a Court of First Instance, or their transfer from one branch to another
whether by raffle or otherwise, the parties or their counsel shall be given written notice sufficiently in
advance so that they may be present therein if they so desire.”
Same; Same; Same; Cases necessitating the issuance of a temporary restraining order can be
allowed through a special raffle.—There may be cases necessitating the issuance of a temporary
restraining order to prevent irreparable injury on the petitioner. To await the regular raffle before the
court can act on the motion for temporary restraining order may render the case moot and academic.
Hence, Administrative Circular No. 1 dated January 28, 1988 was issued by this Court allowing a special
raffle. Said Circular provides: “8.3. Special raffles should not be permitted except on verified application of
the interested party who seeks issuance of a provisional remedy and only upon a finding by the Executive
Judge that unless a special raffle is conducted irreparable damage shall be suffered by the applicant. The
special raffle shall be conducted by at least two judges in a multiplesala station.”
Same; Same; Same.—In a case where a verified application for special raffle is filed, the notice to
the adverse parties may be dispensed with but the raffle has to “be conducted by at least two judges in a
661
VOL. 240, JANUARY 27, 1995 661
Lim vs. Pacquing
multiple-sala station.” The Republic does not claim that Administrative Circular No. 1 has been
violated in the assignment of the case to respondent Judge. The presumption of regularity of official acts
therefore prevails.
Same; Same; Same; Notice; The purpose of notice is to afford the parties a chance to be heard in
the assignment of their cases and this purpose is deemed accomplished if the parties were subsequently
heard.—Going back to Section 7 of Rule 22, this Court has ruled in Commissioner of Immigration v.
Reyes, 12 SCRA 728 (1964) that the purpose of the notice is to afford the parties a chance to be heard in
the assignment of their cases and this purpose is deemed accomplished if the parties were subsequently
heard. In the instant case, Executive Secretary Guingona and GAB Chairman Cepeda were given a hearing
on the matter of the lack of notice to them of the raffle when the court heard on September 23, 1994 their
Motion to Recall Temporary Restraining Order, Urgent Supplemental Motion to Recall Temporary
Restraining Order and Opposition to Issuance of a Writ of Preliminary Issuance of a Writ of Preliminary
Injunction (G.R. No. 117263, Rollo p. 434).
Same; Restraining Order; Injunction; The purpose of a temporary restraining order or preliminary
injunction is to preserve the status quo ante litem motam or the last actual, peaceable, noncontested
status.—Thepurpose of a temporary restraining order or preliminary injunction, whether preventive or
mandatory, is merely to prevent a threatened wrong and to protect the property or rights involved from
further injury, until the issues can be determined after the hearing on the merits (Ohio Oil Co. v. Conway,
279 U.S. 813, 73 L. Ed. 972, 49 S. Ct. 256; Gobbi v. Dilao, 58 Or. 14,111 p. 49, 113, p. 57). What is intended
to be preserved is the status quo ante litem motam or the last actual, peaceable, noncontested status
(Annotation, 15 ALR 2d 237).
Same; Same; Same; Status quo sought to be maintained was that ADC was operating the jai-alai
pursuant to Ordinance No. 7065 of the City of Manila.—In the case at bench, the status quo which the
questioned orders of Judge Reyes sought to maintain was that ADC was operating the jai-alai pursuant to
Ordinance No. 7065 of the City of Manila, the various decisions of the different courts, including the
Supreme Court, and the licenses, permits and provisional authority issued by GAB itself. At times, it may
be necessary for the courts to take some affirmative act essential to restore the status quo (lowa Natural
Resources Council v. Van Zee [Iowa] 158 N.W. 2d. 111).
662
662 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
PUNO, J., Dissenting Opinion:
Constitutional Law; Construction and Interpretation; The title of a law is a valuable intrinsic aid in
determining legislative intent.—The title of R.A. No. 954 does not show that it seeks to limit the operation
of jai-alai only to entities with franchise given by Congress. What the title trumpets as the sole subject of
the law is the criminalization of certain practices relating to jai-alai games. The title of a law is a valuable
intrinsic aid in determining legislative intent.
Same; Same; The Explanatory Note of House Bill 3204 reveals that the intent of the law is to
criminalize the practice of illegal bookies and game-fixing in jai-alai.—The Explanatory Note of House Bill
3204, the precursor of R.A. No. 954, also reveals that the intent of the law is only to criminalize the practice
of illegal bookies and game-fixing in jaialai. It states: “This bill seeks to prohibit certain anomalous practice
of ‘bookies’ in connection with the holding of horse races or ‘basque pelota’ games. The term ‘bookie’ as
commonly understood refers to a person, who without any license therefor, operates outside the
compounds of racing clubs and accepts bets from the public. They pay dividends to winners minus a
commission, which is usually 10%. Prosecutions of said persons have been instituted under Act No. 4240
which was enacted in 1935. However, in a recent opinion released by the City Fiscal of Manila, he maintains
that Act No. 4240 has already been repealed, so that the present law regulating ordinary horse races
permits ‘bookies’ to ply their trade, but not on sweepstakes races and other races held for charitable
purposes. With the operation of ‘booking’ places in the City of Manila, the Government has been losing no
less than P600,000.00 a year, which amount represents the tax that should have been collected from bets
made in such places. For these reasons, the approval of the bill is earnestly recommended”
Same; Same; Nothing from the Explanatory Note suggests any intent of the law to revoke the power
of the City of Manila to issue permits to operate jai-alai games within its territorial jurisdiction.—As said
Explanatory Note is expressive of the purpose of the bill, it gives a reliable keyhole on the scope and
coverage of R.A. No. 954. Nothing from the Explanatory Note remotely suggests any intent of the law to
revoke the power of the City of Manila to issue permits to operate jaialai games within its territorial
jurisdiction.
Same; Same; Legislative debate is a good source to determine the intent of the law.—The Debates
in Congress likewise reject the reading of R.A. No. 954 by petitioners. Again, legislative debate is a good
source
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VOL. 240, JANUARY 27, 1995 663
Lim vs. Pacquing
to determine the intent of a law.
Same; Same; Republic Act No. 954; R.A. No. 954 itself does not intimate that it is repealing any
existing law, especially section 18(jj) of R.A. No. 409 otherwise known as the Charter of Manila.—To top it
all, the text of R.A. No. 954 itself does not intimate that it is repealing any existing law, especially section
18(jj) of R.A. No. 409, otherwise known as the Charter of Manila. Indeed, R.A. No. 954 has no repealing
provision. The reason is obvious—it simply prohibited certain practices in jai-alai then still unregulated by
the laws of the land. It did not regulate aspects of jai-alai already regulated by existing laws, like the matter
of whether it is the national government alone that should issue franchises to operate jai-alai games.
Same; Same; PD No. 771; In clear and certain language, P.D. No. 771 recalled the power of local
governments to issue jai-alai franchises and permits.—The subsequent enactment of P.D. No. 771 on
August 20, 1975 further demolished the submission of petitioners. In clear and certain language, P.D. No.
771 recalled the power of local governments to issue jai-alai franchises and permits. It also revoked existing
franchises and permits issued by local governments. If R.A. No. 954 had already disauthorized local
governments from granting franchises and permits, there would be no need to enact P.D. No. 771. No rule
of statutory construction will consider any law a meaningless redundancy.
Same; Same; Same; If the City of Manila is empowered to license the ADC it is because the power
was delegated to it by Congress.—Thepassage of P.D. No. 771, also negates petitioners’ insistence that for
ADC to continue operating, it must show it has a franchise from Congress, not just a permit from the City
of Manila. The suggested dichotomy between a legislative franchise and city permit does not impress. If
the City of Manila is empowered to license the ADC it is because the power was delegated to it by Congress.
The acts of the City of Manila in the exercise of its delegated power bind Congress as well. Stated
otherwise, the permit given by the City to ADC is not any whit legally inferior to a regular franchise. Through
the years, the permit given by the City endows the grantee complete right to operate, Not once, except in
these cases, has the national government questioned the completeness of this right. For this reason, P.D.
No. 771 has to revoke all existing franchises and permits without making any distinction. It treated permits
in the same class as franchises.
664
664 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
Same; Same; Police Power; Tests to determine validity of police measure.—But while the State is
bestowed near boundless authority to promote public welfare, still the exercise of police power cannot be
allowed to run riot in a republic ruled by reason. Thus, our courts have laid down the test to determine the
validity of a police measure as follows: (1) the interest of the public generally, as distinguished from those
of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. Deeper reflexion will reveal
that the test reiterates the essence of our constitutional guarantees of substantive due process, equal
protection, and nonimpairment of property rights.
Same; Same; Delegation of Power; The revocation of delegated power to local governments does
not impair any right. Applicants to franchises have no right to insist that their applications be acted upon
by local governments, Their right to a franchise is only in posse.—Part of the plenary power of Congress to
make laws is the right to grant franchises and permits allowing the exercise of certain privileges. Congress
can delegate the exercise of this innate power to grant franchises as it did to the City of Manila when it
granted its charter on June 18, 1949 thru R.A. No. 409. Congress can also revoke the delegated power and
choose to wield the power itself as it did thru then President Marcos who exercised legislative powers by
enacting P.D. No. 771. In the petitions at bench, Congress revoked the power of local governments to issue
franchises and permits which it had priorly delegated, In doing so and in deciding to wield the power itself
to meet the perceived problems of the time, the legislature exercised its distinct judgment and the other
branches of government, including this Court, cannot supplant this judgment without running afoul of the
principle of separation of powers. To be sure, this particular legislative method to regulate the problem of
mushrooming applications for jai-alai franchise cannot be faulted as bereft of rationality. In the hearing of
the petitions at bench, Executive Secretary Guingona established the fact that at the time of the enactment
of P.D. No. 771, there were numerous applications to run jai-alai games in various cities and municipalities
of the archipelago. To prevent the proliferation of these applications and minimize their ill effects, the law
centralized their screening by the national government alone. The law excluded local governments in the
process. The revocation of the delegated power to local governments does not impair any
right. Applicants to franchises have no right to insist that their applications be acted upon by local
governments. Their right to a franchise is only in posse.
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Same; Same; Same; Section 3 of P.D. No. 771 must be struck down as constitutionally infirmed.—
Truth, however, has its own time of sprouting out. The truth behind the revocation of ADC’s franchise
revealed itself when former President Marcos transferred ADC’s franchise to the Philippine Jai-Alai and
Amusements Corporation then under the control of his brother-in-law, Mr. Alfredo “Bejo” Romualdez. The
favored treatment was extended hardly two (2) months after the revocation of ADC’s franchise and it left
Philippine Jai-Alai and Amusements Corporation the sole jai-alai operator in the Philippines. The Court is
not informed of any distinction of PJAC that will justify its different treatment. The evidence is thus clear
and the conclusion is irresistible that section 3 of P D. No. 771 was designed with a malignant eye against
ADC. In light of the established facts in field, section 3 of P.D. No. 771 must be struck down as
constitutionally infirmed.
Same; Same; Same; P.D. No. 771 seeks merely to control the multiplication by restoring the
monopoly of national government in the dispensation of franchises.—There is no way to treat the self-
interest of a favored entity as identical with the general interest of the Filipino people. It will also be
repulsive to reason to entertain the thesis that the revocation of the franchise of ADC is reasonably
necessary to enable the State to grapple to the ground the evil of jai-alai as a form of gambling. Petitioners
have not demonstrated that government lacks alternative options to succeed in its effort except to cancel
the lone franchise of ADC. Well to stress, it is not the lofty aim of P.D. No. 771 to completely eradicate jai-
alai games; it merely seeks to control its multiplication by restoring the monopoly of the national
government in the dispensation of franchises.
Same; Same; Same; Section 3 of P.D. No. 771 offends the Constitution which demands faithful
compliance with the requirements of due process, equal protection of the law, and non-impairment of
contracts.—Prescinding from these premises, I share the scholarly view of Mr. Justice Quiason that Sec. 3
of P.D. No. 771 offends the Constitution which demands faithful compliance with the requirements of
substantive due process, equal protection of the law, and non-impairment of contracts. Capsulizing their
essence, substantive due process exacts fairness; equal protection disallows distinction to the distinctless;
and the guaranty of non-impairment of contract protects its integrity unless demanded otherwise by the
public good. Constitutionalism eschews the exercise of unchecked power for history demonstrates that a
meandering, aimless power ultimately tears apart the social fabric of society. Thus, the grant of police
power to promote public welfare cannot carry with it the privilege to be oppressive. The Constitution
ordained the
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666 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
State not just to achieve order or liberty but to attain ordered liberty,however elusive the balance
may be. Cognizant of the truism that in life the only constant is change, the Constitution did not design
that the point that can strike the balance between order and liberty should be static for precisely, the
process of adjusting the moving point of the balance gives government greater elasticity to meet the needs
of the time.
PETITIONS for review of the decisions of the Regional Trial Court of Manila, Br. 40 and Br. 4.
The facts are stated in the opinion of the Court.
Chavez, Laureta & Associates and Cayanga, Zuñiga & Angel for private respondent.
Henry L. Domingo for movant-intervenors.
PADILLA, J.:
These two (2) cases which are inter-related actually involve simple issues. If these issues have apparently
become complicated, it is not by reason of their nature but because of the events and dramatis
personae involved.
The petition in G.R. No. 115044 was dismissed by the First Division of this Court on 01 September
1994 based on a finding that there was “no abuse of discretion, much less lack of or excess of jurisdiction,
on the part of respondent judge [Pacquing],” in issuing the questioned orders. Judge Pacquing had earlier
issued in Civil Case No. 88–45660, RTC of Manila, Branch 40, the following orders which were assailed by
the Mayor of the City of Manila, Hon. Alfredo S. Lim, in said G.R. No. 115044:
1. a.order dated 28 March 1994 directing Manila Mayor Alfredo S. Lim to issue the permit/license
to operate the jai-alai in favor of Associated Development Corporation (ADC).
2. b.order dated 11 April 1994 directing Mayor Lim to explain why he should not be cited for
contempt for non-compliance with the order dated 28 March 1994.
3. c.order dated 20 April 1994 reiterating the previous order directing Mayor Lim to immediately
issue the permit / license to Associated Development Corporation (ADC).
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The order dated 28 March 1994 was in turn issued upon motion by ADC for execution of a final judgment
rendered on 9 September 1988 which ordered the Manila Mayor to immediately issue to ADC the permit
I license to operate the jai-alai in Manila, under Manila Ordinance No. 7065.
On 13 September 1994, petitioner Guingona (as executive secretary) issued a directive to then
chairman of the Games and Amusements Board (GAB) Francisco R. Sumulong, Jr. to hold in abeyance the
grant of authority, or if any had been issued, to withdraw such grant of authority, to Associated
Development Corporation to operate the jai-alai in the City of Manila, until the following legal questions
are properly resolved:
1. “1.Whether P.D. 771 which revoked all existing Jai-Alai franchises issued by local governments
as of 20 August 1975 is unconstitutional.
2. 2.Assuming that the City of Manila had the power on 7 September 1971 to issue a Jai-Alai
franchise to Associated Development Corporation, whether the franchise granted is valid
considering that the franchise has no duration, and appears to be granted in perpetuity.
3. 3.Whether the City of Manila had the power to issue a Jai-Alai franchise to Associated
Development Corporation on 7 September 1971 in view of Executive Order No. 392 dated 1
January 1951 which transferred from local governments to the Games and Amusements
Board the power to regulate Jai-Alai.”1
On 15 September 1994, respondent Associated Development Corporation (ADC) filed a petition for
prohibition, mandamus, injunction and damages with prayer for temporary restraining order and/or writ
of preliminary injunction in the Regional Trial Court of Manila against petitioner Guingona and then GAB
chairman Sumulong, docketed as Civil Case No. 94–71656, seeking to prevent GAB from withdrawing the
provisional authority that had earlier been granted to ADC. On the same day, the RTC of Manila, Branch 4,
through presiding Judge Vetino Reyes, issued a temporary restraining order enjoining the GAB from
withdrawing ADC’s provisional authority. This temporary restraining order was converted into a writ of
preliminary injunc-
_______________
1Annex “D,” Petition in G.R. No. 117263.
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668 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
tion upon ADC’s posting of a bond in the amount of P2,000,000.00.2
Subsequently, also in G.R. No. 115044, the Republic of the Philippines, through the Games and
Amusements Board, filed a “Motion for Intervention; for Leave To File a Motion For Reconsideration in
Intervention; and to Refer the Case to the Court En Banc” and later a “Motion for Leave to File
Supplemental Motion for Reconsideration-in-Intervention and to Admit Attached Supplemental Motion
for Reconsideration-in-Intervention.”
In an En Banc Resolution dated 20 September 1994, this Court referred G.R. No. 115044 to the
Court En Banc and required the respondents therein to comment on the aforementioned motions.
Meanwhile, Judge Reyes on 19 October 1994 issued another order, this time, granting ADC a writ of
preliminary mandatoryinjunction against Guingona and GAB to compel them to issue in favor of ADC the
authority to operate the jai-alai.
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new GAB chairman, then filed
the petition in G.R. No. 117263 assailing the abovementioned orders of respondent Judge Vetino Reyes.
On 25 October 1994, in G.R. No. 117263, this Court granted petitioners’ motion for leave to file
supplemental petition and to admit attached supplemental petition with urgent prayer for restraining
order. The Court further required respondents to file their comment on the petition and supplemental
petition with urgent prayer for restraining order. The Court likewise set the case and all incidents thereof
for hearing on 10 November 1994.
At the hearing on 10 November 1994, the issues to be resolved were formulated by the Court as
follows:
1. 1.whether or not intervention by the Republic of the Philippines at this stage of the proceedings
is proper;
2. 2.assuming such intervention is proper, whether or not the Associated Development
Corporation has a valid and subsisting franchise to maintain and operate the jai-alai;
3. 3.whether or not there was grave abuse of discretion committed by respondent Judge Reyes in
issuing the aforementioned temporary restraining order (later, writ of preliminary injunc
_______________
2
Annex “C,” Petition in G.R. No. 117263.
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Lim vs. Pacquing
1. tion); and
2. 4.whether or not there was grave abuse of discretion committed by respondent Judge Reyes in
issuing the aforementioned writ of preliminary mandatoryinjunction.
On the issue of the propriety of the intervention by the Republic of the Philippines, a question was raised
during the hearing on 10 November 1994 as to whether intervention in G.R. No. 115044was the proper
remedy for the national government to take in questioning the existence of a valid ADC franchise to
operate the jai-alai or whether a separate action for quo warranto under Section 2, Rule 66 of the Rules of
Court was the proper remedy.
We need not belabor this issue since counsel for respondent ADC agreed to the suggestion that this
Court once and for all settle all substantive issues raised by the parties in these cases. Moreover, this Court
can consider the petition filed in G.R. No. 117263 as one for quo warranto which is within the original
jurisdiction of the Court under Section 5(1), Article VIII of the Constitution, 3
On the propriety of intervention by the Republic, however, it will be recalled that this Court in Director
of Lands v. Court of Appeals (93 SCRA 238) allowed intervention even beyond the period prescribed in
Section 2 Rule 12 of the Rules of Court. The Court ruled in said case that a denial of the motions for
intervention would “lead the Court to commit an act of injustice to the movants, to their successor-in-
interest and to all purchasers for value and in good faith and thereby open the door to fraud, falsehood
and misrepresentation, should intervenors’ claim be proven to be true.”
In the present case, the resulting injustice and injury, should the national government’s allegations
be proven correct, are manifest, since the latter has squarely questioned the very existence of a valid
franchise to maintain and operate the jai-alai (which is a gambling operation) in favor of ADC. As will be
more extensively discussed later, the national government contends
_______________
3“Sec. 5. The Supreme Court shall have the following powers: (1) Exercise original jurisdiction x x x
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. x x x”
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670 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
that Manila Ordinance No. 7065 which purported to grant to ADC a franchise to conduct jai-alai operations
is void and ultra viressince Republic Act No. 954, approved on 20 June 1953, or very much earlier than said
Ordinance No. 7065, the latter approved 7 September 1971, in Section 4 thereof, requires a legislative
franchise, not a municipal franchise, for the operation of jai-alai, Additionally, the national government
argues that even assuming, arguendo, that the abovementioned ordinance is valid, ADC’s franchise was
nonetheless effectively revoked by Presidential Decree No. 771, issued on 20 August 1975, Sec. 3 of which
expressly revoked all existing franchises and permits to operate all forms of gambling facilities (including
the jai-alai) issued by local governments.
On the other hand, ADC’s position is that Ordinance No. 7065 was validly enacted by the City of Manila
pursuant to its delegated powers under its charter, Republic Act No. 409. ADC also squarely assails the
constitutionality of PD No. 771 as violative of the equal protection and non-impairment clauses of the
Constitution. In ‘this connection, counsel for ADC contends that this Court should really rule on the validity
of PD No. 771 to be able to determine whether ADC continues to possess a valid franchise.
It will undoubtedly be a grave injustice to both parties in this case if this Court were to shirk from
ruling on the issue of constitutionality of PD No. 771. Such issue has, in our view, “become the very lis
mota in resolving the present controversy, in view of ADC’s insistence that it was granted a valid and legal
franchise by Ordinance No. 7065 to operate the jai-alai.
The time-honored doctrine is that all laws (PD No. 771 included) are presumed valid and constitutional
until or unless otherwise ruled by this Court. Not only this; Article XVIII, Section 3 of the Constitution states:
“Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions and other
executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked.”
There is nothing on record to show or even suggest that PD No. 771 has been repealed, altered or amended
by any subsequent law or presidential issuance (when the executive still
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Lim vs. Pacquing
exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of ADC’s franchise by reason
of the unconstitutionality of PD No. 771 was settled in G.R. No. 115044, for the decision of the Court’s First
Division in said case, aside from not being final, cannot have the effect of nullifying PD No. 771 as
unconstitutional, since only the Court En Banc has that power under Article VIII, Section 4(2) of the
Constitution.4
And on the question of whether or not the government is estopped from contesting ADC’s possession
of a valid franchise, the well-settled rule is that the State cannot be put in estoppel by the mistakes or
errors, if any, of its officials or agents (Republic v. Intermediate Appellate Court, 209 SCRA 90).
Consequently, in the light of the foregoing expostulation, we conclude that the Republic (in contra
distinction to the City of Manila) may be allowed to intervene in G.R. No. 115044. The Republic is
intervening in G.R. No. 115044 in the exercise, not of its business or proprietary functions, but in the
exercise of its governmental functions to protect public morals and promote the general welfare.
II
Anent the question of whether ADC has a valid franchise to “operate the Jai-Alai de Manila, a statement
of the pertinent laws is in order.
1. 1.The Charter of the City of Manila was enacted by Congress on 18 June 1949. Section 18
thereof provides:
“Section 18. Legislative Powers.—The Municipal Board shall have the following legislative powers:
_______________
4”Sec. 4. x x x
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law, which
shall be heard by the Supreme Court en banc x x x shall be decided with the concurrence of a majority of
the Members who actually took part in the deliberations on the issues in the case and voted thereon.
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672 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
xxx
(jj) To tax, license, permit and regulate wagers or betting by the public on boxing, sipa, bowling,
billiards, pools, horse and dog races, cockpits, jai-alai, roller or ice-skating on any sporting or athletic
contests, as well as grant exclusive rights to establishments for this purpose, notwithstanding any existing
law to the contrary.”
1. 2.On 1 January 1951, Executive Order No. 392 was issued transferring the authority
to regulate jai-alais from local govern-ments to the Games and Amusements Board (GAB).
 2. 3.On 20 June 1953, Congress enacted Republic Act No. 954, entitled “An Act To Prohibit Certain
Activities In Connection With Horse Races and Basque Pelota Games (Jai-Alai), And To
Prescribe Penalties For Its Violation,” The provisions of Republic Act No. 954 relating to jai-
alai are as follows:
“Sec. 4. No person, or group of persons other than the operator or maintainer of a fronton with legislative
franchise to conduct basque pelota games (Jai-Alai), shall offer,take or arrange bets on any basque pelota
game or event, or maintain or use a totalizator or other device, method or system to bet or gamble on any
basque pelota game or event. (italics supplied).
Sec. 5. No person, operator or maintainer of a fronton with legislative franchise to conduct basque
pelota games shall offer, take, or arrange betson any basque pelota game or event, or maintain or use a
totalizator or other device, method or system to bet or gamble on any basque pelota game or
event outside the place, enclosure, or fronton where the basque pelota game is held,” (Italics supplied).
1. 4.On 07 September 1971, however, the Municipal Board of Manila nonetheless passed
Ordinance No. 7065 entitled “An Ordinance Authorizing the Mayor To Allow And Permit The
Associated Development Corporation To Establish, Maintain And Operate A Jai-Alai In The
City Of Manila, Under Certain Terms And Conditions And For Other Purposes.”
2. 5.On 20 August 1975; Presidential Decree No. 771 was issued by then President Marcos. The
decree, entitled “Revoking All Powers and Authority of Local Government(s) To Grant
Franchise, License or Permit And Regulate Wagers Or Betting By The Public On Horse And Dog
Races, Jai-Alai Or Basque Pelota, And Other Forms Of Gambling.” in Section 3 thereof,
expressly revoked all existing franchises and permits issued by
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Lim vs. Pacquing
1. local governments.
2. 6.On 16 October 1975, Presidential Decree No. 810, entitled “An Act Granting The Philippine
Jai-Alai And Amusement Corporation A Franchise To Operate, Construct And Maintain A
Fronton For Basque Pelota And Similar Games Of Skill In The Greater Manila Area,” was
promulgated.
3. 7.On 08 May 1987, then President Aquino, by virtue of Article XVIII, Section 6, of the
Constitution, which allowed the incumbent President to continue exercising legislative
powers until the first Congress was convened, issued Executive Order No. 169 expressly
repealing PD 810 and revoking and cancelling the franchise granted to the Philippine Jai-Alai
and Amusements Corporation.
Petitioners in G.R. No. 117263 argue that Republic Act No. 954 effectively removed the power of .the
Municipal Board of Manila to grant franchises for gambling operations. It is argued that the term
“legislative franchise” in Rep. Act No. 954 is used to refer to franchises issued by Congress.
On the other hand, ADC contends that Republic Act No. 409 (Manila Charter) gives legislative powers
to the Municipal Board to grant franchises, and since Republic Act No. 954 does not specifically qualify the
word “legislative” as referring exclusively to Congress, then Rep. Act No. 954 did not remove the power of
the Municipal Board under Section 18(jj) of Republic Act No. 409 and consequently it was within the power
of the City of Manila to allow ADC to operate the jai-alai in the City of Manila.
On this point, the government counter-argues that the term “legislative powers” is used in Rep. Act
No. 409 merely to distinguish the powers under Section 18 of the law from the other powers of the
Municipal Board, but that the term “legislative powers” is used in Rep. Act No. 409 merely to distinguish
the powers under Section 18 of the law from the other powers of the Municipal Board, but that the term
“legislative franchise” in Rep. Act No. 954 refers to a franchise granted solely by Congress.
Further, the government argues that Executive Order No. 392 dated 01 January 1951 transferred even
the power to regulate Jai-Alai from the local governments to the Games and Amusements Board (GAB), a
national government agency.
It is worthy of note that neither of the authorities relied upon by ADC to support its alleged possession
of a valid franchise,
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674 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
namely, the Charter of the City of Manila (Rep. Act No. 409) and Manila Ordinance No. 7065 uses the word
“franchise.” Rep. Act No. 409 empowers the Municipal Board of Manila to “tax, ‘license,
permit and regulate wagers or betting” and to “grant exclusive rights to establishments,” while Ordinance
No. 7065 authorized the Manila City Mayor to “allow and permit” ADC to operate jaialai facilities in the
City of Manila.
It is clear from the foregoing that Congress did not delegate to the City of Manila the power “to
franchise” wagers or betting, including the jai-alai, but retained for itself such power “to franchise.” What
Congress delegated to the City of Manila in Rep. Act No. 409, with respect to wagers or betting, was the
power to “license, permit, or regulate” which therefore means that a license or permit issued by the City
of Manila to operate a wager or betting activity, such as the jai-alai where bets are accepted, would not
amount to something meaningful UNLESS the holder of the permit or license was also FRANCHISED by the
national government to so operate. Moreover, even this power to license, permit, or regulate wagers or
betting on jai-alai was removed from local governments, including the City of Manila, and transferred to
the GAB on 1 January 1951 by Executive Order No. 392. The net result is that the authority to grant
franchises for the operation of jai-alai frontons is in Congress, while the regulatory function is vested in
the GAB.
In relation, therefore, to the facts of this case, since ADC has no franchise from Congress to operate
the jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate the jai-
alai in the City of Manila.
It cannot be overlooked, in this connection, that the Revised Penal Code punishes gambling and
betting under Articles 195 to 199 thereof. Gambling is thus generally prohibited by law, unless another law
is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law. Among these forms of gambling allowed by special law are the horse races authorized by
Republic Acts Nos. 309 and 983 and gambling casinos authorized under Presidential Decree No. 1869.
While jai-alai as a sport is not illegal per se, the accepting of bets or wagers on the results of jai-alai
games is undoubtedly gambling and, therefore, a criminal offense punishable under
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VOL. 240, JANUARY 27, 1995 675
Lim vs. Pacquing
Articles 195–199 of the Revised Penal Code, unless it is shown that a later or special law had been passed
allowing it. ADC has not shown any such special law.
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by Congress on
18 June 1949 gave the Municipal Board certain delegated legislative powers under Section 18. A perusal
of the powers enumerated under Section 18 shows that these powers are basically regulatory in
nature.5 The regulatory nature of these powers finds support not only in the plain words of the
enumerations under Section 18 but also in this Court’s ruling in People v. Vera (65 Phil. 56).
In Vera, this Court declared that a law which gives the Provincial Board the discretion to determine
whether or not a law of general application (such as, the Probation Law-Act No. 4221) would or would not
be operative within the province, is unconstitutional for being an undue delegation of legislative power.
From the ruling in Vera, it would be logical to conclude that, if ADC’s arguments were to prevail, this
Court would likewise declare Section 18(jj) of the Revised Charter of Manila unconstitutional for the power
it would delegate to the Municipal Board of Manila would give the latter the absolute and unlimited
discretion to render the penal code provisions on gambling inapplicable or inoperative to persons or
entities issued permits to operate gambling establishments in the City of Manila.
 We need not go to this extent, however, since the rule is that laws must be presumed valid,
constitutional and in harmony with other laws. Thus, the relevant provisions of Rep. Acts Nos. 409 and 954
and Ordinance No. 7065 should be taken together and it should then be clear that the legislative powers
of the Municipal Board should be understood to be regulatory in nature and that Republic Act No. 954
should be understood to refer to congressional franchises, as a necessity for the operation of jaialais.
We need not, however, again belabor this issue further since the task at hand which will ultimately,
and with finality, decide
______________
5 It will be noted that under Executive Order No. 392, issued on 1 January 1951, even the power
to regulate jai-alais was transferred from the local governments to the Games and Amusement Board
(GAB).
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676 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
the issues in this case is to determine whether PD No. 771 validly revoked ADC’s franchise to operate the
jai-alai, assuming (without conceding) that it indeed possessed such franchise under Ordinance No. 7065.
ADC argues that PD No. 771 is unconstitutional for being violative of the equal protection and non-
impairment provisions of the Constitution. On the other hand, the government contends that PD No. 771
is a valid exercise of the inherent police power of the State.
The police power has been described as the least limitable of the inherent powers of the State. It is
based on the ancient doctrine—salus populi est suprema lex (the welfare of the people is the supreme
law.) In the early case of Rubi v. Provincial Board of Mindoro (39 Phil. 660), this Court through Mr. Justice
George A. Malcolm stated thus:
“The police power of the State x x x is a power coextensive with self-protection, and is not inaptly termed
the ‘law of overruling necessity.’ It may be said to be that inherent and plenary power in the State which
enables it to prohibit all things hurtful to the comfort, safety and welfare of society. Carried onward by the
current of legislation, the judiciary rarely attempts to dam the onrushing power of legislative discretion,
provided the purposes of the law do not go beyond the great principles that mean security for the public
welfare or do not arbitrarily , interfere with the right of the individual.”
In the matter of PD No. 771, the purpose of the law is clearly stated in the “whereas clauses” as follows:
“WHEREAS, it has been reported that in spite of the current drive of our law enforcement agencies against
vices and illegal gambling, these social ills are still prevalent in many areas of the country;
‘WHEREAS, there is need to consolidate all the efforts of the government to eradicate and minimize
vices and other forms of social ills in pursuance of the social and economic development program under
the new society;
‘WHEREAS, in order to effectively control and regulate wagers or betting by the public on horse and
dog races, jai-alai and other forms of gambling there is a necessity to transfer the issuance of permit and/
or franchise from local government to the National Government.”
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It cannot be argued that the control and regulation of gambling do not promote public morals and welfare.
Gambling is essentially antagonistic to the objectives of national productivity and self-reliance. It breeds
indolence and erodes the value of good, honest and hard work. It is, as very aptly stated by PD No. 771, a
vice and a social ill which government must minimize (if not eradicate) in pursuit of social and economic
development.
In Magtajas v. Pryce Properties Corporation (20 July 1994, G.R. No. 111097), this Court stated thru
Mr. Justice Isagani A. Cruz:
“In the exercise of its own discretion, the legislative power may prohibit gambling altogether or allow it
without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may
consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and
horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no
authority to review,much less reverse. Well, has it been said that courts do not sit to resolve the merits of
conflicting theories. That is the prerogative of the political departments. It is settled that questions
regarding wisdom, morality and practicability of statutes are not addressed to the judiciary but may be
resolved only by the executive and legislative departments, to which the function belongs in our scheme
of government.” (Italics supplied)
- Talks regarding the supposed vanishing line between right and privilege in American constitutional law
has no relevance in the context of these cases since the reference there is to economic regulations. On the
other hand, jai-alai is not a mere economic activity which the law seeks to regulate. It is essentially
gambling and whether it should be permitted and, if so, under what conditions are questions primarily for
the lawmaking authority to determine, taking into account national and local interests. Here, it is the police
power of the State that is paramount,
ADC questions the motive for the issuance of PD No. 771. Clearly, however, this Court cannot look
into allegations that PD No. 771 was enacted to benefit a select group which was later given authority to
operate the jai-alai under PD No. 810. The examination of legislative motivation is generally
prohibited. (Palmer v. Thompson, 403 U.S. 217, 29 L. Ed. 2d 438 [1971], per Black, J.) There is, in the first
place, absolute lack of evidence to
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678 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
support ADC’s allegation of improper motivation in the issuance of PD No. 771. In the second place, as
already averred, this Court cannot go behind the expressed and proclaimed purposes of PDNo. 771, which
are reasonable and even laudable.
It should also be remembered that PD No. 771 provides that the national government can
subsequently grant fr anchises “upon proper application and verification of the qualifications of the
applicant” ADC has not alleged that it filed an application for a franchise with the national government
subsequent to the enactment of PD No. 771; thus, the allegations abovementioned (of preference to a
select group) are based on conjectures, speculations and imagined biases which do not warrant the
consideration of this Court.
On the other hand, it is noteworthy that while then President Aquino issued Executive Order No. 169
revoking PD No. 810 (which granted a franchise to a Marcos-crony to operate the jaialai), she did not scrap
or repeal PD No. 771 which had revoked all franchises to operate jai-alais issued by local governments,
thereby re-affirming the government policy that franchises to operate jai-alais are for the national
government (not local governments) to consider and approve.
On the alleged violation of the non-impairment and equal protection clauses of the Constitution, it
should be remembered that a franchise is not in the strict sense a simple contract but rather it is, more
importantly, a mere privilege specially in matters which are within the government’s power to regulate
and even prohibit through the exercise of the police power. Thus, a gambling franchise is always subject
to the exercise of police power for the public welfare,
In RCPI v. NTC (150 SCRA 450), we held that:
“A franchise started out as a ‘royal privilege or (a) branch of the King’s prerogative, subsisting in the hands
of a subject.’ This definition was given by Finch, adopted by Blackstone, and accepted by every authority
since x x x Today, a franchise, being merely a privilege emanating from the sovereign power of the state
and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power
through its administrative agencies.”
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There is a stronger reason for holding ADC’s permit to be a mere privilege because jai-alai, when played
for bets, is pure and simple gambling. To analogize a gambling franchise to a franchise for the operation
of a public utility, such as public transportation company, is to trivialize the great historic origin of this
branch of royal privilege.
 As earlier noted, ADC has not alleged ever applying for a franchise under the provisions of PD No. 771.
And yet, the purpose of PD No. 771 is quite clear from its provisions, i.e., to give to the national
government the exclusive power to grant gambling franchises. Thus, all franchises then existing were
revoked but were made subject to reissuance by the national government upon compliance by the
applicant with governmentset qualifications and requirements.
There was no violation by PD No. 771 of the equal protection clause since the decree
revoked all franchises issued by local governments without qualification or exception. ADC cannot allege
violation of the equal protection clause simply because it was the only one affected by the decree, for as
correctly pointed out by the government, ADC was not singled out when all jai-alai franchises were
revoked. Besides, it is too late in the day for ADC to seek redress for alleged violation of its constitutional
rights for it could have raised these issues as early as 1975, almost twenty (20) years ago.
Finally, we do not agree that Section 3 of PD No. 771 and the requirement of a legislative franchise in
Republic Act No. 954 are “riders” to the two (2) laws and are violative of the rule that laws should embrace
one subject which shall be expressed in the title, as argued by ADC. In Cordero v. Cabatuando (6 SCRA 418),
this Court ruled that the requirement under the Constitution that all laws should embrace only one subject
which shall be expressed in the title is sufficiently met if the title is comprehensive enough reasonably to
include the general object which the statute seeks to effect, without expressing each and every end and
means necessary or convenient for the accomplishing of the objective.

III

On the issue of whether or not there was grave abuse of discretion committed by respondent Judge Reyes
in issuing the temporary restraining order (later converted to a writ of prelimi-
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nary injunction) and the writ of preliminary mandatory injunc-tion, we hold and rule there was.
Section 3, Rule 58 of the Rules of Court provides for the grounds for the issuance of a preliminary
injunction. While ADC could allege these grounds, respondent judge should have taken judicial notice of
Republic Act No. 954 and PD 771, under Section 1 Rule 129 of the Rules of Court. These laws negate the
existence of any legal right on the part of ADC to the reliefs it sought so as to justify the issuance of a writ
of preliminary injunction. Since PD No. 771 and Republic Act No. 954 are presumed valid and constitutional
until ruled otherwise by the Supreme Court after due hearing, ADC was not entitled to the writs issued
and consequently there was grave abuse of discretion in issuing them.
WHEREFORE, for the foregoing reasons, judgment is hereby rendered:

1. 1.allowing the Republic of the Philippines to intervene in G.R. No. 115044.

2. 2.declaring Presidential Decree No. 771 valid and constitutional.
3. 3.declaring that respondent Associated Development Corporation (ADC) does not possess the
required congressional franchise to operate and conduct the jai-alai under Republic Act No.
954 and Presidential Decree No. 771.
4. 4.setting aside the writs of preliminary injunction and preliminary mandatory injunction issued
by respondent Judge Vetino Reyes in Civil Case No. 94–71656.

SO ORDERED.
 G.R. No. 115044. January 27, 1995.*
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, petitioner, vs. HON. FELIPE G. PACQUING, as
Judge, Branch 40, Regional Trial Court of Manila and ASSOCIATED DEVELOPMENT CORPORATION,
respondents.
G.R. No. 117263. January 27, 1995.*
TEOFISTO GUINGONA, JR. and DOMINADOR R. CEPEDA, JR., petitioners, vs. HON. VETINO REYES and
ASSOCIATED DEVELOPMENT CORPORATION, respondents.
Constitutional Law; Validity of Statutes; PD No. 771; All laws (PD No. 771 included) are presumed
valid and constitutional until or unless otherwise ruled by the Court.—The time-honored doctrine is that all
laws (PD No. 771 included) are presumed valid and constitutional until or unless otherwise ruled by this
Court. Not only this; Article XVIII, Section 3 of the Constitution states: “Section 3. All existing laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with
this Constitution shall remain operative until amended, repealed or revoked.”
Same; Same; Same.—There is nothing on record to show or even suggest that PD No. 771 has been
repealed, altered or amended by any subsequent law or presidential issuance (when the executive still
exercised legislative powers).
_______________
*EN BANC.
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Same; Constitution; Article VIII, Section 4(2); Only the Court En Banc can declare a law
unconstitutional under Article VIII, Section 4(2) of the Constitution.—Neither can it be tenably stated that
the issue of the continued existence of ADC’s franchise by reason of the unconstitutionality of PD No. 771
was settled in G.R. No. 115044, for the decision of the Court’s First Division in said case, aside from not
being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the Court En
Banc has that power under Article VIII, Section 4(2) of the Constitution.
Same; Estoppel; The well-settled rule is that the State cannot be put in estoppel by the mistakes or
errors, if any, of its officials or agents.—And on the question of whether or not the government
is estopped from contesting ADC’s possession of a valid franchise, the well-settled rule is that the State
cannot be put in estoppel by the mistakes or errors, if any, of its officials or agents (Republic v. Intermediate
Appellate Court, 209 SCRA 90).
Same; Intervention; The Republic is intervening in G.R. No. 115044 in the exercise of its
governmental functions to protect public morals and promote the general welfare.—Consequently, in the
light of the foregoing expostulation, we conclude that the Republic (in contra distinction to the City of
Manila) may be allowed to intervene in G.R. No. 115044. The Republic is intervening in G.R. No. 115044 in
the exercise, not of its business or proprietary functions, but in the exercise of its governmental functions
to protect public morals and promote the general welfare.
Same; Delegation of Power; Rep. Act No. 409; What Congress delegated to the City of Manila in
Rep. Act No. 409, with respect to wagers or betting, was the power to “license, permit, or regulate” which
would not amount to something meaningful unless the holder of the permit or license was also franchised
by the national government to so operate.—It is clear from the foregoing that Congress did not delegate
to the City of Manila the power “to franchise” wagers or betting, including the jai-alai, but retained for
itself such power “to franchise.” What Congress delegated to the City of Manila in Rep. Act No. 409, with
respect to wagers or betting. was the power to ‘license, permit. or regulate” which therefore means that
a license or permit issued by the City of Manila to operate a wager or betting activity, such as the jai-alai
where bets are accepted, would not amount to something meaningful UNLESS the holder of the permit or
license was also FRANCHISED by the national government to so operate. Moreover, even this power to
license, permit, or regulate wagers or betting on jai-alai was removed
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from local governments, including the City of Manila, and transferred to the GAB on 1 January 1951
by Executive Order No. 392. The net result is that the authority to grant franchises for the operation of
jaialai frontons is in Congress, while the regulatory function is vested in the GAB.
Same; Same; Same; Legislative Franchise; ADC has no franchise from Congress to operate the jai-
alai.—In relation, therefore, to the facts of this case, since ADC has no franchise from Congress to operate
the jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate the jai-
alai in the City of Manila.
Same; Same; Same; Legislative Enactment; Gambling is generally prohibited by law, unless another
law is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law.—It cannot be overlooked, in this connection, that the Revised Penal Code punishes gambling
and betting under Articles 195 to 199 thereof. Gambling is thus generally prohibited by law, unless another
law is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law. Among these forms of gambling allowed by special law are the horse races authorized by
Republic Acts Nos. 309 and 983 and gambling casinos authorized under Presidential Decree No. 1869.
Same; Same; Same; Same.—While jai-alai as a sport is not illegal per se, the accepting of bets or
wagers on the results of jai-alai games is undoubtedly gambling and, therefore, a criminal offense
punishable under Articles 195–199 of the Revised Penal Code, unless it is shown that a later or special law
had been passed allowing it. ADC has not shown any such special law.
Same; Same; Same; Republic Act No. 409 (the Revised Charter of the City of Manila) enacted by
Congress on 18 June 1949 gave the Municipal Board powers that are basically regulatory in nature.—
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by Congress on 18 June
1949 gave the Municipal Board certain delegated legislative powers under Section 18. A perusal of the
powers enumerated under Section 18 shows that these powers are basically regulatory in nature. The
regulatory nature of these powers finds support not only in the plain words of the enumerations under
Section 18 but also in this Court’s ruling in People v. Vera (65 Phil. 56).
Same; Same; Same; A law which gives the Provincial Board the discretion to determine whether or
not a law of general application
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Lim vs. Pacquing
would be operative within the province is unconstitutional for being an undue delegation of
legislative power.—ln Vera, this Court declared that a law which gives the Provincial Board the discretion
to determine whether or not a law of general application (such as, the Probation Law-Act No. 4221) would
or would not be operative within the province, is unconstitutional for being an undue delegation of
legislative power.
Same; Same; Same.—From the ruling in Vera, it would be logical to conclude that, if ADC’s
arguments were to prevail, this Court would likewise declare Section 18(jj) of the Revised Charter of Manila
unconstitutional for the power it would delegate to the Municipal Board of Manila would give the latter
the absolute and unlimited discretion to render the penal code provisions on gambling inapplicable or
inoperative to persons or entities issued permits to operate gambling establishments in the City of Manila.
Same; Same; Same; Presumption of Validity; The rule is that laws must be presumed valid,
constitutional and in harmony with other laws.—We need not go to this extent, however, since the rule is
that laws must be presumed valid, constitutional and in harmony with other laws. Thus, the relevant
provisions of Rep. Acts Nos. 409 and 954 and Ordinance No. 7065 should be taken together and it should
then be clear that the legislative powers of the Municipal Board should be understood to be regulatory in
nature and that Republic Act No. 954 should be understood to refer to congressional franchises, as a
necessity for the operation of jai-alais.
Same; Same; Same; Legislative Franchise; Franchises to operate jai-alais are for the national
government (not local governments) to consider and approve.—On the other hand, it is noteworthy that
while then President Aquino issued Executive Order No. 169 revoking PD No. 810 (which granted a
franchise to a Marcos-crony to operate the jaialai), she did not scrap or repeal PD No. 771 which had
revoked all franchises to operate jai-alais issued by local governments, thereby reaffirming the
government policy that franchises to operate jai-alais are for the national government (not local
governments) to consider and approve.
Same; Same; Same; Same; Police Power; A gambling franchise is always subject to the exercise of
police power for the public welfare.—Onthe alleged violation of the non-impairment and equal protection
clauses of the Constitution, it should be remembered that a franchise is not in the strict sense a simple
contract but rather it is, more importantly, a mere privilege specially in matters which are within the
government’s
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Lim vs. Pacquing
power to regulate and even prohibit through the exercise of the police power. Thus, a gambling
franchise is always subject to the exercise of police power for the public welfare.
Same; Same; PD No. 771; Legislative Franchise; Gambling; The purpose of PD No. 771 is to give to
the national government the exclusive power to grant gambling franchises.—As earlier noted, ADC has not
alleged ever applying for a franchise under the provisions of PD No. 771. And yet, the purpose of PD No.
771 is quite clear from its provisions, i.e., to give to the national government the exclusive power to grant
gambling franchises. Thus, all franchises ‘then existing were revoked but were made subject to reissuance
by the national government upon compliance by the applicant with government-set qualifications and
requirements.
Same; Same; Same; Same; PD No. 771 did not violate the equal protection clause since the decree
revoked all franchises issued by the local governments without qualification or exception.—There was no
violation by PD No. 771 of the equal protection clause since the decree revoked all franchises issued by
local governments without qualification or exception. ADC cannot allege violation of the equal protection
clause simply because it was the only one affected by the decree, for as correctly pointed out by the
government, ADC was not singled out when all jai-alai franchises were revoked. Besides, it is too late in
the day for ADC to seek redress for alleged violation of its constitutional rights for it could have raised
these issues as early as 1975, almost twenty (20) years ago.
Same; Statutory Construction; Validity of Statute; Requirement that all laws should embrace only
one subject which shall be expressed in the title is sufficiently met if the title is comprehensive enough to
include the general object which the statute seeks to effect.—Finally, we do not agree that Section 3 of PD
No. 771 and the requirement of a legislative franchise in Republic Act No. 954 are “riders” to the two (2)
laws and are violative of the rule that laws should embrace one subject which shall be expressed in the
title, as argued by ADC. In Cordero v. Cabatuando (6 SCRA 418), this Court ruled that the requirement
under the Constitution that all laws should embrace only one subject which shall be expressed in the title
is sufficiently met if the title is comprehensive enough reasonably to include the general object which the
statute seeks to effect, without expressing each and every end and means necessary or convenient for the
accomplishing of the objective.
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Lim vs. Pacquing
DAVIDE, JR., J., Separate Opinion:
Remedial Law; Intervention; Pleadings and Practice; Intervention could not be allowed after the
trial had been concluded or after the trial and decision of the original case.—The phrase “at any period of
a trial” in Section 1, Rule 13 of the old Rules of Court has been construed to mean the period for the
presentation of evidence by both parties. And the phrase “before or during the trial” in Section 2, Rule 12
of the present Rules of Court “simply means anytime before the rendition of the final judgment.”
Accordingly, intervention could not be allowed after the trial had been concluded or after the trial and
decision of the original case.
Same; Same; Same; Fundamentally, intervention is never an independent action but is ancillary and
supplemental to an existing litigation.—Fundamentally then, intervention is never an independent action
but is ancillary and supplemental to an existing litigation. Its purpose is not to obstruct nor unnecessarily
delay the placid operation of the machinery of trial, but merely to afford one not an original party, yet
having a certain right or interest in the pending case, the opportunity to appear and be joined so he could
assert or protect such right or interest.
Same; Same; Same; Intervention may be properly filed only before or during the trial of the case—
The grant of an intervention is left to the discretion of the court. Paragraph (b), Section 2, Rule 12 of the
Rules of Court provides: (b) Discretion of court.—In allowing or disallowing a motion for intervention, the
court, in the exercise of discretion, shall consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties and whether or not the intervenor’s rights
may be fully protected in a separate proceeding. It is thus clear that, by its very nature, intervention
presupposes an existing litigation or a pending case, and by the opening paragraph of Section 2, Rule 12
of the Rules of Court, it may be properly filed only before or during the trial of the said case. Even if it is
filed before or during the trial, it should be denied if it will unduly delay or prejudice the adjudication of
the rights of the original parties and if the intervenor’s rights may be fully protected in a separate
proceeding.
Same; Same; Same; The motion to intervene was filed on the 15th day after the First Division had
promulgated the decision. Consequently, intervention herein is impermissible under the rules.—lt is not
disputed that the motion to intervene was filed only on 16 September 1994, or on the fifteenth (15th) day
after the First Division had
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Lim vs. Pacquing
promulgated the decision, and after petitioner Mayor Alfredo Lim complied with or voluntarily
satisfied the judgment. The latter act brought to a definite end or effectively terminated G.R. No. 115044.
Consequently, intervention herein is impermissible under the rules. To grant it would be a capricious
exercise of discretion. The decision of this Court in Director of Lands vs. Court of Appeals cannot be used
to sanction such capriciousness for such decision cannot be expanded further to justify a new doctrine on
intervention. In the first place, the motions to intervene in the said case were filed before the rendition by
this Court of its decision therein. In the second place, there were unusual and peculiar circumstances in
the said case which this Court took into account. Of paramount importance was the fact that the
prospective intervenors were indispensable parties.
Same; Same; Same.—Considering then that the intervention in the case at bar was commenced
only after the decision had been executed, a suspension of the Rules to accommodate the motion for
intervention and the intervention itself would be arbitrary. The Government is not without any other
recourse to protect any right or interest which the decision might have impaired.
Criminal Law; Illegal Gambling; Administrative Law; City Ordinance; Betting an the results of jai-alai
games whether within or offfronton is illegal and the City of Manila cannot, under the present state of the
law, license such betting.—Pursuant to Section 2 of P.D. No. 483, which was not repealed by P.D. No. 1602
since the former is not inconsistent with the latter in that respect, betting in jai-alai is illegal unless allowed
by law. There was such a law, P.D. No. 810, which authorized the Philippine Jai-Alai and Amusement
Corporation. However, as stated in the ponencia, P.D. No. 810 was repealed by E.O. No. 169 issued by then
President Corazon C. Aquino. I am not aware of any other law which authorizes betting in jai-alai. It follows
then that while the private respondent may operate the jai-alai fronton and conduct jai-alai games, it can
do so solely as a sports contest. Betting on the results thereof. whether within or off-fronton, is illegal and
the City of Manila cannot, under the present state of the law, license such betting. The dismissal of the
petition in this case sustaining the challenged orders of the trial court does not legalize betting, for this
Court is not the legislature under our system of government.
KAPUNAN, J., Separate Opinion:
 Constitutional Law; Legislative Franchise; Administrative Law;City Ordinance; While the City of
Manila granted a permit to operate under Ordinance No. 7065, this permit or authority was at best only a
656
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Lim vs. Pacquing
local permit to operate and could be exercised by the ADC only after it shall have obtained a
legislative franchise.—I find no incompatibility therefore, between P.D. 771, which revoked all authority
by local governments to issue franchises for gambling and gaming establishments on one hand, and the
municipal ordinance of the City of Manila, granting a permit or license to operate subject to compliance
with the provisions found therein, on the other hand, a legislative franchise may be required by the
government as a condition for certain gambling operations. After obtaining such franchise, the franchisee
may establish operations in any city or municipality allowed under the terms of the legislative franchise,
subject to local licensing requirements. While the City of Manila granted a permit to operate under
Ordinance No. 7065, this permit or authority was at best only a local permit to operate and could be
exercised by the ADC only after it shall have obtained a legislative franchise.
Same; Same; Constitutional Adjudication; Where a controversy may be settled on a platform other
than one involving constitutional adjudication, the court should exercise becoming modesty and avoid the
constitutional question.—This skirts the constitutional issue. Both P.D. 771 and Ordinance 7065 can stand
alongside each other if one looks at the authority granted by the charter of the City of Manila together
with Ordinance No. 7065 merely as an authority to “allow” and “permit” the operation of jai-alai
facilities within the City of Manila. While the constitutional issue was raised by the respondent corporation
in the case at bench, I see no valid reason why we should jump into the fray of constitutional adjudication
in this case, or on every other opportunity where a constitutional issue is raised by parties before us. It is
a settled rule of avoidance, judiciously framed by the United States Supreme Court in Ashwander v.
TVA that where a controversy may be settled on a platform other than one involving constitutional
adjudication, the court should exercise becoming modesty and avoid the constitutional question.
Same; Same; Police Power; The State has every legitimate right, under the police power, to regulate
gambling operations by requiring legislative franchises for such operations.—The State has every
legitimate right, under the police power, to regulate gambling operations by requiring legislative franchises
for such operations. Gambling, in all its forms, unless specifically authorized by law and carefully regulated
pursuant to such law, is generally proscribed as offensive to the public morals and the public good. In
maintaining a “state policy” on various forms of gambling, the political branches of government are best
equipped to regulate and control such activities and therefore assume
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Lim vs. Pacquing
full responsibility to the people for such policy. Parenthetically, gambling, in all its forms, is
generally immoral.
Same; Same; Same; The police power to establish all manner of regulation of otherwise illicit,
immoral and illegal activities is full, virtually illimitable and plenary.—The disturbing implications of a grant
of a “franchise,” in perpetuity, to the ADC militates against its posture that the government’s insistence
that the ADC first obtain a legislative franchise violates the equal protection and impairment of contracts
clauses of the Constitution. By their very nature, franchises are subject to amendment, alteration or
revocation by the State whenever appropriate. Under the exercise of its police power, the State, through
its requirement for permits, licenses and franchises to operate, undertakes to regulate what would
otherwise be an illegal activity punished by existing penal laws. The police power to establish all manner
of regulation of otherwise illicit, immoral and illegal activities is full, virtually illimitable and plenary.
Same; Same; Same; In its exercise of police power, the State may impose appropriate impositions
or restraints upon liberty or property in order to foster the common good.—ln Edu v. Ericta we defined the
police power as “the state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare.” In its exercise, the State may impose appropriate
impositions or restraints upon liberty or property in order to foster the common good. Such imposition or
restraint neither violates the impairment of contracts nor the equal protection clauses of the Constitution
if the purpose is ultimately the public good.
Same; Same; Same; Franchise and licensing regulations aimed at protecting the public from the
pernicious effects of gambling are extensions of the police power addressed to a legitimate public need.—
Restraints on property are not examined with the same microscopic scrutiny as restrictions on liberty. Such
restraints, sometimes bordering on outright violations of the impairments of contract principle have been
made by this Court for the general welfare of the people. Justice Holmes in Noble State Bank v. Haskel once
expansively described the police power as “extending to all public needs.” Franchise and licensing
regulations aimed at protecting the public from the pernicious effects of gambling are extensions of the
police power addressed to a legitimate public need.
Same; Same; Same; Administrative Law; City Ordinance; ADC, while possessing a permit to operate
pursuant to Ordinance 7065 of the
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Lim vs. Pacquing
City of Manila, still has to obtain a legislative franchise, PD No. 771 being valid and constitutional.—
In Lim vs. Pacquing, I voted to sustain the ADC’s position on issues almost purely procedural. A thorough
analysis of the new issues raised this time, compels a different result since it is plainly obvious that the
ADC, while possessing a permit to operate pursuant to Ordinance 7065 of the City of Manila, still has to
obtain a legislative franchise, P.D. 771 being valid and constitutional.
QUIASON, J., Dissenting Opinion:
Constitutional Law; Non-Impairment Clause; A law may be voided when it does not relate to a
legitimate end and when it reasonably infringes on contractual and property rights.—Under the
“substantive due process” doctrine, a law may be voided when it does not relate to a legitimate end and
when it unreasonably infringes on contractual and property rights. The doctrine as enunciated in Allgeyer
v. Louisiana, 165 U.S. 578 (1897) can be easily stated, thus: the government has to employ means
(legislation) which bear some reasonable relation to a legitimate end (Nowak, Rotunda and Young,
Constitutional Law 436, 443 [2d ed]).
Same; Same; The grant of franchise to PJAC exposed PD No. 771 as exercise of arbitrary power to
divest ADC of its property rights.—Themotivation behind its issuance notwithstanding, there can be no
constitutional objection to P.D. No. 771 insofar as it removed the power to grant jai-alai franchises from
the local governments. We said so in Basco v. Pagcor, 197 SCRA 52 (1991). The constitutional objection
arises, however, when P.D. No. 771 cancelled all the existing franchises. We search in vain to find any
reasonable relation between Section 3 of P.D. No. 771 and any legitimate ends of government intended to
be achieved by its issuance. Besides, the grant of a franchise to PJAC exposed P.D. No. 771 as an exercise
of arbitrary power to divest ADC of its property rights.
Section 3 of PD No. 771 is violative of Article VIII of the 1973 Constitution.—Section 3 also violated
Section 1 of Article VIII of the 1973 Constitution, which provided: “Every bill shall embrace only one subject
which shall be expressed in the title thereof.” The title of P.D. No. 771 reads as follows: “Revoking all
powers and authority of local government to grant franchise, license or permit and regulate wagers or
betting by the public on horse and dog races, jai-alai or basque pelota, and other forms of gaming.”
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Same; Same; PD No. 771; Any law which enlarges, abridges, or in any manner changes the intention
of the parties, necessarily impairs the contract itself.—Any law which enlarges, abridges, or in any manner
changes the intention of the parties, necessarily impairs the contract itself (U.S. v. Conde, 42 Phil. 766
[1922]; Clemons v. Nolting, 42 Phil. 702 .[1922]). A franchise constitutes a contract between the grantor
and the grantee. Once granted, it may not be invoked unless there are valid reasons for doing so (Papa v.
Santiago, 105 Phil. 253 [1959]). A franchise is not revocable at the will of the grantor after contractual or
property rights thereunder have become vested in the grantee, in the absence of any provision therefor
in the grant or in the general law (Grand Trunk Western R. Co. v. South Bend, 227 U.S. 544). D. The Republic
hypothesized that the said Constitutional guarantees presuppose the existence of a contract or property
right in favor of ADC. It claims that Ordinance No. 7065 is not a franchise nor is it a contract but merely a
privilege for the purpose of regulation.
Ordinance No. 7065 is a franchise that is protected by the Constitution.—Ordinance No. 7065 is not
merely a personal privilege that can be withdrawn at any time. It is a franchise that is protected by the
Constitution.
Same; Legislative Franchise; A privilege 18 bestowed out of pure beneficence on the part of the
government. In a franchise, there are certain obligations assumed by the grantee which make up the
valuable consideration for the contract.—The distinction between the two is that a privilege is bestowed
out of pure beneficence on the part of the government. There is no obligation or burden imposed on the
grantee except maybe to pay the ordinary license and permit fees. In a franchise, there are certain
obligations assumed by the grantee which make up the valuable consideration for the contract. That is
why the grantee is first required to signify his acceptance of the terms and conditions of the grant. Once
the grantee accepts the terms and conditions thereof, the grant becomes a binding contract between the
grantor and the grantee.
Same; Same; A franchise in which money has been expended assumes the character of a vested
right.—Another test used to distinguish a franchise from a privilege is the big investment risked by the
grantee. In Papa v. Santiago, supra, we held that this factor should be considered in favor of the grantee.
A franchise in which money has been expended assumes the character of a vested right (Brazosport
Savings and Loan Association v. American Savings and Loan Association, 161 Tex. 543, 342 S.W. 2d. 747).
660
660 SUPREME COURT REPORTS ANNOTATED
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Same; Statutes; Construction and Interpretation; Republic Act No. 938 as amended by Republic Act
No. 1224 provides that night clubs, cabarets, pavilions, or other similar places are covered by the 200-lineal
meter radius.—The operative law on the siting of jai-alai establishments is no longer E.O. No. 135 of
President Quirino but R.A. No. 938 as amended by R.A. No. 1224. Under said law only night clubs, cabarets,
pavilions, or other similar places are covered by the 200-lineal meter radius. In the case of all other places
of amusements except cockpits, the proscribed radial distance has been reduced to 50 meters. With
respect to cockpits, the determination of the radial distance is left to the discretion of the municipal council
or city board (Sec. 1).
Remedial Law; Raffle of Cases; Assignment of Cases; Assignment of cases to the different branches
of the trial court need not always be by raffle.—At the outset, it should be made clear that Section 7 of
Rule 22 of the Revised Rules of Court does not require that the assignment of cases to the different
branches of a trial court should always be by raffle. The Rule talks of assignment “whether by raffle or
otherwise.” What it requires is the giving of written notice to counsel or the parties “so that they may be
present therein if they so desire.” Section 7 of Rule 22 provides: “Assignment of cases. In the assignment
of cases to the different branches of a Court of First Instance, or their transfer from one branch to another
whether by raffle or otherwise, the parties or their counsel shall be given written notice sufficiently in
advance so that they may be present therein if they so desire.”
Same; Same; Same; Cases necessitating the issuance of a temporary restraining order can be
allowed through a special raffle.—There may be cases necessitating the issuance of a temporary
restraining order to prevent irreparable injury on the petitioner. To await the regular raffle before the
court can act on the motion for temporary restraining order may render the case moot and academic.
Hence, Administrative Circular No. 1 dated January 28, 1988 was issued by this Court allowing a special
raffle. Said Circular provides: “8.3. Special raffles should not be permitted except on verified application of
the interested party who seeks issuance of a provisional remedy and only upon a finding by the Executive
Judge that unless a special raffle is conducted irreparable damage shall be suffered by the applicant. The
special raffle shall be conducted by at least two judges in a multiplesala station.”
Same; Same; Same.—In a case where a verified application for special raffle is filed, the notice to
the adverse parties may be dispensed with but the raffle has to “be conducted by at least two judges in a
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Lim vs. Pacquing
multiple-sala station.” The Republic does not claim that Administrative Circular No. 1 has been
violated in the assignment of the case to respondent Judge. The presumption of regularity of official acts
therefore prevails.
Same; Same; Same; Notice; The purpose of notice is to afford the parties a chance to be heard in
the assignment of their cases and this purpose is deemed accomplished if the parties were subsequently
heard.—Going back to Section 7 of Rule 22, this Court has ruled in Commissioner of Immigration v.
Reyes, 12 SCRA 728 (1964) that the purpose of the notice is to afford the parties a chance to be heard in
the assignment of their cases and this purpose is deemed accomplished if the parties were subsequently
heard. In the instant case, Executive Secretary Guingona and GAB Chairman Cepeda were given a hearing
on the matter of the lack of notice to them of the raffle when the court heard on September 23, 1994 their
Motion to Recall Temporary Restraining Order, Urgent Supplemental Motion to Recall Temporary
Restraining Order and Opposition to Issuance of a Writ of Preliminary Issuance of a Writ of Preliminary
Injunction (G.R. No. 117263, Rollo p. 434).
Same; Restraining Order; Injunction; The purpose of a temporary restraining order or preliminary
injunction is to preserve the status quo ante litem motam or the last actual, peaceable, noncontested
status.—Thepurpose of a temporary restraining order or preliminary injunction, whether preventive or
mandatory, is merely to prevent a threatened wrong and to protect the property or rights involved from
further injury, until the issues can be determined after the hearing on the merits (Ohio Oil Co. v. Conway,
279 U.S. 813, 73 L. Ed. 972, 49 S. Ct. 256; Gobbi v. Dilao, 58 Or. 14,111 p. 49, 113, p. 57). What is intended
to be preserved is the status quo ante litem motam or the last actual, peaceable, noncontested status
(Annotation, 15 ALR 2d 237).
Same; Same; Same; Status quo sought to be maintained was that ADC was operating the jai-alai
pursuant to Ordinance No. 7065 of the City of Manila.—In the case at bench, the status quo which the
questioned orders of Judge Reyes sought to maintain was that ADC was operating the jai-alai pursuant to
Ordinance No. 7065 of the City of Manila, the various decisions of the different courts, including the
Supreme Court, and the licenses, permits and provisional authority issued by GAB itself. At times, it may
be necessary for the courts to take some affirmative act essential to restore the status quo (lowa Natural
Resources Council v. Van Zee [Iowa] 158 N.W. 2d. 111).
662
662 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
PUNO, J., Dissenting Opinion:
Constitutional Law; Construction and Interpretation; The title of a law is a valuable intrinsic aid in
determining legislative intent.—The title of R.A. No. 954 does not show that it seeks to limit the operation
of jai-alai only to entities with franchise given by Congress. What the title trumpets as the sole subject of
the law is the criminalization of certain practices relating to jai-alai games. The title of a law is a valuable
intrinsic aid in determining legislative intent.
Same; Same; The Explanatory Note of House Bill 3204 reveals that the intent of the law is to
criminalize the practice of illegal bookies and game-fixing in jai-alai.—The Explanatory Note of House Bill
3204, the precursor of R.A. No. 954, also reveals that the intent of the law is only to criminalize the practice
of illegal bookies and game-fixing in jaialai. It states: “This bill seeks to prohibit certain anomalous practice
of ‘bookies’ in connection with the holding of horse races or ‘basque pelota’ games. The term ‘bookie’ as
commonly understood refers to a person, who without any license therefor, operates outside the
compounds of racing clubs and accepts bets from the public. They pay dividends to winners minus a
commission, which is usually 10%. Prosecutions of said persons have been instituted under Act No. 4240
which was enacted in 1935. However, in a recent opinion released by the City Fiscal of Manila, he maintains
that Act No. 4240 has already been repealed, so that the present law regulating ordinary horse races
permits ‘bookies’ to ply their trade, but not on sweepstakes races and other races held for charitable
purposes. With the operation of ‘booking’ places in the City of Manila, the Government has been losing no
less than P600,000.00 a year, which amount represents the tax that should have been collected from bets
made in such places. For these reasons, the approval of the bill is earnestly recommended”
Same; Same; Nothing from the Explanatory Note suggests any intent of the law to revoke the power
of the City of Manila to issue permits to operate jai-alai games within its territorial jurisdiction.—As said
Explanatory Note is expressive of the purpose of the bill, it gives a reliable keyhole on the scope and
coverage of R.A. No. 954. Nothing from the Explanatory Note remotely suggests any intent of the law to
revoke the power of the City of Manila to issue permits to operate jaialai games within its territorial
jurisdiction.
Same; Same; Legislative debate is a good source to determine the intent of the law.—The Debates
in Congress likewise reject the reading of R.A. No. 954 by petitioners. Again, legislative debate is a good
source
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VOL. 240, JANUARY 27, 1995 663
Lim vs. Pacquing
to determine the intent of a law.
Same; Same; Republic Act No. 954; R.A. No. 954 itself does not intimate that it is repealing any
existing law, especially section 18(jj) of R.A. No. 409 otherwise known as the Charter of Manila.—To top it
all, the text of R.A. No. 954 itself does not intimate that it is repealing any existing law, especially section
18(jj) of R.A. No. 409, otherwise known as the Charter of Manila. Indeed, R.A. No. 954 has no repealing
provision. The reason is obvious—it simply prohibited certain practices in jai-alai then still unregulated by
the laws of the land. It did not regulate aspects of jai-alai already regulated by existing laws, like the matter
of whether it is the national government alone that should issue franchises to operate jai-alai games.
Same; Same; PD No. 771; In clear and certain language, P.D. No. 771 recalled the power of local
governments to issue jai-alai franchises and permits.—The subsequent enactment of P.D. No. 771 on
August 20, 1975 further demolished the submission of petitioners. In clear and certain language, P.D. No.
771 recalled the power of local governments to issue jai-alai franchises and permits. It also revoked existing
franchises and permits issued by local governments. If R.A. No. 954 had already disauthorized local
governments from granting franchises and permits, there would be no need to enact P.D. No. 771. No rule
of statutory construction will consider any law a meaningless redundancy.
Same; Same; Same; If the City of Manila is empowered to license the ADC it is because the power
was delegated to it by Congress.—Thepassage of P.D. No. 771, also negates petitioners’ insistence that for
ADC to continue operating, it must show it has a franchise from Congress, not just a permit from the City
of Manila. The suggested dichotomy between a legislative franchise and city permit does not impress. If
the City of Manila is empowered to license the ADC it is because the power was delegated to it by Congress.
The acts of the City of Manila in the exercise of its delegated power bind Congress as well. Stated
otherwise, the permit given by the City to ADC is not any whit legally inferior to a regular franchise. Through
the years, the permit given by the City endows the grantee complete right to operate, Not once, except in
these cases, has the national government questioned the completeness of this right. For this reason, P.D.
No. 771 has to revoke all existing franchises and permits without making any distinction. It treated permits
in the same class as franchises.
664
664 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
Same; Same; Police Power; Tests to determine validity of police measure.—But while the State is
bestowed near boundless authority to promote public welfare, still the exercise of police power cannot be
allowed to run riot in a republic ruled by reason. Thus, our courts have laid down the test to determine the
validity of a police measure as follows: (1) the interest of the public generally, as distinguished from those
of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. Deeper reflexion will reveal
that the test reiterates the essence of our constitutional guarantees of substantive due process, equal
protection, and nonimpairment of property rights.
Same; Same; Delegation of Power; The revocation of delegated power to local governments does
not impair any right. Applicants to franchises have no right to insist that their applications be acted upon
by local governments, Their right to a franchise is only in posse.—Part of the plenary power of Congress to
make laws is the right to grant franchises and permits allowing the exercise of certain privileges. Congress
can delegate the exercise of this innate power to grant franchises as it did to the City of Manila when it
granted its charter on June 18, 1949 thru R.A. No. 409. Congress can also revoke the delegated power and
choose to wield the power itself as it did thru then President Marcos who exercised legislative powers by
enacting P.D. No. 771. In the petitions at bench, Congress revoked the power of local governments to issue
franchises and permits which it had priorly delegated, In doing so and in deciding to wield the power itself
to meet the perceived problems of the time, the legislature exercised its distinct judgment and the other
branches of government, including this Court, cannot supplant this judgment without running afoul of the
principle of separation of powers. To be sure, this particular legislative method to regulate the problem of
mushrooming applications for jai-alai franchise cannot be faulted as bereft of rationality. In the hearing of
the petitions at bench, Executive Secretary Guingona established the fact that at the time of the enactment
of P.D. No. 771, there were numerous applications to run jai-alai games in various cities and municipalities
of the archipelago. To prevent the proliferation of these applications and minimize their ill effects, the law
centralized their screening by the national government alone. The law excluded local governments in the
process. The revocation of the delegated power to local governments does not impair any
right. Applicants to franchises have no right to insist that their applications be acted upon by local
governments. Their right to a franchise is only in posse.
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Lim vs. Pacquing
Same; Same; Same; Section 3 of P.D. No. 771 must be struck down as constitutionally infirmed.—
Truth, however, has its own time of sprouting out. The truth behind the revocation of ADC’s franchise
revealed itself when former President Marcos transferred ADC’s franchise to the Philippine Jai-Alai and
Amusements Corporation then under the control of his brother-in-law, Mr. Alfredo “Bejo” Romualdez. The
favored treatment was extended hardly two (2) months after the revocation of ADC’s franchise and it left
Philippine Jai-Alai and Amusements Corporation the sole jai-alai operator in the Philippines. The Court is
not informed of any distinction of PJAC that will justify its different treatment. The evidence is thus clear
and the conclusion is irresistible that section 3 of P D. No. 771 was designed with a malignant eye against
ADC. In light of the established facts in field, section 3 of P.D. No. 771 must be struck down as
constitutionally infirmed.
Same; Same; Same; P.D. No. 771 seeks merely to control the multiplication by restoring the
monopoly of national government in the dispensation of franchises.—There is no way to treat the self-
interest of a favored entity as identical with the general interest of the Filipino people. It will also be
repulsive to reason to entertain the thesis that the revocation of the franchise of ADC is reasonably
necessary to enable the State to grapple to the ground the evil of jai-alai as a form of gambling. Petitioners
have not demonstrated that government lacks alternative options to succeed in its effort except to cancel
the lone franchise of ADC. Well to stress, it is not the lofty aim of P.D. No. 771 to completely eradicate jai-
alai games; it merely seeks to control its multiplication by restoring the monopoly of the national
government in the dispensation of franchises.
Same; Same; Same; Section 3 of P.D. No. 771 offends the Constitution which demands faithful
compliance with the requirements of due process, equal protection of the law, and non-impairment of
contracts.—Prescinding from these premises, I share the scholarly view of Mr. Justice Quiason that Sec. 3
of P.D. No. 771 offends the Constitution which demands faithful compliance with the requirements of
substantive due process, equal protection of the law, and non-impairment of contracts. Capsulizing their
essence, substantive due process exacts fairness; equal protection disallows distinction to the distinctless;
and the guaranty of non-impairment of contract protects its integrity unless demanded otherwise by the
public good. Constitutionalism eschews the exercise of unchecked power for history demonstrates that a
meandering, aimless power ultimately tears apart the social fabric of society. Thus, the grant of police
power to promote public welfare cannot carry with it the privilege to be oppressive. The Constitution
ordained the
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666 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
State not just to achieve order or liberty but to attain ordered liberty,however elusive the balance
may be. Cognizant of the truism that in life the only constant is change, the Constitution did not design
that the point that can strike the balance between order and liberty should be static for precisely, the
process of adjusting the moving point of the balance gives government greater elasticity to meet the needs
of the time.
PETITIONS for review of the decisions of the Regional Trial Court of Manila, Br. 40 and Br. 4.
The facts are stated in the opinion of the Court.
Chavez, Laureta & Associates and Cayanga, Zuñiga & Angel for private respondent.
Henry L. Domingo for movant-intervenors.
PADILLA, J.:
These two (2) cases which are inter-related actually involve simple issues. If these issues have apparently
become complicated, it is not by reason of their nature but because of the events and dramatis
personae involved.
The petition in G.R. No. 115044 was dismissed by the First Division of this Court on 01 September
1994 based on a finding that there was “no abuse of discretion, much less lack of or excess of jurisdiction,
on the part of respondent judge [Pacquing],” in issuing the questioned orders. Judge Pacquing had earlier
issued in Civil Case No. 88–45660, RTC of Manila, Branch 40, the following orders which were assailed by
the Mayor of the City of Manila, Hon. Alfredo S. Lim, in said G.R. No. 115044:
1. a.order dated 28 March 1994 directing Manila Mayor Alfredo S. Lim to issue the permit/license
to operate the jai-alai in favor of Associated Development Corporation (ADC).
2. b.order dated 11 April 1994 directing Mayor Lim to explain why he should not be cited for
contempt for non-compliance with the order dated 28 March 1994.
3. c.order dated 20 April 1994 reiterating the previous order directing Mayor Lim to immediately
issue the permit / license to Associated Development Corporation (ADC).
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Lim vs. Pacquing
The order dated 28 March 1994 was in turn issued upon motion by ADC for execution of a final judgment
rendered on 9 September 1988 which ordered the Manila Mayor to immediately issue to ADC the permit
I license to operate the jai-alai in Manila, under Manila Ordinance No. 7065.
On 13 September 1994, petitioner Guingona (as executive secretary) issued a directive to then
chairman of the Games and Amusements Board (GAB) Francisco R. Sumulong, Jr. to hold in abeyance the
grant of authority, or if any had been issued, to withdraw such grant of authority, to Associated
Development Corporation to operate the jai-alai in the City of Manila, until the following legal questions
are properly resolved:
1. “1.Whether P.D. 771 which revoked all existing Jai-Alai franchises issued by local governments
as of 20 August 1975 is unconstitutional.
2. 2.Assuming that the City of Manila had the power on 7 September 1971 to issue a Jai-Alai
franchise to Associated Development Corporation, whether the franchise granted is valid
considering that the franchise has no duration, and appears to be granted in perpetuity.
3. 3.Whether the City of Manila had the power to issue a Jai-Alai franchise to Associated
Development Corporation on 7 September 1971 in view of Executive Order No. 392 dated 1
January 1951 which transferred from local governments to the Games and Amusements
Board the power to regulate Jai-Alai.”1
On 15 September 1994, respondent Associated Development Corporation (ADC) filed a petition for
prohibition, mandamus, injunction and damages with prayer for temporary restraining order and/or writ
of preliminary injunction in the Regional Trial Court of Manila against petitioner Guingona and then GAB
chairman Sumulong, docketed as Civil Case No. 94–71656, seeking to prevent GAB from withdrawing the
provisional authority that had earlier been granted to ADC. On the same day, the RTC of Manila, Branch 4,
through presiding Judge Vetino Reyes, issued a temporary restraining order enjoining the GAB from
withdrawing ADC’s provisional authority. This temporary restraining order was converted into a writ of
preliminary injunc-
_______________
1Annex “D,” Petition in G.R. No. 117263.
668
668 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
tion upon ADC’s posting of a bond in the amount of P2,000,000.00.2
Subsequently, also in G.R. No. 115044, the Republic of the Philippines, through the Games and
Amusements Board, filed a “Motion for Intervention; for Leave To File a Motion For Reconsideration in
Intervention; and to Refer the Case to the Court En Banc” and later a “Motion for Leave to File
Supplemental Motion for Reconsideration-in-Intervention and to Admit Attached Supplemental Motion
for Reconsideration-in-Intervention.”
In an En Banc Resolution dated 20 September 1994, this Court referred G.R. No. 115044 to the
Court En Banc and required the respondents therein to comment on the aforementioned motions.
Meanwhile, Judge Reyes on 19 October 1994 issued another order, this time, granting ADC a writ of
preliminary mandatoryinjunction against Guingona and GAB to compel them to issue in favor of ADC the
authority to operate the jai-alai.
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new GAB chairman, then filed
the petition in G.R. No. 117263 assailing the abovementioned orders of respondent Judge Vetino Reyes.
On 25 October 1994, in G.R. No. 117263, this Court granted petitioners’ motion for leave to file
supplemental petition and to admit attached supplemental petition with urgent prayer for restraining
order. The Court further required respondents to file their comment on the petition and supplemental
petition with urgent prayer for restraining order. The Court likewise set the case and all incidents thereof
for hearing on 10 November 1994.
At the hearing on 10 November 1994, the issues to be resolved were formulated by the Court as
follows:
1. 1.whether or not intervention by the Republic of the Philippines at this stage of the proceedings
is proper;
2. 2.assuming such intervention is proper, whether or not the Associated Development
Corporation has a valid and subsisting franchise to maintain and operate the jai-alai;
3. 3.whether or not there was grave abuse of discretion committed by respondent Judge Reyes in
issuing the aforementioned temporary restraining order (later, writ of preliminary injunc
_______________
2
Annex “C,” Petition in G.R. No. 117263.
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Lim vs. Pacquing
1. tion); and
2. 4.whether or not there was grave abuse of discretion committed by respondent Judge Reyes in
issuing the aforementioned writ of preliminary mandatoryinjunction.
On the issue of the propriety of the intervention by the Republic of the Philippines, a question was raised
during the hearing on 10 November 1994 as to whether intervention in G.R. No. 115044was the proper
remedy for the national government to take in questioning the existence of a valid ADC franchise to
operate the jai-alai or whether a separate action for quo warranto under Section 2, Rule 66 of the Rules of
Court was the proper remedy.
We need not belabor this issue since counsel for respondent ADC agreed to the suggestion that this
Court once and for all settle all substantive issues raised by the parties in these cases. Moreover, this Court
can consider the petition filed in G.R. No. 117263 as one for quo warranto which is within the original
jurisdiction of the Court under Section 5(1), Article VIII of the Constitution,3
On the propriety of intervention by the Republic, however, it will be recalled that this Court in Director
of Lands v. Court of Appeals (93 SCRA 238) allowed intervention even beyond the period prescribed in
Section 2 Rule 12 of the Rules of Court. The Court ruled in said case that a denial of the motions for
intervention would “lead the Court to commit an act of injustice to the movants, to their successor-in-
interest and to all purchasers for value and in good faith and thereby open the door to fraud, falsehood
and misrepresentation, should intervenors’ claim be proven to be true.”
In the present case, the resulting injustice and injury, should the national government’s allegations
be proven correct, are manifest, since the latter has squarely questioned the very existence of a valid
franchise to maintain and operate the jai-alai (which is a gambling operation) in favor of ADC. As will be
more extensively discussed later, the national government contends
_______________
3“Sec. 5. The Supreme Court shall have the following powers: (1) Exercise original jurisdiction x x x
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. x x x”
670
670 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
that Manila Ordinance No. 7065 which purported to grant to ADC a franchise to conduct jai-alai operations
is void and ultra viressince Republic Act No. 954, approved on 20 June 1953, or very much earlier than said
Ordinance No. 7065, the latter approved 7 September 1971, in Section 4 thereof, requires a legislative
franchise, not a municipal franchise, for the operation of jai-alai, Additionally, the national government
argues that even assuming, arguendo, that the abovementioned ordinance is valid, ADC’s franchise was
nonetheless effectively revoked by Presidential Decree No. 771, issued on 20 August 1975, Sec. 3 of which
expressly revoked all existing franchises and permits to operate all forms of gambling facilities (including
the jai-alai) issued by local governments.
On the other hand, ADC’s position is that Ordinance No. 7065 was validly enacted by the City of Manila
pursuant to its delegated powers under its charter, Republic Act No. 409. ADC also squarely assails the
constitutionality of PD No. 771 as violative of the equal protection and non-impairment clauses of the
Constitution. In ‘this connection, counsel for ADC contends that this Court should really rule on the validity
of PD No. 771 to be able to determine whether ADC continues to possess a valid franchise.
It will undoubtedly be a grave injustice to both parties in this case if this Court were to shirk from
ruling on the issue of constitutionality of PD No. 771. Such issue has, in our view, “become the very lis
mota in resolving the present controversy, in view of ADC’s insistence that it was granted a valid and legal
franchise by Ordinance No. 7065 to operate the jai-alai.
The time-honored doctrine is that all laws (PD No. 771 included) are presumed valid and constitutional
until or unless otherwise ruled by this Court. Not only this; Article XVIII, Section 3 of the Constitution states:
“Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions and other
executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked.”
There is nothing on record to show or even suggest that PD No. 771 has been repealed, altered or amended
by any subsequent law or presidential issuance (when the executive still
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Lim vs. Pacquing
exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of ADC’s franchise by reason
of the unconstitutionality of PD No. 771 was settled in G.R. No. 115044, for the decision of the Court’s First
Division in said case, aside from not being final, cannot have the effect of nullifying PD No. 771 as
unconstitutional, since only the Court En Banc has that power under Article VIII, Section 4(2) of the
Constitution.4
And on the question of whether or not the government is estopped from contesting ADC’s possession
of a valid franchise, the well-settled rule is that the State cannot be put in estoppel by the mistakes or
errors, if any, of its officials or agents (Republic v. Intermediate Appellate Court, 209 SCRA 90).
Consequently, in the light of the foregoing expostulation, we conclude that the Republic (in contra
distinction to the City of Manila) may be allowed to intervene in G.R. No. 115044. The Republic is
intervening in G.R. No. 115044 in the exercise, not of its business or proprietary functions, but in the
exercise of its governmental functions to protect public morals and promote the general welfare.
II
Anent the question of whether ADC has a valid franchise to “operate the Jai-Alai de Manila, a statement
of the pertinent laws is in order.
1. 1.The Charter of the City of Manila was enacted by Congress on 18 June 1949. Section 18
thereof provides:
“Section 18. Legislative Powers.—The Municipal Board shall have the following legislative powers:
_______________
4”Sec. 4. x x x
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law, which
shall be heard by the Supreme Court en banc x x x shall be decided with the concurrence of a majority of
the Members who actually took part in the deliberations on the issues in the case and voted thereon.
672
672 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
xxx
(jj) To tax, license, permit and regulate wagers or betting by the public on boxing, sipa, bowling,
billiards, pools, horse and dog races, cockpits, jai-alai, roller or ice-skating on any sporting or athletic
contests, as well as grant exclusive rights to establishments for this purpose, notwithstanding any existing
law to the contrary.”
1. 2.On 1 January 1951, Executive Order No. 392 was issued transferring the authority
to regulate jai-alais from local govern-ments to the Games and Amusements Board (GAB).
 2. 3.On 20 June 1953, Congress enacted Republic Act No. 954, entitled “An Act To Prohibit Certain
Activities In Connection With Horse Races and Basque Pelota Games (Jai-Alai), And To
Prescribe Penalties For Its Violation,” The provisions of Republic Act No. 954 relating to jai-
alai are as follows:
“Sec. 4. No person, or group of persons other than the operator or maintainer of a fronton with legislative
franchise to conduct basque pelota games (Jai-Alai), shall offer,take or arrange bets on any basque pelota
game or event, or maintain or use a totalizator or other device, method or system to bet or gamble on any
basque pelota game or event. (italics supplied).
Sec. 5. No person, operator or maintainer of a fronton with legislative franchise to conduct basque
pelota games shall offer, take, or arrange betson any basque pelota game or event, or maintain or use a
totalizator or other device, method or system to bet or gamble on any basque pelota game or
event outside the place, enclosure, or fronton where the basque pelota game is held,” (Italics supplied).
1. 4.On 07 September 1971, however, the Municipal Board of Manila nonetheless passed
Ordinance No. 7065 entitled “An Ordinance Authorizing the Mayor To Allow And Permit The
Associated Development Corporation To Establish, Maintain And Operate A Jai-Alai In The
City Of Manila, Under Certain Terms And Conditions And For Other Purposes.”
2. 5.On 20 August 1975; Presidential Decree No. 771 was issued by then President Marcos. The
decree, entitled “Revoking All Powers and Authority of Local Government(s) To Grant
Franchise, License or Permit And Regulate Wagers Or Betting By The Public On Horse And Dog
Races, Jai-Alai Or Basque Pelota, And Other Forms Of Gambling.” in Section 3 thereof,
expressly revoked all existing franchises and permits issued by
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Lim vs. Pacquing
1. local governments.
2. 6.On 16 October 1975, Presidential Decree No. 810, entitled “An Act Granting The Philippine
Jai-Alai And Amusement Corporation A Franchise To Operate, Construct And Maintain A
Fronton For Basque Pelota And Similar Games Of Skill In The Greater Manila Area,” was
promulgated.
3. 7.On 08 May 1987, then President Aquino, by virtue of Article XVIII, Section 6, of the
Constitution, which allowed the incumbent President to continue exercising legislative
powers until the first Congress was convened, issued Executive Order No. 169 expressly
repealing PD 810 and revoking and cancelling the franchise granted to the Philippine Jai-Alai
and Amusements Corporation.
Petitioners in G.R. No. 117263 argue that Republic Act No. 954 effectively removed the power of .the
Municipal Board of Manila to grant franchises for gambling operations. It is argued that the term
“legislative franchise” in Rep. Act No. 954 is used to refer to franchises issued by Congress.
On the other hand, ADC contends that Republic Act No. 409 (Manila Charter) gives legislative powers
to the Municipal Board to grant franchises, and since Republic Act No. 954 does not specifically qualify the
word “legislative” as referring exclusively to Congress, then Rep. Act No. 954 did not remove the power of
the Municipal Board under Section 18(jj) of Republic Act No. 409 and consequently it was within the power
of the City of Manila to allow ADC to operate the jai-alai in the City of Manila.
On this point, the government counter-argues that the term “legislative powers” is used in Rep. Act
No. 409 merely to distinguish the powers under Section 18 of the law from the other powers of the
Municipal Board, but that the term “legislative powers” is used in Rep. Act No. 409 merely to distinguish
the powers under Section 18 of the law from the other powers of the Municipal Board, but that the term
“legislative franchise” in Rep. Act No. 954 refers to a franchise granted solely by Congress.
Further, the government argues that Executive Order No. 392 dated 01 January 1951 transferred even
the power to regulate Jai-Alai from the local governments to the Games and Amusements Board (GAB), a
national government agency.
It is worthy of note that neither of the authorities relied upon by ADC to support its alleged possession
of a valid franchise,
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674 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
namely, the Charter of the City of Manila (Rep. Act No. 409) and Manila Ordinance No. 7065 uses the word
“franchise.” Rep. Act No. 409 empowers the Municipal Board of Manila to “tax, ‘license,
permit and regulate wagers or betting” and to “grant exclusive rights to establishments,” while Ordinance
No. 7065 authorized the Manila City Mayor to “allow and permit” ADC to operate jaialai facilities in the
City of Manila.
It is clear from the foregoing that Congress did not delegate to the City of Manila the power “to
franchise” wagers or betting, including the jai-alai, but retained for itself such power “to franchise.” What
Congress delegated to the City of Manila in Rep. Act No. 409, with respect to wagers or betting, was the
power to “license, permit, or regulate” which therefore means that a license or permit issued by the City
of Manila to operate a wager or betting activity, such as the jai-alai where bets are accepted, would not
amount to something meaningful UNLESS the holder of the permit or license was also FRANCHISED by the
national government to so operate. Moreover, even this power to license, permit, or regulate wagers or
betting on jai-alai was removed from local governments, including the City of Manila, and transferred to
the GAB on 1 January 1951 by Executive Order No. 392. The net result is that the authority to grant
franchises for the operation of jai-alai frontons is in Congress, while the regulatory function is vested in
the GAB.
In relation, therefore, to the facts of this case, since ADC has no franchise from Congress to operate
the jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate the jai-
alai in the City of Manila.
It cannot be overlooked, in this connection, that the Revised Penal Code punishes gambling and
betting under Articles 195 to 199 thereof. Gambling is thus generally prohibited by law, unless another law
is enacted by Congress expressly exempting or excluding certain forms of gambling from the reach of
criminal law. Among these forms of gambling allowed by special law are the horse races authorized by
Republic Acts Nos. 309 and 983 and gambling casinos authorized under Presidential Decree No. 1869.
While jai-alai as a sport is not illegal per se, the accepting of bets or wagers on the results of jai-alai
games is undoubtedly gambling and, therefore, a criminal offense punishable under
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VOL. 240, JANUARY 27, 1995 675
Lim vs. Pacquing
Articles 195–199 of the Revised Penal Code, unless it is shown that a later or special law had been passed
allowing it. ADC has not shown any such special law.
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by Congress on
18 June 1949 gave the Municipal Board certain delegated legislative powers under Section 18. A perusal
of the powers enumerated under Section 18 shows that these powers are basically regulatory in
nature.5 The regulatory nature of these powers finds support not only in the plain words of the
enumerations under Section 18 but also in this Court’s ruling in People v. Vera (65 Phil. 56).
In Vera, this Court declared that a law which gives the Provincial Board the discretion to determine
whether or not a law of general application (such as, the Probation Law-Act No. 4221) would or would not
be operative within the province, is unconstitutional for being an undue delegation of legislative power.
From the ruling in Vera, it would be logical to conclude that, if ADC’s arguments were to prevail, this
Court would likewise declare Section 18(jj) of the Revised Charter of Manila unconstitutional for the power
it would delegate to the Municipal Board of Manila would give the latter the absolute and unlimited
discretion to render the penal code provisions on gambling inapplicable or inoperative to persons or
entities issued permits to operate gambling establishments in the City of Manila.
 We need not go to this extent, however, since the rule is that laws must be presumed valid,
constitutional and in harmony with other laws. Thus, the relevant provisions of Rep. Acts Nos. 409 and 954
and Ordinance No. 7065 should be taken together and it should then be clear that the legislative powers
of the Municipal Board should be understood to be regulatory in nature and that Republic Act No. 954
should be understood to refer to congressional franchises, as a necessity for the operation of jaialais.
We need not, however, again belabor this issue further since the task at hand which will ultimately,
and with finality, decide
______________
5 It will be noted that under Executive Order No. 392, issued on 1 January 1951, even the power
to regulate jai-alais was transferred from the local governments to the Games and Amusement Board
(GAB).
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Lim vs. Pacquing
the issues in this case is to determine whether PD No. 771 validly revoked ADC’s franchise to operate the
jai-alai, assuming (without conceding) that it indeed possessed such franchise under Ordinance No. 7065.
ADC argues that PD No. 771 is unconstitutional for being violative of the equal protection and non-
impairment provisions of the Constitution. On the other hand, the government contends that PD No. 771
is a valid exercise of the inherent police power of the State.
The police power has been described as the least limitable of the inherent powers of the State. It is
based on the ancient doctrine—salus populi est suprema lex (the welfare of the people is the supreme
law.) In the early case of Rubi v. Provincial Board of Mindoro (39 Phil. 660), this Court through Mr. Justice
George A. Malcolm stated thus:
“The police power of the State x x x is a power coextensive with self-protection, and is not inaptly termed
the ‘law of overruling necessity.’ It may be said to be that inherent and plenary power in the State which
enables it to prohibit all things hurtful to the comfort, safety and welfare of society. Carried onward by the
current of legislation, the judiciary rarely attempts to dam the onrushing power of legislative discretion,
provided the purposes of the law do not go beyond the great principles that mean security for the public
welfare or do not arbitrarily , interfere with the right of the individual.”
In the matter of PD No. 771, the purpose of the law is clearly stated in the “whereas clauses” as follows:
“WHEREAS, it has been reported that in spite of the current drive of our law enforcement agencies against
vices and illegal gambling, these social ills are still prevalent in many areas of the country;
‘WHEREAS, there is need to consolidate all the efforts of the government to eradicate and minimize
vices and other forms of social ills in pursuance of the social and economic development program under
the new society;
‘WHEREAS, in order to effectively control and regulate wagers or betting by the public on horse and
dog races, jai-alai and other forms of gambling there is a necessity to transfer the issuance of permit and/
or franchise from local government to the National Government.”
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VOL. 240, JANUARY 27, 1995 677
Lim vs. Pacquing
It cannot be argued that the control and regulation of gambling do not promote public morals and welfare.
Gambling is essentially antagonistic to the objectives of national productivity and self-reliance. It breeds
indolence and erodes the value of good, honest and hard work. It is, as very aptly stated by PD No. 771, a
vice and a social ill which government must minimize (if not eradicate) in pursuit of social and economic
development.
In Magtajas v. Pryce Properties Corporation (20 July 1994, G.R. No. 111097), this Court stated thru
Mr. Justice Isagani A. Cruz:
“In the exercise of its own discretion, the legislative power may prohibit gambling altogether or allow it
without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may
consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and
horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no
authority to review,much less reverse. Well, has it been said that courts do not sit to resolve the merits of
conflicting theories. That is the prerogative of the political departments. It is settled that questions
regarding wisdom, morality and practicability of statutes are not addressed to the judiciary but may be
resolved only by the executive and legislative departments, to which the function belongs in our scheme
of government.” (Italics supplied)
- Talks regarding the supposed vanishing line between right and privilege in American constitutional law
has no relevance in the context of these cases since the reference there is to economic regulations. On the
other hand, jai-alai is not a mere economic activity which the law seeks to regulate. It is essentially
gambling and whether it should be permitted and, if so, under what conditions are questions primarily for
the lawmaking authority to determine, taking into account national and local interests. Here, it is the police
power of the State that is paramount,
ADC questions the motive for the issuance of PD No. 771. Clearly, however, this Court cannot look
into allegations that PD No. 771 was enacted to benefit a select group which was later given authority to
operate the jai-alai under PD No. 810. The examination of legislative motivation is generally
prohibited. (Palmer v. Thompson, 403 U.S. 217, 29 L. Ed. 2d 438 [1971], per Black, J.) There is, in the first
place, absolute lack of evidence to
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678 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
support ADC’s allegation of improper motivation in the issuance of PD No. 771. In the second place, as
already averred, this Court cannot go behind the expressed and proclaimed purposes of PDNo. 771, which
are reasonable and even laudable.
It should also be remembered that PD No. 771 provides that the national government can
subsequently grant fr anchises “upon proper application and verification of the qualifications of the
applicant” ADC has not alleged that it filed an application for a franchise with the national government
subsequent to the enactment of PD No. 771; thus, the allegations abovementioned (of preference to a
select group) are based on conjectures, speculations and imagined biases which do not warrant the
consideration of this Court.
On the other hand, it is noteworthy that while then President Aquino issued Executive Order No. 169
revoking PD No. 810 (which granted a franchise to a Marcos-crony to operate the jaialai), she did not scrap
or repeal PD No. 771 which had revoked all franchises to operate jai-alais issued by local governments,
thereby re-affirming the government policy that franchises to operate jai-alais are for the national
government (not local governments) to consider and approve.
On the alleged violation of the non-impairment and equal protection clauses of the Constitution, it
should be remembered that a franchise is not in the strict sense a simple contract but rather it is, more
importantly, a mere privilege specially in matters which are within the government’s power to regulate
and even prohibit through the exercise of the police power. Thus, a gambling franchise is always subject
to the exercise of police power for the public welfare,
In RCPI v. NTC (150 SCRA 450), we held that:
“A franchise started out as a ‘royal privilege or (a) branch of the King’s prerogative, subsisting in the hands
of a subject.’ This definition was given by Finch, adopted by Blackstone, and accepted by every authority
since x x x Today, a franchise, being merely a privilege emanating from the sovereign power of the state
and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power
through its administrative agencies.”
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Lim vs. Pacquing
There is a stronger reason for holding ADC’s permit to be a mere privilege because jai-alai, when played
for bets, is pure and simple gambling. To analogize a gambling franchise to a franchise for the operation
of a public utility, such as public transportation company, is to trivialize the great historic origin of this
branch of royal privilege.
 As earlier noted, ADC has not alleged ever applying for a franchise under the provisions of PD No. 771.
And yet, the purpose of PD No. 771 is quite clear from its provisions, i.e., to give to the national
government the exclusive power to grant gambling franchises. Thus, all franchises then existing were
revoked but were made subject to reissuance by the national government upon compliance by the
applicant with governmentset qualifications and requirements.
There was no violation by PD No. 771 of the equal protection clause since the decree
revoked all franchises issued by local governments without qualification or exception. ADC cannot allege
violation of the equal protection clause simply because it was the only one affected by the decree, for as
correctly pointed out by the government, ADC was not singled out when all jai-alai franchises were
revoked. Besides, it is too late in the day for ADC to seek redress for alleged violation of its constitutional
rights for it could have raised these issues as early as 1975, almost twenty (20) years ago.
Finally, we do not agree that Section 3 of PD No. 771 and the requirement of a legislative franchise in
Republic Act No. 954 are “riders” to the two (2) laws and are violative of the rule that laws should embrace
one subject which shall be expressed in the title, as argued by ADC. In Cordero v. Cabatuando (6 SCRA 418),
this Court ruled that the requirement under the Constitution that all laws should embrace only one subject
which shall be expressed in the title is sufficiently met if the title is comprehensive enough reasonably to
include the general object which the statute seeks to effect, without expressing each and every end and
means necessary or convenient for the accomplishing of the objective.

III

On the issue of whether or not there was grave abuse of discretion committed by respondent Judge Reyes
in issuing the temporary restraining order (later converted to a writ of prelimi-
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680 SUPREME COURT REPORTS ANNOTATED
Lim vs. Pacquing
nary injunction) and the writ of preliminary mandatory injunc-tion, we hold and rule there was.
Section 3, Rule 58 of the Rules of Court provides for the grounds for the issuance of a preliminary
injunction. While ADC could allege these grounds, respondent judge should have taken judicial notice of
Republic Act No. 954 and PD 771, under Section 1 Rule 129 of the Rules of Court. These laws negate the
existence of any legal right on the part of ADC to the reliefs it sought so as to justify the issuance of a writ
of preliminary injunction. Since PD No. 771 and Republic Act No. 954 are presumed valid and constitutional
until ruled otherwise by the Supreme Court after due hearing, ADC was not entitled to the writs issued
and consequently there was grave abuse of discretion in issuing them.
WHEREFORE, for the foregoing reasons, judgment is hereby rendered:

1. 1.allowing the Republic of the Philippines to intervene in G.R. No. 115044.

2. 2.declaring Presidential Decree No. 771 valid and constitutional.
3. 3.declaring that respondent Associated Development Corporation (ADC) does not possess the
required congressional franchise to operate and conduct the jai-alai under Republic Act No.
954 and Presidential Decree No. 771.
4. 4.setting aside the writs of preliminary injunction and preliminary mandatory injunction issued
by respondent Judge Vetino Reyes in Civil Case No. 94–71656.

SO ORDERED.

G.R. No. 149276. September 27, 2002.*
JOVENCIO LIM and TERESITA LIM, petitioners, vs. THE PEOPLE OF THE PHILIPPINES, THE REGIONAL TRIAL
COURT OF QUEZON CITY, BRANCH 217, THE CITY PROSECUTOR OF QUEZON CITY, AND WILSON CHAM,
respondents.
Constitutional Law; Criminal Law; Judgments; Cruel and Excessive Punishment; Settled is the rule
that punishment authorized by statute is not cruel, degrading or disproportionate to the nature of the
offense unless it is flagrantly and plainly oppressive and wholly disproportionate to the nature of the
offense as to shock the moral sense of the community.—Settled is the rule that a punishment authorized
by statute is not cruel, degrading or disproportionate to the nature of the offense unless it is flagrantly and
plainly oppressive and wholly disproportionate to the nature of the offense as to shock the moral sense of
the community. It takes more than merely being harsh, excessive, out of proportion or severe for a penalty
to be obnoxious to the Constitution. Based on this principle, the Court has consistently overruled
contentions of the defense that the penalty of fine or imprisonment authorized by the statute involved is
cruel and degrading.
Same; Same; Same; Same; The prohibition against cruel and unusual punishment is generally aimed
at the form or character of the punishment rather than its severity in respect of its duration or amount, and
applies to punishments which never existed in America or which public sentiment regards as cruel or
obsolete.—In People vs. Tongko, this Court held that the prohibition against cruel and unusual punishment
is generally aimed at the form or character of the punishment rather than its severity in respect of its
duration or amount, and applies to punishments which never existed in America or which public sentiment
regards as cruel or obsolete. This refers, for instance, to those inflicted at the whipping post or in the
pillory, to burning at the stake, breaking on the wheel, disemboweling and the like. The fact that the
penalty is severe provides insufficient basis to declare a law unconstitutional and does not, by that
circumstance alone, make it cruel and inhuman.
Same; Same; Same; Same; Presidential Decree 818; The increase in penalty in PD 818 is to
effectuate the repression of an evil that undermines the country’s commercial and economic growth, and
to serve as a necessary precaution to deter people from issuing bouncing checks.—Clearly, the
______________
*
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VOL. 390, SEPTEMBER 27, 2002 195
Lim vs. People
increase in the penalty, far from being cruel and degrading, was motivated by a laudable purpose,
namely, to effectuate the repression of an evil that undermines the country’s commercial and economic
growth, and to serve as a necessary precaution to deter people from issuing bouncing checks. The fact that
PD 818 did not increase the amounts corresponding to the new penalties only proves that the amount is
immaterial and inconsequential. What the law sought to avert was the proliferation of estafa cases
committed by means of bouncing checks. Taking into account the salutary purpose for which said law was
decreed, we conclude that PD 818 does not violate Section 19 of Article III of the Constitution.
Same; Same; Same; The burden of proving the invalidity of a law rests on those who challenge it.—
When a law is questioned before the Court, the presumption is in favor of its constitutionality. To justify
its nullification, there must be a clear and unmistakable breach of the Constitution, not a doubtful and
argumentative one. The burden of proving the invalidity of a law rests on those who challenge it. In this
case, petitioners failed to present clear and convincing proof to defeat the presumption of constitutionality
of PD 818.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Puno & Associates Law Office for petitioners.
Rodante D. Marcoleta for private respondent.
CORONA, J.:
The constitutionality of PD 818, a decree which amended Article 315 of the Revised Penal Code by
increasing the penalties for estafa committed by means of bouncing checks, is being challenged in this
petition for certiorari, for being violative of the due process clause, the right to bail and the provision
against cruel, degrading or inhuman punishment enshrined under the Constitution.
The antecedents of this case, as gathered from the parties’ pleadings and documentary proofs, follow.
In December 1991, petitioner spouses issued to private respondent two postdated checks, namely,
Metrobank check no. 464728 dated January 15, 1992 in the amount of P365,750 and Metrobank check no.
464743 dated January 22, 1992 in the amount of P429,000. Check no. 464728 was dishonored upon
presentment for
196
196 SUPREME COURT REPORTS ANNOTATED
Lim vs. People
having been drawn against insufficient funds while check no. 464743 was not presented for payment upon
request of petitioners who promised to replace the dishonored check.
When petitioners reneged on their promise to cover the amount of check no. 464728, the private
respondent filed a complaint-affidavit before the Office of the City Prosecutor of Quezon City charging
petitioner spouses with the crime of estafa under Article 315, par. 2 (d) of the Revised Penal Code, as
amended by PD 818.
On February 16, 2001, the City Prosecutor issued a resolution finding probable cause against
petitioners and recommending the filing of an information for estafa with no bail recommended. On the
same day, an information for the crime of estafa was filed with Branch 217 of the Regional Trial Court of
Quezon City against petitioners. The case was docketed as Criminal Case No. Q-01-101574. Thereafter, the
trial court issued a warrant for the arrest of herein petitioners, thus:
“It appearing on the face of the information and from supporting affidavit of the complaining witness and
its annexes that probable cause exists, that the crime charged was committed and accused is probably
guilty thereof, let a warrant for the arrest of the accused be issued.
No Bail Recommended.
SO ORDERED.”1
On July 18, 2001, petitioners filed an “Urgent Motion to Quash Information and Warrant of Arrest” which
was denied by the trial court. Likewise, petitioners’ motion for bail filed on July 24, 2001 was denied by
the trial court on the same day. Petitioner Jovencio Lim was arrested by virtue of the warrant of arrest
issued by the trial court and was detained at the Quezon City Jail. However, petitioner Teresita Lim
remained at large.
On August 22, 2001, petitioners filed the instant petition for certiorari imputing grave abuse of
discretion on the part of the lower court and the Office of the City Prosecutor of Quezon City, arguing that
PD 818 violates the constitutional provisions on due process, bail and imposition of cruel, degrading or
inhuman punishment.
______________
1
Rollo, p. 29.
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VOL. 390, SEPTEMBER 27, 2002 197
Lim vs. People
In a resolution dated February 26, 2002, this Court granted the petition of Jovencio Lim to post bail
pursuant to Department of Justice Circular No. 74 dated November 6, 2001 which amended the 2000 Bail
Bond Guide involving estafa under Article 315, par. 2 (d), and qualified theft. Said Circular specifically
provides as follows:
xxx xxx xxx
3) Where the amount of fraud is P32,000.00 or over in which the imposable penalty is reclusion
temporal to reclusion perpetua, bail shall be based on reclusion temporal maximum, pursuant to Par. 2 (a)
of the 2000 Bail Bond Guide, multiplied by P2,000.00, plus an additional of P2,000.00 for every P10,000.00
in excess of P22,000.00; Provided, however, that the total amount of bail shall not exceed P60,000.00.
In view of the aforementioned resolution, the matter concerning bail shall no longer be discussed. Thus,
this decision will focus on whether or not PD 818 violates Sections 1 and 19 of Article III of the Constitution,
which respectively provide:
Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of the laws.
xxx
Section 19 (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment
inflicted. x x x.
We shall deal first with the issue of whether PD 818 was enacted in contravention of Section 19 of Article
III of the Constitution. In this regard, the impugned provision of PD 818 reads as follows:
SECTION 1. Any person who shall defraud another by means of false pretenses or fraudulent acts as
defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Republic Act No. 4885,
shall be punished by:
1st. The penalty of reclusion temporal if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the later sum, the penalty provided in this paragraph shall be
imposed in its maximum period, adding one year for each additional 10,000 pesos but the total penalty
which may be
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198 SUPREME COURT REPORTS ANNOTATED
Lim vs. People
imposed shall in no case exceed thirty years. In such cases, and in connection with the accessory penalties
which may be imposed under the Revised Penal Code, the penalty shall be termed reclusion perpetua;
2nd. The penalty of prision mayor in its maximum period, if the amount of the fraud is over 6,000
pesos but does not exceed 12,000 pesos.
3rd. The penalty of prision mayor in its medium period, if such amount is over 200 pesos but does not
exceed 6,000 pesos; and
4th. By prision mayor in its minimum period, if such amount does not exceed 200 pesos.
Petitioners contend that, inasmuch as the amount of the subject check is P365,750, they can be penalized
with reclusion perpetuaor 30 years of imprisonment. This penalty, according to petitioners, is too severe
and disproportionate to the crime they committed and infringes on the express mandate of Article III,
Section 19 of the Constitution which prohibits the infliction of cruel, degrading and inhuman punishment.
Settled is the rule that a punishment authorized by statute is not cruel, degrading or disproportionate
to the nature of the offense unless it is flagrantly and plainly oppressive and wholly disproportionate to
the nature of the offense as to shock the moral sense of the community. It takes more than merely being
harsh, excessive, out of proportion or severe for a penalty to be obnoxious to the Constitution.2 Based on
this principle, the Court has consistently overruled contentions of the defense that the penalty of fine or
imprisonment authorized by the statute involved is cruel and degrading.
In People vs. Tongko,3 this Court held that the prohibition against cruel and unusual punishment is
generally aimed at the form or character of the punishment rather than its severity in respect of its
duration or amount, and applies to punishments which never existed in America or which public sentiment
regards as cruel or obsolete. This refers, for instance, to those inflicted at the whipping post or in the
pillory, to burning at the stake, break-
______________
2People vs. Estoista, 93 Phil. 647 (1954).
3290 SCRA 597 (1998).
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VOL. 390, SEPTEMBER 27, 2002 199
Lim vs. People
ing on the wheel, disemboweling and the like. The fact that the penalty is severe provides insufficient basis
to declare a law unconstitutional and does not, by that circumstance alone, make it cruel and inhuman.
Petitioners also argue that while PD 818 increased the imposable penalties for estafa committed
under Article 315, par. 2 (d) of the Revised Penal Code, it did not increase the amounts corresponding to
the said new penalties. Thus, the original amounts provided for in the Revised Penal Code have remained
the same notwithstanding that they have become negligible and insignificant compared to the present
value of the peso.
This argument is without merit. The primary purpose of PD 818 is emphatically and categorically
stated in the following:
WHEREAS, reports received of late indicate an upsurge of estafa(swindling) cases committed by means of
bouncing checks;
WHEREAS, if not checked at once, these criminal acts would erode the people’s confidence in the use
of negotiable instruments as a medium of commercial transaction and consequently result in the
retardation of trade and commerce and the undermining of the banking system of the country;
WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of estafa cases by increasing
the existing penalties provided therefor.
Clearly, the increase in the penalty, far from being cruel and degrading, was motivated by a laudable
purpose, namely, to effectuate the repression of an evil that undermines the country’s commercial and
economic growth, and to serve as a necessary precaution to deter people from issuing bouncing checks.
The fact that PD 818 did not increase the amounts corresponding to the new penalties only proves that
the amount is immaterial and inconsequential. What the law sought to avert was the proliferation
of estafa cases committed by means of bouncing checks. Taking into account the salutary purpose for
which said law was decreed, we conclude that PD 818 does not violate Section 19 of Article III of the
Constitution.
Moreover, when a law is questioned before the Court, the presumption is in favor of its
constitutionality. To justify its nullification, there must be a clear and unmistakable breach of the Consti-
200
200 SUPREME COURT REPORTS ANNOTATED
Lim vs. People
tution, not a doubtful and argumentative one.4 The burden of proving the invalidity of a law rests on those
who challenge it. In this case, petitioners failed to present clear and convincing proof to defeat the
presumption of constitutionality of PD 818.
With respect to the issue of whether PD 818 infringes on Section 1 of Article III of the Constitution,
petitioners claim that PD 818 is violative of the due process clause of the Constitution as it was not
published in the Official Gazette. This claim is incorrect and must be rejected. Publication, being an
indispensable part of due process, is imperative to the validity of laws, presidential decrees and executive
orders.5 PD 818 was published in the Official Gazette on December 1, 1975.6
With the foregoing considerations in mind, this Court upholds the constitutionality of PD 818.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.

G.R. No. 94723. August 21, 1997.*
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses
FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION, petitioners, vs. CENTRAL BANK OF THE
PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y NORTHCOTT, respondents.
Remedial Law; Jurisdiction; Declaratory Relief; Court has no original and exclusive jurisdiction over
a petition for declaratory relief.—This Court has no original and exclusive jurisdiction over a petition for
declaratory relief. However, exceptions to this rule have been recognized. Thus, where the petition has
far-reaching implications and raises questions that should be resolved, it may be treated as one for
mandamus.
Statutory Construction; Statutes; In case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.—In fine, the application of the
law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central
Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body whatsoever, is applicable to a
foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused
Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that “in case of doubt in
the interpretation or application of laws, it is presumed that the lawmaking
____________
*EN BANC.
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28 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
body intended right and justice to prevail. “Ninguno non deue enriquecerse tortizeramente con
dano de otro.” Simply stated, when the statute is silent or ambiguous, this is one of those fundamental
solutions that would respond to the vehement urge of conscience.
PETITION for declaratory relief in the Supreme Court.
The facts are stated in the opinion of the Court.
Erlinda S. Carolino for petitioners.
Del Rosario, Lim, Devera, Vigilia & Panganiban for China Banking Corp.
TORRES, JR., J.:
In our predisposition to discover the “original intent” of a statute, courts become the unfeeling pillars of
the status quo. Little do we realize that statutes or even constitutions are bundles of compromises thrown
our way by their framers. Unless we exercise vigilance, the statute may already be out of tune and
irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:
1. a.)Immediately upon the filing of this petition, an Order be issued restraining the respondents
from applying and enforcing Section 113 of Central Bank Circular No. 960;
2. b.)After hearing, judgment be rendered:
1. 1.)Declaring the respective rights and duties of petitioners and respondents;
2. 2.)Adjudging Section 113 of Central Bank Circular No. 960 as contrary to the provisions of the
Constitution, hence void; because its provision that “Foreign currency deposits shall be
exempt from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever”
1. i.)has taken away the right of petitioners to have the bank deposit of defendant Greg Bartelli y
Northcott garnished to satisfy the judgment rendered in petitioners’ favor in viola-
29
VOL. 278, AUGUST 21, 1997 29
Salvacion vs. Central Bank of the Philippines
1. tion of substantive due process guaranteed by the Constitution;
2. ii.)has given foreign currency depositors an undue favor or a class privilege in violation of the
equal protection clause of the Constitution;
3. iii.)has provided a safe haven for criminals like the herein respondent Greg Bartelli y Northcott
since criminals could escape civil liability for their wrongful acts by merely converting their
money to a foreign currency and depositing it in a foreign currency deposit account with an
authorized bank.
The antecedent facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen
Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on February 4, and
three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people living
nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail. The policemen
recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No. 021000678-1166111303,
US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account—China Banking
Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces;
7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg Bartelli,
Criminal Case No. 801 for Serious Illegal Detention and Criminal Cases Nos. 802, 803, 804, and 805 for four
(4) counts of Rape. On the same day, petitioners filed with the Regional Trial Court of Makati Civil Case No.
89-3214 for damages with preliminary attachment against Greg Bartelli. On February 24, 1989, the day
there was a scheduled hearing for Bartelli’s petition for bail the latter escaped from jail.
On February 28, 1989, the court granted the fiscal’s Urgent Ex-Parte Motion for the Issuance of
Warrant of Arrest and
30
30 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
Hold Departure Order. Pending the arrest of the accused Greg Bartelli y Northcott, the criminal cases were
archived in an Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989 granting
the application of herein petitioners, for the issuance of the writ of preliminary attachment. After
petitioners gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the amount of P100,000.00, a Writ
of Preliminary Attachment was issued by the trial court on February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China Banking
Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation
invoked Republic Act No. 1405 as its answer to the notice of garnishment served on it. On March 15, 1989,
Deputy Sheriff of Makati Armando de Guzman sent his reply to China Banking Corporation saying that the
garnishment did not violate the secrecy of bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order which has placed the subject deposits
in custodia legis. In answer to this letter of the Deputy Sheriff of Makati, China Banking Corporation, in a
letter dated March 20, 1989, invoked Section 113 of Central Bank Circular No. 960 to the effect that the
dollar deposits of defendant Greg Bartelli are exempt from attachment, garnishment, or any other order
or process of any court, legislative body, government agency or any administrative body, whatsoever.
 This prompted the counsel for petitioners to make an inquiry with the Central Bank in a letter dated “SO ORDERED.”
April 25, 1989 on whether Section 113 of CB Circular No. 960 has any exception or whether said section The heinous acts of respondent Greg Bartelli which gave rise to the award were related in graphic detail
has been repealed or amended since said section has rendered nugatory the substantive right of the by the trial court in its decision as follows:
plaintiff to have the claim sought to be enforced by the civil action secured by way of the writ of preliminary “The defendant in this case was originally detained in the municipal jail of Makati but was able to escape
attachment as granted to the plaintiff under Rule 57 of the Revised Rules of Court. The Central Bank therefrom on February 24, 1989 as per report of the Jail Warden of Makati to the Presiding Judge,
responded as follows: Honorable Manuel M. Cosico of the Regional Trial Court of Makati, Branch 136, where he was charged
31 with four counts of Rape and Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly, upon
motion of plaintiffs, through counsel, summons was served upon defendant by publication in the Manila
VOL. 278, AUGUST 21, 1997 31
Times, a newspaper of general circulation as attested by the Advertising Manager of the Metro Media
Salvacion vs. Central Bank of the Philippines Times, Inc., the publisher of the said newspaper. Defendant, however, failed to file his answer to the
May 26, 1989 complaint despite the lapse of the period of sixty (60) days from the last publication; hence, upon motion
“Ms. Erlinda S. Carolino of the plaintiffs, through counsel, defendant was declared in default and plaintiffs were authorized to
12 Pres. Osmena Avenue present their evidence ex parte.
South Admiral Village “In support of the complaint, plaintiffs presented as witnesses the minor Karen E. Salvacion, her
Parañaque, Metro Manila father, Federico N. Salvacion, Jr., a certain Joseph Aguilar and a certain Liberato Madulio, who gave the
“Dear Ms. Carolino: following testimony:
“This is in reply to your letter dated April 25, 1989 regarding your inquiry on Section 113, CB Circular “Karen took her first year high school in St. Mary’s Academy in Pasay City but has recently transferred
No. 960 (1983). to Arellano University for her second year.
“The cited provision is absolute in application. It does not admit of any exception, nor has the same “In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati Cinema Square, with her
been repealed nor amended. friend Edna Tangile whiling away her free time. At about 3:30 p.m. while she was finishing her snack on a
“The purpose of the law is to encourage dollar accounts within the country’s banking system which concrete bench in front of Plaza Fair, an American ap-
would help in the development of the economy. There is no intention to render futile the basic rights of a 33
person as was suggested in your subject letter. The law may be harsh as some perceive it, but it is still the VOL. 278, AUGUST 21, 1997 33
law. Compliance is, therefore, enjoined.
“Very truly yours, Salvacion vs. Central Bank of the Philippines
(SGD) AGAPITO S. FAJARDO proached her. She was then alone because Edna Tangile had already left, and she was about to go home.
Director”1 (TSN, Aug. 15, 1989, pp. 2 to 5)
Meanwhile, on April 10, 1989, the trial court granted petitioners’ motion for leave to serve summons by “The American asked her name and introduced himself as Greg Bartelli. He sat beside her when he
publication in the Civil Case No. 89-3214 entitled “Karen Salvacion, et al. vs. Greg Bartelli y Northcott.” talked to her. He said he was a Math teacher and told her that he has a sister who is a nurse in New York.
Summons with the complaint was published in the Manila Times once a week for three consecutive weeks. His sister allegedly has a daughter who is about Karen’s age and who was with him in his house along
Greg Bartelli failed to file his answer to the complaint and was declared in default on August 7, 1989. After Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5)
hearing the case ex-parte, the court rendered judgment in favor of petitioners on March 29, 1990, the “The American asked Karen what was her favorite subject and she told him it’s Pilipino. He then
dispositive portion of which reads: invited her to go with him to his house where she could teach Pilipino to his niece. He even gave her a
“WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendant, ordering the stuffed toy to persuade her to teach his niece. (Id., pp. 5-6) “They walked from Plaza Fair along Pasong
latter: Tamo, turning right to reach the defendant’s house along Kalayaan Avenue. (Id., p. 6)
“When they reached the apartment house, Karen noticed that defendant’s alleged niece was not
outside the house but defendant told her maybe his niece was inside. When Karen did not see the alleged
1. “1.To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral damages;
niece inside the house, defendant told her maybe his niece was upstairs, and invited Karen to go upstairs.
(Id., p. 7)
_______________ “Upon entering the bedroom defendant suddenly locked the door. Karen became nervous because
his niece was not there. Defendant got a piece of cotton cord and tied Karen’s hands with it, and then he
1Annex “R,” Petition. undressed her. Karen cried for help but defendant strangled her. He took a packing tape and he covered
32 her mouth with it and he circled it around her head. (Id., p. 7)
“Then, defendant suddenly pushed Karen towards the bed which was just near the door. He tied her
32 SUPREME COURT REPORTS ANNOTATED
feet and hands spread apart to the bed posts. He knelt in front of her and inserted his finger in her sex
Salvacion vs. Central Bank of the Philippines organ. She felt severe pain. She tried to shout but no sound could come out because there were tapes on
her mouth. When defendant withdrew his finger it was full of blood and Karen felt more pain after the
withdrawal of the finger. (Id., p. 8)
1. “2.To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and Evelina E. Salvacion the “He then got a Johnson’s Baby Oil and he applied it to his sex organ as well as to her sex organ. After
amount of P150,000.00 each or a total of P300,000.00 for both of them; that he forced his sex organ into her but he was not able to do so. While he was doing it, Karen found it
2. “3.To pay plaintiffs exemplary damages of P100,000.00; and difficult to breathe and she perspired a lot while feeling severe pain. She merely presumed that he was
3. “4.To pay attorney’s fees in an amount equivalent to 25% ofthe total amount of damages herein able to insert his sex organ a little, because she could not see. Karen could not recall how long the
awarded; defendant was in that position. (Id. pp. 8-9).
4. “5.To pay litigation expenses of P10,000.00; plus 34
5. “6.Costs of the suit.

34 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
“After that, he stood up and went to the bathroom to wash. He also told Karen to take a shower and he
untied her hands. Karen could only hear the sound of the water while the defendant, she presumed, was
in the bathroom washing his sex organ. When she took a shower more blood came out from her. In the
meantime, defendant changed the mattress because it was full of blood. After the shower, Karen was
allowed by defendant to sleep. She fell asleep because she got tired crying. The incident happened at about
4:00 p.m. Karen had no way of determining the exact time because defendant removed her watch.
Defendant did not care to give her food before she went to sleep. Karen woke up at about 8:00 o’clock the
following morning. (Id., pp. 9-10)
“The following day, February 5, 1989, a Sunday, after a breakfast of biscuit and coke at about 8:30 to
9:00 a.m. defendant raped Karen while she was still bleeding. For lunch, they also took biscuit and coke.
She was raped for the second time at about 12:00 to 2:00 p.m. In the evening, they had rice for dinner
which defendant had stored downstairs; it was he who cooked the rice that is why it looks like “lugaw.”
For the third time, Karen was raped again during the night. During those three times defendant succeeded
in inserting his sex organ but she could not say whether the organ was inserted wholly.
“Karen did not see any firearm or any bladed weapon. The defendant did not tie her hands and feet
nor put a tape on her mouth anymore but she did not cry for help for fear that she might be killed; besides,
all the windows and doors were closed. And even if she shouted for help, nobody would hear her. She was
so afraid that if somebody would hear her and would be able to call the police, it was still possible that as
she was still inside the house, defendant might kill her. Besides, the defendant did not leave that Sunday,
ruling out her chance to call for help. At nighttime he slept with her again. (TSN, Aug. 15, 1989, pp. 12-14)
“On February 6, 1989, Monday, Karen was raped three times, once in the morning for thirty minutes
after a breakfast of biscuits; again in the afternoon; and again in the evening. At first, Karen did not know
that there was a window because everything was covered by a carpet, until defendant opened the window
for around fifteen minutes or less to let some air in, and she found that the window was covered by
styrofoam and plywood. After that, he again closed the window with a hammer and he put the styrofoam,
plywood, and carpet back. (Id., pp. 14-15)
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VOL. 278, AUGUST 21, 1997 35
Salvacion vs. Central Bank of the Philippines
“That Monday evening, Karen had a chance to call for help, although defendant left but kept the door
closed. She went to the bathroom and saw a small window covered by styrofoam and she also spotted a
small hole. She stepped on the bowl and she cried for help through the hole. She cried: ‘Maawa na po
kayo sa akin. Tulungan n’yo akong makalabas dito. Kinidnap ako!’ Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was ‘istorbo.’ Karen pleaded for help and the woman
told her to sleep and she will call the police. She finally fell asleep but no policeman came. (TSN, Aug. 15,
1989, pp. 15-16).
“She woke up at 6:00 o’clock the following morning, and she saw defendant in bed, this time sleeping.
She waited for him to wake up. When he woke up, he again got some food but he always kept the door
locked. As usual, she was merely fed with biscuit and coke. On that day, February 7, 1989, she was again
raped three times. The first at about 6:30 to 7:00 a.m., the second at about 8:30-9:00, and the third was
after lunch at 12:00 noon. After he had raped her for the second time he left but only for a short while.
Upon his return, he caught her shouting for help but he did not understand what she was shouting about.
After she was raped the third time, he left the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to
the bathroom and shouted for help. After shouting for about five minutes, she heard many voices. The
voices were asking for her name and she gave her name as Karen Salvacion. After a while, she heard a
voice of a woman saying they will just call the police. They were also telling her to change her clothes. She
went from the bathroom to the room but she did not change her clothes being afraid that should the
neighbors call for the police and the defendant see her in different clothes, he might kill her. At that time
she was wearing a T-shirt of the American because the latter washed her dress. (Id., p. 16)
“Afterwards, defendant arrived and he opened the door. He asked her if she had asked for help
because there were many policemen outside and she denied it. He told her to change her clothes, and she
did change to the one she was wearing on Saturday. He instructed her to tell the police that she left home
and willingly; then he went downstairs but he locked the door. She could hear people conversing but she
could not understand what they were saying. (Id., p. 19)
“When she heard the voices of many people who were conversing downstairs, she knocked
repeatedly at the door as hard as she could. She heard somebody going upstairs and when the door was
opened, she saw a policeman. The policeman asked her name
36
36 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
and the reason why she was there. She told him she was kidnapped. Downstairs, he saw about five
policemen in uniform and the defendant was talking to them. ‘Nakikipag-areglo po sa mga pulis,’ Karen
added. “The policeman told him to just explain at the precinct. (Id., p. 20)
“They went out of the house and she saw some of her neighbors in front of the house. They rode the
car of a certain person she called Kuya Boy together with defendant, the policeman, and two of her
neighbors whom she called Kuya Bong Lacson and one Ate Nita. They were brought to Sub-Station I and
there she was investigated by a policeman. At about 2:00 a.m., her father arrived, followed by her mother
together with some of their neighbors. Then they were brought to the second floor of the police
headquarters. (Id., p. 21)
“At the headquarters, she was asked several questions by the investigator. The written statement she
gave to the police was marked as Exhibit A. Then they proceeded to the National Bureau of Investigation
together with the investigator and her parents. At the NBI, a doctor, a medico-legal officer, examined her
private parts. It was already 3:00 in the early morning of the following day when they reached the NBI.
(TSN, Aug. 15, 1989, p. 22) The findings of the medico-legal officer has been marked as Exhibit B.
“She was studying at the St. Mary’s Academy in Pasay City at the time of the incident but she
subsequently transferred to Apolinario Mabini, Arellano University, situated along Taft Avenue, because
she was ashamed to be the subject of conversation in the school. She first applied for transfer to Jose Abad
Santos, Arellano University along Taft Avenue near the Light Rail Transit Station but she was denied
admission after she told the school the true reason for her transfer. The reason for their denial was that
they might be implicated in the case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx
“After the incident, Karen has changed a lot. She does not play with her brother and sister anymore,
and she is always in a state of shock; she has been absent-minded and is ashamed even to go out of the
house. (TSN, Sept. 12, 1989, p. 10) She appears to be restless or sad. (Id., p. 11) The father prays for
P500,000.00 moral damages for Karen for this shocking experience which probably, she would always
recall until she reaches old age, and he is not sure if she could ever recover from this experience.” (TSN,
Sept. 24, 1989, pp. 10-11)
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VOL. 278, AUGUST 21, 1997 37
Salvacion vs. Central Bank of the Philippines
Pursuant to an Order granting leave to publish notice of decision, said notice was published in the Manila
Bulletin once a week for three consecutive weeks. After the lapse of fifteen (15) days from the date of the
last publication of the notice of judgment and the decision of the trial court had become final, petitioners
tried to execute on Bartelli’s dollar deposit with China Banking Corporation. Likewise, the bank invoked
Section 113 of Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil down to two:
May this Court entertain the instant petition despite the fact that original jurisdiction in petitions for
declaratory relief rests with the lower court? Should Section 113 of Central Bank Circular No. 960 and
Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known as the Foreign Currency Deposit Act be
made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No. 960 providing that
“Foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any administrative body whatsoever,” should be
adjudged as unconstitutional on the grounds that: 1.) it has taken away the right of petitioners to have the
bank deposit of defendant Greg Bartelli y Northcott garnished to satisfy the judgment rendered in
petitioners’ favor in violation of substantive due process guaranteed by the Constitution; 2.) it has given
foreign currency depositors an undue favor or a class privilege in violation of the equal protection clause
of the Constitution; 3.) it has provided a safe haven for criminals like the herein respondent Greg Bartelli
y Northcott since criminals could escape civil liability for their wrongful acts by merely converting their
money to a foreign currency and depositing it in a foreign currency deposit account with an authorized
bank; and 4.) the Monetary Board, in issuing Section 113 of Central Bank Circular No. 960 has exceeded its
delegated quasi-legislative power when it took away: a.) the plaintiff’s substantive right to have the claim
sought to be
38
38 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
enforced by the civil action secured by way of the writ of preliminary attachment as granted by Rule 57 of
the Revised Rules of Court; b.) the plaintiff’s substantive right to have the judgment credit satisfied by way
of the writ of execution out of the bank deposit of the judgment debtor as granted to the judgment creditor
by Rule 39 of the Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges that the Monetary Board in
issuing Section 113 of CB Circular No. 960 did not exceed its power or authority because the subject Section
is copied verbatim from a portion of R.A. No. 6426 as amended by P.D. 1246. Hence, it was not the
Monetary Board that grants exemption from attachment or garnishment to foreign currency deposits, but
the law (R.A. 6426 as amended) itself; that it does not violate the substantive due process guaranteed by
the Constitution because a.) it was based on a law; b.) the law seems to be reasonable; c.) it is enforced
according to regular methods of procedure; and d.) it applies to all members of a class.
Expanding, the Central Bank said: that one reason for ex-empting the foreign currency deposits from
attachment, garnishment or any other order or process of any court, is to assure the development and
speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines;
that another reason is to encourage the inflow of foreign currency deposits into the banking institutions
thereby placing such institutions more in a position to properly channel the same to loans and investments
in the Philippines, thus directly contributing to the economic development of the country; that the subject
section is being enforced according to the regular methods of procedure; and that it applies to all foreign
currency deposits made by any person and therefore does not violate the equal protection clause of the
Constitution.
Respondent Central Bank further avers that the questioned provision is needed to promote the public
interest and the general welfare; that the State cannot just stand idly by while a considerable segment of
the society suffers from eco-
39
VOL. 278, AUGUST 21, 1997 39
Salvacion vs. Central Bank of the Philippines
nomic distress; that the State had to take some measures to encourage economic development; and that
in so doing persons and property may be subjected to some kinds of restraints or burdens to secure the
general welfare or public interest. Respondent Central Bank also alleges that Rule 39 and Rule 57 of the
Revised Rules of Court provide that some properties are exempted from execution attachment especially
provided by law and R.A. No. 6426 as amended is such a law, in that it specifically provides, among others,
that foreign currency deposits shall be exempted from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving reasons similar to that of
respondent Central Bank, also stated that respondent China Bank is not unmind-ful of the inhuman
sufferings experienced by the minor Karen E. Salvacion from the beastly hands of Greg Bartelli; that it is
only too willing to release the dollar deposit of Bartelli which may perhaps partly mitigate the sufferings
petitioner has undergone; but it is restrained from doing so in view of R.A. No. 6426 and Section 113 of
Central Bank Circular No. 960; and that despite the harsh effect of these laws on petitioners, CBC has no
other alternative but to follow the same.
This Court finds the petition to be partly meritorious. Petitioner deserves to receive the damages
awarded to her by the court. But this petition for declaratory relief can only be entertained and treated as
a petition for mandamus to require respondents to honor and comply with the writ of execution in Civil
Case No. 89-3214.
This Court has no original and exclusive jurisdiction over a petition for declaratory relief.2 However,
exceptions to this rule have been recognized. Thus, where the petition has far-
_______________
2
Alliance of Government Workers (AGW) v. Ministry of Labor and Employment, 124 SCRA 1.
40
40 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
reaching implications and raises questions that should be resolved, it may be treated as one for
mandamus.3
Here is a child, a 12-year old girl, who in her belief that all Americans are good and in her gesture of
kindness by teaching his alleged niece the Filipino language as requested by the American, trustingly went
with said stranger to his apartment, and there she was raped by said American tourist Greg Bartelli. Not
once, but ten times. She was detained therein for four (4) days. This American tourist was able to escape
from the jail and avoid punishment. On the other hand, the child, having received a favorable judgment in
the Civil Case for damages in the amount of more than P1,000,000.00, which amount could alleviate the
humiliation, anxiety, and besmirched reputation she had suffered and may continue to suffer for a long,
long time; and knowing that this person who had wronged her has the money, could not, however get the
award of damages because of this unreasonable law. This questioned law, therefore, makes futile the
favorable judgment and award of damages that she and her parents fully deserve. As stated by the trial
court in its decision,
“Indeed, after hearing the testimony of Karen, the Court believes that it was undoubtedly a shocking and
traumatic experience she had undergone which could haunt her mind for a long, long time, the mere recall
of which could make her feel so humiliated, as in fact she had been actually humiliated once when she was
refused admission at the Abad Santos High School, Arellano University, where she sought to transfer from
another school simply because the school authorities of the said High School learned about what happened
to her and allegedly feared that they might be implicated in the case.
xxx
The reason for imposing exemplary or corrective damages is due to the wanton and bestial manner
defendant had committed the acts of rape during a period of serious illegal detention of his hapless vic-
_______________
3
Nationalista Party vs. Angelo Bautista, 85 Phil. 101; Aquino vs. Comelec, 62 SCRA 275; |and Alliance
of Government Workers vs. Minister of Labor and Employment, supra.
41
VOL. 278, AUGUST 21, 1997 41
Salvacion vs. Central Bank of the Philippines
tim, the minor Karen Salvacion whose only fault was in her being so naïve and credulous to believe easily
that defendant, an American national, could not have such a bestial desire on her nor capable of
committing such a heinous crime. Being only 12 years old when that unfortunate incident happened, she
has never heard of an old Filipino adage that in every forest there is a snake, x x x.”4
If Karen’s sad fate had happened to anybody’s own kin, it would be difficult for him to fathom how the
incentive for foreign currency deposit could be more important than his child’s rights to said award of
damages; in this case, the victim’s claim for damages from this alien who had the gall to wrong a child of
tender years of a country where he is a mere visitor. This further illustrates the flaw in the questioned
provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country’s
economy was in a shambles; when foreign investments were minimal and presumably, this was the reason
why said statute was enacted. But the realities of the present times show that the country has recovered
economically; and even if not, the questioned law still denies those entitled to due process of law for being
unreasonable and oppressive. The intention of the questioned law may be good when enacted. The law
failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case
before us.
It has thus been said that—
“But I also know,5 that laws and institutions must go hand in hand with the progress of the human mind.
As that becomes more developed, more enlightened, as new discoveries are made, new truths are
disclosed and manners and opinions change with the change of circumstances, institutions must advance
also, and keep pace with the times . . . We might as well require a man to wear still
_______________
4
Decision, Regional Trial Court, Civil Case No. 89-3214, pp. 9 & 12; Rollo, pp. 66 & 69.
5Thomas Jefferson, Democracy, ed. Saul K. Padover. (New York, Penguin, 1946) p. 171.
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42 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
the coat which fitted him when a boy, as civilized society to remain ever under the regimen of their
barbarous ancestors.”
In his Comment, the Solicitor General correctly opined, thus:
“The present petition has far-reaching implications on the right of a national to obtain redress for a wrong
committed by an alien who takes refuge under a law and regulation promulgated for a purpose which does
not contemplate the application thereof envisaged by the alien. More specifically, the petition raises the
question whether the protection against attachment, garnishment or other court process accorded to
foreign currency deposits by PD No. 1246 and CB Circular No. 960 applies when the deposit does not come
from a lender or investor but from a mere transient or tourist who is not expected to maintain the deposit
in the bank for long.
“The resolution of this question is important for the protection of nationals who are victimized in the
forum by foreigners who are merely passing through.
xxx
“x x x Respondents China Banking Corporation and Central Bank of the Philippines refused to honor
the writ of execution issued in Civil Case No. 89-3214 on the strength of the following provision of Central
Bank Circular No. 960:
‘Sec. 113. Exemption from attachment.—Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever.’ “Central Bank Circular No. 960 was issued pursuant to Section 7 of
Republic Act No. 6426:
‘Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall promulgate such rules
and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the
publication of such rules and regulations in the Official Gazette and in a newspaper of national circulation
for at least once a week for three consecutive weeks. In case the Central Bank promulgates new rules and
regulations decreasing the rights of depositors, the rules and regulations at the time the deposit was made
shall govern.’
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VOL. 278, AUGUST 21, 1997 43
Salvacion vs. Central Bank of the Philippines
“The aforecited Section 113 was copied from Section 8 of Republic Act No. 6426, as amended by P.D. 1246,
thus:
‘Sec. 8. Secrecy of Foreign Currency Deposits.—All foreign currency deposits authorized under this Act, as
amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature
and, except upon the written permission of the depositor, in no instance shall such foreign currency
deposits be examined, inquired or looked into by any person, government official, bureau or office
whether judicial or administrative or legislative or any other entity whether public or private: Provided,
however, that said foreign currency deposits shall be exempt from attachment, garnishment, or any other
order or process of any court, legislative body, government agency or any administrative body whatsoever.’
“The purpose of PD 1246 in according protection against attachment, garnishment and other court
process to foreign currency deposits is stated in its whereases, viz.:
‘WHEREAS, under Republic Act No. 6426, as amended by Presidential Decree No. 1035, certain Philippine
banking institutions and branches of foreign banks are authorized to accept deposits in foreign currency;
‘WHEREAS, under the provisions of Presidential Decree No. 1034 authorizing the establishment of an
offshore banking system in the Philippines, offshore banking units are also authorized to receive foreign
currency deposits in certain cases;
“WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit
System and the Offshore Banking System in the Philippines, certain incentives were provided for under the
two Systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the
interest income of depositors who are nonresidents and are not engaged in trade or business in the
Philippines;
‘WHEREAS, making absolute the protective cloak of confidentiality over such foreign currency
deposits, exempting such deposits from tax, and guaranteeing the vested rights of depositors would better
encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such
deposits in the Philippines thereby placing such in-
44
44 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
stitutions more in a position to properly channel the same to loans and investments in the Philippines,
thus directly contributing to the economic development of the country;’
“Thus, one of the principal purposes of the protection accorded to foreign currency deposits is ‘to
assure the development and speedy growth of the Foreign Currency Deposit system and the Offshore
Banking in the Philippines’ (3rd Whereas). “The Offshore Banking System was established by PD No. 1034.
In turn, the purposes of PD No. 1034 are as follows:
‘WHEREAS, conditions conducive to the establishment of an offshore banking system, such as political
stability, a growing economy and adequate communication facilities, among others, exist in the
Philippines;
‘WHEREAS, it is in the interest of developing countries to have as wide access as possible to the
sources of capital funds for economic development;
‘WHEREAS, an offshore banking system based in the Philippines will be advantageous and beneficial
to the country by increasing our links with foreign lenders, facilitating the flow of desired investments into
the Philippines, creating employment opportunities and expertise in international finance, and
contributing to the national development effort.
‘WHEREAS, the geographical location, physical and human resources, and other positive factors
provide the Philippines with the clear potential to develop as another financial center in Asia;’
“On the other hand, the Foreign Currency Deposit system was created by PD No. 1035. Its purposes
are as follows:
‘WHEREAS, the establishment of an offshore banking system in the Philippines has been authorized under
a separate decree;
‘WHEREAS, a number of local commercial banks, as depository bank under the Foreign Currency
Deposit Act (RA No. 6426), have the resources and managerial competence to more actively engage in
foreign exchange transactions and participate in the grant of foreign currency loans to resident
corporations and firms;
‘WHEREAS, it is timely to expand the foreign currency lending authority of the said depository banks
under RA 6426 and apply to their transactions the same taxes as would be applicable to transaction of the
proposed offshore banking units;’
“It is evident from the above [Whereas clauses] that the Offshore Banking System and the Foreign
Currency Deposit System were designed to draw deposits from foreign lenders and investors (Vide second
Whereas of PD No. 1034; third Whereas of PD No. 1035). It is these deposits that are induced by the two
laws and given protection and incentives by them.
“Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such
depositor stays only for a few days in the country and, therefore, will maintain his deposit in the bank only
for a short time.
“Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his dollars with
respondent China Banking Corporation only for safekeeping during his temporary stay in the Philippines.
“For the reasons stated above, the Solicitor General thus submits that the dollar deposit of
respondent Greg Bartelli is not entitled to the protection of Section 113 of Central Bank Circular No. 960
and PD No. 1246 against attachment, garnishment or other court processes.”6
In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the
questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment,
or any other order or process of any court, legislative body, government agency or any administrative body
whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by
a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides
that “in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body
intended right and justice to prevail. “Ninguno non deue enriquecerse tortizeramente con dano de
otro.” Simply stated, when the statute is silent or
________________

6
Comment of the Solicitor General, Rollo, pp. 128-129; 135-136.
46
46 SUPREME COURT REPORTS ANNOTATED
Salvacion vs. Central Bank of the Philippines
ambiguous, this is one of those fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).
It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a
device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the
innocent.
Call it what it may—but is there no conflict of legal policy here? Dollar against Peso? Upholding the
final and executory judgment of the lower court against the Central Bank Circular protecting the foreign
depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a
national and victim of a crime? This situation calls for fairness against legal tyranny.
We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as
it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of execution issued in Civil
Case No. 89-3214, Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to
RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y Northcott in such amount as would
satisfy the judgment.
SO ORDERED.

G.R. No. 112099. February 21, 1995.*
ACHILLES C. BERCES, SR., petitioner, vs. HON. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA, JR., CHIEF
PRESIDENTIAL LEGAL COUNSEL ANTONIO CARPIO and MAYOR NAOMI C. CORRAL OF TIWI, ALBAY,
respondents.
Statutory Construction; Repealing clause of Section 530(f), R.A. No. 7160 is not an express repeal of
Section 6 of Administrative Order No. 18.—The aforementioned clause is not an express repeal of Section
6 of Administrative Order No. 18 because it failed to identify or designate the laws or executive orders that
are intended to be repealed.
_______________
19 See, e.g., People v. Ocampo, 206 SCRA 223 (1992) and People v. Sayat, 223 SCRA 285 (1993),
where the Court had awarded moral damages on account of the perversity of the offense, the offenders
being the stepfather and the half-brother, respectively, of the rape victim.
* EN BANC.
540
540 SUPREME COURT REPORTS ANNOTATED
Berces, Sr. vs. Guingona, Jr.
Same; Repeal by implication is not favored.—If there is any repeal of Administrative Order No. 18
by R.A. No. 7160, it is through implication though such kind of repeal is not favored (The Philippine
American Management Co., Inc. v. The Philippine American Management Employees Association, 49 SCRA
194 [1973]). There is even a presumption against implied repeal.
Same; In the absence of an express repeal, a subsequent law cannot be construed as repealing a
prior law unless an irreconcilable inconsistency and repugnancy exists in the terms of the new and old
laws.—An implied repeal predicates the intended repeal upon the condition that a substantial conflict
must be found between the new and prior laws. In the absence of an express repeal, a subsequent law
cannot be construed as repealing a prior law unless an irreconcilable inconsistency and repugnancy exists
in the terms of the new and old laws (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA
377 [1965]). The two laws must be absolutely incompatible (Compania General de Tabacos v. Collector of
Customs, 46 Phil. 8 [1924]). There must be such a repugnancy between the laws that they cannot be made
to stand together.
Same; Provisions of Section 68 of R.A. No. 7160 and Section 6 of Administrative Order No. 18 are
not irreconcilably inconsistent and repugnant.—We find that the provisions of Section 68 of R.A. No. 7160
and Section 6 of Administrative Order No. 18 are not irreconcilably inconsistent and repugnant and the
two laws must in fact be read together.
Same; If the intention of Congress was to repeal Section 6 of Administrative Order No. 18, it could
have used more direct language expressive of such intention.—The first sentence of Section 68 merely
provides that an "appeal shall not prevent a decision from becoming final or executory." As worded, there
is room to construe said provision as giving discretion to the reviewing officials to stay the execution of
the appealed decision. There is nothing to infer therefrom that the reviewing officials are deprived of the
authority to order a stay of the appealed order. If the intention of Congress was to repeal Section 6 of
Administrative Order No. 18, it could have used more direct language expressive of such intention.
Same; The term "shall" may be read either as mandatory or directory.—The term "shall" may be
read either as mandatory or directory depending upon a consideration of the entire provision in which it
is found, its object and the consequences that would follow
541
VOL. 241, FEBRUARY 21, 1995 541
Berces, Sr. vs. Guingona, Jr.
from construing it one way or the other (c/! De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case
at bench, there is no basis to justify the construction of the word as mandatory.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition with Preliminary Injunction.
The facts are stated in the opinion of the Court.
Muñoz Law Office for petitioner.
Antonio B. Betito for private respondent.
QUIASON, J.:
This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court with prayer for
mandatory preliminary injunction, assailing the Orders of the Office of the President as having been issued
with grave abuse of discretion. Said Orders directed the stay of execution of the decision of the
Sangguniang Panlalawigan suspending the Mayor of Tiwi, Albay from office.
I
Petitioner filed two administrative cases against respondent Naomi C. Corral, the incumbent Mayor of
Tiwi, Albay with the Sangguniang Panlalawigan of Albay, to wit:
1. (1)Administrative Case No. 02-92 for abuse of authority and/or oppression for non-payment of
accrued leave benefits due the petitioner amounting to P36,779.02.
2. (2)Administrative Case No. 05-92 for dishonesty and abuse of authority for installing a water
pipeline which is being operated, maintained and paid for by the municipality to service
respondent's private residence and medical clinic.
On July 1, 1993, the Sangguniang Panlalawigan disposed the two Administrative cases in the following
manner:
1. "(1)Administrative Case No. 02-92
ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi, Albay, is hereby ordered to pay Achilles Costo
Berces, Sr. the sum of
542
542 SUPREME COURT REPORTS ANNOTATED
Berces, Sr. vs. Guingona, Jr.
THIRTY-SIX THOUS AND AND SEVEN HUNDRED SEVENTY-NINE PESOS and TWO CENTAVOS (P36,779.02)
per Voucher No. 352, plus legal interest due thereon from the time it was approved in audit up to final
payment, it being legally due the Complainant representing the money value of his leave credits accruing
for services rendered in the municipality from 1988 to 1992 as a duly elected Municipal Councilor. IN
ADDITION, respondent Mayor NAOMI C. CORRAL is hereby ordered SUSPENDED office as Municipal Mayor
of Tiwi, Albay, for a period of two (2) months, effective upon receipt hereof for her blatant abuse of
authority coupled with oppression as a public example to deter others similarly inclined from using public
office as a tool for personal vengeance, vindictiveness and oppression at the expense of the Taxpayer"
(Rollo, p. 14).
1. "(2)Administrative Case No. 05-92
WHEREFORE, premises considered, respondent Mayor NAOMI C. CORRAL of Tiwi, Albay, is hereby
sentenced to suffer the penalty of SUSPENSION from office as Municipal Mayor thereof for a period of
THREE (3) MONTHS beginning after her service of the first penalty of suspension ordered in Administrative
Case No. 02-92. She is likewise ordered to reimburse the Municipality of Tiwi One-half of the amount the
latter have paid for electric and water bills from July to December 1992, inclusive" (Rollo, p. 16),
Consequently, respondent Mayor appealed to the Office of the President questioning the decision and at
the same time prayed for the stay of execution thereof in accordance with Section 67(b) of the Local
Government Code, which provides:
"Administrative Appeals.—Decision in administrative cases may, within thirty (30) days from receipt
thereof, be appealed to the following:
xxx xxx xxx
(b) The Office of the President, in the case of decisions of the sangguniang panlalawigan and the
sangguniang panglungsod of highly urbanized cities and independent component cities."
Acting on the prayer to stay execution during the pendency of the appeal, the Office of the President issued
an Order on July 28, 1993, the pertinent portions of which read as follows:
xxx xxx xxx
543
VOL. 241, FEBRUARY 21, 1995 543
Berces, Sr. vs. Guingona, Jr.
"The stay of execution is governed by Section 68 of R.A. No. 7160 and Section 6 of Administrative Order
No. 18 dated 12 February 1987, quoted below:
'SEC. 68. Execution Pending Appeal.—An appeal shall not prevent a decision from becoming final or
executory. The respondent shall be considered as having been placed under preventive suspension during
the pendency of an appeal in the event he wins such appeal. In the event the appeal results in an
exoneration, he shall be paid his salary and such other emoluments during the pendency of the appeal
(R.A. No. 7160).
'SEC. 6. Except as otherwise provided by special laws, the execution of the decision/resolution/order
appealed from is stayed upon the filing of the appeal within the period prescribed herein. However, in all
cases, at any time during the pendency of the appeal, the Office of the President may direct or stay the
execution of the decision/resolution/order appealed from upon such terms and conditions as it may deem
just and reasonable (Adm. Order No. 18).'"
xxx xxx xxx
"After due consideration, and in the light of the Petition for Review filed before this Office, we find
that a stay of execution pending appeal would be just and reasonable to prevent undue prejudice to public
interest.
"WHEREFORE, premises considered, this Office hereby orders the suspension/stay of execution of:
1. a)the Decision of the Sangguniang Panlalawigan of Albay in Administrative Case No. 02-92
dated 1 July 1993 suspending Mayor Naomi C. Corral from office for a period of two (2)
months, and
2. b)the Resolution of the Sangguniang Panlalawigan of Albay in Administrative Case No. 05-92
dated 5 July 1993 suspending Mayor Naomi C. Corral from office for a period of three (3)
months" (Rollo, pp. 55-56).
Petitioner then filed a Motion for Reconsideration questioning the aforesaid Order of the Office of the
President.
On September 13, 1990, the Motion for Reconsideration was denied.
Hence, this petition.
544
544 SUPREME COURT REPORTS ANNOTATED
Berces, Sr. vs. Guingona, Jr.
II
Petitioner claims that the governing law in the instant case is R.A. No. 7160, which contains a mandatory
provision that an appeal "shall not prevent a decision from becoming final and executory." He argues that
Administrative Order No. 18 dated February 12, 1987, (entitled "Prescribing the Rules and Regulations
Governing Appeals to the Office of the President") authorizing the President to stay the execution of the
appealed decision at any time during the pendency of the appeal, was repealed by R.A. No. 7160, which
took effect on January 1, 1991 (Rollo, pp. 5-6).
The petition is devoid of merit.
Petitioner invokes the repealing clause of Section 530(f), R.A. No. 7160, which provides:
"All general and special laws, acts, city charters, decrees, executive orders, administrative regulations, part
or parts thereof, which are inconsistent with any of the provisions of this Code, are hereby repealed or
modified accordingly."
The aforementioned clause is not an express repeal of Section 6 of Administrative Order No. 18 because it
failed to identify or designate the laws or executive orders that are intended to be repealed (cf. I
Sutherland, Statutory Construction 467 [1943]).
If there is any repeal of Administrative Order No. 18 by R.A. No. 7160, it is through implication though
such kind of repeal is not favored (The Philippine American Management Co., Inc. v. The Philippine
American Management Employees Association, 49 SCRA 194 [1973]). There is even a presumption against
implied repeal.
An implied repeal predicates the intended repeal upon the condition that a substantial conflict must
be found between the new and prior laws. In the absence of an express repeal, a subsequent law cannot
be construed as repealing a prior law unless an irreconcilable inconsistency and repugnancy exists in the
terms of the new and old laws (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377
[1965]). The two laws must be absolutely incompatible (Compania General de Tabacos v. Collector of
Customs, 46 Phil. 8 [1924]). There must be such a repugnancy between the laws that they cannot be made
to stand
545
VOL. 241, FEBRUARY 21, 1995 545
Berces, Sr. vs. Guingona, Jr.
together (Crawford, Construction of Statutes 631 [1940]).
We find that the provisions of Section 68 of R.A. No. 7160 and Section 6 of Administrative Order No.
18 are not irreconcilably inconsistent and repugnant and the two laws must in fact be read together.
The first sentence of Section 68 merely provides that an "appeal shall not prevent a decision from
becoming final or executory." As worded, there is room to construe said provision as giving discretion to
the reviewing officials to stay the execution of the appealed decision. There is nothing to infer therefrom
that the reviewing officials are deprived of the authority to order a stay of the appealed order. If the
intention of Congress was to repeal Section 6 of Administrative Order No. 18, it could have used more
direct language expressive of such intention.
The execution of decisions pending appeal is procedural and in the absence of a clear legislative intent
to remove from the reviewing officials the authority to order a stay of execution, such authority can be
provided in the rules and regulations governing the appeals of elective officials in administrative cases.
The term "shall" may be read either as mandatory or directory depending upon a consideration of the
entire provision in which it is found, its object and the consequences that would follow from construing it
one way or the other (cf. De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case at bench, there is no basis
to justify the construction of the word as mandatory.
The Office of the President made a finding that the execution of the decision of the Sangguniang
Panlalawigan suspending respondent Mayor from office might be prejudicial to the public interest. Thus,
in order not to disrupt the rendition of service by the mayor to the public, a stay of the execution of the
decision is in order.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

No. L-72873. May 28, 1987.*
CARLOS ALONZO and CASIMIRA ALONZO, petitioners, vs.INTERMEDIATE APPELLATE COURT and TECLA
PADUA, respondents.
Statutes; We test a law by its results. A law should not be interpreted so as to cause an injustice.—
But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
_______________
*EN BANC.
260
260 SUPREME COURT REPORTS ANNOTATED
Alonzo us. Intermediate Appellate Court
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge
should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never
be interpreted in such a way as to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render
justice.
Same; Law and justice are inseparable. Laws must be applied in consonance with justice.—Thus, we
interpret and apply the law not independently of but in consonance with justice. Law and justice are
inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may
seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation,
we are not bound, because only of our nature and functions, to apply them just the same, in slavish
obedience to their language. What we do instead is find a balance between the word and the will, that
justice may be done even as the law is obeyed.
Same; Judges must not unfeelingly yield like robots to the literal command of the law.—As judges,
we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like
robots to the literal command without regard to its cause and consequence. "Courts are apt to err by
sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where these words
import a policy that goes beyond them." While we admittedly may not legislate, we nevertheless have the
power to interpret the law in such a way as to reflect the will of the legislature. While we may not
read into the law a purpose that is not there, we nevertheless have the right to read out of itthe reason
for its enactment. In doing so, we defer not to "the letter that killeth" but to "the spirit that vivifieth," to
give effect to the lawmaker's will.
Same; Property; Prescription; Succession; Redemption; Where co-heirs filed action for redemption
of co-heir's sold share only after thirteen years had elapsed from the sale, they are deemed to have been
actually informed thereof sometime during those years although no written notice of sale was given to
them.—While we do not here declare that this period started from the dates of such sales in 1963 and
1964, we do say that sometime between those years and 1976, when the first complaint for redemption
was filed, the other co-heirs were actually informed of the sale and that thereafter the 30-day period
started running and ultimately expired. This could have happened any time during the interval of thirteen
years, when none of
261
VOL. 150, MAY 28, 1987 261
Alonzo vs. Intermediate Appellate Court
the co-heirs made a move to redeem the properties sold. By 1977, in other words, when Tecla
Padua filed her complaint, the right of redemption had already been extinguished because the period for
its exercise had alr eady expired.
Same; Same; Same; Same; Same; Judgments; The Court's deviation from the strict letters of Art.
1088 NCC on giving of written notice to co-heirs of the sale of an heir's share is not being abandoned. The
ruling here should be deemed an exception due to peculiar circumstances of this case.—We realize that in
arriving at our conclusion today, we are deviating from the strict letter of the law, which the respondent
court understandably applied pursuant to existing jurisprudence. The said court acted properly as it had
no competence to reverse the doctrines laid down by this Court in the above-cited cases. In fact, and this
should be clearly stressed, we ourselves are not abandoning the De Conejero and Buttle doctrines. What
we are doing simply is adopting an exception to the general rule, in view of the peculiar circumstances of
this case.
PETITION to review the decision of the Intermediate Appellate Court.
The f acts are stated in the opinion of the Court.
Perpetuo L.B. Alonzo for petitioners.
Luis R. Reyes for private respondent.
CRUZ, J.:
The question is sometimes asked, in serious inquiry or in curious conjecture, whether we are a court of
law or a court of justice. Do we apply the law even if it is unjust or do we administer justice even against
the law? Thus queried, we do not equivocate. The answer is that we do neither because we are a
court both of law and of justice. We apply the law with justice for that is our mission and purpose in the
scheme of our Republic. This case is an illustration.
Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in the name
of their deceased parents under OCT No. 10977 of the Registry of Deeds of Tarlac.1
_______________
1
Rollo, p. 5.
262
262 SUPREME COURT REPORTS ANNOTATED
Alonzo vs. Intermediate Appellate Court
On March 15, 1963, one of them, Celestino Padua, transferred his undivided share of the herein petitioners
for the sum of P550.00 by way of absolute sale.2 One year later, on April 22, 1964, Eustaquia Padua, his
sister, sold her own share to the same vendees, in an instrument denominated "Con Pacto de Retro Sale,"
for the sum of P440.00.3
By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding to
two-fifths of the said lot, representing the portions sold to them. The vendees subsequently enclosed the
same with a fence. In 1975, with their consent, their son Eduardo Alonzo and his wife built a semi-concrete
house on a part of the enclosed area.4
On February 25, 1976, Mariano Padua, one of the five coheirs, sought to redeem the area sold to the
spouses Alonzo, but his complaint was dismissed when it appeared that he was an American citizen.5 On
May 27, 1977, however, Tecla Padua, another co-heir, filed her own complaint invoking the same right of
redemption claimed by her brother.6
The trial court ** also dismiss this complaint, now on the ground that the right had lapsed, not having
been exercised within thirty days from notice of the sales in 1963 and 1964. Although there was no written
notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of the law.7
In truth, such actual notice as acquired by the co-heirs cannot be plausibly denied. The other co-heirs,
including Tecla Padua, lived on the same lot, which consisted of only 604 square meters, including the
portions sold to the petitioners.8 Eustaquia herself, who had sold her portion, was staying in the same
house with her sister Tecla, who later claimed redemp-
_______________
2 Ibid., p. 6.
3 Id., p. 64.
4 Id
5 Id., p. 21.
6 Id., p. 21.
 ** Presided by Judge Cezar D. Francisco.
7 Id., p. 65.
8
Id., p. 5.
263
VOL. 150, MAY 28, 1987 263
Alonzo vs. Intermediate Appellate Court
tion.9 Moreover, the petitioners and the private respondents were close friends and neighbors whose
children went to school together.10
It is highly improbable that the other co-heirs were unaware of the sales and that they thought, as
they alleged, that the area occupied by the petitioners had merely been mortgaged by Celestino and
Eustaquia. In the circumstances just narrated, it was impossible for Tecla not to know that the area
occupied by the petitioners had been purchased by them from the other co-heirs. Especially significant
was the erection thereon of the permanent semi-concrete structure by the petitioners' son, which was
done without objection on her part or of any of the other co-heirs.
The only real question in this case, therefore, is the correct interpretation and application of the
pertinent law as invoked, interestingly enough, by both the petitioners and the private respondents. This
is Article 1088 of the Civil Code, providing as follows:
"Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of
the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they were notified in writing of the sale
by the vendor."
In reversing the trial court, the respondent court*** declared that the notice required by the said article
was written notice and that actual notice would not suffice as a substitute. Citing the same case of De
Conejero v. Court of Appeals11 applied by the trial court, the respondent court held that that decision,
interpreting a like rule in Article 1623, stressed the need for written notice although no particular form
was required.
Thus, according to Justice J.B.L. Reyes, who was the
_______________
9 Id., p. 64.
10 Id, p. 26.
*** Gaviola, Jr., P.J., ponente, Caguioa, Quetulio-Losa & Luciano, JJ.
11
16 SCRA 775.
264
264 SUPREME COURT REPORTS ANNOTATED
Alonzo vs. Intermediate Appellate Court
ponente of the Court, furnishing the co-heirs with a copy of the deed of sale of the property subject to
redemption would satisfy the requirement for written notice. "So long, therefore, as the latter (i.e., the
redemptioner) is informed in writing of the sale and the particulars thereof," he declared, "the thirty days
for redemption start running."
In the earlier decision of Butte v. Uy,12 the Court, speaking through the same learned jurist,
emphasized that the written notice should be given by the vendor and not the vendees, conformably to a
similar requirement under Article 1623, reading as follows:
" Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days
from the notice in writing by the prospective vendor, or by the vendors, as the case may be. The deed of
sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor
that he has given written notice thereof to all possible redemptioners.
"The right of redemption of co-owners excludes that of the adjoining owners."
As "it is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular
method of giving notice, and that notice must be deemed exclusive," the Court held that notice given by
the vendees and not the vendor would not toll the running of the 30-day period.
The petition before us appears to be an illustration of the Holmes dictum that "hard cases make bad
laws" as the petitioners obviously cannot argue against the fact that there was really no written notice
given by the vendors to their co-heirs. Strictly applied and interpreted, Article 1088 can lead to only one
conclusion, to wit, that in view of such deficiency, the 30day period for redemption had not begun to run,
much less expired in 1977.
But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should
be to discover in its provisions the in-
_______________
12
4 SCRA 527.
265
VOL. 150, MAY 28, 1987 265
Alonzo vs. Intermediate Appellate Court
tent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause
injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we
presume the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and
justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such
a situation, we are not bound, because only of our nature and functions, to apply them just the same, in
slavish obedience to their language. What we do instead is find a balance between the word and the will,
that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt
to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where
these words import a policy that goes beyond them."13 While we admittedly may not legislate, we
nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature.
While we may not read into the law a purpose that is not there, we nevertheless have the right to read out
of it the reason for its enactment. In doing so, we defer not to "the letter that killeth" but to "the spirit
that vivifieth," to give effect to the lawmaker's will.'
"The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read
according to its spirit or intent. For what is within the spirit is within the statute although it is not within
the letter thereof, and that which is within the letter but not within the spirit is not within the statute.
Stated differently, a thing which is within the intent of the lawmaker is as much within the statute as if
within the letter; and a thing which is within the letter of the statute is not within the statute unless within
the intent of
_______________
13Dissenting in Olmstead v. U.S., 277 U.S. 438.
266
266 SUPREME COURT REPORTS ANNOTATED
Alonzo vs. Intermediate Appellate Court
the law makers."14
In requiring written notice, Article 1088 seeks to ensure that the redemptioner is properly notified of the
sale and to indicate the date of such notice as the starting time of the 30-day period of redemption.
Considering the shortness of the period, it is really necessary, as a general rule, to pinpoint the precise
date it is supposed to begin, to obviate any problem of alleged delays, sometimes consisting of only a day
or two.
The instant case presents no such problem because the right of redemption was invoked
not days but years after the sales were made in 1963 and 1964. The complaint was filed by Tecla Padua in
1977, thirteen years after the first sale and fourteen years after the second sale. The delay invoked by the
petitioners extends to more than a decade, assuming of course that there was a valid notice that tolled
the running of the period of redemption.
Was there a valid notice? Granting that the law requires the notice to be written, would such notice
be necessary in this case? Assuming there was a valid notice although it was not in writing, would there be
any question that the 30-day period for redemption had expired long before the complaint was filed in
1977?
In the face of the established facts, we cannot accept the private respondents' pretense that they
were unaware of the sales made by their brother and sister in 1963 and 1964. By requiring written proof
of such notice, we would be closing our eyes to the obvious truth in favor of their palpably false claim of
ignorance, thus exalting the letter of the law over its purpose. The purpose is clear enough: to make sure
that the redemptioners are duly notified. We are satisfied that in this case the other brothers and sisters
were actually informed, although not in writing, of the sales made in 1963 and 1964,
_______________
14 Statutory Construction, Ruben E. Agpalo, pp. 64-65, 1986, citing Manila Race Horse Trainers' Assn.
v. De la Fuente, 88 Phil. 60; Go Chi v. Go Cho, 96 Phil. 622; Hidalgo v. Hidalgo, 33 SCRA 105; Roa v. Collector
of Customs, 23 Phil. 315; Villanueva v. City of Iloilo, 26 SCRA 578; People v. Purisima, 86 SCRA 542; US v.
Go Chico, 14 Phil. 128.
267
above-cited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the De
Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general rule, in
view of the peculiar circumstances of this case.
The co-heirs in this case were undeniably informed of the sales although no notice in writing was
given them. And there is no doubt either that the 30-day period began and ended during the 14 years
between the sales in question and the filing of the complaint for redemption in 1977, without the co-heirs
exercising their right of redemption. These are the justifications for this exception.
More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to
render every one his due."16That wish continues to motivate this Court when it assesses the facts and the
law in every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus
when the facts warrants, we interpret the law in a way that will render justice, presuming that it was the
intention of the lawmaker, to begin with, that the law be dispensed with justice. So we have done in this
case.
WHEREFORE, the petition is granted. The decision of the respondent court is REVERSED and that of
the trial court is reinstated, without any pronouncement as to costs. It is so ordered.
Teehankee, C.J., Yap, Narvasa, Melencio-Herrera, Gutierrez,
Jr., Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
Fernan and Feliciano, JJ., on leave.
Petition granted.

VOL. 150, MAY 28, 1987 267

Alonzo vs. Intermediate Appellate Court
and that such notice was sufficient.
Now, when did the 30-day period of redemption begin?
While we do not here declare that this period started from the dates of such sales in 1963 and 1964,
we do say that sometime between those years and 1976, when the first complaint for redemption was
filed, the other co-heirs were actually informed of the sale and that thereafter the 30-day period started
running and ultimately expired. This could have happened any time during the interval of thirteen years,
when none of the co-heirs made a move to redeem the properties sold. By 1977, in other words, when
Tecla Padua filed her complaint, the right of redemption had already been extinguished because the period
f or its exercise had already expired.
The f ollowing doctrine is also worth noting:
"While the general rule is, that to charge a party with laches in the assertion of an alleged right it is essential
that he should have knowledge of the facts upon which he bases his claim, yet if the circumstances were
such as should have induced inquiry, and the means of ascertaining the truth were readily available upon
inquiry, but the party neglects to make it, he will be chargeable with laches, the same as if he had known
the facts. "15
It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not among
them, should enclose a portion of the inherited lot and build thereon a house of strong materials. This
definitely was not the act of a temporary possessor or a mere mortgagee. This certainly looked like an act
of ownership. Yet, given this unseemly situation, none of the co-heirs saw fit to object or at least inquire,
to ascertain the facts, which were readily available. It took all of thirteen years before one of them chose
to claim the right of redemption, but then it was already too late.
We realize that in arriving at our conclusion today, we are deviating from the strict letter of the law,
which the respondent court understandably applied pursuant to existing jurisprudence. The said court
acted properly as it had no competence to reverse the doctrines laid down by this Court in the
_______________

15Ater v. Smith 245 111. 57, 19 Am. Cases 105.

268
268 SUPREME COURT REPORTS ANNOTATED
Alonzo vs. Intermediate Appellate Court
 provided for in Section 699 of the Revised Administrative Code x x x whose benefits are administered by
G.R. No. 103982.December 11, 1992.*
the system (meaning SSS or GSIS) or by other agencies of the government.”
ANTONIO A. MECANO, petitioner, vs. COMMISSION ON AUDIT, respondent.

Statutes; Administrative Code of 1987; Implied repeal.—In the case of the two Administrative PETITION for certiorari to review the decision of the Commission on Audit.
Codes in question, the ascertainment of whether or not it was the intent of the legislature to supplant the
old Code with the new Code partly depends on the scrutiny of the repealing clause of the new Code. This The facts are stated in the opinion of the Court.
provision is found in Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 which reads: 502
“Sec. 27. Repealing Clause.—All laws, decrees, orders, rules and regulations, or portions thereof,
502 SUPREME COURT REPORTS ANNOTATED
inconsistent with this Code are hereby repealed or modified accordingly.” The question that should be
asked is: What is the nature of this repealing clause? It is certainly not an express repealing clause because Mecano vs. Commission on Audit
it fails to identify or designate the act or acts that are intended to be repealed. Rather, it is an example of
a general repealing provision, as stated in Opinion No. 73, S. 1991. It is a clause which predicates the CAMPOS, JR., J.:
intended repeal under the condition that a substantial conflict must be found in existing and prior acts.
The failure to add a specific repealing clause indicates that the intent was not to repeal any existing law,
Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission on
unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws. This
Audit (COA, for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying his claim for
latter situation falls under the category of an implied repeal.
reimbursement under Section 699 of the Revised Administrative Code (RAC), as amended, in the total
Same; Same; Same.—There are two categories of repeal by implication. The first is where
amount of P40,831.00.
provisions in the two acts on the same subject matter are in an irreconcilable conflict, the later act to the
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for
extent of the conflict constitutes an implied repeal of the earlier one. The second is if the later act covers
cholecystitis from March 26, 1990 to April 7, 1990, on account of which he incurred medical and
the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the
hospitalization expenses, the total amount of which he is claiming from the COA.
earlier law. Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity), he
same subject matter; they are so clearly inconsistent and incompatible with each other that they cannot
requested reimbursement for his expenses on the ground that he is entitled to the benefits under Section
be reconciled or harmonized; and both cannot be given effect, that is, that one law cannot be enforced
6991 of the RAC, the pertinent provisions of which read:
without nullifying the other. Comparing the two Codes, it is apparent that the new Code does not cover
“Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of duty.—When a person
nor attempt to cover the entire subject matter of the old Code. There are several matters treated in the
in the service of the national government or in the service of the government of a province, city,
old Code which are not found
municipality or municipal district is so injured in the performance of duty as thereby to receive some actual
_______________
physical hurt or wound, the proper Head of Department may direct that absence during any period of
disability thereby occasioned shall be on full pay, though not more than six months, and in such case he
*EN BANC. may in his discretion also authorize the payment of the medical attendance, necessary transportation,
501 subsistence and hospital fees of the injured person. Absence in the case contemplated shall be charged
VOL. 216, DECEMBER 11, 1992 501 first against vacation leave, if any there be.
xxx xxx
Mecano vs. Commission on Audit “In case of sickness caused by or connected directly with the performance of some act in the line of
in the new Code, such as the provisions on notaries public, the leave law, the public bonding law, duty, the Department head may in his discretion authorize the payment of the necessary hospital fees.”
military reservations, claims for sickness benefits under Section 699, and still others. Director Lim then forwarded petitioner’s claim, in a 1st Indorsement dated June 22, 1990, to the Secretary
Same; Same; Same.—Lastly, it is a well-settled rule of statutory construction that repeals of of Justice,
statutes by implication are not favored. The presumption is against inconsistency and repugnancy for the ________________
legislature is presumed to know the existing laws on the subject and not to have enacted inconsistent or
conflicting statutes. This Court, in a case, explains the principle in detail as follows: “Repeals by implication 1As amended by R.A. No. 1232 dated June 7, 1955.
are not favored, and will not be decreed unless it is manifest that the legislature so intended. As laws are
503
presumed to be passed with deliberation with full knowledge of all existing ones on the subject, it is but
reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any VOL. 216, DECEMBER 11, 1992 503
former law relating to some matter, unless the repugnancy between the two is not only irreconcilable, but
Mecano vs. Commission on Audit
also clear and convincing, and flowing necessarily from the language used, unless the later act fully
along with the comment, bearing the same date, of Gerarda Galang, Chief, LED of the NBI, “recommending
embraces the subject matter of the earlier, or unless the reason for the earlier act is beyond peradventure
favorable action thereof.” Finding petitioner’s illness to be service-connected, the Committee on Physical
renewed. Hence, every effort must be used to make all acts stand and if, by any reasonable construction,
Examination of the Department of Justice favorably recommended the payment of petitioner’s claim.
they can be reconciled, the later act will not operate as a repeal of the earlier.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November
Administrative Code of 1917; Allowances in case of injury, death or sickness incurred in performance
21, 1990, returned petitioner’s claim to Director Lim, having considered the statements of the Chairman
of duty; Payment of compensation under Employees’ Compensation Program does not bar recovery under
of the COA in its 5th Indorsement dated 19 September 1990, to the effect that the RAC being relied upon
Sec. 699 of the Revised Administrative Code.—Regarding respondent’s contention that recovery under this
was repealed by the Administrative Code of 1987.
subject section shall bar the recovery of benefits under the Employees’ Compensation Program, the same
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 19912 dated
cannot be upheld. The second sentence of Article 173, Chapter II, Title II (dealing on Employees’
April 26, 1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that “the
Compensation and State Insurance Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly
provides that “the payment of compensation under this Title shall not bar the recovery of benefits as
issuance of the Administrative Code did not operate to repeal or abrogate in its entirety the Revised
Administrative Code, including the particular Section 699 of the latter.”
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano’s claim to then
Undersecretary Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary
Drilon forwarded petitioner’s claim to the COA Chairman, recommending payment of the same. COA
Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992, however, denied petitioner’s
claim on the ground that Section 699 of the RAC has been repealed by the Administrative Code of 1987,
solely for the reason that the same section was not restated nor re-enacted in the Administrative Code of
1987. He commented, however, that the claim may be filed with the Employees’ Compensation
Commission, considering that the illness of Director Mecano occurred after the effectivity of the
Administrative Code of 1987.
Eventually, petitioner’s claim was returned by Undersecretary of Justice Eduardo Montenegro to
Director Lim under a 9th Indorsement dated February 7, 1992, with the advice that petitioner “elevate the
matter to the Supreme Court if he so
_______________
2Rollo, pp. 26-30
504
504 SUPREME COURT REPORTS ANNOTATED
Mecano vs. Commission on Audit
desires.”
On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section
699 of the RAC, this petition was brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned
Opinion No. 73, S. 1991 of Secretary Drilon. He further maintains that in the event that a claim is filed with
the Employees’ Compensation Commission, as suggested by respondent, he would still not be barred from
filing a claim under the subject section. Thus, the resolution of whether or not there was a repeal of the
Revised Administrative Code of 1917 would decide the fate of petitioner’s claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of
1987 (Exec. Order No. 292) operated to revoke or supplant in its entirety the Revised Administrative Code
of 1917. The COA claims that from the “whereas” clauses of the new Administrative Code, it can be gleaned
that it was the intent of the legislature to repeal the old Code. Moreover, the COA questions the
applicability of the aforesaid opinion of the Secretary of Justice in deciding the matter. Lastly, the COA
contends that employment-related sickness, injury or death is adequately covered by the Employees’
Compensation Program under P.D. 626, such that to allow simultaneous recovery of benefits under both
laws on account of the same contingency would be unfair and unjust to the Government.
The question of whether a particular law has been repealed or not by a subsequent law is a matter of
legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and portions thereof, that are intended to
be repealed.3 A declaration in a statute, usually in its repealing clause, that a particular and specific law,
identified by its number or title, is repealed is an express repeal; all others are implied repeals.4
________________
3School Dist. No. 45 vs. Board of County of Comira, 141 Kan. 108.
4AGPALO, STATUTORY CONSTRUCTION 289 (1986).
505
VOL. 216, DECEMBER 11, 1992 505
Mecano vs. Commission on Audit
In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the
intent of the legislature to supplant the old Code with the new Code partly depends on the scrutiny of the
repealing clause of the new Code. This provision is found in Section 27, Book VII (Final Provisions) of the
Administrative Code of 1987 which reads:
“Sec. 27. Repealing Clause.—All laws, decrees, orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.”
The question that should be asked is: What is the nature of this repealing clause? It is certainly not an
express repealing clause because it fails to identify or designate the act or acts that are intended to be
repealed.5 Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, S. 1991. It
is a clause which predicates the intended repeal under the condition that a substantial conflict must be
found in existing and prior acts. The failure to add a specific repealing clause indicates that the intent was
not to repeal any existing law, unless an irreconcilable inconsistency and repugnancy exist in the terms of
the new and old laws.6 This latter situation falls under the category of an implied repeal.
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an
intention on the part of the legislature to abrogate a prior act on the subject, that intention must be given
effect.7 Hence, before there can be a repeal, there must be a clear showing on the part of the lawmaker
that the intent in enacting the new law was to abrogate the old one. The intention to repeal must be clear
and manifest;8 otherwise, at least, as a general rule, the later act is to be construed as a continuation of,
and not a substitute for, the first act and will continue so far as the two acts are the same from
_________________
5 Iloilo Palay and Corn Planters Association, Inc. vs. Feliciano, 13 SCRA 377(1965).
6
CRAWFORD, CONSTRUCTION OF STATUTE 631 (1940 ed.).
7
Posadas vs. National City Bank, 296 U.S. 497, 80 L. Ed. 351 (1936)
8 Maceda vs. Macaraig, 197 SCRA 771 (1991).
506
506 SUPREME COURT REPORTS ANNOTATED
Mecano vs. Commission on Audit
the time of the first enactment.9
There are two categories of repeal by implication. The first is where provisions in the two acts on the
same subject matter are in an irreconcilable conflict, the later act to the extent of the conflict constitutes
an implied repeal of the earlier one. The second is if the later act covers the whole subject of the earlier
one and is clearly intended as a substitute, it will operate to repeal the earlier law.10
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same
subject matter; they are so clearly inconsistent and incompatible with each other that they cannot be
reconciled or harmonized; and both cannot be given effect, that is, that one law cannot be enforced
without nullifying the other.11
Comparing the two Codes, it is apparent that the new Code does not cover not attempt to cover the
entire subject matter of the old Code. There are several matters treated in the old Code which are not
found in the new Code, such as the provisions on notaries public, the leave law, the public bonding law,
military reservations, claims for sickness benefits under Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the
subject claim are in an irreconcilable conflict. In fact, there can be no such conflict because the provision
on sickness benefits of the nature being claimed by petitioner has not been restated in the Administrative
Code of 1987. However, the COA would have Us consider that the fact that Section 699 was not restated
in the Administrative Code of 1987 meant that the same section had been repealed. It further maintained
that to allow the particular provisions not restated in the new Code to continue in force argues against the
Code itself. The COA anchored this argument on the whereas clause of the 1987 Code, which states:
“WHEREREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which
incorporates in a
______________
9 Supra, note 7.
10 Supra, note 4.
11
Villegas vs. Subido, 41 SCRA 190 (1971).
507
VOL. 216, DECEMBER 11, 1992 507
 19 Philippine Global Communications, Inc. vs. Relova, 145 SCRA 385 (1986).
Mecano vs. Commission on Audit 20 National Power Corporation vs. Hon. Zain B. Angas, G.R. Nos. 60225-26, May 8, 1992; Maceda vs.
unified document the major structural, functional and procedural principles and rules of governance; and
Macaraig, 197 SCRA 771 (1991); Maddumba vs. Government Service Insurance System, 182 SCRA
x x x x x x”
281 (1990); Larga vs. Ranada, Jr., 164 SCRA 18 (1988); De Jesus vs. People, 120 SCRA 760 (1983).
It argues, in effect, that what is contemplated is only one Code—the Administrative Code of 1987. This 21 U.S. vs. Palacio, 33 Phil. 208 (1916).
contention is untenable.
509
The fact that a later enactment may relate to the same subject matter as that of an earlier statute is
not of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely be VOL. 216, DECEMBER 11, 1992 509
cumulative or a continuation of the old one.12 What is necessary is a manifest indication of legislative
Mecano vs. Commission on Audit
purpose to repeal.13
reconcilable, but also clear and convincing, and flowing necessarily from the language used, unless the
We come now to the second category of repeal—the enactment of a statute revising or codifying the
later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act is beyond
former laws on the whole subject matter. This is only possible if the revised statute or code was intended
peradventure renewed. Hence, every effort must be used to make all acts stand and if, by any reasonable
to cover the whole subject to be a complete and perfect system in itself. It is the rule that a subsequent
construction, they can be reconciled, the later act will not operate as a repeal of the earlier.22
statute is deemed to repeal a prior law if the former revises the whole subject matter of the former
Regarding respondent’s contention that recovery under this subject section shall bar the recovery of
statute.14 When both intent and scope clearly evince the idea of a repeal, then all parts and provisions of
benefits under the Employees’ Compensation Program, the same cannot be upheld. The second sentence
the prior act that are omitted from the revised act are deemed repealed.15 Furthermore, before there can
of Article 173, Chapter II, Title II (dealing on Employees’ Compensation and State Insurance Fund), Book IV
be an implied repeal under this category, it must be the clear intent of the legislature that the later act be
of the Labor Code, as amended by P.D. 1921, expressly provides that “the payment of compensation under
the substitute to the prior act.16
this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to
Code x x x whose benefits are administered by the system (meaning SSS or GSIS) or by other agencies of
cover only those aspects of government that pertain to administration, organization and procedure,
the government.”
understandably because of the many changes that transpired in the government structure since the
WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby
enactment of the RAC decades of years ago. The COA challenges the weight that this opinion carries in the
ordered to give due course to petitioner’s claim for benefits. No costs.
determination of this
SO ORDERED.
________________
Narvasa (C.J.), Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide,
Jr., Romero, Nocon, Bellosillo and Melo, JJ., concur.
12 Valera vs. Tuason, 80 Phil. 823 (1948). Gutierrez, Jr., J., In the result.
13
Jalandoni vs. Endaya, 55 SCRA 261 (1974). Petition granted.
14 People vs. Almuete, 69 SCRA 410, 414 (1976).
15 People vs. Benuya, 61 Phil. 208 (1916).
16
Supra, note 9.
508
508 SUPREME COURT REPORTS ANNOTATED
Mecano vs. Commission on Audit
controversy inasmuch as the body which had been entrusted with the implementation of this particular
provision has already rendered its decision. The COA relied on the rule in administrative law enunciated in
the case of Sison vs. Pangramuyen17 that in the absence of palpable error or grave abuse of discretion, the
Court would be loathe to substitute its own judgment for that of the administrative agency entrusted with
the enforcement and implementation of the law. This will not hold water. This principle is subject to
limitations. Administrative decisions may be reviewed by the courts upon a showing that the decision is
vitiated by fraud, imposition or mistake.18 It has been held that Opinions of the Secretary and
Undersecretary of Justice are material in the construction of statutes in pari materia.19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not
favored.20 The presumption is against inconsistency and repugnancy for the legislature is presumed to
know the existing laws on the subject and not to have enacted inconsistent or conflicting statutes.21
This Court, in a case, explains the principle in detail as follows: “Repeals by implication are not favored,
and will not be decreed unless it is manifest that the legislature so intended. As laws are presumed to be
passed with deliberation with full knowledge of all existing ones on the subject, it is but reasonable to
conclude that in passing a statute it was not intended to interfere with or abrogate any former law relating
to some matter, unless the repugnancy between the two is not only ir-
_______________

17
84 SCRA 364 (1978).
18
Jaculina vs. National Police Commission, 200 SCRA 489 (1991); Greenhills Mining Co. vs. Office of
the President, 163 SCRA 350 (1988).

G.R. No. 147192. June 27, 2006.*
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. THE CITY ASSESSOR OF ILOILO CITY, THE
REGISTER OF DEEDS OF ILOILO CITY and ROSALINA FRANCISCO, represented by her attorney-in-fact,
SALVADOR PAJA I,**respondents.
Taxation; Government Service Insurance System (GSIS); The tax-exempt status of the GSIS could not
prevent the accrual of the real estate tax liability on properties conveyed by it to private persons.—Even if
the charter of the GSIS generally exempts it from tax liabilities, the prescription is not so encompassing as
to make the tax exemption applicable to the properties in dispute here. In the early case of City of Baguio
v. Busuego, 100 SCRA 116 (1980), we held that the tax-exempt status of the GSIS could not prevent the
accrual of the real estate tax liability on properties transferred by it to a private buyer through a contract
to sell. In the present case, GSIS had already conveyed the properties to private persons thus making them
subject to assessment and payment of real property taxes. The
_______________
*
SECOND DIVISION.
** The Presiding Judges of the Regional Trial Court, Branches 36 and 31, both of Iloilo City, were
impleaded as public respondents. Under Rule 45 of the Rules of Court, the appeal therein may be filed
without impleading the lower courts or the judges thereof, either as petitioners or respondents.
170
170 SUPREME COURT REPORTS ANNOTATED
Government Service Insurance System vs. City Assessor of Iloilo City
alienation of the properties sold by GSIS was the proximate cause and necessary consequence of
the delinquent taxes due.
Same; Same; Statutory Construction; The abrogation or repeal of a law cannot be assumed—the
intention to revoke must be clear and manifest.—The abrogation or repeal of a law cannot be assumed;
the intention to revoke must be clear and manifest. RA 8291 made no express repeal or abrogation of the
provisions of RA 7160, particularly Section 234 (a) thereof. Repeal by implication in this case is not at all
convincing either. To bring about an implied repeal, the two laws must be absolutely incompatible. They
must be clearly repugnant in a way that the later law (RA 8291) cannot exist without nullifying the prior
law (RA 7160). Indeed, there is nothing in RA 8291 which abrogates, expressly or impliedly, that particular
provision of the LGC. The two statutes are not inconsistent on that specific point, let alone so irreconcilable
as to compel us to uphold one and strike down the other.
Same; Same; Same; The rule is that every statute must be interpreted and brought into accord with
other laws in a way that will form a uniform system of jurisprudence.—The rule is that every statute must
be interpreted and brought into accord with other laws in a way that will form a uniform system of
jurisprudence. The legislature is presumed to have known existing laws on the subject and not to have
enacted conflicting laws. Thus, the legislature cannot be presumed to have intended Section 234 (a) to run
counter to Section 39 of RA 8291.
Same; Same; Same; Vested Rights; Even if we were to construe that R.A. No. 8291 abrogated
Section 234(a) of the Local Government Code, still it cannot be made to apply retroactively if it will impair
the vested rights of private persons.—Even if we were to construe that RA 8291 abrogated Section 234(a)
of the LGC, still it cannot be made to apply retroactively without impairing the vested rights of private
respondent. The appellate court thus correctly stated: x x x it has been the courts’ consistent ruling that a
repealing statute must not interfere with vested rights or impair the obligation of contracts; that if any
other construction is possible, the act should not be construed so as to affect rights which have vested
under the old law. Private respondent[s], we reiterate, have become the private owner[s] of the properties
in question in the regular course of pro-
171
VOL. 493, JUNE 27, 2006 171
Government Service Insurance System vs. City Assessor of Iloilo City
ceedings established by law, and after the decisions granting such rights have become final and
executory. The enactment of the new GSIS Charter cannot be applied in a retroactive manner as to divest
the private respondent[s] of [their] ownership.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
City Legal Office and Pedro B. Gellada for respondents City Assessor and City Treasurer.
CORONA, J.:
Assailed in this present petition for review under Rule 45 of the Rules of Court are the decision1 and
resolution2 of the Court of Appeals (CA) dismissing a petition for annulment of judgment3filed by
petitioner, the Government Service Insurance System (GSIS), in Cadastral Case No. 84 and another
unnumbered cadastral case decided by the Regional Trial Court (RTC), Branches 36 and 31, of Iloilo City,
respectively. In the two cadastral cases, private respondent Rosalina Francisco petitioned for the issuance
of new transfer certificates of title (TCTs) in her name over two parcels of land, to wit:
TCT No. 41681
A parcel of land known as Lot No. 6, Block 2, of the Subdivision Plan (LRC) Psd-184005 being a portion of
Lot 2214-B, Jaro Cadastre, LRC (GLRO) Record No. 8 situated in the District of Jaro, Iloilo City,
_______________
1
Penned by Justice Rodrigo V. Cosico and concurred in by Associate Justices Godardo A. Jacinto and
Remedios Salazar-Fernando of the 11th Division of the Court of Appeals; Rollo, pp. 31-35.
2 Penned by Justice Rodrigo V. Cosico, and concurred in by Associate Justices Godardo A. Jacinto and
Remedios Salazar-Fernando of the Former 11th Division of the Court of Appeals; Rollo, pp. 37-38.
3 CA-G.R. SP No. 51149.
172
172 SUPREME COURT REPORTS ANNOTATED
Government Service Insurance System vs.City Assessor of Iloilo City
Island of Panay, registered in the name of GSIS c/o Baldomero Dagdag, of legal age, Filipino citizen and
resident of Jaro, Iloilo City, Philippines on June 28, 1991.
TCT No. 48580
A parcel of land known as Lot No. 22, Block 2, of the Subdivision Record No. 8 situated in the District
of Jaro, Iloilo City, Island of Panay, registered in the name of GSIS c/o Rodolfo Ceres, of legal age, Filipino
Citizen and a resident of Iloilo City, Philippines, with an area of Two Hundred Ninety Four (294) square
meters, more or less.
Private respondent Francisco purchased the subject properties in the auction sales held for the satisfaction
of delinquent real property taxes. After the lapse of the one-year redemption period and the failure of the
registered owner or any interested person to redeem the properties, the Iloilo City Treasurer issued the
corresponding final bill of sale to private respondent. The sales were later on duly annotated on the
certificates of title on file with the Register of Deeds. However, the final bill of sale could not be registered
because the owner’s duplicate certificate of title was unavailable at that time.
To effect registration in her name, private respondent instituted separate petitions for the entry of
title in her name over the two lots with the RTCs of Iloilo City. Both petitions were unopposed.
Finding merit in her petitions, the RTCs, in separate orders issued on separate dates, directed the
issuance of new duplicate TCTs. The dispositive portion of the April 29, 1993 order of RTC Branch 36 in
Cadastral Case No. 84 read:
“WHEREFORE, premises considered, the Register of Deeds of the City of Iloilo is hereby ordered to issue
new owner’s duplicate copy of Transfer Certificate of Title No. T-41681 in the name of GSIS c/o Baldomero
Dagdag, upon payment of the required legal fees.
 173
VOL. 493, JUNE 27, 2006 173
Government Service Insurance System vs. City Assessor of Iloilo City
Accordingly, the lost copy of the subject title is hereby declared as NULL and VOID.”4
On the other hand, RTC Branch 31 also issued an order, dated November 8, 1994, in the other
(unnumbered) cadastral case, the dispositive portion of which read:
“WHEREFORE, as prayed for, the Register of Deeds, City of Iloilo is hereby directed to issue a new owner’s
duplicate certificate of Title No. T-48580 in the name of the G.S.I.S. C/O RODOLFO CERES, the registered
owner, basing the same on the Original Certificate of Title found intact and existing in the Office of the
Register of Deeds and the latter to cancel Transfer Certificate of Title No. T-48580 together with the
encumbrances therein and to issue a new Transfer Certificate of Title in the name of ROSALINA FRANCISCO
of legal age, single, Filipino Citizen and resident of Brgy. Tacas, Jaro, Iloilo City, Philippines. The owner’s
duplicate certificate of title No. T-48580 which was not surrendered is hereby declared null and void.”5
No appeal was made from both orders of the courts aquo, hence, they became final and executory.
In a petition to annul the judgment of the trial court, petitioner, as the alleged previous owner of the
parcels of land sold at public auction, assailed the orders of the RTCs of Iloilo City before the CA. It claimed
that the assessment of real property taxes on it (GSIS) was void since, under its charter (RA 8291), it was
exempt from all forms of taxes (including real property taxes on the properties held by it) that were due
to the local governments where such properties were located. Furthermore, it claimed that the
proceedings in the assessment and levy of said taxes, as well as the sale of the properties at public auction,
were held without notice to it, hence, its right to due process was violated.
_______________
4
Decided by Judge Quiaico G. Defensor.
5Decided by Judge Nicolas Sian Monteblanco.
174
174 SUPREME COURT REPORTS ANNOTATED
Government Service Insurance System vs. City Assessor of Iloilo City
The appellate court gave no credence to the arguments of petitioner and dismissed its petition. According
to the CA, the exemption of GSIS under its charter was not applicable pur-suant to Section 234(a) of RA
7160, otherwise known as The Local Government Code of 1991 (LGC). Under that law, the tax-exempt
status of GSIS cannot be invoked where the actual use or beneficial ownership of the properties under its
title has been conveyed to another person.6 The CA added that there was also no basis for GSIS’s claim
that it was denied due process.7
Petitioner filed a motion for reconsideration but this was denied by the CA, hence, it brought this case
to us via a petition for review on certiorari under Rule 45 of the Rules of Court.
In this petition, petitioner essentially faults the CA for ruling that its properties were not exempt from
all forms of taxes under its charter (RA 8291) and that the proceedings on the assessment and levy of its
properties were legal.
In support of its position, petitioner points to Section 39 of RA 8291 which reads:
Section 39. Exemption from Tax, Legal Process and Lien.—It is hereby declared that the actuarial solvency
of the funds of the GSIS shall be preserved and maintained at all times and that the contribution rates are
necessary to sustain the benefits under this Act shall be kept low as possible in order not to burden the
member of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency
of its funds and increase the contribution rate necessary to sustain the benefits of this Act. Accordingly,
notwithstanding any laws to the contrary, the GSIS, its assets, revenues, including all accruals thereto, and
benefits paid shall be exempt from all taxes, assessment fees, charges or duties of all kinds. These
exemptions shall continue unless expressly and specifically revoked and any assessment against the GSIS
as of the approval of this Act are hereby considered paid. Consequently, all
_______________
6 Rollo, pp. 31-35.
7Id.
175
VOL. 493, JUNE 27, 2006 175
Government Service Insurance System vs. City Assessor of Iloilo City
laws, ordinances, regulations, issuances, opinions, or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered ineffective and without legal force and
effect.
xxx xxx xxx
The funds and/or properties referred to herein as well as the benefits, sums or monies corresponding
to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other
processes issued by the courts, quasi-judicial agencies or administrative bodies including the Commission
on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary
accountability arising from or caused or occasioned by his exercise or performance of his official functions
or duties, or incurred relative to or in connection with his position or otherwise, is in favor of GSIS.8 (italics
supplied)
We find no reversible error in the decision and resolution of the CA.
Even if the charter of the GSIS generally exempts it from tax liabilities, the prescription is not so
encompassing as to make the tax exemption applicable to the properties in dispute here.
In the early case of City of Baguio v. Busuego,9 we held that the tax-exempt status of the GSIS could
not prevent the accrual of the real estate tax liability on properties transferred by it to a private buyer
through a contract to sell. In the present case, GSIS had already conveyed the properties to private persons
thus making them subject to assessment and payment of real property taxes.10 The alienation of the
properties sold by GSIS was the proximate cause and necessary consequence of the delinquent taxes due.
_______________
8
Rollo, pp. 10-11.
9No. L-29772, 18 September 1980, 100 SCRA 116.
10
The property with TCT 41681 was previously conveyed to Baldomero Dagdag, while the property
with TCT No. 48580 was conveyed to Rodolfo Ceres. Supra at p. 2.
176
176 SUPREME COURT REPORTS ANNOTATED
Government Service Insurance System vs. City Assessor of Iloilo City
The doctrine laid down in City of Baguio is reflected in Section 234 (a) of the LGC,11 which states:
Section 234. Exemptions from Real Property Tax.—The following are exempted from payment of the real
property tax:
(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except
when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable
person.(emphasis supplied)
Petitioner, however, claims that RA 8291, which took effect in 1997, abrogated Section 234 (a) of the LGC
of 1991.
We disagree.
The abrogation or repeal of a law cannot be assumed; the intention to revoke must be clear and
manifest.12 RA 8291 made no express repeal or abrogation of the provisions of RA 7160, particularly
Section 234 (a) thereof.
Repeal by implication in this case is not at all convincing either. To bring about an implied repeal, the
two laws must be absolutely incompatible. They must be clearly repugnant
_______________
11
Section 40 of the Real Property Tax Code, which took effect in 1974, also carries the same provision.
The case of City of Baguio quoted:
“Sec. 40. Exemptions from Real Property Tax.—The exemption shall be as follows: (a) Real property owned
by the Republic of the Philippines or any of its political subdivisions and government-owned or controlled
corporations so exempt by its charter; Provided, however, that this tax exemption shall not apply to real construed so as to affect rights which have vested under the old law. Private respondent[s], we reiterate,
property of the above-named entitles the beneficial use of which has been granted, for consideration or have become the private owner[s] of the properties in question in the regular course of proceedings
otherwise to a taxable person.” established by law, and after the decisions granting such rights have become final and executory. The
12 STATUTORY CONSTRUCTION, Agpalo, Fifth Edition (2003) (REX Printing Company, Inc., Quezon City, enactment of the new GSIS Charter cannot be applied in a retroactive manner as to divest the private
Philippines); citing City of Manila v. Reyes, 99 Phil. 986 (1957). respondent[s] of [their] ownership.”19 (citations omitted)
177 _______________
VOL. 493, JUNE 27, 2006 177
18330 Phil. 392; 261 SCRA 667 (1996).
Government Service Insurance System vs. City Assessor of Iloilo City 19
Rollo, p. 38.
in a way that the later law (RA 8291) cannot exist without nullifying the prior law (RA 7160).13 179
Indeed, there is nothing in RA 8291 which abrogates, expressly or impliedly, that particular provision
VOL. 493, JUNE 27, 2006 179
of the LGC. The two statutes are not inconsistent on that specific point, let alone so irreconcilable as to
compel us to uphold one and strike down the other. Trinidad vs. Acapulco
The rule is that every statute must be interpreted and brought into accord with other laws in a way WHEREFORE, the petition is hereby DENIED.
that will form a uniform system of jurisprudence.14 The legislature is presumed to have known existing No costs.
laws on the subject and not to have enacted conflicting laws.15 Thus, the legislature cannot be presumed SO ORDERED.
to have intended Section 234 (a) to run counter to Section 39 of RA 8291. Puno (Chairperson), Sandoval-Gutierrez, Azcuna and Garcia, JJ., concur.
This conclusion is buttressed by the Court’s 2003 decision in National Power Corporation v. City of Petition denied.
Cabanatuan16 where we declared that the tax provisions of the LGC were the most significant provisions
therein insofar as they removed the blanket exclusion of instrumentalities and agencies of the national
government (like petitioner) from the coverage of local taxation. In that case, petitioner National Power
Corporation (NPC) claimed that it was an instrumentality of the government exempt under its charter from
paying franchise tax. The Court overruled NPC and upheld the right of respondent city government to
impose the franchise tax on its privilege to transact business in its area.
Again, in the 2004 case of Rubia v. Government Service Insurance System,17 the Court declared that
any interpretation that gave Section 39 an expansive construction to exempt all GSIS assets and properties
from legal processes was unwar-
_______________

13
Id., pp. 399, 404-405.
14 Hagad v. Gozo-Dadole, 321 Phil. 604; 251 SCRA 242 (1995).
15 Id.
16 449 Phil. 233; 401 SCRA 259 (2003).
17
G.R. No. 151439, 21 June 2004, 432 SCRA 529.
178
178 SUPREME COURT REPORTS ANNOTATED
Government Service Insurance System vs. City Assessor of Iloilo City
ranted. These processes included the levy and garnishment of its assets for taxes or claims enforced against
it. The Court there ruled that the exemption under Section 39 of the GSIS Charter should be read
consistently with its avowed purpose—the maintenance of its actuarial solvency to finance the retirement,
disability and life insurance benefits of its members. The Court meant that the tax-exempt properties and
assets of GSIS referred to those that remained at its disposal and use, either for investment or for income-
generating purposes. Properties whose actual and beneficial use had been transferred to private taxable
persons, for consideration or otherwise, were excluded and were thus taxable.
In Mactan Cebu International Airport Authority v. Marcos,18the Court ruled that the exemption of a
government-owned or controlled corporation from taxes and other charges was not absolute and could
be withdrawn, as in fact certain provisions of the LGC, including Section 234 (a), were deemed to have
expressly withdrawn the tax-exempt privilege of petitioner as a government-owned corporation.
Lastly, even if we were to construe that RA 8291 abrogated Section 234(a) of the LGC, still it cannot
be made to apply retroactively without impairing the vested rights of private respondent. The appellate
court thus correctly stated:
“x x x it has been the courts’ consistent ruling that a repealing statute must not interfere with vested rights
or impair the obligation of contracts; that if any other construction is possible, the act should not be

G.R. No. 141667. July 17, 2006.*
REPUBLIC OF THE PHILIPPINES, represented by NATIONAL TELECOMMUNICATIONS COMMISSION (NTC),
petitioner, vs. INTERNATIONAL COMMUNICATIONS CORPORATION (ICC), respondent.
Civil Procedure; Appeals; A recourse to the Supreme Court by way of a petition for review must be
filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of
the denial of the petitioner’s motion for new trial or reconsideration filed in due time after notice of the
judgment.—Under Section 2 of Rule 45 of the Rules of Court, a recourse to this Court by way of a petition
for review must be filed within fifteen (15) days from notice of the judgment or final order or resolution
appealed from, or of the denial of the petitioner’s motion for new trial or reconsideration filed in due time
after notice of the judgment. While a motion for reconsideration ordinarily tolls the period for appeal, one
that fails to point out the findings or conclusions which were supposedly contrary to law or the
_______________
*
SECOND DIVISION.
193
VOL. 495, JULY 17, 2006 193
Republic vs. International Communications Corporation (ICC)
evidence does not have such an effect on the reglementary period as it is merely a pro
forma motion.
Same; Motions for Reconsideration; The mere fact that a motion for reconsideration reiterates
issues already passed upon by the court does not, by itself, make it a pro forma motion. Among the ends
to which a motion for reconsideration is addressed is precisely to convince the court that its ruling is
erroneous and improper, contrary to the law or evidence; the movant has to dwell of necessity on issues
already passed upon.—Under established jurisprudence, the mere fact that a motion for reconsideration
reiterates issues already passed upon by the court does not, by itself, make it a pro forma motion. Among
the ends to which a motion for reconsideration is addressed is precisely to convince the court that its ruling
is erroneous and improper, contrary to the law or evidence; and in so doing, the movant has to dwell of
necessity on issues already passed upon. If a motion for reconsideration may not discuss those issues, the
consequence would be that after a decision is rendered, the losing party would be confined to filing only
motions for reopening and new trial.
Same; Same; Where there is no apparent intent to employ dilatory tactics, courts should be slow in
declaring outright a motion for reconsideration as pro forma.—Where there is no apparent intent to
employ dilatory tactics, courts should be slow in declaring outright a motion for reconsideration as pro
forma. The doctrine relating to pro forma motions has a direct bearing upon the movant’s valuable right
to appeal. Hence, if petitioner’s motion for reconsideration was indeed pro forma, it would still be in the
interest of justice to review the Amended Decision a quo on the merits, rather than to abort the appeal
due to a technicality, especially where, as here, the industry involved (telecommunications) is vested with
public interest. All the more so given that the instant petition raises some arguments that are well-worth
resolving for future reference.
Commercial Law; Public Public Service Act; Police Power; Taxation; Section 40(g) of the Public
Service Act is not a tax measure but a simple regulatory provision for the collection of fees imposed
pursuant to the exercise of the State’s police power.—Section 40(g) of the Public Service Act is not a tax
measure but a simple regulatory provision for the collection of fees imposed pursuant to the exercise of
the State’s police power. A tax is imposed under the taxing power of government principally for the
purpose of raising revenues. The law in question, however, merely authorizes and requires the collection
of fees for the reimbursement of the Commission’s expenses in the authorization, supervision and/or
regulation of public services. There can be
194
194 SUPREME COURT REPORTS ANNOTATED
Republic vs. International Communications Corporation (ICC)
no doubt then that petitioner NTC is authorized to collect such fees. However, the amount thereof
must be reasonably related to the cost of such supervision and/or regulation.
Statutory Construction; An implied repeal is predicated on a substantial conflict between the new
and prior laws. In the absence of an express repeal, a subsequent law cannot be construed as repealing a
prior one unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws.
Courts of justice should endeavor to reconcile the same instead of declaring outright the validity of one as
against the other.—NTC is correct in saying that there is no showing of legislative intent to repeal, even
impliedly, Section 40(g), supra, of the Public Service Act, as amended. An implied repeal is predicated on a
substantial conflict between the new and prior laws. In the absence of an express repeal, a subsequent
law cannot be construed as repealing a prior one unless an irreconcilable inconsistency and repugnancy
exist in the terms of the new and old laws. The two laws must be absolutely incompatible such that they
cannot be made to stand together. Courts of justice, when confronted with apparently conflicting statutes
or provisions, should endeavor to reconcile the same instead of declaring outright the validity of one as
against the other. Such alacrity should be avoided. The wise policy is for the judge to harmonize such
statutes or provisions if this is possible, bearing in mind that they are equally the handiwork of the same
legislature, and so give effect to both while at the same time also according due respect to a coordinate
department of the government. It is this policy the Court will apply in arriving at the interpretation of the
laws and the conclusions that should follow therefrom.
Same; Repeals by implication are not favored. An implied repeal will not be allowed unless it is
convincingly and unambiguously demonstrated that the two laws are so clearly repugnant and patently
inconsistent with each other that they cannot co-exist. This is based on the rationale that the will of the
legislature cannot be overturned by the judicial function of construction and interpretation.—It is a rule of
statutory construction that repeals by implication are not favored. An implied repeal will not be allowed
unless it is convincingly and unambiguously demonstrated that the two laws are so clearly repugnant and
patently inconsistent with each other that they cannot coexist. This is based on the rationale that the will
of the legislature cannot be overturned by the judicial function of construction and interpretation. Courts
cannot take the place of Congress in repealing statutes. Their function is to try to harmonize, as much as
possible, seeming conflicts in the laws and resolve doubts in favor of their validity and co-existence.
195
VOL. 495, JULY 17, 2006 195
Republic vs. International Communications Corporation (ICC)
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
The Solicitor General for petitioner.
Raoul R. Angangco and Laxmi J. Rosell for respondent.
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioner Republic, through the National
Telecommunications Commission (NTC), seeks the annulment and setting aside of the Amended
Decision1 dated September 30, 1999 of the Court of Appeals (CA), setting aside the orders dated June 4,
1996 and June 25, 1997 of the NTC insofar as said orders required respondent International
Communications Corporation (ICC) to pay the amount of P1,190,750.50 by way of permit fee as a condition
for the grant of a provisional authority to operate an international telecommunications leased circuit
service, and the Resolution2 dated January 24, 2000, denying NTC’s motion for reconsideration.
There is no dispute as to the facts:
On April 4, 1995, respondent ICC, holder of a legislative franchise under Republic Act (RA) No. 7633
to operate domestic telecommunications, filed with the NTC an application for a Certificate of Public
Convenience and Necessity to install, operate, and maintain an international telecommunications leased
circuit service between the Philippines and other countries, and to charge rates therefor, with provisional
authority for the purpose.
In an Order3 dated June 4, 1996, the NTC approved the application for a provisional authority subject,
among others, to the condition:
_______________
1 Penned by former Associate Justice Demetrio G. Demetria, with Associate Justices Ramon A.
Barcelona (ret.) and Martin S. Villarama, Jr., concurring; Rollo, pp. 34-53.
2 Rollo, p. 55.
3 Rollo, p. 65.
196
196 SUPREME COURT REPORTS ANNOTATED
Republic vs. International Communications Corporation (ICC)
1. 2.That applicant [ICC] shall pay a permit fee in the amount of P1,190,750.00, in accordance with
section 40(g) of the Public Service Act,4 as amended;
Respondent ICC filed a motion for partial reconsideration of the Order insofar as the same required the
payment of a permit fee. In a subsequent Order dated June 25, 1997, the NTC denied the motion.
Therefrom, ICC went to the CA on a petition for certiorari with prayer for a temporary restraining order
and/or writ of preliminary injunction, questioning the NTC’s imposition against it of a permit fee of
P1,190,750.50 as a condition for the grant of the provisional authority applied for.
In its original decision5 dated January 29, 1999, the CA ruled in favor of the NTC whose challenged
orders were sustained, and accordingly denied ICC’s certiorari petition, thus:
“WHEREFORE, the instant petition is hereby DENIED. In view thereof, the assailed orders dated 4 June
1996 and 25 June 1997, requiring the payment of permit fees in the amount of One Million One Hundred
Ninety Thousand Seven Hundred Fifty and 50/100 Pesos (P1,190,750.50) as a condition for the grant of a
Provisional Authority to operate an International Circuit service, are hereby AFFIRMED. ACCORDINGLY, the
International Communications Corporation is hereby ordered to pay the amount of One Million One
Hundred Ninety Thousand Seven Hundred Fifty and 50/100 Pesos (P1,190,750.50) to the National
Telecommunications Commission.
SO ORDERED.”
In time, ICC moved for a reconsideration. This time, the CA, in its Amended Decision dated September 30,
1999, reversed itself, to wit:
“WHEREFORE, the instant Motion for Reconsideration is hereby GRANTED. Accordingly, the Decision dated
29 January 1999 including the
_______________
4 Commonwealth Act No. 146, as amended, “An Act to reorganize the Public Service Commission,
prescribe its powers and duties, define and regulate public services, provide and fix the rates and quota of
expenses to be paid by the same and for other purposes.”
5
Rollo, pp. 71-79.
197
VOL. 495, JULY 17, 2006 197
Republic vs. International Communications Corporation (ICC)
imposition by the public respondent of permit fees with respect to [ICC’s] international leased circuit
service is hereby REVERSED. Judgment is hereby rendered, setting aside the questioned orders dated 04
June 1996 and 25 June 1997, insofar as they impose upon petitioner ICC the payment of the amount of
One Million One Hundred Ninety Thousand Seven Hundred Fifty and Fifty Centavos (P1,190,750.50) by
way of permit fees as a condition for the grant of a provisional authority to operate an International Leased
Circuit Service. No costs.
SO ORDERED.” (Word in bracket added).
Petitioner NTC filed a motion for reconsideration, but its motion was denied by the CA in its equally
challenged Resolution dated January 24, 2000. Hence, NTC’s present recourse claiming that the CA erred
in ruling that:
1. 1.NTC has arrogated upon itself the power to tax an entity;
2. 2.Section 40(g) of the Public Service Act has been amended by Section 5(g) of R.A. 7925;6
3. 3.The imposition of permit fees is no longer authorized by R.A. 7925; and
4. 4.The imposed permit fee in the amount of P1,190,750.50 for respon-dent’s provisional
authority is exorbitant.
Before addressing the issues raised, we shall first dwell on the procedural matter raised by respondent
ICC, namely, that the present petition should be dismissed outright for having been filed out of time. It is
respondent’s posture that petitioner’s motion for reconsideration filed with the CA vis-a-vis the latter’s
Amended Decision is a pro forma motion and, therefore, did not toll the running of the reglementary
period to come to this Court via this petition for review.
Under Section 2 of Rule 45 of the Rules of Court, a recourse to this Court by way of a petition for
review must be filed within fifteen (15) days from notice of the judgment or final order or resolution
appealed
_______________
6
Republic Act No. 7925, “An Act to promote and govern the development of Philippine
telecommunications and the delivery of public telecommunications services,” otherwise known as the
Public Telecommunications Policy Act of the Philippines, March 1, 1995.
198
198 SUPREME COURT REPORTS ANNOTATED
Republic vs. International Communications Corporation (ICC)
from, or of the denial of the petitioner’s motion for new trial or reconsideration filed in due time after notice
of the judgment. While a motion for reconsideration ordinarily tolls the period for appeal, one that fails to
point out the findings or conclusions which were supposedly contrary to law or the evidence does not have
such an effect on the reglementary period as it is merely a pro forma motion.7
In arguing for the outright dismissal of this petition, respondent ICC claims that the motion for
reconsideration filed by petitioner NTC in connection with the CA’s Amended Decision failed to point out
specifically the findings or conclusions of the CA which were supposedly contrary to law. Respondent
contends that the issues raised by the petitioner in its motion for reconsideration were mere reiterations
of the same issues which had already been considered and passed upon by the CA when it promulgated
its Amended Decision. On this premise, respondent maintains that petitioner’s aforementioned motion
for reconsideration is a mere pro forma motion that did not toll the period for filing the present petition.
Under established jurisprudence, the mere fact that a motion for reconsideration reiterates issues
already passed upon by the court does not, by itself, make it a pro forma motion.8 Among the ends to
which a motion for reconsideration is addressed is precisely to convince the court that its ruling is
erroneous and improper, contrary to the law or evidence; and in so doing, the movant has to dwell of
necessity on issues already passed upon. If a motion for reconsideration may not discuss those issues, the
consequence would be that after a decision is rendered, the losing party would be confined to filing only
motions for reopening and new trial.9
_______________
7 Section 2, Rule 37 of The Rules of Court; Luzon Stevedoring Company, Inc. v. Court of Industrial
Relations, G.R. No. L-16682, July 26, 1963, 8 SCRA 447.
8 Cruz v. Villaluz, G.R. No. L-41684, February 21, 1979, 88 SCRA 506; People v. Rodriguez, G.R. No.
32657, September 1, 1992, 213 SCRA 171; Marina Properties Corp. v. Court of Appeals, G.R. No. 125447,
August 14, 1998, 294 SCRA 273.
9 Guerra Enterprises Co., Inc. v. Court of First Instance of Lanao del Sur, G.R. No. L-28310, April 17,
1970, 32 SCRA 314.
199
VOL. 495, JULY 17, 2006 199
Republic vs. International Communications Corporation (ICC)
Where there is no apparent intent to employ dilatory tactics, courts should be slow in declaring outright a
motion for reconsideration as pro forma. The doctrine relating to pro formamotions has a direct bearing
upon the movant’s valuable right to appeal. Hence, if petitioner’s motion for reconsideration was
indeed pro forma, it would still be in the interest of justice to review the Amended Decision a quo on the
merits, rather than to abort the appeal due to a technicality, especially where, as here, the industry
involved (telecommunications) is vested with public interest. All the more so given that the instant petition
raises some arguments that are well-worth resolving for future reference.
This brings us to the substantive merits of the petition.
In its Amended Decision, the CA ruled that petitioner NTC had arrogated upon itself the power to tax
an entity, which it is not authorized to do. Petitioner disagreed, contending the fee in question is not in
the nature of a tax, but is merely a regulatory measure.
Section 40(g) of the Public Service Act provides:
Sec. 40. The Commission is authorized and ordered to charge and collect from any public service or
applicant, as the case may be, the following fees as reimbursement of its expenses in the authorization,
supervision and/or regulation of the public services:
xxx xxx xxx
g) For each permit, authorizing the increase in equipment, the installation of new units or authorizing
the increase of capacity, or the extension of means or general extensions in the services, twenty centavos
for each one hundred pesos or fraction of the additional capital necessary to carry out the permit.
(Emphasis supplied)
Clearly, Section 40(g) of the Public Service Act is not a tax measure but a simple regulatory provision for
the collection of fees imposed pursuant to the exercise of the State’s police power. A tax is imposed under
the taxing power of government principally for the purpose of raising revenues. The law in question,
however, merely authorizes and requires the collection of fees for the reimbursement of the Commission’s
expenses in the authorization, supervision and/or regulation of public services. There can be no doubt
then that petitioner NTC is
200
200 SUPREME COURT REPORTS ANNOTATED
Republic vs. International Communications Corporation (ICC)
authorized to collect such fees. However, the amount thereof must be reasonably related to the cost of
such supervision and/or regulation.10
Petitioner NTC also assails the CA’s ruling that Section 40(g) of the Public Service Act had been
amended by Section 5(g) of R.A. No. 7925, which reads:
Sec. 5. Responsibilities of the National Telecommunications Commission.—The National
Telecommunications Commission (Commission) shall be the principal administrator of this Act and as such
shall take the necessary measures to implement the policies and objectives set forth in this Act.
Accordingly, in addition to its existing functions, the Commission shall be responsible for the following:
xxx xxx xxx
g) In the exercise of its regulatory powers, continue to impose suchfees and charges as may be
necessary to cover reasonable costs andexpenses for the regulation and supervision of the operations of
telecommunications entities. (Emphasis supplied)
The CA ratiocinated that while Section 40(g) of the Public Service Act (CA 146, as amended), supra, allowed
NTC to impose fees as reimbursement of its expenses related to, among other things, the “authorization”
of public services, Section 5(g), above, of R.A. No. 7921 no longer speaks of “authorization” but only of
“regulation” and “supervision.” To the CA, the omission by Section 5(g) of R.A. No. 7921 of the word
“authorization” found in Section 40(g) of the Public Service Act, as amended, meant that the fees which
NTC may impose are only for reimbursement of its expenses for regulation and supervision but no longer
for authorization purposes.
We find, however, that NTC is correct in saying that there is no showing of legislative intent to repeal,
even impliedly, Section 40(g), supra, of the Public Service Act, as amended. An implied repeal is predicated
on a substantial conflict between the new and prior laws. In the absence of an express repeal, a subsequent
law cannot be construed as repealing a prior one unless an irreconcilable inconsistency
_______________
10 Philippine Long Distance Telephone v. Public Service Commission, G.R. No. L-26762, August 29,
1975, 66 SCRA 341, 351.
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VOL. 495, JULY 17, 2006 201
Republic vs. International Communications Corporation (ICC)
and repugnancy exist in the terms of the new and old laws.11 The two laws must be absolutely incompatible
such that they cannot be made to stand together.12
Courts of justice, when confronted with apparently conflicting statutes or provisions, should endeavor
to reconcile the same instead of declaring outright the validity of one as against the other. Such alacrity
should be avoided. The wise policy is for the judge to harmonize such statutes or provisions if this is
possible, bearing in mind that they are equally the handiwork of the same legislature, and so give effect to
both while at the same time also according due respect to a coordinate department of the government. It
is this policy the Court will apply in arriving at the interpretation of the laws and the conclusions that should
follow therefrom.13
It is a rule of statutory construction that repeals by implication are not favored. An implied repeal will
not be allowed unless it is convincingly and unambiguously demonstrated that the two laws are so clearly
repugnant and patently inconsistent with each other that they cannot co-exist. This is based on the
rationale that the will of the legislature cannot be overturned by the judicial function of construction and
interpretation. Courts cannot take the place of Congress in repealing statutes. Their function is to try to
harmonize, as much as possible, seeming conflicts in the laws and resolve doubts in favor of their validity
and co-existence.14
Here, there does not even appear to be a conflict between Section 40(g) of the Public Service Act, as
amended, and Section 5(g) of R.A. 7925. In fact, the latter provision directs petitioner NTC to “continue to
impose such fees and charges as may be necessary to cover reasonable costs and expenses for the
regulation and supervision of telecommunications entities.” The absence alone of the word “authoriza-
_______________
11
Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, G.R. No. L-24022, March 3, 1965, 13
SCRA 377.
12 Compania General de Tabacos v. Collector of Customs, 46 Phil. 8 [1924].
13 Gordon v. Meridiano, G.R. No. L-55230, November 8, 1988, 167 SCRA 51, 58-59.
14 Ty v. Trampe, G.R. No. 117577, December 1, 1995, 250 SCRA 500.
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202 SUPREME COURT REPORTS ANNOTATED
Republic vs. International Communications Corporation (ICC)
tion” in Section 5(g) of R.A. No. 7921 cannot be construed to mean that petitioner NTC had thus been
deprived of the power to collect such fees. As pointed out by the petitioner, the words “authorization,
supervision and/or regulation” used in Section 40(g) of the Public Service Act are not distinct and
completely separable concepts which may be taken singly or piecemeal. Taken in their entirety, they are
the quintessence of the Commission’s regulatory functions, and must go hand-in-hand with one another.
In petitioner’s own words, “[t]he Commission authorizes, supervises and regulates telecommunications
entities and these functions. . . cannot be considered singly without destroying the whole concept of the
Commission’s regulatory functions.”15 Hence, petitioner NTC is correct in asserting that the passage of R.A.
7925 did not bring with it the abolition of permit fees.
However, while petitioner had made some valid points of argument, its position must, of necessity,
crumble on the fourth issue raised in its petition. Petitioner itself admits that the fees imposed are
precisely regulatory and supervision fees, and nottaxes. This necessarily implies, however, that such fees
must be commensurate to the costs and expenses involved in discharging its supervisory and regulatory
functions. In the words of Section 40(g) of the Public Service Act itself, the fees and charges which
petitioner NTC is authorized to collect from any public service or applicant are limited to the
“reimbursement of its expenses in the authorization, supervision and/or regulation of public services.” It
is difficult to comprehend how the cost of licensing, regulating, and surveillance could amount to
P1,190,750.50. The CA was correct in finding the amount imposed as permit fee exorbitant and in complete
disregard of the basic limitation that the fee should be at least approximately commensurate to the
expense. Petitioner itself admits that it had imposed the maximum amount possible under the Public
Service Act, as amended. That is hardly taking into consideration the actual costs of fulfilling its regulatory
and supervisory functions.
Independent of the above, there is one basic consideration for the dismissal of this petition, about
which petitioner NTC did not bother
_______________

15Reply; Rollo, p. 141.

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VOL. 495, JULY 17, 2006 203
Republic vs. International Communications Corporation (ICC)
to comment at all. We refer to the fact that, as respondent ICC aptly observed, the principal ground given
by the CA in striking down the imposition of the P1,190,750.50 fee is that respondent ICC is entitled to the
benefits of the so-called “parity clause” embodied in Section 23 of R.A. No. 7925, to wit:
Section 23. Equality of Treatment in the Telecommunications Industry.—Any advantage, favor, privilege,
exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso
factobecome part of previously granted telecommunications franchises and shall be accorded immediately
and unconditionally to the grantees of such franchises x x x.
In this connection, it is significant to note that the subsequent congressional franchise granted to the
Domestic Satellite Corporation under Presidential Decree No. 947, states:
Section 6. In consideration of the franchise and rights hereby granted, the grantee shall pay to the Republic
of the Philippines during the life of this franchise a tax of one-half percent of gross earnings derived by the
grantee from its operation under this franchise and which originate from the Philippines. Such tax shall be
due and payable annually within ten days after the audit and approval of the accounts by the Commission
on Audit as prescribed in Section 11 hereof and shall be in lieu of all taxes, assessments, charges, fees, or
levies of any kind, nature, or descriptionlevied, established or collected by any municipal, provincial, or
national authority x x x (Emphasis supplied)
The CA was correct in ruling that the above-quoted provision is, by law, considered as ipso facto part of
ICC’s franchise due to the “parity clause” embodied in Section 23 of R.A. No. 7925. Accordingly, respondent
ICC cannot be made subject to the payment of the subject fees because its payment of the franchise tax is
“in lieu” of all other taxes and fees.
WHEREFORE, the petition is hereby DENIED and the assailed Amended Decision and Resolution of the
CA are AFFIRMED.

SO ORDERED.

G.R. No. 112170. April 10, 1996.*
CESARIO URSUA, petitioner, vs. COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.
Statutory Construction; Statutes are to be construed in the light of the purposes to be achieved and
the evils sought to be remedied—the court may consider the spirit and reason of the statute, where a literal
meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the
lawmakers.—Time and again we have decreed that statutes are to be construed in the light of the purposes
to be achieved and the evils sought to be remedied. Thus in construing a statute the reason for its
enactment should be kept in mind and the statute should be construed with reference to the intended
scope and purpose. The court may consider the spirit and reason of the statute, where a literal meaning
would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers.
Same; Names; Aliases; Criminal Law; C.A. No. 142; The objective and purpose of C.A. No. 142 have
their origin and basis in Act No. 3883.—The objective and purpose of C.A. No. 142 have their origin and
basis in Act No. 3883, An Act to Regulate the Use in Business Transactions of Names other than True Names,
Prescribing the Duties of the Director of the Bureau of Commerce and Industry in its Enforcement, Providing
Penalties for Violations thereof, and for other purposes, which was approved on 14 November 1931 and
amended by Act No. 4147, approved on 28 November 1934.
Same; Same; Same; Same; Same; The enactment of C.A. No. 142 as amended was made primarily
to curb the common practice among the Chinese of adopting scores of different names and aliases which
created tremendous confusion in the field of trade.—For a bit of history, the enactment of C.A. No. 142 as
amended was made primarily to curb the common practice among the Chinese of adopting scores of
different names and aliases which created tremendous confusion in the field of trade. Such a practice
almost bordered on the crime of using fictitious names which for obvious
______________
*FIRST DIVISION.
148
148 SUPREME COURT REPORTS ANNOTATED
Ursua vs. Court of Appeals
reasons could not be successfully maintained against the Chinese who, rightly or wrongly, claimed
they possessed a thousand and one names. C.A. No. 142 thus penalized the act of using an alias name,
unless such alias was duly authorized by proper judicial proceedings and recorded in the civil register.
Same; Same; Same; Same; Same; Words and Phrases; ”Alias” and ”Name,” Defined.—Clearly
therefore an alias is a name or names used by a person or intended to be used by him publicly and
habitually usually in business transactions in addition to his real name by which he is registered at birth or
baptized the first time or substitute name authorized by a competent authority. A man’s name is simply
the sound or sounds by which he is commonly designated by his fellows and by which they distinguish him
but sometimes a man is known by several different names and these are known as aliases.
Same; Same; Same; Same; Same; The use of a fictitious name or a different name belonging to
another person in a single instance without any sign or indication that the user intends to be known by this
name in addition to his real name from that day forth does not fall within the prohibition in C.A. No. 142.—
Hence, the use of a fictitious name or a different name belonging to another person in a single instance
without any sign or indication that the user intends to be known by this name in addition to his real name
from that day forth does not fall within the prohibition contained in C.A. No. 142 as amended. This is so in
the case at bench.
Same; Same; Same; Same; Same; Presumptions; There exists a valid presumption that undesirable
consequences were never intended by a legislative measure and that a construction of which the statute is
fairly susceptible is favored which will avoid all objectionable, mischievous, indefensible, wrongful, evil and
injurious consequences.—While the act of petitioner may be covered by other provisions of law, such does
not constitute an offense within the concept of C.A. No. 142 as amended under which he is prosecuted.
The confusion and fraud in business transactions which the anti-alias law and its related statutes seek to
prevent are not present here as the circumstances are peculiar and distinct from those contemplated by
the legislature in enacting C.A. No. 142 as amended. There exists a valid presumption that undesirable
consequences were never intended by a legislative measure and that a construction of which
149
VOL. 256, APRIL 10, 1996 149
Ursua vs. Court of Appeals
the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous,
indefensible, wrongful, evil and injurious consequences.
Same; Same; Same; Same; Same; The reason for the principle that a penal statute should be
construed strictly against the State and in favor of the accused is the tenderness of the law for the rights of
individuals and the object is to establish a certain rule by conformity to which mankind would be safe, and
the discretion of the court limited.—Moreover, as C.A. No. 142 is a penal statute, it should be construed
strictly against the State and in favor of the accused. The reason for this principle is the tenderness of the
law for the rights of individuals and the object is to establish a certain rule by conformity to which mankind
would be safe, and the discretion of the court limited. Indeed, our mind cannot rest easy on the proposition
that petitioner should be convicted on a law that does not clearly penalize the act done by him.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ceferino Padua Law Office for petitioner.
BELLOSILLO, J.:
This is a petition for review of the decision of the Court of Appeals which affirmed the conviction of
petitioner by the Regional Trial Court of Davao City for violation of Sec. 1 of C.A. No. 142, as amended by
R.A. No. 6085, otherwise known as “An Act to Regulate the Use of Aliases.”1
Petitioner Cesario Ursua was a Community Environment and Natural Resources Officer assigned in
Kidapawan, Cotabato. On 9 May 1989 the Provincial Governor of Cotabato requested the Office of the
Ombudsman in Manila to conduct an investigation on a complaint for bribery, dishonesty, abuse of
authority and giving of unwarranted benefits by petitioner and other officials of the Department of
Environment and
_______________
1
Rollo, pp. 24-37.
150
150 SUPREME COURT REPORTS ANNOTATED
Ursua vs. Court of Appeals
Natural Resources. The complaint was initiated by the Sangguniang Panlalawigan of Cotabato through a
resolution advising the Governor to report the involvement of petitioner and others in the illegal cutting
of mahogany trees and hauling of illegally-cut logs in the area.2
On 1 August 1989 Atty. Francis Palmones, counsel for petitioner, wrote the Office of the Ombudsman
in Davao City requesting that he be furnished copy of the complaint against petitioner. Atty. Palmones
then asked his client Ursua to take his letter-request to the Office of the Ombudsman because his law
firm’s messenger, Oscar Perez, had to attend to some personal matters. Before proceeding to the Office
of the Ombudsman petitioner talked to Oscar Perez and told him that he was reluctant to personally ask
for the document since he was one of the respondents before the Ombudsman. However, Perez advised
him not to worry as he could just sign his (Perez) name if ever he would be required to acknowledge receipt
of the complaint.3
When petitioner arrived at the Office of the Ombudsman in Davao City he was instructed by the
security officer to register in the visitors’ logbook. Instead of writing down his name petitioner wrote the
name “Oscar Perez” after which he was told to proceed to the Administrative Division for the copy of the
complaint he needed. He handed the letter of Atty. Palmones to the Chief of the Administrative Division,
Ms. Loida Kahulugan, who then gave him a copy of the complaint, receipt of which he acknowledged by
writing the name “Oscar Perez.”4
Before petitioner could leave the premises he was greeted by an acquaintance, Josefa Amparo, who
also worked in the same office. They conversed for a while then he left. When Loida learned that the
person who introduced himself as “Oscar Perez” was actually petitioner Cesario Ursua, a customer of
Josefa Amparo in her gasoline station, Loida reported
_______________
2 Id., p. 26.
3
Records, p. 7.
4 Rollo, p. 26.
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VOL. 256, APRIL 10, 1996 151
Ursua vs. Court of Appeals
the matter to the Deputy Ombudsman who recommended that petitioner be accordingly charged.
On 18 December 1990, after the prosecution had completed the presentation of its evidence,
petitioner without leave of court filed a demurrer to evidence alleging that the failure of the prosecution
to prove that his supposed alias was different from his registered name in the local civil registry was fatal
to its cause. Petitioner argued that no document from the local civil registry was presented to show the
registered name of accused which according to him was a condition sine qua non for the validity of his
conviction.
The trial court rejected his contentions and found him guilty of violating Sec. 1 of C.A. No. 142 as
amended by R.A. No. 6085. He was sentenced to suffer a prison term of one (1) year and one (1) day
of prision correccional minimum as minimum, to four (4) years of prision correccional medium as
maximum, with all the accessory penalties provided for by law, and to pay a fine of P4,000.00 plus costs.
Petitioner appealed to the Court of Appeals.
On 31 May 1993 the Court of Appeals affirmed the conviction of petitioner but modified the penalty
by imposing an indeterminate term of one (1) year as minimum to three (3) years as maximum and a fine
of P5,000.00.
Petitioner now comes to us for review of his conviction as he reasserts his innocence. He contends
that he has not violated C.A. No. 142 as amended by R.A. No. 6085 as he never used any aliasname; neither
is “Oscar Perez” his alias. An alias, according to him, is a term which connotes the habitual use of another
name by which a person is also known. He claims that he has never been known as “Oscar Perez” and that
he only used such name on one occasion and it was with the express consent of Oscar Perez himself. It is
his position that an essential requirement for a conviction under C.A. No. 142 as amended by R.A. No. 6085
has not been complied with when the prosecution failed to prove that his supposed alias was different
from his registered name in the Registry of Births. He further argues that the Court of Appeals erred in not
considering the defense theory that he
152
152 SUPREME COURT REPORTS ANNOTATED
Ursua vs. Court of Appeals
was charged under the wrong law.5
Time and again we have decreed that statutes are to be construed in the light of the purposes to be
achieved and the evils sought to be remedied. Thus in construing a statute the reason for its enactment
should be kept in mind and the statute should be construed with reference to the intended scope and
purpose.6 The court may consider the spirit and reason of the statute, where a literal meaning would lead
to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers.7
For a clear understanding of the purpose of C.A. No. 142 as amended, which was allegedly violated
by petitioner, and the surrounding circumstances under which the law was enacted, the pertinent
provisions thereof, its amendments and related statutes are herein cited. C.A. No. 142, which was
approved on 7 November 1936, and before its amendment by R.A. No. 6085, is entitled An Act to Regulate
the Use of Aliases. It provides as follows:
Section 1. Except as a pseudonym for literary purposes, no person shall use any name different from the
one with which he was christened or by which he has been known since his childhood, or such substitute
name as may have been authorized by a competent court. The name shall comprise the patronymic name
and one or two surnames.
Section 2. Any person desiring to use an alias or aliases shall apply for authority therefor in
proceedings like those legally provided to obtain judicial authority for a change of name. Separate
proceedings shall be had for each alias, and each new petition shall set forth the original name and the
alias or aliases for the use of which judicial authority has been obtained, specifying the proceedings and
the date on which such authority was granted. Judicial
_______________
5
Id., p. 12.
6
People v. Purisima, Nos. L-42050-66, 28 November 1978, 86 SCRA 542.
7
Gregorio, Antonio L., Fundamentals of Criminal Law Review, 1985 Ed., p. 9; People v. Manantan, No.
L-14129, 31 July 1962, 5 SCRA 684.
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VOL. 256, APRIL 10, 1996 153
Ursua vs. Court of Appeals
authorities for the use of aliases shall be recorded in the proper civil register x x x x
The above law was subsequently amended by R.A. No. 6085, approved on 4 August 1969. As amended,
C.A. No. 142 now reads:
Section 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment
purposes and in athletic events where the use of pseudonym is a normally accepted practice, no person
shall use any name different from the one with which he was registered at birth in the office of the local
civil registry or with which he was baptized for the first time, or in case of an alien, with which he was
registered in the bureau of immigration upon entry; or such substitute name as may have been authorized
by a competent court: Provided, That persons whose births have not been registered in any local civil
registry and who have not been baptized, have one year from the approval of this act within which to
register their names in the civil registry of their residence. The name shall comprise the patronymic name
and one or two surnames.
Sec. 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those
legally provided to obtain judicial authority for a change of name and no person shall be allowed to secure
such judicial authority for more than one alias. The petition for an alias shall set forth the person’s
baptismal and family name and the name recorded in the civil registry, if different, his immigrant’s name,
if an alien, and his pseudonym, if he has such names other than his original or real name, specifying the
reason or reasons for the desired alias. The judicial authority for the use of alias, the christian name and
the alien immigrant’s name shall be recorded in the proper local civil registry, and no person shall use any
name or names other than his original or real name unless the same is or are duly recorded in the proper
local civil registry.
The objective and purpose of C.A. No. 142 have their origin and basis in Act No. 3883, An Act to Regulate
the Use in Business Transactions of Names other than True Names, Prescribing the Duties of the Director
of the Bureau of Commerce and Industry in its Enforcement, Providing Penalties for Violations thereof,
and for other purposes, which was approved on 14 November 1931 and amended by Act No.
154
154 SUPREME COURT REPORTS ANNOTATED
Ursua vs. Court of Appeals
4147, approved on 28 November 1934.8 The pertinent provisions of Act No. 3883 as amended follow—
Section 1. It shall be unlawful for any person to use or sign, on any written or printed receipt including
receipt for tax or business or any written or printed contract not verified by a notary public or on any
written or printed evidence of any agreement or business transactions, any name used in connection with
his business other than his true name, or keep conspicuously exhibited in plain view in or at the place
where his business is conducted, if he is engaged in a business, any sign announcing a firm name or
business name or style without first registering such other name, or such firm name, or business name or
style in the Bureau of Commerce together with his true name and that of any other person having a joint
or common interest with him in such contract, agreement, business transaction, or business x x x x
For a bit of history, the enactment of C.A. No. 142 as amended was made primarily to curb the common
practice among the Chinese of adopting scores of different names and aliases which created tremendous
confusion in the field of trade. Such a practice almost bordered on the crime of using fictitious names
which for obvious reasons could not be successfully maintained against the Chinese who, rightly or
wrongly, claimed they possessed a thousand and one names. C.A. No. 142 thus penalized the act of using
an alias name, unless such alias was duly authorized by proper judicial proceedings and recorded in the
civil register.9
In Yu Kheng Chiau v. Republic 10 the Court had occasion to explain the meaning, concept and ill effects
of the use of an alias within the purview of C.A. No. 142 when we ruled—
_______________
8Aquino, Ramon C., The Revised Penal Code, 1961 Ed., Vol. II, pp. 1008-1009.
9Francisco, Vicente J., The Revised Penal Code Annotated, 1954 Ed., Vol. II, p. 331; Guevarra,
Guillermo B., Commentaries on the Revised Penal Code, 1946 Ed., p. 359.
10
106 Phil. 762 (1959).
155
VOL. 256, APRIL 10, 1996 155
Ursua vs. Court of Appeals
There can hardly be any doubt that petitioner’s use of alias ‘Kheng Chiau Young’ in addition to his real
name ‘Yu Kheng Chiau’ would add to more confusion. That he is known in his business, as manager of the
Robert Reid, Inc., by the former name, is not sufficient reason to allow him its use. After all, petitioner
admitted that he is known to his associates by both names. In fact, the Anselmo Trinidad, Inc., of which he
is a customer, knows him by his real name. Neither would the fact that he had encountered certain
difficulties in his transactions with government offices which required him to explain why he bore two
names, justify the grant of his petition, for petitioner could easily avoid said difficulties by simply using and
sticking only to his real name ‘Yu Kheng Chiau.’
The fact that petitioner intends to reside permanently in the Philippines, as shown by his having filed
a petition for naturalization in Branch V of the above-mentioned court, argues the more against the grant
of his petition, because if naturalized as a Filipino citizen, there would then be no necessity for his further
using said alias, as it would be contrary to the usual Filipino way and practice of using only one name in
ordinary as well as business transactions. And, as the lower court correctly observed, if he believes (after
he is naturalized) that it would be better for him to write his name following the Occidental method, ‘he
can easily file a petition for change of name, so that in lieu of the name ‘Yu Kheng Chiau,’ he can,
abandoning the same, ask for authority to adopt the name Kheng Chiau Young.’
All things considered, we are of the opinion and so hold, that petitioner has not shown satisfactory
proper and reasonable grounds under the aforequoted provisions of Commonwealth Act No. 142 and the
Rules of Court, to warrant the grant of his petition for the use of an alias name.
Clearly therefore an alias is a name or names used by a person or intended to be used by him publicly and
habitually usually in business transactions in addition to his real name by which he is registered at birth or
baptized the first time or substitute name authorized by a competent authority. A man’s name is simply
the sound or sounds by which he is commonly designated by his fellows and by which they distinguish him
but sometimes a man is known by several
156
156 SUPREME COURT REPORTS ANNOTATED
Ursua vs. Court of Appeals
different names and these are known as aliases.11 Hence, the use of a fictitious name or a different name
belonging to another person in a single instance without any sign or indication that the user intends to be
known by this name in addition to his real name from that day forth does not fall within the prohibition
contained in C.A. No. 142 as amended. This is so in the case at bench.
It is not disputed that petitioner introduced himself in the Office of the Ombudsman as “Oscar Perez,”
which was the name of the messenger of his lawyer who should have brought the letter to that office in
the first place instead of petitioner. He did so while merely serving the request of his lawyer to obtain a
copy of the complaint in which petitioner was a respondent. There is no question then that “Oscar Perez”
is not an alias name of petitioner. There is no evidence showing that he had used or was intending to use
that name as his second name in addition to his real name. The use of the name “Oscar Perez” was made
by petitioner in an isolated transaction where he was not even legally required to expose his real identity.
For, even if he had identified himself properly at the Office of the Ombudsman, petitioner would still be
able to get a copy of the complaint as a matter of right, and the Office of the Ombudsman could not refuse
him because the complaint was part of public records hence open to inspection and examination by
anyone under the proper circumstances.
While the act of petitioner may be covered by other provisions of law, such does not constitute an
offense within the concept of C.A. No. 142 as amended under which he is prosecuted. The confusion and
fraud in business transactions which the anti-alias law and its related statutes seek to prevent are not
present here as the circumstances are peculiar and distinct from those contemplated by the legislature in
enacting C.A. No. 142 as amended. There exists a valid presumption that undesirable consequences were
never intended
_______________
11
Words and Phrases, Permanent Edition, Vol. III, West Publishing Co., p. 139.
157
VOL. 256, APRIL 10, 1996 157
Ursua vs. Court of Appeals
by a legislative measure and that a construction of which the statute is fairly susceptible is favored, which
will avoid all objectionable, mischievous, indefensible, wrongful, evil and injurious
consequences.12 Moreover, as C.A. No. 142 is a penal statute, it should be construed strictly against the
State and in favor of the accused.13 The reason for this principle is the tenderness of the law for the rights
of individuals and the object is to establish a certain rule by conformity to which mankind would be safe,
and the discretion of the court limited.14 Indeed, our mind cannot rest easy on the proposition that
petitioner should be convicted on a law that does not clearly penalize the act done by him.
WHEREFORE, the questioned decision of the Court of Appeals affirming that of the Regional Trial
Court of Davao City is REVERSED and SET ASIDE and petitioner CESARIO URSUA is ACQUITTED of the crime
charged.
SO ORDERED.