1
Republic of the Philippines and 7-71 of the respondent Fiscal's office of the said city, all in
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-33628 December 29, 1987
BIENVENIDO A. EBARLE, SANTIAGO EISMA, MIRUFO CELERIAN,
JOSE SAYSON, CESAR TABILIRAN, and MAXIMO ADLAWAN,
petitioners,
vs.
HON. JUDGE MELQUIADES B. SUCALDITO, RUFINO LABANG,
MENELEO MESINA, ARTURO GUILLERMO, IN THEIR RESPECTIVE
CAPACITIES AS JUDGE OF THE COURT OF FIRST INSTANCE OF
ZAMBOANGA DEL SUR, CITY FISCAL OF PAGADIAN CITY AND
STATE PROSECUTOR, and ANTI-GRAFT LEAGUE OF THE
PHILIPPINES, INC., respondents.
No. L-34162 December 29, 1987
BIENVENIDO A. EBARLE, petitioner,
vs.
HON. JUDGE ASAALI S. ISNANI, RUFINO LABANG, ALBERTO S.
LIM, JR., JESUS ACEBES, IN THEIR RESPECTIVE CAPACITIES AS
JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL
SUR, CITY FISCAL OF PAGADIAN CITY AND STATE PROSECUTORS,
ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC., and ARTEMIO
ROMANILLOS, respondents.
SARMIENTO, J.:
The petitioner, then provincial Governor of Zamboanga del Sur
and a candidate for reelection in the local elections of 1971,
seeks injunctive relief in two separate petitions, to enjoin further
proceedings in Criminal Cases Nos. CCC XVI-4-ZDS, CCC XVI-6-
ZDS, and CCC XVI-8-ZDS of the then Circuit Criminal Court sitting
in Pagadian City, as well as I.S. Nos. 1-70, 2-71, 4-71, 5-71, 6-71,
private secretary of respondent Bienvenido
the nature of prosecutions for violation of certain provisions of Ebarle, formerly confidential secretary of the
the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) latter; that said awardee was given wholly
and various provisions of the Revised Penal Code, commenced by unwarranted advantage and preference by
the respondent Anti-Graft League of the Philippines, Inc. means of manifest partiality; that respondent
officials are hereby also charged with interest
On June 16, 1971 and October 8, 1971, respectively, we issued for personal gain for approving said award
temporary restraining orders directing the respondents (in both which was manifestly irregular and grossly
petitions) to desist from further proceedings in the cases in unlawful because the same was facilitated
and committed by means of falsification of
question until further orders from the Court. At the same time,
official documents.
we gave due course to the petitions and accordingly, required
the respondents to answer.
SPECIFICATION NO. II
The petitions raise pure question of law. The facts are hence,
undisputed. That after the aforecited award and contract,
Tabiliran Trucking Company, represented by
On September 26, 1970, the private respondent Anti-Graft respondent Cesar Tabiliran, attempted to
League of the Philippines, Inc., filed a complaint with the collect advances under his trucking contract
respondent City Fiscal, docketed as Criminal Case No. 1-70 in the under his trucking contract in the
thereof, for violation of the provisions of the Anti-Graft Law as amount of P4,823.95 under PTA No. 3654;
well as Article 171 of the Revised Penal Code, as follows: that the same was not passed in audit by the
Provincial Auditor in view of the then
subsisting contract with Tecson Trucking
xxx xxx xxx
Company; which was to expire on November
2, 1969; that nevertheless the said amount
SPECIFICATION NO. I — was paid and it was made to appear that it
was collected by Tecson Trucking Company,
That on or about October 10, 1969, above- although there was nothing due from tile
named respondents, conspiring and latter and the voucher was never indorsed or
confabulating together, allegedly conducted signed by the operator of Tecson Trucking;
a bidding for the supply of gravel and sand and that in facilitating and consummating the
for the Province of Zamboanga del Sur: that it aforecited collection, respondent officials,
was made to appear that Tabiliran Trucking hereinabove cited, conspired and connived to
Company won the bidding; that, thereafter, the great prejudice and damage of the
the award and contract pursuant to the said Provincial Government of Zamboanga del Sur.
simulated bidding were effected and 1
executed in favor of Tabiliran Trucking
Company; that, in truth and in fact, the said xxx xxx xxx
bidding was really simulated and the papers
on the same were falsified to favor Tabiliran
On the same date, the private respondent commenced Criminal
Trucking Company, represented by the
Case No. 2-71 of the respondent City Fiscal, another proceeding
 2

for violation of Republic Act No. 3019 as well as Article 171 of the REC. NO. N-468, for registration of title to Lot the so-called "bidding" for
Revised Penal Code. The complaint reads as follows: No. 2545 in particular; the supply of gravel and
sand for the province of
xxx xxx xxx That respondent BIENVENIDO EBARLE Zamboanga del Sur; that
testified falsely under oath during the hearing said respondents, without
and reception of evidence that he acquired any valid or legal ground,
That on or about April 8, 1970, a bidding was
said lot by purchase from a certain Brigido did not include or even
held for the construction of the right wing
Sanchez and that he is the owner, when in open the bid of one Jesus
portion of the Capitol Building of the Province
truth and in fact Lot 2545 had been Teoson that was
of Zamboanga del Sur, by the Bidding
previously acquired and is owned by the seasonably submitted,
Committee composed of respondents cited
provincial Government of Zamboanga del Sur, despite the fact that he is
hereinabove; that the said building was
where the provincial jail building is now a registered duly qualified
maliciously manipulated so as to give wholly
located. operator of "Teoson
unwarranted advantage and preference in
Trucking Service," and
favor of the, supposed winning bidder,
notwithstanding his
Codeniera Construction, allegedly owned and 2. That aforesaid deceit, false testimony and
compliance with all the
managed by Wenceslao Codeniera, brother- untruthful statement of respondent in said
rules and requirements
in-law of the wife of respondent Bienvenido Cadastral case were made knowingly to the
on public bidding; that,
Ebarle; that respondent official is interested great damage and prejudice of the Provincial
instead, aforecited
for personal gain because he is responsible Government of Zamboanga del Sur in
respondents illegally and
for the approval of the manifestly irregular violation of aforecited provisions of the
irregularly awarded said
and unlawful award and contract aforecited; Revised Penal Code. 3
contract to Cesar
and that, furthermore, respondent, being a
Tabiliran, an associate of
Member of the Bidding Committee, also On February 10, 1971, finally, the private respondent filed a respondent Governor
violated Article 171 of the Revised Penal complaint, docketed as I.S. No. 5-71 of the respondent Fiscal, an Bienvenido Ebarle; and
Code, by making it appear in the very action for violation of Republic Act No. 3019 and Articles 171 and
abstract of bids that another interested 213 of the Revised Penal Code, as follows:
bidder, was not interested in the bidding, 2. That in truth and in
when in truth and in fact, it was not so. 2 fact, aforesaid "bidding"
xxx xxx xxx was really simulated and
papers were falsified or
xxx xxx xxx
We hereby respectfully charge the above- otherwise "doctored" to
named respondents for violation of Sec. 3, favor respondent Cesar
On January 26, 1971, the private respondent instituted I.S. No. 4- R.A. No. 3019, otherwise known as the Anti- Tabiliran thereby giving
71 of the respondent Fiscal, a prosecution for violation of Articles Graft and Corrupt Practices Act, Articles 171 him wholly unwarranted
182, 183, and 318 of the Revised Penal Code, as follows: and 213, Revised Penal Code and the rules advantage, preference
and regulations of public bidding, committed and benefits by means of
xxx xxx xxx as follows: manifest partiality; and
that there is a statutory
That on or about April 4, 1967, in Pagadian 1. That on June 16, 1970, presumption of interest
City, said respondent testified falsely under without publication, for personal gain because
oath in Cadastral Case No. N-17, LRC CAD respondents conducted the transaction and
award were manifestly

irregular and contrary to
applicable law, rules and
regulations. 4
xxx xxx xxx
The petitioner initially moved to dismiss the aforesaid
preliminary investigations, but the same having been denied, he
went to the respondent Court of First Instance of Zamboanga del
Sur, the Honorable Melquiades Sucaldito presiding, on
prohibition and mandamus (Special Case No. 1000) praying at the
same time, for a writ of preliminary injunction to enjoin further
proceedings therein. The court granted preliminary injunctive
relief (restraining order) for which the Anti-Graft League filed a
motion to have the restraining order lifted and to have the
petition itself dismissed.
On May 14, 1971, the respondent, Judge Sucaldito, handed down
the first of the two challenged orders, granting Anti-Graft
League's motion and dismissing Special Case No. 1000.
On June 11, 1971, the petitioner came to this Court on certiorari
with prayer for a temporary restraining order (G.R. No. 33628).
As we said, we issued a temporary restraining order on June 16,
1971.
Meanwhile, and in what would begin yet another series of
criminal prosecutions, the private respondent, on April 26, 1971,
filed three complaints, subsequently docketed as Criminal Cases
Nos. CCC XVI-4-ZDS, CCC XVI-6-ZDS, and CCC XVI-8-ZDS of the
Circuit Criminal Court of Pagadian City for violation of various
provisions of the Anti-Graft Law as well as Article 171(4) of the
Revised Penal Code, as follows:
xxx xxx xxx
That on or about December 18, 1969, in
Pagadian City, and within the jurisdiction of
this Honorable Court, BIENVENIDO A.
EBARLE, Provincial Governor of Zamboanga
3
del Sur, did then and there unlawfully and
feloniously extended and gave ELIZABETH
EBARLE MONTESCLAROS, daughter of his
brother, his relative by consanguinity within
the third degree, and appointment as Private
Secretary in the Office of the Provincial
Governor of Zamboanga del Sur, although he
well know that the latter is related with him
within the third degree by consanguinity.
CONTRARY TO LAW. 5
xxx xxx xxx
xxx xxx xxx
That on or about December 18, 1969, in
Pagadian City, and within the jurisdiction of
this Honorable Court, BIENVENIDO A.
EBARLE, then and there unlawfully and
feloniously made untruthful statements in a
narration of facts by accomplishing and
issuing a certificate, to wit: ,
c. That the provisions of law and rules on
promotion, seniority and nepotism have been
observed.
required by law in such cases, in support of
the appointment he extended to ELIZABETH
EBARLE-MONTESCLAROS as Private Secretary
in the Office of the Provincial Governor of
Zamboanga del Sur, although he well know
that the latter is related with him within the
third degree of consanguinity.
CONTRARY TO LAW. 6
xxx xxx xxx
xxx xxx xxx
That on or about December 18, 1969, in
Pagadian City, and within the jurisdiction of
this Honorable Court, BIENVENIDO A.
EBARLE, then and there unlawfully and
feloniously made untruthful statements in a
narration of facts by accomplishing and
issuing a certificate, to wit:
c. That the provisions of law and rules on
promotion, seniority and nepotism have been
observed.
required by law in such cases, in support of
the appointment he extended to TERESITO
MONTESCLAROS, husband of his niece
Elizabeth Ebarle, as Motor Pool Dispatcher,
Office of the Provincial Engineer of
Zamboanga del Sur, although he well knew
that the latter is related with him within the
third degree affinity.
CONTRARY TO LAW. 7
xxx xxx xxx
Subsequently, on August 23, 1971, the private respondent
brought I.S. No. 6-71 of the respondent Pagadian City Fiscal
against the petitioner, still another proceeding for violation of
Republic Act No. 3019 and Article 171 (4) of the Revised Penal
Code, thus:
xxx xxx xxx
First Count.
That on or about December 1, 1969, in
Pagadian City, BIENVENIDO A. EBARLE,
Provincial Governor of Zamboanga del Sur,

did then and there unlawfully and feloniously
extended and gave MARIO EBARLE, son of his
brother, his relative by consanguinity within
the third degree, an appointment as
SECURITY GUARD in the Office of the
Provincial Engineer of Zamboanga del Sur
although he well knew that the latter is
related with him in the third degree by
consanguinity and is not qualified under the
Civil Service Law.
Second Count.
That in January, 1970, at Pagadian City, Gov.
BIENVENIDO A. EBARLE replaced JOHNNY
ABABON who was then the incumbent Motor
Pool Dispatcher in the Office of the Provincial
Engineer of Zamboanga del Sur with his
nephew-in-law TERESITO MONTESCLAROS
relative by affinity within the third Civil
degree, in violation of the Civil Service Law,
this knowingly causing undue injury in the
discharge of his administrative function
through manifest partiality against said
complaining employee.
Third Count:
That on or about December 18, 1969, in
Pagadian City, BIENVENIDO A. EBARLE,
Provincial Governor of Zamboanga del Sur,
did then and there unlawfully and feloniously
extended and gave ELIZABETH EBARLE
MONTESCLAROS, daughter of his brother, his
relative by consanguinity within the third
degree, an appointment as Private Secretary
in the Office of the Provincial Governor of
Zamboanga del Sur, although he well know
that the latter is related with him within the
third degree of consanguinity, and said
4
appointment is in violation of the Civil Service
Law.
Fourth Count.
That on or about January 22, 1970, in
Pagadian City, BIENVENIDO A. EBARLE,
Provincial Governor of Zamboanga del Sur,
did then and there unlawfully and feloniously
extended and gave ZACARIAS UGSOD, JR.,
son of the younger sister of Governor Ebarle,
his relative by consanguinity within the third
degree, an appointment as Architectural
Draftsman in the Office of the Provincial
Engineer of Zamboanga del Sur although he
well know that the latter is related with him
in the third degree of consanguinity.
Fifth Count.
That on February 5, 1970, at Pagadian City,
BIENVENIDO A. EBARLE, Provincial Governor
of Zamboanga del Sur, did then and there
unlawfully and feloniously extended and gave
TERESITO MONTESCLAROS, husband of his
niece ELIZABETH EBARLE, his relative by
affinity within the third degree, an
appointment as Motor Pool Dispatcher,
Office of the Provincial Engineer of
Zamboanga del Sur, although he wen knew
then that the latter was not qualified to such
appointment as it was in violation of the Civil
Service Law, thereby knowingly granting and
giving unwarranted advantage and
preference in the discharge of his
administrative function through manifest
partiality.
II. SPECIFICATION FOR VIOLATION OF
SECTION 4 (b), R.A. 3019
That on August 19, 1967, respondent
BIENVENIDO A. EBARLE, Governor of
Zamboanga del Sur, taking advantage of his
position caused, persuaded, induced, or
influence the Presiding Judge to perform
irregular and felonious act in violation of
applicable law or constituting an offense into
awarding and decreeing Lot 2645 of the
Pagadian Public Lands subdivision to him
who, according to the records of the case,
failed to establish his rights of ownership
pursuant to the provisions of the Land
Registration law and the Public Land Act, it
appearing that the Provincial Government of
Zamboanga del Sur as and is a claimant and in
adverse possession of Lot 2545 whereon the
Provincial Jail Building thereon still stands.
III. SPECIFICATION FOR VIOLATION OF
ARTICLE 171 (4), REVISED PENAL CODE
First Count.
That on or about December 18, 1969, in
Pagadian City, BIENVENIDO A. EBARLE, then
and there unlawfully and feloniously made
untruthful statement in a narration of facts
by accomplishing and issuing a certificate, to
wit:
c. That the provisions of law and rules on
promotion, seniority and nepotism have been
observed.
required by law in such cases, in support of
the appointment he extended to TERESITO
MONTESCLAROS, husband of his niece
ELIZABETH EBARLE, as Motor Pool
Dispatcher, Office of the Provincial Engineer
of Zamboanga del Sur, although he wen knew
that the latter is related with him within the

third degree of affinity and is in violation of
the Civil Service Law.
Second Count.
That on or about December 18, 1969, in
Pagadian City, BIENVENIDO A. EBARLE, then
and there unlawfully and feloniously made
untruthful statements a certificate, to wit:
c. That the provisions of the law and rules on
promotion, seniority and nepotism have been
observed.
required by law in such cases, in support of
the appointment he extended to ELIZABETH
EBARLE-MONTESCLAROS as Private Secretary
in the Office of the Provincial Governor of
Zamboanga del Sur, although he well knew
that the latter is related with him within the
third degree of consanguinity, and is in
violation of the Civil Service Law. CONTRARY
to aforecited laws. 8
xxx xxx xxx
On September 21, 1971, the private respondent instituted I.S.
No. 7-71 of the said City Fiscal, again charging the petitioner with
further violations of Republic Act No. 3019 thus:
xxx xxx xxx
First Count.
That on or about December 2, 1969, in
Pagadian City, BIENVENIDO EBARLE,
Provincial Governor of Zamboanga del Sur,
did then and there unlawfully and feloniously
extend and give unwarranted benefits and
privileges BONINDA EBARLE, wife of his
5
brother Bertuldo Ebarle, the former being his
relative by affinity within the second civil
degree, an appointment as LABORATORY
TECHNICIAN in Pagadian City, although he
well knew that the latter is related to him in
the second degree by affinity and is not
qualified under the Civil Service Law.
Second Count.
That on or about January 1, 1970, at Pagadian
City, BIENVENIDO EBARLE, Provincial
Governor of Zamboanga del Sur, did then and
there unlawfully and feloniously extend and
give unwarranted benefits and privileges
JESUS EBARLE, nephew of said respondent,
an appointment as DRIVER of the Provincial
Engineer's Office, Pagadian City, although he
well knew that Jesus Ebarle is related to him
within the third civil degree by consanguinity
and is not qualified under the Civil Service
Law.
Third Count.
That on or about November 1, 1969, at
Pagadian City, BIENVENIDO EBARLE,
Provincial Governor of Zamboanga del Sur,
did then and there unlawfully and feloniously
extend and give unwarranted benefits and
privileges PHENINA CODINERA, sister-in-law
of said respondent, an appointment as
CONFIDENTIAL ASSISTANT in the Office of the
Provincial Governor, Pagadian City, although
he well knew that Phenina Codinera is related
to him in the second civil degree of
consanguinity and is not qualified under the
Civil Service Law.
ALL CONTRARY TO AFORECITED LAW.
Please give due course to the above
complaint and please set the case for
immediate preliminary investigation pursuant
to the First Indorsement dated August 27,
1971 of the Secretary of Justice, and in the
paramount interest of good government. 9
xxx xxx xxx
The petitioner thereafter went to the respondent Court of First
Instance of Zamboanga del Sur, the Honorable Asaali Isnani
presiding, on a special civil action (Special Civil Case No. 1048) for
prohibition and certiorari with preliminary injunction. The
respondent Court issued a restraining order. The respondent
Anti-Graft League moved to have the same lifted and the case
itself dismissed.
On September 27, 1971, Judge Isnani issued an order, dismissing
the case.
On October 6, 1971, the petitioner instituted G.R. No. 34162 of
this Court, a special civil action for certiorari with preliminary
injunction. As earlier noted, we on October 8, 1971, stayed the
implementation of dismissal order.
Subsequently, we consolidated both petitions and considered the
same submitted for decision.
Principally, the petitioner relies (in both petitions) on the failure
of the respondents City Fiscal and the Anti-Graft League to
comply with the provisions of Executive Order No. 264,
"OUTLINING THE PROCEDUE BY WHICH COMPLAINANTS
CHARGING GOVERNMENT OFFICIALS AND EMPLOYEES WITH
COMMISSION OF IRREGULARITIES SHOULD BE GUIDED," 10
preliminary to their criminal recourses. At the same time, he
assails the standing of the respondent Anti-Graft League to
commence the series of prosecutions below (G.R. No. 33628). He
likewise contends that the respondent Fiscal (in G.R. No. 34162),
in giving due course to the complaints notwithstanding the
restraining order we had issued (in G.R. No. 33628), which he

claims applies as well thereto, committed a grave abuse of
discretion.
He likewise submits that the prosecutions in question are
politically motivated, initiated by his rivals, he being, as we said, a
candidate for reelection as Governor of Zamboanga del Sur.
We dismiss these petitions.
The petitioner's reliance upon the provisions of Executive Order
No. 264 has no merit. We reproduce the Order in toto:
MALACAÑANG
RESIDENCE OF THE PRESIDENT
OF THE PHILIPPINES
MANILA
BY THE PRESIDENT OF THE PHILIPPINES
EXECUTIVE ORDER NO. 264
OUTLINING THE PROCEDURE BY WHICH
COMPLAINANTS CHARGING GOVERNMENT
OFFICIALS AND EMPLOYEES WITH
COMMISSION OF IRREGULARITIES SHOULD
BE GUIDED.
WHEREAS, it is necessary that the general
public be duly informed or reminded of the
procedure provided by law and regulations
by which complaints against public officials
and employees should be presented and
prosecuted.
WHEREAS, actions on complaints are at times
delayed because of the failure to observe the
6
form.91 requisites therefor, to indicate with
sufficient clearness and particularity the
charges or offenses being aired or
denounced, and to file the complaint with the
proper office or authority;
WHEREAS, without in any way curtailing the
constitutional guarantee of freedom of
expression, the Administration believes that
many complaints or grievances could be
resolved at the lower levels of government if
only the provisions of law and regulations on
the matter are duly observed by the parties
concerned; and
WHEREAS, while all sorts of officials
misconduct should be eliminated and
punished, it is equally compelling that public
officials and employees be given opportunity
afforded them by the constitution and law to
defend themselves in accordance with the
procedure prescribed by law and regulations;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the
powers vested in me by law, do hereby order:
1. Complaints against public officials and
employees shall be in writing, subscribed and
sworn to by the complainants, describing in
sufficient detail and particularity the acts or
conduct complained of, instead of
generalizations.
2. Complaints against presidential appointees
shag be filed with the Office of the President
or the Department Head having direct
supervision or control over the official
involved.
3. Those against subordinate officials and
employees shall be lodged with the proper
department or agency head.
4. Those against elective local officials shall
be filed with the Office of the President in
case of provincial and city officials, with the
provincial governor or board secretary in case
of municipal officials, and with the municipal
or city mayor or secretary in case of barrio
officials.
5. Those against members of police forces
shall be filed with the corresponding local
board of investigators headed by the city or
municipal treasurer, except in the case of
those appointed by the President which
should be filed with the Office of the
President.
6. Complaints against public officials and
employees shall be promptly acted upon and
disposed of by the officials or authorities
concerned in accordance with pertinent laws
and regulations so that the erring officials or
employees can be soonest removed or
otherwise disciplined and the innocent,
exonerated or vindicated in like manner, and
to the end also that other remedies, including
court action, may be pursued forthwith by
the interested parties after administrative
remedies shall have been exhausted.
Done in the City of Manila, this 6th day of
October, in the year of Our Lord, nineteen
hundred and seventy.
 7

. n
) e
F s
E
R President:
By the
D
I
(
N
S
A
g
N It is plain from the verydwording of the Order that it has exclusive
D application to administrative, not criminal complaints. The Order
.
E itself shows why. )
.
A
M
The very title speaks ofL"COMMISSION OF IRREGULARITIES."
A
There is no mention, not E even by implication, of criminal
R
"offenses," that is to say,
J "crimes." While "crimes" amount to
C
"irregularities," the Executive
A Order could have very well referred
O
to the more specific termN had it intended to make itself
S
applicable thereto. D
R
P
The first perambulatoryOclause states the necessity for informing
r M
the public "of the procedure provided by law and regulations by
e E public officials and employees should
which complaints against
s L
be presented and prosecuted. 12 To our mind, the "procedure
i C
provided by law and regulations" referred to pertains to existing
d H
procedural rules with respect to the presentation of
e
administrative charges O against erring government officials. And in
n R
fact, the aforequoted paragraphs are but restatements thereof.
t
That presidential appointees are subject to the disciplinary
o
jurisdiction of the President, for instance, isEa reecho of the long-
f
standing doctrine that the President exercises x the power of
t
control over his appointees. 13 Paragraph 3, e on the other hand,
h
regarding subordinate officials, is a mere reiteration
c of Section 33
e
of Republic Act No. 2260, the Civil Service Actu (of 1959) then in
P
force, placing jurisdiction upon "the propert Head of Department,
h
the chief of a bureau or office" 14 to investigate
i and decide on
i
matters involving disciplinary action. v
l
e
i
Paragraph 4, which refers to complaints filed S against elective
p
p local officials, reiterates, on the other hand,e the Decentralization
i Act of 1967, providing that "charges againstc any elective

provincial and city officials shall be preferred before the
President of the Philippines; against any elective municipal
official before the provincial governor or the secretary of the
provincial board concerned; and against any elective barrio
official before the municipal or secretary concerned. 15
Paragraph 5, meanwhile, is a reproduction of the provisions of
the Police Act of 1966, vesting upon a "Board of Investigators" 16
the jurisdiction to try and decide complaints against members of
the Philippine police.
Clearly, the Executive Order simply consolidates these existing
rules and streamlines the administrative apparatus in the matter
of complaints against public officials. Furthermore, the fact is
that there is no reference therein to judicial or prejudicial (like a
preliminary investigation conducted by the fiscal) recourse, not
because it makes such a resort a secondary measure, but
because it does not intend to serve as a condition precedent to,
much less supplant, such a court resort.
To be sure, there is mention therein of "court action[s] [being]
pursued forthwith by the interested parties, " 17 but that does
not, so we hold, cover proceedings such as criminal actions,
which do not require a prior administrative course of action. It
will indeed be noted that the term is closely shadowed by the
qualification, "after administrative remedies shall have been
exhausted," 18 which suggests civil suits subject to previous
administrative action.
It is moreover significant that the Executive Order in question
makes specific reference to "erring officials or employees ...
removed or otherwise vindicated. 19 If it were intended to apply
to criminal prosecutions, it would have employed such technical
terms as "accused", "convicted," or "acquitted." While this is not
necessarily a controlling parameter for all cases, it is here
material in construing the intent of the measure.
What is even more compelling is the Constitutional implications if
the petitioner's arguments were accepted. For Executive Order
No. 264 was promulgated under the 1935 Constitution in which
legislative power was vested exclusively in Congress. The regime
8
of Presidential lawmaking was to usher in yet some seven years
later. If we were to consider the Executive Order law, we would
be forced to say that it is an amendment to Republic Act No.
5180, the law on preliminary investigations then in effect, a
situation that would give rise to a Constitutional anomaly. We
cannot accordingly countenace such a view.
The challenge the petitioner presents against the personality of
the Anti-Graft League of the Philippines to bring suit is equally
without merit. That the Anti-Graft League is not an "offended
party" within the meaning of Section 2, Rule 110, of the Rules of
Court (now Section 3 of the 1985 Rules on Criminal Procedure),
cannot abate the complaints in question.
A complaint for purposes of preliminary investigation by the
fiscal need not be filed by the "offended party." The rule has
been that, unless the offense subject thereof is one that cannot
be prosecuted de oficio, the same may be filed, for preliminary
investigation purposes, by any competent person. 20 The
"complaint" referred to in the Rule 110 contemplates one filed in
court, not with the fiscal, In that case, the proceeding must be
started by the aggrieved party himself. 21
For as a general rule, a criminal action is commenced by
complaint or information, both of which are filed in court. In case
of a complaint, it must be filed by the offended party; with
respect to an information, it is the fiscal who files it. But a
"complaint" filed with the fiscal prior to a judicial action may be
filed by any person.
The next question is whether or not the temporary restraining
order we issued in G.R. No. 33628 embraced as well the
complaint subject of G.R. No. 34162.
It is noteworthy that the charges levelled against the petitioner
— whether in G.R. No. 33628 or 34162 — refer invariably to
violations of the Anti-Graft Law or the Revised Penal Code. That
does not, however, make such charges Identical to one another.
The complaints involved in G.R. No. 34162 are, in general,
nepotism under Sections 3(c) and (j) of Republic Act No. 3019;
exerting influence upon the presiding Judge of the Court of First
Instance of Zamboanga del Sur to award a certain parcel of land
in his favor, over which the provincial government itself lays
claims, contrary to the provisions of Section 4(b) of Republic Act
No. 3019; and making untruthful statements in the certificates of
appointment of certain employees in his office. On the other
hand, the complaints subject matter of G.R. No. 33628 involve
charges of simulating bids for the supply of gravel and sand for
certain public works projects, in breach of Section 3 of the Anti-
Graft statute; manipulating bids with respect to the construction
of the capitol building; testifying falsely in connection with
Cadastral Case No. N-17, LRC Cad. Rec. N-468, in which the
petitioner alleged that he was the owner of a piece of land, in
violation of Articles 182, 183, and 318 of the Revised Penal Code;
and simulating bids for the supply of gravel and sand in
connection with another public works project.
It is clear that the twin sets of complaints are characterized by
major differences. When, therefore, we restrained further
proceedings in I.S. Nos. 1-71, 2-71, and 4-71, subject of G.R. No.
33628. we did not consequently stay the proceedings in CCC-XVI-
4-ZDS, CCC XVI-6-ZDS, CCC XVI-8-ZDS, and I.S. Nos. 6-71 and 7-71,
the same proceedings we did restrain in G.R. No. 34162.
This brings us to the last issue: whether or not the complaints in
question are tainted with a political color.
It is not our business to resolve complaints the disposition of
which belongs to another agency, in this case, the respondent
Fiscal. But more than that, and as a general rule, injunction does
not lie to enjoin criminal prosecutions. 22 The rule is subject to
exceptions, to wit: (1) for the orderly administration of justice;
(2) to prevent the use of the strong arm of the law in an
oppressive and vindictive manner; (3) to avoid multiplicity of
actions; (4) to afford adequate protection to constitutional rights;
and (5) because the statute relied on is constitutionally infirm or
otherwise void. 23 We cannot perceive any of the exceptions
applicable here. The petitioner cries foul, in a manner of
speaking, with respect to the deluge of complaints commenced

by the private respondent below, but whether or not they were
filed for harassment purposes is a question we are not in a
position to decide. The proper venue, we believe, for the
petitioner's complaint is precisely in the preliminary
investigations he wishes blocked here.
WHEREFORE, the petitions are DISMISSED. The temporary
restraining orders are LIFTED and SET ASIDE. Costs against the
petitioners.
It is so ORDERED.
Yap (Chairman), Melencio-Herrera, Paras, and Padilla, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-42050-66 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST
INSTANCE OF MANILA, BRANCH VII, and PORFIRIO
CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON
BUNDALIAN, JR., JOSEPH C. MAISO, EDUARDO A. LIBORDO,
ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO,
MARIANO COTIA, JR., ARMANDO L. DIZON, ROGELIO B.
PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A.
BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA,
respondents.
G.R. No. L-46229-32 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF
MANILA, BRANCH XVIII, and REYNALDO LAQUI Y AQUINO,
9
ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO
VERSOZA, respondents.
G.R. No. L-46313-16 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF
MANILA, BRANCH XVIII, and JUANITO DE LA CRUZ Y NUNEZ,
SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN
CASTILLO Y UBALDO, respondents.
G.R. No. L-46997 November 20, 1978
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE WENCESLAO M. POLO, Judge of the Court of
First Instance of Samar, and PANCHITO REFUNCION,
respondents.
Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of
the City of Fiscal of Manila and the Office of Provincial Fiscal of
Samar for petitioners.
Norberto Parto for respondents Candelosas, Baes and Garcia.
Amado C. de la Marced for respondents Simeon Bundalian Jr., et
al.
Manuel F. de Jesus for all the respondents in L-46229-32 and L-
46313-16.
Norberto L. Apostol for respondent Panchito Refuncion.
Hon. Amante P. Purisima for and in his own behalf.
MUÑOZ PALMA, J.:
These twenty-six (26) Petitions for Review filed by the People of
the Philippines represented, respectively, by the Office of the
City Fiscal of Manila, the Office of the Provincial Fiscal of Samar,
and joined by the Solicitor General, are consolidated in this one
Decision as they involve one basic question of law.
These Petitions or appeals involve three Courts of First Instance,
namely: the Court of First Instance of Manila, Branch VII,
presided by Hon. Amante P. Purisima (17 Petitions), the Court of
First Instance of Manila, Branch XVIII, presided by Hon. Maximo
A. Maceren (8 Petitions) and, the Court of First Instance of
Samar, with Hon. Wenceslao M. Polo, presiding, (1 Petition).
Before those courts, Informations were filed charging the
respective accused with "illegal possession of deadly weapon" in
violation of Presidential Decree No. 9. On a motion to quash filed
by the accused, the three Judges mentioned above issued in the
respective cases filed before them — the details of which will be
recounted below — an Order quashing or dismissing the
Informations, on a common ground, viz, that the Information did
not allege facts which constitute the offense penalized by
Presidential Decree No. 9 because it failed to state one essential
element of the crime.
Thus, are the Informations filed by the People sufficient in form
and substance to constitute the offense of "illegal possession of
deadly weapon" penalized under Presidential Decree (PD for
short) No. 9? This is the central issue which we shall resolve and
dispose of, all other corollary matters not being indispensable for
the moment.
A — The Information filed by the People —
1. In L-42050-66, one typical Information filed with the Court
presided by Judge Purisima follows:
THE PEOPLE OF THE PHILIPPINES, plaintiff,
versus PORFIRIO CANDELOSAS Y DURAN,
accused.
 10

Crim. Case No. 19639 I

M
VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF .
PROCLAMATION 1081 C
A
S
INFORMATION
E
N
The undersigned accuses PORFIRIO O
CANDELOSAS Y DURAN of a violation of .
paragraph 3, Presidential Decree No. 9 of 2
Proclamation 1081, committed as follows: 9
6
That on or about the 14 th day of December, 7
1974, in the City of Manila, Philippines, the 7
said accused did then and there wilfully,
unlawfully, feloniously and knowingly have in V
his possession and under his custody and I
control one (1) carving knife with a blade of O
6-½ inches and a wooden handle of 5-1/4 L
inches, or an overall length of 11-¾ inches, .
which the said accused carried outside of his O
residence, the said weapon not being used as F
a tool or implement necessary to earn his P
livelihood nor being used in connection A
therewith. R
.
Contrary to law. (p. 32, rollo of L-42050-66) 3
,
The other Informations are similarly worded except for the name
of the accused, the date and place of the commission of the P
crime, and the kind of weapon involved. D
9
2. In L-46229-32 and L-46313-16, the Information filed with the I
Court presided by Judge Maceren follows: N
R
E
THE PEOPLE OF THE PHILIPPINES, plaintiff, L
versus REYNALDO LAQUI Y AQUINO, accused. .
T
C O
R L
 11

9 .
7 C
5 A
S
INFORMATION E
N
O
The undersigned accuses REYNALDO LAQUI Y
.
AQUINO of a VIOLATION OF PARAGRAPH 3,
9
PRESIDENTIAL DECREE NO. 9 in relation to
3
Letter of Instruction No. 266 of the Chief
3
Executive dated April 1, 1975, committed as
follows:
F
o
That on or about the 28 th day of January,
r
1977, in the City of Manila, Philippines, the
:
said accused did then and there wilfully,
unlawfully and knowingly carry outside of his
residence a bladed and pointed weapon, to I
wit: an ice pick with an overall length of L
about 8½ inches, the same not being used as L
a necessary tool or implement to earn his E
livelihood nor being used in connection G
therewith. A
L
P
Contrary to law. (p. 14, rollo of L-46229-32)
O
S
The other Informations are likewise similarly worded except for S
the name of the accused, the date and place of the commission E
of the crime, and the kind of weapon involved. INFORMATION S
S
3. In L-46997, the Information before the Court of First Instance I
The undersigned First Assistant Provincial
of Samar is quoted hereunder: Fiscal of Samar, accusesOPANCHITO
REFUNCION of the crime N of ILLEGAL
PEOPLE OF THE PHILIPPINES, complainant, POSSESSION OF DEADLYO WEAPON or
versus PANCHITO REFUNCION, accused. VIOLATION OF PD NO. 9F issued by the
President of the Philippines on Oct. 2, 1972,
C pursuant to ProclamationD No. 1081 dated
R Sept. 21 and 23, 1972, committed
E as follows:
I A
M D

That on or about the 6th day of October,
1976, in the evening at Barangay Barruz,
Municipality of Matuginao, Province of Samar
Philippines, and within the jurisdiction of this
Honorabe Court, the abovenamed accused,
knowingly, wilfully, unlawfully and feloniously
carried with him outside of his residence a
deadly weapon called socyatan, an
instrument which from its very nature is no
such as could be used as a necessary tool or
instrument to earn a livelihood, which act
committed by the accused is a Violation of
Presidential Decree No. 9.
CONTRARY TO LAW. (p. 8, rollo of L-46997)
B. — The Orders of dismissal —
In dismissing or quashing the Informations the trial courts
concurred with the submittal of the defense that one essential
element of the offense charged is missing from the Information,
viz: that the carrying outside of the accused's residence of a
bladed, pointed or blunt weapon is in furtherance or on the
occasion of, connected with or related to subversion, insurrection,
or rebellion, organized lawlessness or public disorder.
1. Judge Purisima reasoned out, inter alia, in this manner:
... the Court is of the opinion that in order
that possession of bladed weapon or the like
outside residence may be prosecuted and
tried under P.D. No. 9, the information must
specifically allege that the possession of
bladed weapon charged was for the purpose
of abetting, or in furtherance of the
conditions of rampant criminality, organized
lawlessness, public disorder, etc. as are
contemplated and recited in Proclamation
No. 1081, as justification therefor. Devoid of
this specific allegation, not necessarily in the
same words, the information is not complete,
12
as it does not allege sufficient facts to
constitute the offense contemplated in P.D.
No. 9. The information in these cases under
consideration suffer from this defect.
xxx xxx xxx
And while there is no proof of it before the
Court, it is not difficult to believe the
murmurings of detained persons brought to
Court upon a charge of possession of bladed
weapons under P.D. No. 9, that more than
ever before, policemen - of course not all can
be so heartless — now have in their hands
P.D. No. 9 as a most convenient tool for
extortion, what with the terrifying risk of
being sentenced to imprisonment of five to
ten years for a rusted kitchen knife or a pair
of scissors, which only God knows where it
came from. Whereas before martial law an
extortion-minded peace officer had to have a
stock of the cheapest paltik, and even that
could only convey the coercive message of
one year in jail, now anything that has the
semblance of a sharp edge or pointed object,
available even in trash cans, may already
serve the same purpose, and yet five to ten
times more incriminating than the infamous
paltik.
For sure, P.D. No. 9 was conceived with the
best of intentions and wisely applied, its
necessity can never be assailed. But it seems
it is back-firing, because it is too hot in the
hands of policemen who are inclined to
backsliding.
The checkvalves against abuse of P.D. No. 9
are to be found in the heart of the Fiscal and
the conscience of the Court, and hence this
resolution, let alone technical legal basis, is
prompted by the desire of this Court to apply
said checkvalves. (pp. 55-57, rollo of L-42050-
66)
2. Judge Maceren in turn gave his grounds for dismissing the
charges as follows:
xxx xxx xxx
As earlier noted the "desired result" sought to
be attained by Proclamation No. 1081 is the
maintenance of law and order throughout the
Philippines and the prevention and
suppression of all forms of lawless violence as
well as any act of insurrection or rebellion. It
is therefore reasonable to conclude from the
foregoing premises that the carrying of
bladed, pointed or blunt weapons outside of
one's residence which is made unlawful and
punishable by said par. 3 of P.D. No. 9 is one
that abets subversion, insurrection or
rebellion, lawless violence, criminality, chaos
and public disorder or is intended to bring
about these conditions. This conclusion is
further strengthened by the fact that all
previously existing laws that also made the
carrying of similar weapons punishable have
not been repealed, whether expressly or
impliedly. It is noteworthy that Presidential
Decree No. 9 does not contain any repealing
clause or provisions.
xxx xxx xxx
The mere carrying outside of one's residence
of these deadly weapons if not concealed in
one's person and if not carried in any of the
aforesaid specified places, would appear to
be not unlawful and punishable by law.

With the promulgation of Presidential Decree
No. 9, however, the prosecution, through
Assistant Fiscal Hilario H. Laqui, contends in
his opposition to the motion to quash, that
this act is now made unlawful and
punishable, particularly by paragraph 3
thereof, regardless of the intention of the
person carrying such weapon because the law
makes it "mala prohibita". If the contention of
the prosecution is correct, then if a person
happens to be caught while on his way home
by law enforcement officers carrying a
kitchen knife that said person had just bought
from a store in order that the same may be
used by one's cook for preparing the meals in
one's home, such person will be liable for
punishment with such a severe penalty as
imprisonment from five to ten years under
the decree. Such person cannot claim that
said knife is going to be used by him to earn a
livelihood because he intended it merely for
use by his cook in preparing his meals.
This possibility cannot be discounted if
Presidential Decree No. 9 were to be
interpreted and applied in the manner that
that the prosecution wants it to be done. The
good intentions of the President in
promulgating this decree may thus be
perverted by some unscrupulous law
enforcement officers. It may be used as a tool
of oppression and tyranny or of extortion.
xxx xxx xxx
It is therefore the considered and humble
view of this Court that the act which the
President intended to make unlawful and
punishable by Presidential Decree No. 9,
particularly by paragraph 3 thereof, is one
that abets or is intended to abet subversion,
13
rebellion, insurrection, lawless violence,
criminality, chaos and public disorder. (pp.
28-30, rollo of L-46229-32)
3. Judge Polo of the Court of First Instance of Samar expounded
his order dismissing the Information filed before him, thus:
... We believe that to constitute an offense
under the aforcited Presidential decree, the
same should be or there should be an
allegation that a felony was committed in
connection or in furtherance of subversion,
rebellion, insurrection, lawless violence and
public disorder. Precisely Proclamation No.
1081 declaring a state of martial law
throughout the country was issued because of
wanton destruction to lives and properties
widespread lawlessness and anarchy. And in
order to restore the tranquility and stability of
the country and to secure the people from
violence anti loss of lives in the quickest
possible manner and time, carrying firearms,
explosives and deadly weapons without a
permit unless the same would fall under the
exception is prohibited. This conclusion
becomes more compelling when we consider
the penalty imposable, which is from five
years to ten years. A strict enforcement of the
provision of the said law would mean the
imposition of the Draconian penalty upon the
accused.
xxx xxx xxx
It is public knowledge that in rural areas, even
before and during martial law, as a matter of
status symbol, carrying deadly weapons is
very common, not necessarily for committing
a crime nor as their farm implement but for
self-preservation or self-defense if necessity
would arise specially in going to and from
their farm. (pp. 18-19, rollo of L-46997)
In most if not all of the cases, the orders of dismissal were given
before arraignment of the accused. In the criminal case before
the Court of (First Instance of Samar the accused was arraigned
but at the same time moved to quash the Information. In all the
cases where the accused were under arrest, the three Judges
ordered their immediate release unless held on other charges.
C. — The law under which the Informations in question were filed
by the People.
As seen from the Informations quoted above, the accused are
charged with illegal possession of deadly weapon in violation of
Presidential Decree No. 9, Paragraph 3.
We quote in full Presidential Decree No. 9, to wit:
PRESIDENTIAL DECREE NO. 9
DECLARING VIOLATIONS OF GENERAL
ORDERS NO. 6 and NO. 7 DATED SEPTEMBER
22, 1972, AND SEPTEMBER 23, 1972,
RESPECTIVELY, TO BE UNLAWFUL AND
PROVIDING PENALTIES THEREFORE.
WHEREAS, pursuant to Proclamation No.
1081 dated September 21, 1972, the
Philippines has been placed under a state of
martial law;
WHEREAS, by virtue of said Proclamation No.
1081, General Order No. 6 dated September
22, 1972 and General Order No. 7 dated
September 23, 1972, have been promulgated
by me;
WHEREAS, subversion, rebellion, insurrection,
lawless violence, criminality, chaos and public

disorder mentioned in the aforesaid
Proclamation No. 1081 are committed and
abetted by the use of firearms, explosives and
other deadly weapons;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
Commander-in-Chief of all the Armed Forces
of the Philippines, in older to attain the
desired result of the aforesaid Proclamation
No. 1081 and General Orders Nos. 6 and 7, do
hereby order and decree that:
1. Any violation of the aforesaid General
Orders Nos. 6 and 7 is unlawful and the
violator shall, upon conviction suffer:
(a) The mandatory penalty of death by a
firing squad or electrocution as a Military,
Court/Tribunal/Commission may direct, it the
firearm involved in the violation is unlicensed
and is attended by assault upon, or resistance
to persons in authority or their agents in the
performance of their official functions
resulting in death to said persons in authority
or their agent; or if such unlicensed firearm is
used in the commission of crimes against
persons, property or chastity causing the
death of the victim used in violation of any
other General Orders and/or Letters of
Instructions promulgated under said
Proclamation No. 1081:
(b) The penalty of imprisonment ranging from
twenty years to life imprisonment as a
Military Court/Tribunal/commission may
direct, when the violation is not attended by
any of the circumstances enumerated under
the preceding paragraph;
(c) The penalty provided for in the preceding
paragraphs shall be imposed upon the owner,
14
president, manager, members of the board of 4. When the violation penalized in the
directors or other responsible officers of any preceding paragraphs 2 and 3 is committed
public or private firms, companies, during the commission of or for the purpose
corporations or entities who shall willfully or of committing, any other crime, the penalty
knowingly allow any of the firearms owned by shall be imposed upon the offender in its
such firm, company, corporation or entity maximum extent, in addition to the penalty
concerned to be used in violation of said provided for the particular offenses
General Orders Nos. 6 and 7. committed or intended to be committed.
2. It is unlawful to posses deadly weapons, Done in the City of Manila, this 2nd day of
including hand grenades, rifle grenades and October in the year of Our Lord, nineteen
other explosives, including, but not limited to, hundred and seventy-two.
"pill box bombs," "molotov cocktail bombs,"
"fire bombs," or other incendiary device (SGD) FERDINAND E. MARCOS
consisting of any chemical, chemical
compound, or detonating agents containing
combustible units or other ingredients in such
D. — The arguments of the People —
proportion, quantity, packing, or bottling that
ignites by fire, by friction, by concussion, by
In the Comment filed in these cases by the Solicitor General who
percussion, or by detonation of all or part of
as stated earlier joins the City Fiscal of Manila and the Provincial
the compound or mixture which may cause
Fiscal of Samar in seeking the setting aside of the questioned
such a sudden generation of highly heated
orders of dismissal, the main argument advanced on the issue
gases that the resultant gaseous pressures
now under consideration is that a perusal of paragraph 3 of P.D.
are capable of producing destructive effects
9 'shows that the prohibited acts need not be related to
on continguous objects or of causing injury or
subversive activities; that the act proscribed is essentially a
death of a person; and any person convicted
malum prohibitum penalized for reasons of public policy. 1
thereof shall be punished by imprisonment
ranging from ten to fifteen years as a Military
Court/Tribunal/Commission may direct. The City Fiscal of Manila in his brief adds further that in statutory
offenses the intention of the accused who commits the act is
3. It is unlawful to carry outside of residence immaterial; that it is enough if the prohibited act is voluntarily
any bladed, pointed or blunt weapon such as perpetuated; that P.D. 9 provides and condemns not only the
"fan knife," "spear," "dagger," "bolo," carrying of said weapon in connection with the commission of the
crime of subversion or the like, but also that of criminality in
"balisong," "barong," "kris," or club, except
general, that is, to eradicate lawless violence which characterized
where such articles are being used as
pre-martial law days. It is also argued that the real nature of the
necessary tools or implements to earn a
criminal charge is determined not from the caption or preamble
livelihood and while being used in connection
of the information nor from the specification of the provision of
therewith; and any person found guilty
law alleged to have been violated but by the actual recital of facts
thereof shall suffer the penalty of
imprisonment ranging from five to ten years in the complaint or information. 2
as a Military Court/Tribunal/Commission may
direct.

E. — Our Ruling on the matter —
1. It is a constitutional right of any person who stands charged in
a criminal prosecution to be informed of the nature and cause of
the accusation against him. 3
Pursuant to the above, Section 5, Rule 110 of the Rules of Court,
expressly requires that for a complaint or information to be
sufficient it must, inter alia state the designation of the offense by
the statute, and the acts or omissions complained of as
constituting the offense. This is essential to avoid surprise on the
accused and to afford him the opportunity to prepare his defense
accordingly. 4
To comply with these fundamental requirements of the
Constitution and the Rules on Criminal Procedure, it is imperative
for the specific statute violated to be designated or mentioned 4
in the charge. In fact, another compelling reason exists why a
specification of the statute violated is essential in these cases. As
stated in the order of respondent Judge Maceren the carrying of
so-called "deadly weapons" is the subject of another penal
statute and a Manila city ordinance. Thus, Section 26 of Act No.
1780 provides:
Section 26. It should be unlawful for any
person to carry concealed about his person
any bowie knife, dirk dagger, kris, or other
deadly weapon: ... Any person violating the
provisions of this section shall, upon
conviction in a court of competent
jurisdiction, be punished by a fine not
exceeding five hundred pesos, or by
imprisonment for a period not exceeding six
months, or both such fine and imprisonment,
in the discretion of the court.
Ordinance No. 3820 of the City of Manila as amended by
Ordinance No. 3928 which took effect on December 4, 1957, in
turn penalizes with a fine of not more than P200.00 or
imprisonment for not more than one months, or both, at the
discretion of the court, anyone who shall carry concealed in his
15
person in any manner that would disguise its deadly character
any kind of firearm, bowie knife, or other deadly weapon ... in any
public place. Consequently, it is necessary that the particular law
violated be specified as there exists a substantial difference
between the statute and city ordinance on the one hand and P.D.
9 (3) on the other regarding the circumstances of the commission
of the crime and the penalty imposed for the offense.
We do not agree with petitioner that the above-mentioned
statute and the city ordinance are deemed repealed by P.D. 9 (3).
5 P. D. 9(3) does not contain any repealing clause or provision,
and repeal by implication is not favored. 6 This principle holds true
with greater force with regards to penal statutes which as a rule
are to be construed strictly against the state and liberally in favor
of the accused. 7 In fact, Article 7 of the New Civil Code provides
that laws are repealed only by subsequent ones and their
violation or non- observance shall not be excused by disuse, or
custom or practice to the contrary.
Thus we are faced with the situation where a particular act may
be made to fall, at the discretion of a police officer or a
prosecuting fiscal, under the statute, or the city ordinance, or the
presidential decree. That being the case, the right becomes more
compelling for an accused to be confronted with the facts
constituting the essential elements of the offense charged against
him, if he is not to become an easy pawn of oppression and
harassment, or of negligent or misguided official action — a fear
understandably shared by respondent Judges who by the nature
of their judicial functions are daily exposed to such dangers.
2. In all the Informations filed by petitioner the accused are
charged in the caption as well as in the body of the Information
with a violation of paragraph 3, P.D. 9. What then are the
elements of the offense treated in the presidential decree in
question?
We hold that the offense carries two elements: first, the carrying
outside one's residence of any bladed, blunt, or pointed weapon,
etc. not used as a necessary tool or implement for a livelihood;
and second, that the act of carrying the weapon was either in
furtherance of, or to abet, or in connection with subversion,
rebellion, insurrection, lawless violence, criminality, chaos, or
public disorder.
It is the second element which removes the act of carrying a
deadly weapon, if concealed, outside of the scope of the statute
or the city ordinance mentioned above. In other words, a simple
act of carrying any of the weapons described in the presidential
decree is not a criminal offense in itself. What makes the act
criminal or punishable under the decree is the motivation behind
it. Without that motivation, the act falls within the purview of the
city ordinance or some statute when the circumstances so
warrant.
Respondent Judges correctly ruled that this can be the only
reasonably, logical, and valid construction given to P.D. 9(3).
3. The position taken by petitioner that P.D. 9(3) covers one and
all situations where a person carries outside his residence any of
the weapons mentioned or described in the decree irrespective of
motivation, intent, or purpose, converts these cases into one of
"statutory construction." That there is ambiguity in the
presidential decree is manifest from the conflicting views which
arise from its implementation. When ambiguity exists, it becomes
a judicial task to construe and interpret the true meaning and
scope of the measure, guided by the basic principle that penal
statutes are to be construed and applied liberally in favor of the
accused and strictly against the state.
4. In the construction or interpretation of a legislative measure —
a presidential decree in these cases — the primary rule is to
search for and determine the intent and spirit of the law.
Legislative intent is the controlling factor, for in the words of this
Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee,
whatever is within the spirit of a statute is within the statute, and
this has to be so if strict adherence to the letter would result in
absurdity, injustice and contradictions. 8
There are certain aids available to Us to ascertain the intent or
reason for P.D. 9(3).

First, the presence of events which led to or precipitated the
enactment of P.D. 9. These events are clearly spelled out in the
"Whereas" clauses of the presidential decree, thus: (1) the state
of martial law in the country pursuant to Proclamation 1081
dated September 21, 1972; (2) the desired result of Proclamation
1081 as well as General Orders Nos. 6 and 7 which are
particularly mentioned in P.D. 9; and (3) the alleged fact that
subversion, rebellion, insurrection, lawless violence, criminality,
chaos, aid public disorder mentioned in Proclamation 1081 are
committed and abetted by the use of firearms and explosives and
other deadly weapons.
The Solicitor General however contends that a preamble of a
statute usually introduced by the word "whereas", is not an
essential part of an act and cannot enlarge or confer powers, or
cure inherent defects in the statute (p. 120, rollo of L-42050-66);
that the explanatory note or enacting clause of the decree, if it
indeed limits the violation of the decree, cannot prevail over the
text itself inasmuch as such explanatory note merely states or
explains the reason which prompted the issuance of the decree.
(pp. 114-115, rollo of 46997)
We disagree with these contentions. Because of the problem of
determining what acts fall within the purview of P.D. 9, it
becomes necessary to inquire into the intent and spirit of the
decree and this can be found among others in the preamble or,
whereas" clauses which enumerate the facts or events which
justify the promulgation of the decree and the stiff sanctions
stated therein.
A "preamble" is the key of the statute, to
open the minds of the makers as to the
mischiefs which are to be remedied, and
objects which are to be accomplished, by the
provisions of the statute." (West Norman
Timber v. State, 224 P. 2d 635, 639, cited in
Words and Phrases, "Preamble"; emphasis
supplied)
While the preamble of a statute is not strictly
a part thereof, it may, when the statute is in
16
itself ambiguous and difficult of
interpretation, be resorted to, but not to
create a doubt or uncertainty which
otherwise does not exist." (James v. Du Bois,
16 N.J.L. (1 Har.) 285, 294, cited in Words and
Phrases, "Preamble")
In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al.
this Court had occasion to state that '(L)egislative intent must be
ascertained from a consideration of the statute as a whole, and
not of an isolated part or a particular provision alone. This is a
cardinal rule of statutory construction. For taken in the abstract,
a word or phrase might easily convey a meaning quite different
from the one actually intended and evident when the word or
phrase is considered with those with which it is associated. Thus,
an apparently general provision may have a limited application if
read together with other provisions. 9
Second, the result or effects of the presidential decree must be
within its reason or intent.
xxx xxx xxx
In the paragraph immediately following the last "Whereas"
clause, the presidential decree states:
NOW, THEREFORE, I , FERDINAND E.
MARCOS, Commander-in-Chief of an the
Armed Forces of the Philippines, in order to
attain the desired result of the aforesaid
Proclamation No. 1081 and General Orders
Nos. 6 and 7, do hereby order and decree
that:
xxx xxx xxx
From the above it is clear that the acts
penalized in P.D. 9 are those related to the
desired result of Proclamation 1081 and
General Orders Nos. 6 and 7. General Orders
Nos. 6 and 7 refer to firearms and therefore
have no relevance to P.D. 9(3) which refers to
blunt or bladed weapons. With respect to
Proclamation 1081 some of the underlying
reasons for its issuance are quoted
hereunder:
WHEREAS, these lawless elements having
taken up arms against our duly constituted
government and against our people, and
having committed and are still committing
acts of armed insurrection and rebellion
consisting of armed raids, forays, sorties,
ambushes, wanton acts of murders, spoilage,
plunder, looting, arsons, destruction of public
and private buildings, and attacks against
innocent and defenseless civilian lives and
property, all of which activities have seriously
endangered and continue to endanger public
order and safety and the security of the
nation, ...
WHEREAS, it is evident that there is
throughout the land a state of anarchy and
lawlessness, chaos and disorder, turmoil and
destruction of a magnitude equivalent to an
actual war between the forces of our duly
constituted government and the New
People's Army and their satellite
organizations because of the unmitigated
forays, raids, ambuscades, assaults, violence,
murders, assassinations, acts of terror,
deceits, coercions, threats, intimidations,
treachery, machinations, arsons, plunders
and depredations committed and being
committed by the aforesaid lawless elements
who have pledged to the whole nation that
they will not stop their dastardly effort and
scheme until and unless they have fully
attained their primary and ultimate purpose
of forcibly seizing political and state power in

this country by overthrowing our present duly
constituted government, ... (See Book I, Vital
Documents on the Declaration of Martial Law
in the Philippines by the Supreme Court of the
Philippines, pp. 13-39)
It follows that it is only that act of carrying a blunt or bladed
weapon with a motivation connected with or related to the afore-
quoted desired result of Proclamation 1081 that is within the
intent of P.D. 9(3), and nothing else.
Statutes are to be construed in the light of
purposes to be achieved and the evils sought
to be remedied. (U.S. v. American Tracking
Association, 310 U.S. 534, cited in LVN
Pictures v. Philippine Musicians Guild, 110
Phil. 725, 731; emphasis supplied)
When construing a statute, the reason for its
enactment should be kept in mind, and the
statute should be construed with reference to
its intended scope and purpose. (Statutory
Construction by E.T. Crawford, pp. 604-605,
cited in Commissioner of Internal Revenue v.
Filipinas Compania de Seguros, 107 Phil.
1055, 1060; emphasis supplied)
5. In the construction of P.D. 9(3) it becomes relevant to inquire
into the consequences of the measure if a strict adherence to the
letter of the paragraph is followed.
It is a salutary principle in statutory construction that 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. 9-a
It is to be presumed that when P.D. 9 was promulgated by the
President of the Republic there was no intent to work a hardship
17
or an oppressive result, a possible abuse of authority or act of 6. Penal statutes are to be construed strictly against the state and
oppression, arming one person with a weapon to impose liberally in favor of an accused.
hardship on another, and so on. 10
American jurisprudence sets down the reason for this rule to be
At this instance We quote from the order of Judge Purisima the "the tenderness of the law of the rights of individuals; the object
following: is to establish a certain rule by conformity to which mankind
would be safe, and the discretion of the court limited." 11 The
And while there is no proof of it before the purpose is not to enable a guilty person to escape punishment
Court, it is not difficult to believe the through a technicality but to provide a precise definition of
murmurings of detained persons brought to forbidden acts. 12
Court upon a charge of possession of bladed
weapons under P.D. No. 9, that more than Our own decisions have set down the same guidelines in this
ever before, policemen - of course not all can manner, viz:
be so heartless — now have in their hands
P.D. No. 9 as a most convenient tool for Criminal statutes are to be construed strictly.
extortion, what with the terrifying risk of No person should be brought within their
being sentenced to imprisonment of five to terms who is not clearly within them, nor
ten years for a rusted kitchen knife or a pair should any act be pronounced criminal which
of scissors, which only God knows where it is not made clearly so by the statute. (U.S. v.
came from. Whereas before martial law an Abad Santos, 36 Phil. 243, 246)
extortion-minded peace officer had to have a
stock of the cheapest paltik, and even that
The rule that penal statutes are given a strict
could only convey the coercive message of
construction is not the only factor controlling
one year in jail, now anything that has the
the interpretation of such laws, instead, the
semblance of a sharp edge or pointed object,
rule merely serves as an additional, single
available even in trash cans, may already
factor to be considered as an aid in
serve the same purpose, and yet five to ten
determining the meaning of penal laws.
times more incriminating than the infamous
(People v. Manantan, 5 SCRA 684, 692)
paltik. (pp. 72-73, rollo L-42050-66)
F. The Informations filed by petitioner are fatally defective.
And as respondent Judge Maceren points out, the people's
interpretation of P.D. 9(3) results in absurdity at times. To his
The two elements of the offense covered by P.D. 9(3) must be
example We may add a situation where a law-abiding citizen, a
alleged in the Information in order that the latter may constitute
lawyer by profession, after gardening in his house remembers to
a sufficiently valid charged. The sufficiency of an Information is
return the bolo used by him to his neighbor who lives about 30
determined solely by the facts alleged therein. 13 Where the facts
meters or so away and while crossing the street meets a
are incomplete and do not convey the elements of the crime, the
policeman. The latter upon seeing the bolo being carried by that
quashing of the accusation is in order.
citizen places him under arrest and books him for a violation of
P.D. 9(3). Could the presidential decree have been conceived to
produce such absurd, unreasonable, and insensible results?

Section 2(a), Rule 117 of the Rules of Court provides that the
defendant may move to quash the complaint or information
when the facts charged do not constitute an offense.
In U.S.U. Gacutan, 1914, it was held that where an accused is
charged with knowingly rendering an unjust judgment under
Article 204 of the Revised Penal Code, failure to allege in the
Information that the judgment was rendered knowing it to be
unjust, is fatal. 14
In People v. Yadao, 1954, this Court through then Justice Cesar
Bengzon who later became Chief Justice of the Court affirmed an
order of the trial court which quashed an Information wherein the
facts recited did not constitute a public offense as defined in
Section 1, Republic Act 145. 15
G. The filing of these Petitions was unnecessary because the
People could have availed itself of other available remedies
below.
Pertinent provisions of the Rules of Court follow:
Rule 117, Section 7. Effect of sustaining the
motion to quash. — If the motion to quash is
sustained the court may order that another
information be filed. If such order is made the
defendant, if in custody, shall remain so
unless he shall be admitted to bail. If such
order is not made or if having been made
another information is not filed withuntime to
be specified in the order, or within such
further time as the court may allow for good
cause shown, the defendant, if in custody,
shall be discharged therefrom, unless he is in
custody on some other charge.
Rule 110, Section 13. Amendment. — The
information or complaint may be amended, in
substance or form, without leave of court, at
any time before the defendant pleads; and
18
thereafter and during the trial as to all
matters of form, by leave and at the
discretion of the court, when the same can be
done without prejudice to the rights of the
defendant.
xxx xxx xxx
Two courses of action were open to Petitioner upon the quashing
of the Informations in these cases, viz:
First, if the evidence on hand so warranted, the People could have
filed an amended Information to include the second element of
the offense as defined in the disputed orders of respondent
Judges. We have ruled that if the facts alleged in the Information
do not constitute a punishable offense, the case should not be
dismissed but the prosecution should be given an opportunity to
amend the Information. 16
Second, if the facts so justified, the People could have filed a
complaint either under Section 26 of Act No. 1780, quoted earlier,
or Manila City Ordinance No. 3820, as amended by Ordinance No.
3928, especially since in most if not all of the cases, the dismissal
was made prior to arraignment of the accused and on a motion
to quash.
Section 8. Rule 117 states that:
An order sustaining the motion to quash is
not a bar to another prosecution for the same
offense unless the motion was based on the
grounds specified in section 2, subsections (f)
and (h) of this rule.
Under the foregoing, the filing of another complaint or
Information is barred only when the criminal action or liability
had been extinguished (Section 2[f]) or when the motion to quash
was granted for reasons of double jeopardy. (ibid., [h])
As to whether or not a plea of double jeopardy may be
successfully invoked by the accused in all these cases should new
complaints be filed against them, is a matter We need not resolve
for the present.
H. — We conclude with high expectations that police authorities
and the prosecuting arm of the government true to the oath of
office they have taken will exercise utmost circumspection and
good faith in evaluating the particular circumstances of a case so
as to reach a fair and just conclusion if a situation falls within the
purview of P.D. 9(3) and the prosecution under said decree is
warranted and justified. This obligation becomes a sacred duty in
the face of the severe penalty imposed for the offense.
On this point, We commend the Chief State Prosecutor Rodolfo A.
Nocon on his letter to the City Fiscal of Manila on October 15,
1975, written for the Secretary, now Minister of Justice, where he
stated the following:
In any case, please study well each and every
case of this nature so that persons accused of
carrying bladed weapons, specially those
whose purpose is not to subvert the duly
constituted authorities, may not be unduly
indicted for the serious offenses falling under
P.D. No. 9. 17
Yes, while it is not within the power of courts of justice to inquire
into the wisdom of a law, it is however a judicial task and
prerogative to determine if official action is within the spirit and
letter of the law and if basic fundamental rights of an individual
guaranteed by the Constitution are not violated in the process of
its implementation. We have to face the fact that it is an unwise
and unjust application of a law, necessary and justified under
prevailing circumstances, which renders the measure an
instrument of oppression and evil and leads the citizenry to lose
their faith in their government.
WHEREFORE, We DENY these 26 Petitions for Review and We
AFFIRM the Orders of respondent Judges dismissing or quashing
the Information concerned, subject however to Our observations
 19

made in the preceding pages 23 to 25 of this Decision regarding
the right of the State or Petitioner herein to file either an
amended Information under Presidential Decree No. 9, paragraph
3, or a new one under other existing statute or city ordinance as
the facts may warrant.
I concur with the additional observation that accused could TMX SALES, INC. and THE COURT OF TAX APPEALS, respondents.
properly be convicted of a violation of Act 1780 of the Philippine
Commission or of the ordinance. F.R. Quiogue for private respondent.

Without costs.
GUTIERREZ, JR., J.:

SO ORDERED. Separate Opinions In a case involving corporate quarterly income tax, does the two-
year prescriptive period to claim a refund of erroneously
Fernando, Teehankee, Santos, Fernandez and Guerrero, JJ., BARREDO, J., concurring. collected tax provided for in Section 292 (now Section 230) of the
concur. National Internal Revenue Code commence to run from the date
I concur with the qualification that under existing jurisprudence the quarterly income tax was paid, as contended by the
Castro, C.J. and Antonio, J, concur in the result. conviction is possible, without the need of amending the petitioner, or from the date of filing of the Final Adjustment
information, for violation of other laws or ordinances on Return (final payment), as claimed by the private respondent?
Aquino, J, took no part. concealment of deadly weapons.
Section 292 (now Section 230) of the National Internal Revenue
Makasiar, J, concurs. Code provides:

CONCEPCION, JR., J, concurring: Sec. 292. Recovery of tax erroneously or

illegally collected. — No suit or proceeding
shall be maintained in any court for the
Separate Opinions I concur with the additional observation that accused could
recovery of any national internal revenue tax
properly be convicted of a violation of Act 1780 of the Philippine
hereafter alleged to have been erroneously
Commission or of the ordinance.
or illegally assessed or collected, or of any
penalty claimed to have been collected
BARREDO, J., concurring. Republic of the Philippines without authority, or of any sum alleged to
SUPREME COURT have been excessive or in any manner
Manila wrongfully collected, until a claim for refund
I concur with the qualification that under existing jurisprudence
conviction is possible, without the need of amending the or credit has been duly filed with the
information, for violation of other laws or ordinances on EN BANC Commissioner of Internal Revenue; but such
concealment of deadly weapons. suit or proceeding may be maintained,
whether or not such tax, penalty, or sum has
been paid under protest or duress.
Makasiar, J, concurs.
G.R. No. 83736 January 15, 1992
In any case no such suit or proceeding shall be
CONCEPCION, JR., J, concurring: begun after the expiration of two years from
COMMISSIONER OF INTERNAL REVENUE, petitioner, the date of payment of that tax or penalty
regardless of any supervening cause that may
vs. arise after payment: . . . (Emphasis supplied)

The facts of this case are uncontroverted.
Private respondent TMX Sales, Inc., a domestic corporation, filed
its quarterly income tax return for the first quarter of 1981,
declaring an income of P571,174.31, and consequently paying an
income tax thereon of P247,010.00 on May 15, 1981. During the
subsequent quarters, however, TMX Sales, Inc. suffered losses so
that when it filed on April 15, 1982 its Annual Income Tax Return
for the year ended December 31, 1981, it declared a gross
income of P904,122.00 and total deductions of P7,060,647.00, or
a net loss of P6,156,525.00 (CTA Decision, pp. 1-2; Rollo, pp. 45-
46).
Thereafter, on July 9, 1982, TMX Sales, Inc. thru its external
auditor, SGV & Co. filed with the Appellate Division of the Bureau
of Internal Revenue a claim for refund in the amount of
P247,010.00 representing overpaid income tax. (Rollo, p. 30)
This claim was not acted upon by the Commissioner of Internal
Revenue. On March 14, 1984, TMX Sales, Inc. filed a petition for
review before the Court of Tax Appeals against the Commissioner
of Internal Revenue, praying that the petitioner, as private
respondent therein, be ordered to refund to TMX Sales, Inc. the
amount of P247,010.00, representing overpaid income tax for
the taxable year ended December 31, 1981.
In his answer, the Commissioner of Internal Revenue averred
that "granting, without admitting, the amount in question is
refundable, the petitioner (TMX Sales, Inc.) is already barred
from claiming the same considering that more than two (2) years
had already elapsed between the payment (May 15, 1981) and
the filing of the claim in Court (March 14, 1984). (Sections 292
and 295 of the Tax Code of 1977, as amended)."
On April 29, 1988, the Court of Tax Appeals rendered a decision
granting the petition of TMX Sales, Inc. and ordering the
Commissioner of Internal Revenue to refund the amount
claimed.
20
The Tax Court, in granting the petition, viewed the quarterly
income tax paid as a portion or installment of the total annual
income tax due. Said the Tax Court in its assailed decision:
xxx xxx xxx
When a tax is paid in installments, the
prescriptive period of two years provided in
Section 306 (now Section 292) of the
Revenue Code should be counted from the
date of the final payment or last installment. .
. . This rule proceeds from the theory that in
contemplation of tax laws, there is no
payment until the whole or entire tax liability
is completely paid. Thus, a payment of a part
or portion thereof, cannot operate to start
the commencement of the statute of
limitations. In this regard the word "tax" or
words "the tax" in statutory provisions
comparable to section 306 of our Revenue
Code have been uniformly held to refer to
the entire tax and not a portion thereof (Clark
v. U.S., 69 F. 2d 748; A.S. Kriedner Co. v. U.S.,
30 F Supp. 274; Hills v. U.S., 50 F 2d 302, 55 F
2d 1001), and the vocable "payment of tax"
within statutes requiring refund claim, refer
to the date when all the tax was paid, not
when a portion was paid (Braun v. U.S., 8 F
supp. 860, 863; Collector of Internal Revenue
v. Prieto, 2 SCRA 1007; Commissioner of
Internal Revenue v. Palanca, 18 SCRA 496).
Petitioner Commissioner of Internal Revenue is now before this
Court seeking a reversal of the above decision. Thru the Solicitor
General, he contends that the basis in computing the two-year
period of prescription provided for in Section 292 (now Section
230) of the Tax Code, should be May 15, 1981, the date when the
quarterly income tax was paid and not April 15, 1982, when the
Final Adjustment Return for the year ended December 31, 1981
was filed.
He cites the case of Pacific Procon Limited v. Commissioner of
Internal Revenue (G.R. No. 68013, November 12, 1984) involving
a similar set of facts, wherein this Court in a minute resolution
affirmed the Court of Appeals' decision denying the claim for
refund of the petitioner therein for being barred by prescription.
A re-examination of the aforesaid minute resolution of the Court
in the Pacific Procon case is warranted under the circumstances
to lay down a categorical pronouncement on the question as to
when the two-year prescriptive period in cases of quarterly
corporate income tax commences to run. A full-blown decision in
this regard is rendered more imperative in the light of the
reversal by the Court of Tax Appeals in the instant case of its
previous ruling in the Pacific Procon case.
Section 292 (now Section 230) of the National Internal Revenue
Code should be interpreted in relation to the other provisions of
the Tax Code in order to give effect to legislative intent and to
avoid an application of the law which may lead to inconvenience
and absurdity. In the case of People vs. Rivera (59 Phil 236
[1933]), this Court stated that statutes should receive a sensible
construction, such as will give effect to the legislative intention
and so as to avoid an unjust or an absurd conclusion.
INTERPRETATIO TALIS IN AMBIGUIS SEMPER FRIENDA EST, UT
EVITATUR INCONVENIENS ET ABSURDUM. Where there is
ambiguity, such interpretation as will avoid inconvenience and
absurdity is to be adopted. Furthermore, courts must give effect
to the general legislative intent that can be discovered from or is
unraveled by the four corners of the statute, and in order to
discover said intent, the whole statute, and not only a particular
provision thereof, should be considered. (Manila Lodge No. 761,
et al. v. Court of Appeals, et al., 73 SCRA 162 [1976]) Every
section, provision or clause of the statute must be expounded by
reference to each other in order to arrive at the effect
contemplated by the legislature. The intention of the legislator
must be ascertained from the whole text of the law and every
part of the act is to be taken into view. (Chartered Bank v.
Imperial, 48 Phil. 931 [1921]; Lopez v. El Hogar Filipino, 47 Phil.
249, cited in Aboitiz Shipping Corporation v. City of Cebu, 13
SCRA 449 [1965]).
 21

Thus, in resolving the instant case, it is necessary that we
consider not only Section 292 (now Section 230) of the National
Internal Revenue Code but also the other provisions of the Tax
Code, particularly Sections 84, 85 (now both incorporated as
Section 68), Section 86 (now Section 70) and Section 87 (now
Section 69) on Quarterly Corporate Income Tax Payment and
Section 321 (now Section 232) on keeping of books of accounts.
All these provisions of the Tax Code should be harmonized with
each other.
Section 292 (now Section 230) provides a two-year prescriptive
period to file a suit for a refund of a tax erroneously or illegally
paid, counted from the tile the tax was paid. But a literal
application of this provision in the case at bar which involves
quarterly income tax payments may lead to absurdity and
inconvenience.
Section 85 (now Section 68) provides for the method of
computing corporate quarterly income tax which is on a
cumulative basis, to wit:
Sec. 85. Method of computing corporate
quarterly income tax. — Every corporation
shall file in duplicate a quarterly summary
declaration of its gross income and
deductions on a cumulative basis for the
preceding quarter or quarters upon which the
income tax, as provided in Title II of this Code
shall be levied, collected and paid. The tax so
computed shall be decreased by the amount
of tax previously paid or assessed during the
preceding quarters and shall be paid not later
than sixty (60) days from the close of each of
the first three (3) quarters of the taxable
year, whether calendar or fiscal year.
(Emphasis supplied)
Sec. 87. Filing of adjustment returns final =========
payment of income tax. — On or before the
fifteenth day of April or on or before the Tax Due & Paid [Sec. 24 NIRC (25%)]
fifteenth day of the fourth month following 12,500.00
the close of the fiscal year, every taxpayer
covered by this Chapter shall file an
=========
Adjustment Return covering the total net
taxable income of the preceding calendar or
fiscal year and if the sum of the quarterly tax SECOND QUARTER:
payments made during that year is not equal
to the tax due on the entire net taxable Gross Income 1st Quarter 100,000.00
income of that year the corporation shall
either (a) pay the excess tax still due or (b) be 2nd Quarter 50,000.00 150,000.00
refunded the excess amount paid as the case
may be. . . . (Emphasis supplied)
—————
In the case at bar, the amount of P247,010.00 claimed by private
respondent TMX Sales, Inc. based on its Adjustment Return Less: Deductions 1st Quarter 50,000.00
required in Section 87 (now Section 69), is equivalent to the tax
paid during the first quarter. A literal application of Section 292 2nd Quarter 75,000.00 125,000.00
(now Section 230) would thus pose no problem as the two-year
prescriptive period reckoned from the time the quarterly income —————
tax was paid can be easily determined. However, if the quarter in
which the overpayment is made, cannot be ascertained, then a
Net Taxable Income 25,000.00
literal application of Section 292 (Section 230) would lead to
absurdity and inconvenience.
=========
The following application of Section 85 (now Section 68) clearly
illustrates this point: Tax Due Thereon 6,250.00
FIRST QUARTER: Less: Tax Paid 1st Quarter 12,500.00
Gross Income 100,000.00 —————
Creditable Income Tax (6,250.00)
Less: Deductions 50,000.00

————— —————
while Section 87 (now Section 69) requires the filing of an
adjustment returns and final payment of income tax, thus:
Net Taxable Income 50,000.00 THIRD QUARTER:

Gross Income 1st Quarter 100,000.00
2nd Quarter 50,000.00
3rd Quarter 100,000.00 250,000.00
—————
Less: Deductions 1st Quarter 50,000.00
2nd Quarter 75,000.00
3rd Quarter 25,000.00 150,000.00
————— —————
100,000.00
=========
Tax Due Thereon 25,000.00
Less: Tax Paid 1st Quarter 12,500.00
2nd Quarter — 12,500.00
————— =========
FOURTH QUARTER: (Adjustment Return
required in Sec. 87)
Gross Income 1st Quarter 100,000.00
2nd Quarter 50,000.00
3rd Quarter 100,000.00
22
4th Quarter 75,000.00 325,000.00
————— —————
Less: Deductions 1st Quarter 50,000.00
2nd Quarter 75,000.00
3rd Quarter 25,000.00
4th Quarter 100,000.00 250,000.00
————— —————
Net Taxable Income 75,000.00
=========
Tax Due Thereon 18,750.00
Less: Tax Paid 1st Quarter 12,500.00
2nd Quarter —
3rd Quarter 12,500.00 25,000.00
————— —————
Creditable Income Tax (to be REFUNDED)
(6,250.00)
=========
Based on the above hypothetical data appearing in the Final
Adjustment Return, the taxpayer is entitled under Section 87
(now Section 69) of the Tax Code to a refund of P6,250.00. If
Section 292 (now Section 230) is literally applied, what then is
the reckoning date in computing the two-year prescriptive
period? Will it be the 1st quarter when the taxpayer paid
P12,500.00 or the 3rd quarter when the taxpayer also paid
P12,500.00? Obviously, the most reasonable and logical
application of the law would be to compute the two-year
prescriptive period at the time of filing the Final Adjustment
Return or the Annual Income Tax Return, when it can be finally
ascertained if the taxpayer has still to pay additional income tax
or if he is entitled to a refund of overpaid income tax.
Furthermore, Section 321 (now Section 232) of the National
Internal Revenue Code requires that the books of accounts of
companies or persons with gross quarterly sales or earnings
exceeding Twenty Five Thousand Pesos (P25,000.00) be audited
and examined yearly by an independent Certified Public
Accountant and their income tax returns be accompanied by
certified balance sheets, profit and loss statements, schedules
listing income producing properties and the corresponding
incomes therefrom and other related statements.
It is generally recognized that before an accountant can make a
certification on the financial statements or render an auditor's
opinion, an audit of the books of accounts has to be conducted in
accordance with generally accepted auditing standards.
Since the audit, as required by Section 321 (now Section 232) of
the Tax Code is to be conducted yearly, then it is the Final
Adjustment Return, where the figures of the gross receipts and
deductions have been audited and adjusted, that is truly
reflective of the results of the operations of a business
enterprise. Thus, it is only when the Adjustment Return covering
the whole year is filed that the taxpayer would know whether a
tax is still due or a refund can be claimed based on the adjusted
and audited figures.
Therefore, the filing of quarterly income tax returns required in
Section 85 (now Section 68) and implemented per BIR Form
1702-Q and payment of quarterly income tax should only be
considered mere installments of the annual tax due. These
quarterly tax payments which are computed based on the
cumulative figures of gross receipts and deductions in order to
arrive at a net taxable income, should be treated as advances or

portions of the annual income tax due, to be adjusted at the end
of the calendar or fiscal year. This is reinforced by Section 87
(now Section 69) which provides for the filing of adjustment
returns and final payment of income tax. Consequently, the two-
year prescriptive period provided in Section 292 (now Section
230) of the Tax Code should be computed from the time of filing
the Adjustment Return or Annual Income Tax Return and final
payment of income tax.
In the case of Collector of Internal Revenue v. Antonio Prieto (2
SCRA 1007 [1961]), this Court held that when a tax is paid in
installments, the prescriptive period of two years provided in
Section 306 (Section 292) of the National internal Revenue Code
should be counted from the date of the final payment. This ruling
is reiterated in Commission of Internal Revenue v. Carlos Palanca
(18 SCRA 496 [1966]), wherein this Court stated that where the
tax account was paid on installment, the computation of the two-
year prescriptive period under Section 306 (Section 292) of the
Tax Code, should be from the date of the last installment.
In the instant case, TMX Sales, Inc. filed a suit for a refund on
March 14, 1984. Since the two-year prescriptive period should be
counted from the filing of the Adjustment Return on April 15,
1982, TMX Sales, Inc. is not yet barred by prescription.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DENIED. The decision of the Court of Tax Appeals dated April 29,
1988 is AFFIRMED. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-21734 September 5, 1975
23
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, both fine and imprisonment are to be
vs. imposed upon the offender. In the instant
ABELARDO SUBlDO, defendant-appellant. case, we believe, considering the attendant
circumstances of the case that the imposition
Office of the Solicitor General Edilberto Barot and Solicitor of the corresponding penalty should be
Ceferino Padua for plaintiff-appellee. Estanislao A. Fernandez for tempered with judicial discretion. For this
defendant-appellant. reason, we impose upon accused-appellant a
fine of P500.00.
Similarly, the amount of the indemnity to be
paid by appellant to the offended party is
MARTIN, J.:
reduced to P5,000.00.
Appeal on questions of law from the Orders of the Court of First
WHEREFORE, with the modifications above
Instance of Manila in Criminal Case No. 23041, entitled People of
indicated, the appealed judgment is hereby
the Philippines versus Abelardo Subido, denying defendant-
affirmed at appellant's costs.
appellant's motion for the cancellation of his appeal bond and
declaring him to suffer subsidiary imprisonment in case of failure
to pay the fine and indemnity. In due time the case was remanded to the trial court for
execution of the judgment.
From an adverse decision in said case, the dispositive portion of
which reads: On September 27, 1958, the accused-appellant filed a motion
with the trial court praying that (1) the court enter of record that
the judgment of the Court of Appeals has been promulgated and
From the facts above stated the Court finds
(2) that his appeal bond be cancelled. Accused-appellant argued
the accused guilty of libel and he is hereby
that although he could not pay the fine and the indemnity
sentenced to three (3) months of arresto
prescribed in the judgment of the Court of Appeals, he could not
mayor with the accessory penalties of the
be required to serve the amount of fine and indemnity in the
law, to pay a fine of five hundred (P500.00)
form of subsidiary imprisonment because said judgment did not
pesos, to indemnify the offended party,
expressly and specifically provide that he should serve the fine
Mayor Arsenio Lacson in the sum of ten
and indemnity in form of subsidiary imprisonment in case of
thousand (P10,000.00) pesos, with subsidiary
insolvency.
imprisonment in case of insolvency, and to
pay the costs.
On December 20, 1958, upon motion of the offended party the
lower court issued a writ of execution of its judgment. However,
defendant-appellant Abelardo Subido has taken an appeal to the
the writ was returned unsatisfied.
Court of Appeals, which modified the said judgment in the
following tenor:
On February 25, 1959, the Sheriff of the City of Manila, armed
with an alias writ of execution, attached "whatever rights,
However, in the application of the penalty
interests, or participation, if any, defendant Abelardo Subido may
provided for the violation of the libel law, the
have" in a two-storey building situated at No. 2313 Suter, Sta.
courts are given discretion of whether or not

Ana, Manila, covered by Transfer Certificate of Title No. 54170 of
the Register of Deeds of Manila. However, it turned out that the
property levied upon be the sheriff was registered in the name of
Agapito Subido who, upon learning of the levy, immediately filed
a Third party claim with the sheriff's office and instituted an
action in the lower court (Civil Case No. 41731) to enjoin the
Sheriff of Manila from proceeding with the sale of his property. In
the meantime the lower court issued a writ of preliminary
injunction enjoining the sale of property levied upon by the
sheriff.
On December 10, 1959, the offended party registered its
opposition to accused-appellant's motion for cancellation of
appeal bond and asked the lower court to require accused-
appellant to pay the fine of P500.00 and the indemnity of
P5,000.00 with subsidiary imprisonment in case of insolvency.
On December 19, 1959, the lower court issued an order denying
the accused-appellant's motion and declared that in accordance
with the terms of the judgment of the Court of Appeals the
accused-appellant has to suffer subsidiary imprisonment in case
he could not pay the fine and indemnity prescribed in the
decision. Accused-appellant moved for reconsideration, but the
same was denied on December 26, 1959.
Hence this appeal from the lower court's orders of December 19
and 26.
In his appeal, accused-appellant presses that the lower court
erred
I the sum of Ten Thousand Pesos (P10,000.00) pesos." The use of a
IN HOLDING THAT UNDER THE TERMS OF THE
DECISION OF THE COURT OF APPEALS
ACCUSED-APPELLANT IS LIABLE TO
SUBSIDIARY IMPRISONMENT IN CASE OF
INSOLVENCY.
II
24
IN NOT HOLDING THAT THE CIVIL LIABILITY
OF ACCUSED-APPELLANT HAS BEEN
SATISFIED WITH THE ATTACHMENT SECURED
BY THE OFFENDED PARTY. 1
The threshold issue in this appeal is whether or not the accused-
appellant can be required to serve the fine and indemnity
prescribed in the judgment of the Court of Appeals in form of
subsidiary imprisonment in case of insolvency. Under Article 355
of the Revised Penal Code "a libel committed by means of
writing, printing, litography, engraving, radio, phonograph,
paintings, theatrical exhibition, cinematographic exhibition or
any similar means, shall be punished by prision correccional in its
minimum and medium period or a fine ranging from 200 to 6000
pesos or both, in addition to the civil action which may be
brought by the offended party". It is evident from the foregoing
provision that the court is given the discretion to impose the
penalty of imprisonment or fine or both for the crime of libel. It
will be noted that the lower court chose to impose upon the
accused: three months of arresto mayor; a fine of P500.00;
indemnification of the offended party in the sum of P10,000.00;
subsidiary imprisonment in case of insolvency; and the payment
of the costs. On the other hand, the Court of Appeals in the
exercise of its discretion decided to eliminate the penalty of
three (3) months arresto mayor and to reduce the indemnity of
P10,000.00 to P5,000.00.
Thus the Court of Appeals resolved:
However, in the application of the penalty
provided for in the violation of the libel law,
the courts are given discretion of whether or
not both fine and imprisonment are to be
imposed upon the offender. In the instant
case, we believe, considering the attendant
circumstances of the same, that the
imposition of the corresponding penalty
should be tempered with judicial discretion.
For this reason we impose the accused a fine
of P500.00.
Similarly, the amount of the indemnity to be
paid by appellant to the offended party is
reduced to P5,000.00.
WHEREUPON, with the modifications above
indicated, the appealed judgment is hereby
affirmed at appellant's cost.
To Us it is clear that when the Court of Appeals provided in the
concluding portion of its decision:
WHEREUPON, with the modifications above
indicated, the appealed judgment is hereby
affirmed at appellant's costs
the alluded modifications could mean no less than the
elimination of the three months of arresto mayor and the
reduction of the indemnity to the offended party, Mayor Arsenio
Lacson, from P10,000.00 to P5,000.00. All the rest of the
punishment remains including the subsidiary imprisonment in
case of insolvency. Had the Court wanted to do away with the
subsidiary imprisonment in case of insolvency of accused-
appellant to pay the fine and the indemnity it would have so
expressly provided.
A careful scrutiny of the decision of the trial court reveals that
the clause "with subsidiary imprisonment in case of insolvency" is
separated by a comma (,) from the preceding clause" is hereby
sentenced to three months of arresto mayor with the accessory
penalties of the law, to pay a fine of five hundred (P500.00)
pesos, to indemnify the offended party, Mayor Arsenio Lacson, in
comma (,) in the part of the sentence is to make "the subsidiary
imprisonment in case of insolvency" refer not only to non-
payment of the indemnity, but also to non-payment of the fine.
If the lower court intended to make the phrase "with subsidiary
imprisonment in case of insolvency" refer to non-payment of
indemnity only and not to the non-payment of the fine, it would
have omitted the comma (,), after the phrase "to indemnify the

offended party, Mayor Arsenio Lacson in the amount of
P10,000.00 pesos," so that the decision of the lower court would
read:
From the facts above stated the Court finds
the accused guilty of libel and he is hereby
sentenced to three (3) months of arresto
mayor, to pay a fine of five hundred
(P500.00) pesos, to indemnify the offended
party, Mayor Arsenio Lacson, in the sum of
ten thousand (P10,000.00) pesos with
subsidiary imprisonment in case of
insolvency, and to pay the costs.
As thus worded and punctuated there would be no doubt that
the lower court would want to make accused-appellant serve the
subsidiary imprisonment in case of non-payment of the
indemnity only.
Besides, We see no plausible reason why the lower court would
want accused-appellant to suffer subsidiary imprisonment in case
of insolvency to pay the indemnity only and not to suffer
subsidiary imprisonment in case of non-payment of the fine.
Accordingly if according to the lower court's decision, the
accused-appellant should suffer subsidiary imprisonment in case
of insolvency to pay the fine and the indemnity and the only
modifications made by the Court of Appeals are to eliminate the
three (3) months of arresto mayor and to reduce the indemnity
to the offended party, Mayor Arsenio Lacson, from P10,000.00 to
P5,000.00, then by force of logic and reason, the fine of
P5000.00, the reduced indemnity of P5,000.00 and the subsidiary
imprisonment in case of insolvency should stand.
Fortunately, however, accused-appellant is favored by the
retroactive force of Article 39 of the Revised Penal Code, as
amended by Republic Act No. 5465 which exempts an accused
person from subsidiary imprisonment in case of insolvency to pay
his civil liability. 2
It is a well known rule of legal hermeneutics that penal statutes
are to be strictly construed against the government and liberally
25
in favor of the accused. 3 In the interpretation of a penal statute,
the tendency is to give it careful scrutiny, and to construe it with
such strictness as to safeguard the rights of the defendant. 4
Considering that Article 39 of the Revised Penal Code, as
amended, is favorable to the accused-appellant, the same should
be made applicable to him. It is so provided in Article 22 of the
Revised Penal Code that:
Penal laws shall have a retroactive effect in
so far as they favor the person guilty of a
felony, who is not a habitual criminal, as this
term is defined in Rule 5 of Article 62 of this
Code, although at the time of the publication
of such laws a final sentence has been
pronounced and the convict is serving
sentence.
Thus applying Article 39 of the Revised Penal Code, as amended,
to the accused-appellant, he cannot also be required to serve his
civil liability to the offended party in form of subsidiary
imprisonment in case of insolvency because this is no longer
required by the aforesaid article.
Accused-appellant contends that he cannot be made to suffer
subsidiary imprisonment because his civil liability has been
satisfied with the attachment secured by the offended party on
the property of Agapito Subido, wherein he is supposed to have
an interest. He therefore argues that until the final
determinations of Civil Case No. 71731 which Agapito Subido
filed to enjoin the Sheriff of Manila from proceeding with the sale
of his property, accused-appellant's liability for subsidiary
imprisonment cannot attach as the determination of whether the
accused is solvent or not is a prejudicial question which must first
be determined before subsidiary imprisonment may be imposed.
We cannot agree. Attachment does not operate as a satisfaction
of the judgment on civil liability and the accused must suffer
subsidiary imprisonment in case of non-payment thereof.
Subsidiary imprisonment applies when the offender is insolvent
as shown in the present case. There is nothing in the law that
before subsidiary imprisonment may attach, there must be prior
determination of the question of solvency of the accused. The
moment he cannot pay the fine, that means he is insolvent and
he must serve the same in form of subsidiary imprisonment. So
accused-appellant has to choose to pay the fine or serve in jail.
IN VIEW OF THE FOREGOING except with the modification that
accused-appellant may no longer be required to suffer subsidiary
imprisonment in case of insolvency to pay the indemnity
provided for in the judgment below, the Orders of the lower
court dated December 19 and 26, 1959 denying defendant-
appellant's motion for cancellation of appeal bond and
sentencing him to suffer the subsidiary imprisonment in case of
insolvency to pay the fine imposed by said judgment, are hereby
affirmed.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25326 May 29, 1970
IGMIDIO HIDALGO and MARTINA ROSALES, petitioners,
vs.
POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE,
SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE
DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE
REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE
PROVINCE OF BATANGAS, respondents.
G.R. No. L-25327 May 29, 1970
HILARIO AGUILA and ADELA HIDALGO, petitioners,

vs.
POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE,
SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE
DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE
REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE
PROVINCE OF BATANGAS, respondents.
Jose O. Lara for petitioners.
Pedro Panganiban y Tolentino for respondents.
TEEHANKEE, J.:
Two petitions for review of decisions of the Court of Agrarian
Relations dismissing petitioners' actions as share tenants for the
enforcerment of the right to redeem agricultural lands, under the
provisions of section 12 of the Agricultural Land Reform Code. As
the same issue of law is involved and the original landowner and
vendees in both cases are the same, the two cases are herein
jointly decided.
Respondent-vendor Policarpio Hidalgo was until the time of the
execution of the deeds of sale on September 27, 1963 and March
2, 1964 in favor of his seven above-named private co-
respondents, the owner of the 22,876-square meter and 7,638-
square meter agricultural parcels of land situated in Lumil, San
Jose, Batangas, described in the decisions under review.
In Case L-25326, respondent-vendor sold the 22,876-square
meter parcel of land, together with two other parcels of land for
P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina
Resales, as tenants thereof, alleging that the parcel worked by
them as tenants is fairly worth P1,500.00, "taking into account
the respective areas, productivities, accessibilities, and assessed
values of three lots, seek by way of redemption the execution of
a deed of sale for the same amount of P1,500.00 by respondents-
vendees 1 in their favor.
26
In Case L-25327, respondent-vendor sold the 7,638-square meter
parcel of land for P750.00, and petitioners-spouses Hilario Aguila
and Adela Hidalgo as tenants thereof, seek by way of redemption
the execution of a deed of sale for the same price of P750.00 by
respondents-vendees in their favor.
As stated in the decisions under review, since the parties
stipulated on the facts in both cases, petitioners-tenants have for
several years been working on the lands as share tenants. No 90-
day notice of intention to sell the lands for the exercise of the
right of pre-emption prescribed by section 11 of the Agricultural
Land Reform Code (Republic Act No. 3844, enacted on August 8,
1963) was given by respondent-vendor to petitioners-tenants.
Subsequently, the deeds of sale executed by respondent-vendor
were registered by respondents register of deeds and provincial
assessor of Batangas in the records of their respective offices
notwithstanding the non-execution by respondent-vendor of the
affidavit required by section 13 of the Land Reform Code. 2 The
actions for redemption were timely filled on March 26, 1965 by
petitioners-tenants within the two-year prescriptive period from
registration of the sale, prescribed by section 12 of the said Code.
The agrarian court rendered on July 19, 1965 two identical
decisions dismissing the petitions for redemption.
It correctly focused on the sole issue of law as follows: "(T)he
only issue in this case is whether or not plaintiffs, as share
tenants, are entitled to redeem the parcel of land they are
working from the purchasers thereof, where no notice was
previously given to them by the vendor, who was their
landholder, of the latter's intention to sell the property and
where the vendor did not execute the affidavit required by Sec.
13 of Republic Act No. 3844 before the registration of the deed
of sale. In other words, is the right of redemption granted by Sec.
12 of Republic Act No. 3844 applicable to share tenants?"
But proceeding from several erroneous assumptions and
premises, it arrived at its erroneous conclusion that the right of
redemption granted by section 12 of the Land Reform Code is
available to leasehold tenants only but not to share tenants, and
thus dismissed the petitions: "(S)ec 12 of Republic Act No. 3844,
which comes under Chapter I of said Act, under the heading
'Agricultural Leasehold System,' reads as follows:
'SEC. 12. Lessee's Right of Redemption. — In
case the landholding is sold to a third person
without the knowledge of the agricultural
lessee, the latter shall have the right to
redeem the same at a reasonable price and
consideration: Provided: further, That where
there are two or more agricultural lessees,
each shall be entitled to said right of
redemption only to the extent of the area
actually cultivated by him. The right of
redemption under this Section may be
exercised within two years from the
registration of the sale, and shall have
priority over any other right of legal
redemption.'
The systems of agricultural tenancy
recognized in this jurisdiction are share
tenancy and leasehold tenancy. (Sec. 4,
Republic Act No. 1199; Sec. 4, Republic Act
No. 3844). A share tenant is altogether
different from a leasehold tenant and their
respective rights and obligations are not co-
extensive or co-equal. (See Secs. 22 to 41,
inclusive, and Secs. 42 to 48, inclusive, of
Republic Act No. 1199; see also Secs. 4 to 38,
inclusive, of Republic Act No. 3844).
It is our considered view that the right of
redemption granted by Section 12 of
Republic Act No. 3844 is applicable to
leasehold tenants only, but not to share
tenants, because said provision of law clearly,
definitely, and unequivocally grants said right
to the 'agricultural lessee,' and to nobody
else. In enacting the Agricultural Land Reform
Code, Congress was fully aware of the
existence of share tenancy and in fact

provided for the abolition of the agricultural
share tenancy system. (Sec. 4, Republic Act
No. 3844.) If it were the intention of Congress
to grant the right of redemption to share
tenants, it would have unmistakably and
unequivocally done so. We cannot extend
said right to share tenants through judicial
legislation, wherever our sympathies may lie.
The agrarian court fell into several erroneous assumptions and
premises in holding that agricultural share tenancy remains
recognized in this jurisdiction; that "a share tenant is altogether
different from a leasehold tenant and their respective rights and
obligations are not co-extensive or co-equal"; and that the right
of redemption granted by section 12 of the Land Reform Code" is
applicable to leasehold tenants only, but not to share tenants,
because said provision of law clearly, definitely, and
unequivocally grants said right to the 'agricultural lessee,' and to
nobody else."
1. The very essence of the Agricultural Land Reform Code is the
abolition of agricultural share tenancy as proclaimed in its title.
Section 4 of the Code expressly outlaws agricultural share
tenancy as "contrary to public policy" and decrees its abolition. 3
Section 2 of the Code expressly declares it to be the policy of the
State, inter alia, "to establish owner cultivatorship and the
economic family-size farm as the basis of Philippine agriculture
and, as a consequence, divert landlord capital in agriculture to
industrial development; to achieve a dignified existence for the
small farmers free from pernicious institutional restraints and
practices; ... and to make the small farmers more independent,
self-reliant and responsible citizens, and a source of strength in
our democratic society." 4 It was error, therefore, for the agrarian
court to state the premise after the Land Reform Code had
already been enacted, that "the systems of agricultural tenancy
recognized in this jurisdiction are share tenancy and leasehold
tenancy." A more accurate statement of the premise is that
based on the transitory provision in the first proviso of section 4
of the Code, i.e. that existing share tenancy contracts are allowed
to continue temporarily in force and effect, notwithstanding their
express abolition, until whichever of the following events occurs
earlier: (a) the end of the agricultural year when the National
27
Land Reform Council makes the proclamation declaring the
region or locality a land reform area; or (b) the shorter period
provided in the share tenancy contracts expires; or (c) the share
tenant sooner exercises his option to elect the leasehold system.
In anticipation of the expiration of share tenancy contracts —
whether by contractual stipulation or the tenant's exercise of his
option to elect the leasehold system instead or by virtue of their
nullity — occuring before the proclamation of the locality as a
land reform area, the same section 4 has further declared in the
third proviso thereof that in such event, the tenant shall continue
in possession of the land for cultivation and "there shall be
presumed to exist a leasehold relationship under the provisions
of this Code."
2. The foregoing exposes the error of the agrarian court's
corollary premise that "a share tenant is altogether different
from a leasehold tenant." The agrarian court's dictum that "their
respective rights and obligations are not co-extensive or co-equal
"refer to their contractual relations with the landowner, with
respect to the contributions given, management, division or
payment of the produce. 5
But the Land Reform Code forges by operation of law, between
the landowner and the farmer — be a leasehold tenant or
temporarily a share tenant — a vinculum juris with certain vital
juridical consequences, such as security of tenure of the tenant
and the tenant's right to continue in possession of the land he
works despite the expiration of the contract or the sale or
transfer of the land to third persons, and now, more basically,
the farmer's pre-emptive right to buy the land he cultivates under
section 11 of the Code 6 as well as the right to redeem the land, if
sold to a third person without his knowledge, under section 12 of
the Code.
This is an essential and indispensable mandate of the Code to
implement the state's policy of establishing owner-cultivatorship
and to achieve a dignified and self-reliant existence for the small
farmers that would make them a pillar of strength of our
Republic. Aside from expropriation by the Land Authority of
private agricultural land for resale in economic family-size farm
units "to bona fide tenants, occupants and qualified farmers," 7
the purchase by farmers of the lands cultivated by them, when
the owner decides to sell the same — through rights of pre-
emption and redemption — are the only means prescribed by
the Code to achieve the declared policy of the State.
3. The agrarian court therefore facilely let itself fall into the error
of concluding that the right of redemption (as well as necessarily
the right of pre-emption) imposed by the Code is available to
leasehold tenants only and excludes share tenants for the literal
reason that the Code grants said rights only to the "agricultural
lessee and to nobody else." For one, it immediately comes to
mind that the Code did not mention tenants, whether leasehold
or share tenants, because it outlaws share tenancy and envisions
the agricultural leasehold system as its replacement. Thus,
Chapter I of the Code, comprising sections 4 to 38, extensively
deals with the establishment of "agricultural leasehold relation,"
defines the parties thereto and the rights and obligations of the
"agricultural lessor" and of the "agricultural lessee" (without the
slightest mention of leasehold tenants) and the statutory
consideration or rental for the leasehold to be paid by the lessee.
There is a studied omission in the Code of the use of the term
tenant in deference to the "abolition of tenancy" as proclaimed
in the very title of the Code, and the elevation of the tenant's
status to that of lessee.
Then, the terms "agricultural lessor" and "agricultural lessee" are
consistently used throughout the Chapter and carried over the
particular sections (11 and 12) on pre-emption and redemption.
The agrarian court's literal construction would wreak havoc on
and defeat the proclaimed and announced legislative intent and
policy of the State of establishing owner-cultivatorship for the
farmers, who invariably were all share tenants before the
enactment of the Code and whom the Code would now uplift to
the status of lessees.
A graphic instance of this fallacy would be found in section 11
providing that "In case the agricultural lessor decides to sell the
landholding the agricultural lessee shall have the preferential
right to buy the same under reasonable terms and conditions." It
will be seen that the term "agricultural lessor" is here used

interchangeably with the term "landowner"; which conflicts with
the Code's definition of "agricultural lessor" to mean "a person
natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the
cultivation and use of his land for a price certains." 8 Obviously,
the Code precisely referred to the "agricultural lessor (who)
decides to sell the landholding," when it could have more
precisely referred to the "landowner," who alone as such, rather
than a civil law lessee, usufructuary or legal possessor, could sell
the landholding, but it certainly cannot be logically contended
that the imprecision should defeat the clear spirit and intent of
the provision.
4. We have, here, then a case of where the true intent of the law
is clear that calls for the application of the cardinal rule of
statutory construction that such intent or spirit must prevail over
the letter thereof, for whatever is within the spirit of a statute is
within the statute, since adherence to the letter would result in
absurdity, injustice and contradictions and would defeat the plain
and vital purpose of the statute.
Section 11 of the Code providing for the "agricultural lessee's"
preferential right to buy the land he cultivates provides expressly
that "the entire landholding offered for sale must be pre-empted
by the Land Authority if the landowner so desires, unless the
majority of the lessees object to such acquisition," presumably
for being beyond their capabilities. Taken together with the
provisions of Chapter III of the Code on the organization and
functions of the Land Authority and Chapter VII on the Land
Project Administration and the creation and functions of the
National Land Reform Council, (in which chapters the legislature
obviously was not laboring under the inhibition of referring to
the term tenants as it was in Chapter I establishing the
agricultural leasehold system and decreeing the abolition of
share tenancy, 9 the Code's intent, policy and objective to give
both agricultural lessees and farmers who transitionally continue
to be share tenants notwithstanding the Code's enactment, the
same priority and preferential rights over the lands under their
cultivation, in the event of acquisition of the lands, by
expropriation or voluntary sale, for distribution or resale that
may be initiated by the Land Authority or the National Land
Reform Council, are clearly and expressly stated.
28
Thus Chapter III, section 51 of the Code decrees it the
responsibility of the Land Authority "(1) To initiate and prosecute
expropriation proceedings for the acquisition of private
agricultural lands as defined in Section one hundred sixty-six of
chapter XI of this Code for the purpose of subdivision into
economic family — size farm units and resale of said farm units
to bona fide tenants, occupants and qualified farmers ... and "(2)
To help bona fide farmers without lands of agricultural owner-
cultivators of uneconomic-size farms to acquire and own
economic family-size farm units ...."
Similarly, Chapter VII, section 128 of the Code, in enjoining the
National Land Reform Council to formulate the necessary rules
and regulations to implement the Code's provisions for selection
of agricultural land to be acquired and distributed and of the
beneficiaries of the family farms, ordains the giving of the same
priority "to the actual occupants personally cultivating the land
either as agricultural lessees or otherwise with respect to the
area under their cultivation."
5. It would certainly result in absurdity, contradictions and
injustice if a share tenant would be denied the rights of pre-
emption and redemption which he seeks to exercise on his own
resources, notwithstanding that the National Land Reform
Council has not yet proclaimed that all the government
machineries and agencies in the region or locality envisioned in
the Code are operating — which machineries and agencies,
particularly, the Land Bank were precisely created "to finance the
acquisition by the Government of landed estates for division and
resale to small landholders, as well as the purchase of the
landholding by the agricultural lessee from the landowner." 10
The non-operation in the interval of the Land Bank and the
government machineries and agencies in the region which are
envisioned in the Code to assist the share tenant in shedding off
the yoke of tenancy and afford him the financial assistance to
exercise his option of electing the leasehold system and his
preferential right of purchasing the land cultivated by him could
not possibly have been intended by Congress to prevent the
exercise of any of these vital rights by a share tenant who is able
to do so, e.g. to purchase the land, on his own and without
government assistance. It would be absurd and unjust that while
the government is unable to render such assistance, the share
tenant would be deemed deprived of the very rights granted him
by the Code which he is in a position to exercise even without
government assistance.
6. Herein lies the distinction between the present case and
Basbas vs. Entena 11 where the Court upheld the agrarian court's
dismissal of the therein tenant's action to redeem the
landholding sold to a third party by virtue of the tenant's failure
to tender payment or consign the purchase price of the property.
There, the tenant-redemptioner was shown by the evidence to
have no funds and had merely applied for them to the Land
Authority which was not yet operating in the locality and hence,
the Court held that no part of the Code "indicates or even hints
that the 2-year redemption period will not commence to run
(indefinitely) until the tenant obtains financing from the Land
Bank, or stops the tenant from securing redemption funds from
some other source." 12 In the present case, the petitioners-
tenants' possession of funds and compliance with the
requirements of redemption are not questioned, the case having
been submitted and decided on the sole legal issue of the right of
redemption being available to them as share tenants. The clear
and logical implication of Basbas is where the tenant has his own
resources or secures redemption funds from sources other than
the Land Bank or government agencies under the Code, the fact
that the locality has not been proclaimed a land reform area and
that such government machineries and agencies are not
operating therein is of no relevance and cannot prejudice the
tenant's rights under the Code to redeem the landholding.
7. Even from the landowner's practical and equitable viewpoint,
the landowner is not prejudiced in the least by recognizing the
share tenant's right of redemption. The landowner, having
decided to sell his land, has gotten his price therefor from his
vendees. (The same holds true in case of the tenant's exercise of
the pre-emptive right by the tenant who is called upon to pay the
landowner the price, if reasonable, within ninety days from the
landowner's written notice.) As for the vendees, neither are they
prejudiced for they will get back from the tenant-redemptioner
the price that they paid the vendor, if reasonable, since the Code
grants the agricultural lessee or tenant the top priority of
redemption of the landholding cultivated by him and expressly
decrees that the same "shall have priority over any other right of

legal redemption." In the absence of any provision in the Code as
to manner of and amounts payable on redemption, the pertinent
provisions of the Civil Code apply in a suppletory character. 13
Hence, the vendees would be entitled to receive from the
redemptioners the amount of their purchase besides "(1) the
expenses of the contract, and any other legitimate payments
made by reason of the sale; (and) (2) the necessary and useful
expenses made on the thing sold." 14
8. The historical background for the enactment of the Code's
provisions on pre-emption and redemption further strengthens
the Court's opinion. It is noted by Dean Montemayor 15 that
"(T)his is a new right which has not been granted to tenants
under the Agricultural Tenancy Act. It further bolsters the
security of tenure of the agricultural lessee and further
encourages agricultural lessees to become owner-cultivators.
In the past, a landlord often ostensibly sold
his land being cultivated by his tenant to
another tenant, who in turn filed a petition
for ejectment against the first tenant on the
ground of personal cultivation. While many of
such sales were simulated, there was a
formal transfer of title in every case, and the
first tenant was invariably ordered ejected.
There is indication in this case of the same pattern of sale by the
landowner to another tenant, 16 in order to effect the ejectment
of petitioners-tenants. This is further bolstered by the fact that
the sales were executed by respondent-vendor on September 27,
1963 and March 2, 1954 shortly after the enactment on August 8,
1963 of the Land Reform Code — which furnishes still another
reason for upholding ... petitioners-tenants' right of redemption,
for certainly a landowner cannot be permitted to defeat the
Code's clear intent by precipitately disposing of his lands, even
before the tenant has been given the time to exercise his newly
granted option to elect the new agricultural leasehold system
established by the Code as a replacement for the share tenancy
outlawed by it.
29
9. Clearly then, the Code intended, as above discussed, to afford
the farmers' who transitionally continued to be share tenants
after its enactment but who inexorably would be agricultural
lessees by virtue of the Code's proclaimed abolition of tenancy,
the same priority and preferential right as those other share
tenants, who upon the enactment of the Code or soon thereafter
were earlier converted by fortuitous circumstance into
agricultural lessees, to acquire the lands under their cultivation in
the event of their voluntary sale by the owner or of their
acquisition, by expropriation or otherwise, by the Land Authority.
It then becomes the court's duty to enforce the intent and will of
the Code, for "... (I)n fact, the spirit or intention of a statute
prevails over the letter thereof.' (Tañada vs. Cuenco, L-10520,
Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be
construed according to its spirit or intention, disregarding as far
as necessary, the letter of the law.' (Lopez & Sons, Inc. vs. Court
of Tax Appeals, 100 Phil. 855.) By this, we do not correct the act
of the Legislature, but rather ... carry out and give due course to
'its intent.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil.
850)." 17 The Court has consistently held in line with authoritative
principles of statutory construction that, it will reject a narrow
and literal interpretation, such as that given by the agrarian
court, that would defeat and frustrate rather than foster and give
life to the law's declared policy and intent. 18 Finally, under the
established jurisprudence of the Court, in the interpretation of
tenancy and labor legislation, it will be guided by more than just
an inquiry into the letter of the law as against its spirit and will
ultimately resolve grave doubts in favor of the tenant and
worker. 19
The agrarian court's dismissal of the cases at bar should
therefore be reversed and petitioners-tenants' right to redeem
the landholdings recognized section 12 of the Code.
In Case L-25326, however, the deed of sale executed by
respondent-vendor in favor of respondents-vendees for the price
of P4,000.00 covers three parcels of land, while what is sought to
be redeemed is only the first parcel of land of 22,876 square
meters, described in the deed. Petitioners-tenants' allegation
that the proportionate worth of said parcel "taking into account
the respective areas, productivities, accessibilities and assessed
values of the three lots," is P1,500.00, was traversed by
respondents in their answer, with the claim that "the said land is
fairly worth P20,000.00. 20 While the vendor would be bound by,
and cannot claim more than, the price stated in the deed, and
the Code precisely provides that the farmer shall have "the
preferential right to buy the (landholding) under reasonable
terms and conditions" or "redeem the same at a reasonable price
and consideration" 21 with a view to affording the farmer the
right to seek judicial assistance and relief to fix such reasonable
price and terms when the landowner places in the notice to sell
or deed an excessive or exorbitant amount in collusion with the
vendee, we note that in this case the deed of sale itself
acknowledged that the selling price of P4,000.00 therein stated
was not the fair price since an additional consideration therein
stated was that the vendees would support the vendor during his
lifetime and take care of him, should he fall ill, and even assumed
the expenses of his burial upon his death:
Ang halagang P4,000.00 ay hindi kaulat sa
tunay na halaga ng mga lupa subalit ang mga
bumili ay may katungkulan na sostentohin
ako habang ako'y nabubuhay, ipaanyo at
ipagamot ako kung ako ay may sakit, saka
ipalibing ako kung ako ay mamatay sa
kanilang gastos at ito ay isa sa alang-alang o
consideracion ng bilihang ito.
Under these circumstances, since the agrarian court did not rule
upon conflicting claims of the parties as to what was the
proportionate worth of the parcel of land in the stated price of
P4,000.00 — whether P1,500.00 as claimed by petitioners or a
little bit more, considering the proportionate values of the two
other parcels, but the whole total is not to exceed the stated
price of P4,000.00, since the vendor is bound thereby — and
likewise, what was the additional proportionate worth of the
expenses assumed by the vendees, assuming that petitioners are
not willing to assume the same obligation, the case should be
remanded to the agrarian court solely for the purpose of
determining the reasonable price and consideration to be paid by
petitioners for redeeming the landholding, in accordance with
these observations.

In Case L-25327, there is no question as to the price of P750.00
paid by the vendees and no additional consideration or expenses,
unlike in Case L-25326, supra, assumed by the vendees. Hence,
petitioners therein are entitled to redeem the landholding for the
same stated price.
ACCORDINGLY, the decisions appealed from are hereby reversed,
and the petitions to redeem the subject landholdings are
granted.
In Case L-25326, however, the case is remanded to the agrarian
court solely for determining the reasonable price to be paid by
petitioners therein to respondents-vendees for redemption of
the landholding in accordance with the observations hereinabove
made.
No pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-8888 November 29, 1957
SONG KIAT CHOCOLATE FACTORY, plaintiff-appellant,
vs.
CENTRAL BANK OF THE PHILIPPINES and VICENTE GELLA, in his
capacity as Treasurer of the Philippines, defendants-appellees.
Rogelio M. Jalandoni for appellant.
Office of the Solicitor General Ambrosio Padilla and Solicitor Jose
P. Alejandro for appellee, Vicente Gella.
Nat. M. Balbao and F. E. Evangelista for appellee, Central Bank of
the Philippines.
BENGZON, J.:
30
The question in this appeal is whether cocoa beans may be
considered as "chocolate" for the purposes of exemption from
the foreign exchange tax imposed by Republic Act No. 601 as
amended.
During the period from January 8, 1953 to October 9, 1953, the
plaintiff appellant imported sun dried cocoa beans for which it
paid the foreign exchange tax of 17 per cent totalling P74,671.04.
Claiming exemption from said tax under section 2 of same Act, it
sued the Central Bank that had exacted payment; and in its
amended complaint it included the Treasurer of the Philippines.
The suit was filed in the Manila Court of First Instance, wherein
defendants submitted in due time a motion to dismiss on the
grounds: first, the complaint stated no cause of action because
cocoa beans were not "chocolate"; and second, it was a suit
against the Government without the latter's consent. .
The Hon. Gregorio S. Narvasa, Judge, sustained the motion, and
dismissed the case by his order of November 19, 1954. Hence
this appeal.
The lower court, appellant contends, erred in dismissing the case
and in holding that the term "chocolate" does not include sun
dried cocoa beans.
SEC. 2 of the aforesaid Act provides that "the tax collected or
foreign exchange used for the payment of costs transportation
and/or other charges incident to importation into the Philippines
of rice, flour ..soya beans, butterfat, chocolate, malt syrup .. shall
be refunded to any importer making application therefor, upon
satisfactory proof of actual importation . . ."
In support of its contention appellant quotes from dictionaries
and encyclopedias interchangeably using the words "chocolate",
"cacao" and "cocoa". Yet we notice that the quotations refer to
"cocoa" as chocolate nut" "chocolate bean" or "chocolate tree."
And the legal exemption refers to "chocolate" not the bean, nor
the nut nor the tree. We agree with the Solicitor General and the
other counsel of respondents that in common parlance the law is
presumed to refer to it1 — chocolate is a manufactured or
finished product made out of cocoa beans, or "cacao" beans as
they are locally known. We may take notice of the fact that
grocery stores sell powdered cocoa beans as chocolate, labeled
"cocoa powder", or simply "cocoa". They are, however, really
chocolate; they are not cocoa beans. The manufacture of
chocolate involves several processes, such as selecting and drying
the cocoa beans, then roasting, grinding, sieving and blending.2
Cocoa beans do not become chocolate unless and until they have
undergone the manufacturing processes above described. The
first is raw material, the other finished product.
The courts regard "chocolate" as
"Chocolate" is a preparation of roasted cacao beans
without the abstraction of the butter and always
contains sugar and added cacao butter. Rockwood &
Co., vs. American President Lines, D. C. N. J., 68 F. Supp.
224, 226.
Chocolate is a cocoa bean roasted, cracked, shelled,
crushed, ground, and molded in cakes. It contains no
sugar, and is in general use in families. Sweetened
chocolate is manufactured in the same way but the
paste is mixed wit sugar, and is used by confectioners
in making chocolate confections. In re Schiling, 53 F. 81,
82, 3 C. C. A. 440.
In view of the foregoing, and having in mind the principle of strict
construction of statutes exempting from taxation,3 we are of the
opinion and so hold, that the exemption for "chocolate" in the
above section 2 does not include "cocoa beans". The one is raw
material, the other manufactured consumer product; the latter is
ready for human consumption; the former is not.
However, we cannot stop here, because in August 1954 — suit
was brought in May 1954 — Congress approved Republic Act
1197 amending section 2 by substituting "cocoa beans" for
"chocolate." This shows, maintains the appellant, the
Legislature's intention to include cocoa beans in the word
"chocolate." In fact, it goes on, the Committee Chairman who
reported House Bill No. 2676 which became Republic Act 1197,
declared before the House.

Mr. ROCES: Mr. SPEAKER, on line 8 page 1, after the
word 'canned', strike out the words, 'fresh, frozen and'
and also the words 'other beef', on line 9 and on the
same line, line 9, after the word 'chocolate', insert the
words '(COCOA BEANS)' in parenthesis ( ). I am
proposing to insert the words '(COCOA BEANS)' in
parenthesis ( ) after the word chocolate, Mr. Speaker,
in order to clarify any doubt and manifest the intention
of the past Congress that the word 'chocolate' should
mean 'cocoa beans.
In reply to this, appellees point out that said chairman could not
have spoken of the Congressional intention in approving Republic
Act 601 because he was not a member of the Congress that
passed said Act. Naturally, all he could state was his own
interpretation of such piece of legislation. Courts do not usually
give decisive weight to one legislator's opinion, expressed in
Congressional debates concerning the application of existing
laws.4 Yet even among the legislators taking part in the
consideration of the amendatory statute (Republic Act 1197) the
impression prevailed that, as the law then stood5 chocolate
candy or chocolate bar was exempted, but cocoa beans were not.
Here are Senator Peralta's statements during the discussion of
the same House Bill No. 2576:
SENATOR PERALTA: I signed that conference report and
I am really bound by it, but, Mr. President, a few hours
ago I received some information which maybe the
chairman would like to know, to the effect that we
allow chocolate bar, chocolate candy to come this
country except from the 17 per cent tax when we do
not allow cocoa beans, out of which our local
manufacturers can make chocolate candy, exempted.
So why do we not take off that exemption for
chocolate and instead put 'cocoa beans' so as to
benefit our manufacturers of chocolate candy?
xxx xxx xxx.
Senator PERALTA: Yes, I agree with the chairman, only I
was just wondering if the chairman, might not consider
31
the fact that in view of the information, this seems to The order of dismissal is affirmed, with costs against appellant.
be inconsistent we allow chocolate to come here
exempt and not exempt cocoa beans which is used by Republic of the Philippines
our manufacturers in making chocolate candy. SUPREME COURT
Manila
And Senator Puyat is quoted as saying, in the same connection:
EN BANC
MR. PRESIDENT, On the same page (page 1), line 9,
delete "cocoa beans". The text as it came to the Senate
was misleading. In the original law the exemption is for
chocolate and the version that we got from the Lower
G.R. No. 106719 September 21, 1993
House is "(cocoa beans)" giving the impression that
chocolate and cocoa beans are synonymous. Now I
think this is a sort of a rider, so your committee DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR.,
recommends the deletion of those words. (Journal of ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms.
the Senate, July 30, 1954, re H. B. No. 2576, Emphasis ENYA N. LOPEZ, petitioners,
ours.) vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M.
VASQUEZ, and NCMH NURSES ASSOCIATION, represented by
Other parts of the Congressional record quoted in the briefs
RAOULITO GAYUTIN, respondents.
would seem to show that in approving House Bill No. 2576, the
Congress agreed to exempt "cocoa beans" instead of chocolate
Renato J. Dilag and Benjamin C. Santos for petitioners.
with a view to favoring local manufacturers of chocolate
products.6 A change of legislative policy, as appellees contend7 —
not a declaration or clarification of previous Congressional Danilo C. Cunanan for respondent Ombudsman.
purpose. In fact, as indicating, the Government's new policy of
exempting for the first time importations of "cocoa beans," there
Crispin T. Reyes and Florencio T. Domingo for private respondent.
is the President's proclamation No. 62 of September 2, 1954
issued in accordance with Republic Act No. 1197 specifying that
said exemption (of cocoa beans) shall operate from and after
September 3, 1954 — not before. As a general rule, it may be
added, statutes operate prospectively. QUIASON, J.:
Observe that appellant's cocoa beans had been imported during This is a Petition for Certiorari, Prohibition and Mandamus, with
January-October 1953, i.e. before the exemption decree. Prayer for Preliminary Injunction or Temporary Restraining
Order, under Rule 65 of the Revised Rules of Court.
After the foregoing discussion, it is hardly necessary to express
our approval of the lower court's opinion about plaintiff's cause Principally, the petition seeks to nullify the Order of the
of action, or the lack of it. And it becomes unnecessary to Ombudsman dated January 7, 1992, directing the preventive
consider the other contention of defendants that this is a suit suspension of petitioners,
against the Government without its consent. Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez,
Jr., Administrative Officer III; Conrado Rey Matias, Technical

Assistant to the Chief of Hospital; Cora C. Solis, Accountant III;
and Enya N. Lopez, Supply Officer III, all of the National Center
for Mental Health. The petition also asks for an order directing
the Ombudsman to disqualify Director Raul Arnaw and
Investigator Amy de Villa-Rosero, of the Office of the
Ombudsman, from participation in the preliminary investigation
of the charges against petitioner (Rollo, pp. 2-17; Annexes to
Petition, Rollo, pp. 19-21).
The questioned order was issued in connection with the
administrative complaint filed with the Ombudsman (OBM-ADM-
0-91-0151) by the private respondents against the petitioners for
violation of the Anti-Graft and Corrupt Practices Act.
According to the petition, the said order was issued upon the
recommendation of Director Raul Arnaw and Investigator Amy de
Villa-Rosero, without affording petitioners the opportunity to
controvert the charges filed against them. Petitioners had sought
to disqualify Director Arnaw and Investigator Villa-Rosero for
manifest partiality and bias (Rollo, pp. 4-15).
On September 10, 1992, this Court required respondents'
Comment on the petition.
On September 14 and September 22, 1992, petitioners filed a
"Supplemental Petition (Rollo, pp. 124-130); Annexes to
Supplemental Petition; Rollo pp. 140-163) and an "Urgent
Supplemental Manifestation" (Rollo,
pp. 164-172; Annexes to Urgent Supplemental Manifestation;
Rollo, pp. 173-176), respectively, averring developments that
transpired after the filing of the petition and stressing the
urgency for the issuance of the writ of preliminary injunction or
temporary restraining order.
On September 22, 1992, this Court ". . . Resolved to REQUIRE the
respondents to MAINTAIN in the meantime, the STATUS QUO
pending filing of comments by said respondents on the original
supplemental manifestation" (Rollo, p. 177).
32
On September 29, 1992, petitioners filed a motion to direct
respondent Secretary of Health to comply with the Resolution
dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-
203). In a Resolution dated October 1, 1992, this Court required
respondent Secretary of Health to comment on the said motion.
On September 29, 1992, in a pleading entitled "Omnibus
Submission," respondent NCMH Nurses Association submitted its
Comment to the Petition, Supplemental Petition and Urgent
Supplemental Manifestation. Included in said pleadings were the
motions to hold the lawyers of petitioners in contempt and to
disbar them (Rollo, pp. 210-267). Attached to the "Omnibus
Submission" as annexes were the orders and pleadings filed in
Administrative Case No. OBM-ADM-0-91-1051 against petitioners
(Rollo, pp. 268-480).
The Motion for Disbarment charges the lawyers of petitioners
with:
(1) unlawfully advising or otherwise causing or inducing their
clients — petitioners Buenaseda, et al., to openly defy, ignore,
disregard, disobey or otherwise violate, maliciously evade their
preventive suspension by Order of July 7, 1992 of the
Ombudsman . . ."; (2) "unlawfully interfering with and
obstructing the implementation of the said order (Omnibus
Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of
the Canons of the Code of Professional Responsibility and of
unprofessional and unethical conduct "by foisting blatant lies,
malicious falsehood and outrageous deception" and by
committing subornation of perjury, falsification and fabrication in
their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261-
263).
On November 11, 1992, petitioners filed a "Manifestation and
Supplement to 'Motion to Direct Respondent Secretary of Health
to Comply with 22 September 1992 Resolution'" (Manifestation
attached to Rollo without pagination between pp. 613 and 614
thereof).
On November 13, 1992, the Solicitor General submitted its
Comment dated November 10, 1992, alleging that: (a) "despite
the issuance of the September 22, 1992 Resolution directing
respondents to maintain the status quo, respondent Secretary
refuses to hold in abeyance the implementation of petitioners'
preventive suspension; (b) the clear intent and spirit of the
Resolution dated September 22, 1992 is to hold in abeyance the
implementation of petitioners' preventive suspension, the status
quo obtaining the time of the filing of the instant petition; (c)
respondent Secretary's acts in refusing to hold in abeyance
implementation of petitioners' preventive suspension and in
tolerating and approving the acts of Dr. Abueva, the OIC
appointed to replace petitioner Buenaseda, are in violation of the
Resolution dated September 22, 1992; and
(d) therefore, respondent Secretary should be directed to comply
with the Resolution dated September 22, 1992 immediately, by
restoring the status quo ante contemplated by the aforesaid
resolution" (Comment attached to Rollo without paginations
between pp. 613-614 thereof).
In the Resolution dated November 25, 1992, this Court required
respondent Secretary to comply with the aforestated status quo
order, stating inter alia, that:
It appearing that the status quo ante litem
motam, or the last peaceable uncontested
status which preceded the present
controversy was the situation obtaining at
the time of the filing of the petition at bar on
September 7, 1992 wherein petitioners were
then actually occupying their respective
positions, the Court hereby ORDERS that
petitioners be allowed to perform the duties
of their respective positions and to receive
such salaries and benefits as they may be
lawfully entitled to, and that respondents
and/or any and all persons acting under their
authority desist and refrain from performing
any act in violation of the aforementioned
Resolution of September 22, 1992 until
further orders from the Court (Attached to
Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the
Petition, Supplemental Petition and Supplemental Manifestation,
stated that (a) "The authority of the Ombudsman is only to
recommend suspension and he has no direct power to suspend;"
and (b) "Assuming the Ombudsman has the power to directly
suspend a government official or employee, there are conditions
required by law for the exercise of such powers; [and] said
conditions have not been met in the instant case" (Attached to
Rollo without pagination).
In the pleading filed on January 25, 1993, petitioners adopted the
position of the Solicitor General that the Ombudsman can only
suspend government officials or employees connected with his
office. Petitioners also refuted private respondents' motion to
disbar petitioners' counsel and to cite them for contempt
(Attached to Rollo without pagination).
The crucial issue to resolve is whether the Ombudsman has the
power to suspend government officials and employees working
in offices other than the Office of the Ombudsman, pending the
investigation of the administrative complaints filed against said
officials and employees.
In upholding the power of the Ombudsman to preventively
suspend petitioners, respondents (Urgent Motion to Lift Status
Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24
of R.A. No. 6770, which provides:
Sec. 24. Preventive Suspension. — The
Ombudsman or his Deputy may preventively
suspend any officer or employee under his
authority pending an investigation, if in his
judgment the evidence of guilt is strong, and
(a) the charge against such officer or
employee involves dishonesty, oppression or
grave misconduct or neglect in the
performance of duty; (b) the charge would
warrant removal from the service; or (c) the
respondent's continued stay in office may
prejudice the case filed against him.
33
The preventive suspension shall continue
until the case is terminated by the Office of
Ombudsman but not more than six months,
without pay, except when the delay in the
disposition of the case by the Office of the
Ombudsman is due to the fault, negligence or
petition of the respondent, in which case the
period of such delay shall not be counted in
computing the period of suspension herein
provided.
Respondents argue that the power of preventive suspension
given the Ombudsman under Section 24 of R.A. No. 6770 was
contemplated by Section 13 (8) of Article XI of the 1987
Constitution, which provides that the Ombudsman shall exercise
such other power or perform such functions or duties as may be
provided by law."
On the other hand, the Solicitor General and the petitioners
claim that under the 1987 Constitution, the Ombudsman can
only recommend to the heads of the departments and other
agencies the preventive suspension of officials and employees
facing administrative investigation conducted by his office.
Hence, he cannot order the preventive suspension himself.
They invoke Section 13(3) of the 1987 Constitution which
provides that the Office of the Ombudsman shall have inter alia
the power, function, and duty to:
Direct the officer concerned to take
appropriate action against a public official or
employee at fault, and recommend his
removal, suspension, demotion, fine, censure
or prosecution, and ensure compliance
therewith.
The Solicitor General argues that under said provision of the
Constitutions, the Ombudsman has three distinct powers,
namely: (1) direct the officer concerned to take appropriate
action against public officials or employees at fault; (2)
recommend their removal, suspension, demotion fine, censure,
or prosecution; and (3) compel compliance with the
recommendation (Comment dated December 3, 1992, pp. 9-10).
The line of argument of the Solicitor General is a siren call that
can easily mislead, unless one bears in mind that what the
Ombudsman imposed on petitioners was not a punitive but only
a preventive suspension.
When the constitution vested on the Ombudsman the power "to
recommend the suspension" of a public official or employees
(Sec. 13 [3]), it referred to "suspension," as a punitive measure.
All the words associated with the word "suspension" in said
provision referred to penalties in administrative cases, e.g.
removal, demotion, fine, censure. Under the rule of Noscitor a
sociis, the word "suspension" should be given the same sense as
the other words with which it is associated. Where a particular
word is equally susceptible of various meanings, its correct
construction may be made specific by considering the company
of terms in which it is found or with which it is associated (Co Kim
Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v.
Palomar, 18 SCRA 247 [1966]).
Section 24 of R.A. No. 6770, which grants the Ombudsman the
power to preventively suspend public officials and employees
facing administrative charges before him, is a procedural, not a
penal statute. The preventive suspension is imposed after
compliance with the requisites therein set forth, as an aid in the
investigation of the administrative charges.
Under the Constitution, the Ombudsman is expressly authorized
to recommend to the appropriate official the discipline or
prosecution of erring public officials or employees. In order to
make an intelligent determination whether to recommend such
actions, the Ombudsman has to conduct an investigation. In turn,
in order for him to conduct such investigation in an expeditious
and efficient manner, he may need to suspend the respondent.
The need for the preventive suspension may arise from several
causes, among them, the danger of tampering or destruction of
evidence in the possession of respondent; the intimidation of
witnesses, etc. The Ombudsman should be given the discretion

to decide when the persons facing administrative charges should
be preventively suspended.
Penal statutes are strictly construed while procedural statutes
are liberally construed (Crawford, Statutory Construction,
Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil.
456 [1953]). The test in determining if a statute is penal is
whether a penalty is imposed for the punishment of a wrong to
the public or for the redress of an injury to an individual (59
Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-
497). A Code prescribing the procedure in criminal cases is not a
penal statute and is to be interpreted liberally (People v. Adler,
140 N.Y. 331; 35 N.E. 644).
The purpose of R.A. No. 6770 is to give the Ombudsman such
powers as he may need to perform efficiently the task committed
to him by the Constitution. Such being the case, said statute,
particularly its provisions dealing with procedure, should be
given such interpretation that will effectuate the purposes and
objectives of the Constitution. Any interpretation that will
hamper the work of the Ombudsman should be avoided.
A statute granting powers to an agency created by the
Constitution should be liberally construed for the advancement
of the purposes and objectives for which it was created (Cf.
Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200
Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind.
522, 190 N.E., 438 [1934]).
In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a
preventive suspension is not a penalty, said:
Suspension is a preliminary step in an
administrative investigation. If after such
investigation, the charges are established and
the person investigated is found guilty of acts
warranting his removal, then he is removed
or dismissed. This is the penalty.
34
To support his theory that the Ombudsman can only preventively
suspend respondents in administrative cases who are employed
in his office, the Solicitor General leans heavily on the phrase
"suspend any officer or employee under his authority" in Section
24 of R.A. No. 6770.
The origin of the phrase can be traced to Section 694 of the
Revised Administrative Code, which dealt with preventive
suspension and which authorized the chief of a bureau or office
to "suspend any subordinate or employee in his bureau or under
his authority pending an investigation . . . ."
Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which
superseded Section 694 of the Revised Administrative Code also
authorized the chief of a bureau or office to "suspend any
subordinate officer or employees, in his bureau or under his
authority."
However, when the power to discipline government officials and
employees was extended to the Civil Service Commission by the
Civil Service Law of 1975 (P.D. No. 805), concurrently with the
President, the Department Secretaries and the heads of bureaus
and offices, the phrase "subordinate officer and employee in his
bureau" was deleted, appropriately leaving the phrase "under his
authority." Therefore, Section 41 of said law only mentions that
the proper disciplining authority may preventively suspend "any
subordinate officer or employee under his authority pending an
investigation . . ." (Sec. 41).
The Administrative Code of 1987 also empowered the proper
disciplining authority to "preventively suspend any subordinate
officer or employee under his authority pending an investigation"
(Sec. 51).
The Ombudsman Law advisedly deleted the words "subordinate"
and "in his bureau," leaving the phrase to read "suspend any
officer or employee under his authority pending an investigation
. . . ." The conclusion that can be deduced from the deletion of
the word "subordinate" before and the words "in his bureau"
after "officer or employee" is that the Congress intended to
empower the Ombudsman to preventively suspend all officials
and employees under investigation by his office, irrespective of
whether they are employed "in his office" or in other offices of
the government. The moment a criminal or administrative
complaint is filed with the Ombudsman, the respondent therein
is deemed to be "in his authority" and he can proceed to
determine whether said respondent should be placed under
preventive suspension.
In their petition, petitioners also claim that the Ombudsman
committed grave abuse of discretion amounting to lack of
jurisdiction when he issued the suspension order without
affording petitioners the opportunity to confront the charges
against them during the preliminary conference and even after
petitioners had asked for the disqualification of Director Arnaw
and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the
Solicitor General contends that assuming arguendo that the
Ombudsman has the power to preventively suspend erring public
officials and employees who are working in other departments
and offices, the questioned order remains null and void for his
failure to comply with the requisites in Section 24 of the
Ombudsman Law (Comment dated December 3, 1992, pp. 11-
19).
Being a mere order for preventive suspension, the questioned
order of the Ombudsman was validly issued even without a full-
blown hearing and the formal presentation of evidence by the
parties. In Nera, supra, petitioner therein also claimed that the
Secretary of Health could not preventively suspend him before
he could file his answer to the administrative complaint. The
contention of petitioners herein can be dismissed perfunctorily
by holding that the suspension meted out was merely preventive
and therefore, as held in Nera, there was "nothing improper in
suspending an officer pending his investigation and before tho
charges against him are heard . . . (Nera v. Garcia., supra).
There is no question that under Section 24 of R.A. No. 6770, the
Ombudsman cannot order the preventive suspension of a
respondent unless the evidence of guilt is strong and (1) the
charts against such officer or employee involves dishonesty,
oppression or grave misconduct or neglect in the performance of
duty; (2) the charge would warrant removal from the service; or

(3) the respondent's continued stay in office may prejudice the
case filed against him.
The same conditions for the exercise of the power to
preventively suspend officials or employees under investigation
were found in Section 34 of R.A. No. 2260.
The import of the Nera decision is that the disciplining authority
is given the discretion to decide when the evidence of guilt is
strong. This fact is bolstered by Section 24 of R.A. No. 6770,
which expressly left such determination of guilt to the
"judgment" of the Ombudsman on the basis of the administrative
complaint. In the case at bench, the Ombudsman issued the
order of preventive suspension only after: (a) petitioners had
filed their answer to the administrative complaint and the
"Motion for the Preventive Suspension" of petitioners, which
incorporated the charges in the criminal complaint against them
(Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4,
Rollo,
pp. 290-296); (b) private respondent had filed a reply to the
answer of petitioners, specifying 23 cases of harassment by
petitioners of the members of the private respondent (Annex 6,
Omnibus Submission, Rollo, pp. 309-333); and (c) a preliminary
conference wherein the complainant and the respondents in the
administrative case agreed to submit their list of witnesses and
documentary evidence.
Petitioners herein submitted on November 7, 1991 their list of
exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337)
while private respondents submitted their list of exhibits (Annex
9 of Omnibus Submission, Rollo, pp. 338-348).
Under these circumstances, it can not be said that Director Raul
Arnaw and Investigator Amy de Villa-Rosero acted with manifest
partiality and bias in recommending the suspension of
petitioners. Neither can it be said that the Ombudsman had
acted with grave abuse of discretion in acting favorably on their
recommendation.
The Motion for Contempt, which charges the lawyers of
petitioners with unlawfully causing or otherwise inducing their
35
clients to openly defy and disobey the preventive suspension as
ordered by the Ombudsman and the Secretary of Health can not
prosper (Rollo, pp. 259-261). The Motion should be filed, as in
fact such a motion was filed, with the Ombudsman. At any rate,
we find that the acts alleged to constitute indirect contempt
were legitimate measures taken by said lawyers to question the
validity and propriety of the preventive suspension of their
clients.
On the other hand, we take cognizance of the intemperate
language used by counsel for private respondents hurled against
petitioners and their counsel (Consolidated: (1) Comment on
Private Respondent" "Urgent Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private
Respondent's Comment and Supplemental Comment, pp. 4-5).
A lawyer should not be carried away in espousing his client's
cause. The language of a lawyer, both oral or written, must be
respectful and restrained in keeping with the dignity of the legal
profession and with his behavioral attitude toward his brethren
in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The
use of abusive language by counsel against the opposing counsel
constitutes at the same time a disrespect to the dignity of the
court of justice. Besides, the use of impassioned language in
pleadings, more often than not, creates more heat than light.
The Motion for Disbarment (Rollo, p. 261) has no place in the
instant special civil action, which is confined to questions of
jurisdiction or abuse of discretion for the purpose of relieving
persons from the arbitrary acts of judges and quasi-judicial
officers. There is a set of procedure for the discipline of members
of the bar separate and apart from the present special civil
action.
WHEREFORE, the petition is DISMISSED and the Status quo
ordered to be maintained in the Resolution dated September 22,
1992 is LIFTED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Griño-Aquino, Regalado,
Davide, Jr., Romero, Nocon, Melo, Puno and Vitug, JJ., concur.
Feliciano, J., is on leave.
Separate Opinions
BELLOSILLO, J., concurring:
I agree that the Ombudsman has the authority, under Sec. 24 of
R.A.
No. 6770, to preventively suspend any government official or
employee administratively charged before him pending the
investigation of the complaint, the reason being that
respondent's continued stay in office may prejudice the
prosecution of the case.
However, in the case before us, I am afraid that the facts thus far
presented may not provide adequate basis to reasonably place
petitioners under preventive suspension. For, it is not enough to
rule that the Ombudsman has authority to suspend petitioners
preventively while the case is in progress before him. Equally
important is the determination whether it is necessary to issue
the preventive suspension under the circumstances. Regretfully, I
cannot see any sufficient basis to justify the preventive
suspension. That is why, I go for granting oral argument to the
parties so that we can truthfully determine whether the
preventive suspension of respondents are warranted by the
facts. We may be suspending key government officials and
employees on the basis merely of speculations which may not
serve the ends of justice but which, on the other hand, deprive
them of their right to due process. The simultaneous preventive

suspension of top officials and employees of the National Center
for Mental Health may just disrupt, the hospital's normal
operations, much to the detriment of public service. We may
safely assume that it is not easy to replace them in their
respective functions as those substituting them may be taking
over for the first time. The proper care of mental patients may
thus be unduly jeopardized and their lives and limbs imperilled.
I would be amenable to holding oral argument to hear the parties
if only to have enough factual and legal bases to justify the
preventive suspension of petitioners.
# Separate Opinions
BELLOSILLO, J., concurring:
I agree that the Ombudsman has the authority, under Sec. 24 of
R.A.
No. 6770, to preventively suspend any government official or
employee administratively charged before him pending the
investigation of the complaint, the reason being that
respondent's continued stay in office may prejudice the
prosecution of the case.
However, in the case before us, I am afraid that the facts thus far
presented may not provide adequate basis to reasonably place
petitioners under preventive suspension. For, it is not enough to
rule that the Ombudsman has authority to suspend petitioners
preventively while the case is in progress before him. Equally
important is the determination whether it is necessary to issue
the preventive suspension under the circumstances. Regretfully, I
cannot see any sufficient basis to justify the preventive
suspension. That is why, I go for granting oral argument to the
parties so that we can truthfully determine whether the
preventive suspension of respondents are warranted by the
facts. We may be suspending key government officials and
employees on the basis merely of speculations which may not
serve the ends of justice but which, on the other hand, deprive
36
them of their right to due process. The simultaneous preventive
suspension of top officials and employees of the National Center
for Mental Health may just disrupt, the hospital's normal
operations, much to the detriment of public service. We may
safely assume that it is not easy to replace them in their
respective functions as those substituting them may be taking
over for the first time. The proper care of mental patients may
thus be unduly jeopardized and their lives and limbs imperilled.
I would be amenable to holding oral argument to hear the parties
if only to have enough factual and legal bases to justify the
preventive suspension of petitioners.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
March 30, 1954
G.R. No. L-6835
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
FAUSTO YADAO, ET AL., defendants-appellees.
Office of the Solicitor General Juan R. Liwag and Solicitor Augusto
M. Luciano for appellant.
Jose T. Cajulis for appellees.
BENGZON, J.:
The sole question for decision is whether the information filed
against defendant-appellees in the Court of First Instance of Rizal
sufficiently describes a violation of section 1 of Republic Act No.
145, which reads as follows:
Any person assisting a claimant in the preparation, presentation
and prosecution of his claim for benefits under the laws of the
United States administered by the United States Veterans
Administration, who shall, directly or indirectly, solicit, contract,
for charge, or receive, or who shall attempt to solicit, contract
for, charge, or receive any fee or compensation exceeding twenty
pesos in any one claim, or who shall collect his fee before the
claim is actually paid to a beneficiary or claimant, shall be
deemed guilty of an offense and upon conviction thereof shall for
every offense be fined not exceeding one thousand pesos or
imprisoned not exceeding two years, or both, in the discretion of
the court.
Said information alleges that defendants conspiring together,
willfully did "offer to assist one Floverto Jazmin in the
prosecution and expeditious approval of his legitimate claim of
$2,207 for benefits under the laws of the United States
administered in the Philippines by the United States Veterans
Administration, and as consideration for which, said accused
directly solicited and/or charged said Floverto Jazmin as fee or
compensation the sum of P800 which is in excess of the lawful
charge of P20 in any one claim." The Honorable Julio Villamor,
Judge, upheld a motion to quash, on the ground that the facts
charged did not constitute a public offense. Hence this appeal by
the prosecution, raising the juridical issue above stated. It is
clear, in our opinion, that section 1 of Republic Act 145 punishes:
(a) Any person assisting a claimant etc., . . . who shall directly or
indirectly solicit . . . a fee exceeding twenty pesos;
(b) Any person assisting a claimant . . . who shall attempt to
solicit, . . . a fee exceeding twenty pesos; and
(c) Any person assisting a claimant . . . who shall collect his fee
before the claim is actually paid.
In all the three instances the person must be one "assisting" the
claimant.[[1]] The principle "assisting" and the clause "assisting a
claimant in the preparation etc." qualify "any person" as
antecedent of the pronoun "who" in the phrases, "who shall
solicit", "who shall attempt to solicit" or "who shall collect".

Examining the information, we find it does not aver that the
defendants assisted or were assisting the claimant for veterans
benefits. It merely asserts they offered to assist, and it is evident
that violation is committed only when a person receives or
attempts to solicit etc. more than is permitted by law. One who
offers to assist, but does not assist, is not included within the
penal prohibition, which by its nature must be restrictively
interpreted, or strictly construed against the government.[[2]] Of
course there was an attempt to commit the offense described by
Republic Act No. 145. But the said statute does not expressly
punish attempts to commit the offense, and the provisions of the
Penal Code about attempts (tentativas) do not apply.[[3]]
The prosecution relies upon Sanchez vs. U.S. 134 Fed. (2nd) 279,
63 S. Ct. 1325, 319 U.S. 768 wherein this was said:
A showing that an excessive fee was solicited, contracted for,
charged or received for assistance in preparation and execution
of necessary papers in any application to Veterans'
Administration will support a conviction of violation of fee
limitation for assistance in such application regardless of whether
such assistance was in fact rendered.
But such adjudication is not conclusive, because the statute
therein construed differs materially from ours. It punishes "any
person who shall directly or indirectly contract for, charge or
receive, or who shall attempt to solicit, contract for excessive
compensation." The section does not contain the phrase
"assisting a claimant" after the words "any person" and before
the words "who shall etc". That phrase conditions each and every
violation of section 1 of Republic Act No. 145. The appealed
decision quashing the indictment is, therefore, affirmed, without
costs.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
37
G.R. No. 86738 November 13, 1991
NESTLE PHILIPPINES, INC., petitioner,
vs.
COURT OF APPEALS and SECURITIES AND EXCHANGE
COMMISSION, respondents.
Nepomuceno, Hofilena & Guingona for petitioner.
FELICIANO, J.:p
Sometime in February 1983, the authorized capital stock of
petitioner Nestle Philippines Inc. ("Nestle") was increased from
P300 million divided into 3 million shares with a par value of
P100.00 per share, to P600 million divided into 6 million shares
with a par value of P100.00 per share. Nestle underwent the
necessary procedures involving Board and stockholders
approvals and effected the necessary filings to secure the
approval of the increase of authorized capital stock by
respondent Securities and Exchange Commission ("SEC"), which
approval was in fact granted. Nestle also paid to the SEC the
amount of P50,000.00 as filing fee in accordance with the
Schedule of Fees and Charges being implemented by the SEC
under the Corporation Code. 1
Nestle has only two (2) principal stockholders: San Miguel
Corporation and Nestle S.A. The other stockholders, who are
individual natural persons, own only one (1) share each, for
qualifying purposes, i.e., to qualify them as members of the
Board of Directors being elected thereto on the strength of the
votes of one or the other principal shareholder.
On 16 December 1983, the Board of Directors and stockholders
of Nestle approved resolutions authorizing the issuance of
344,500 shares out of the previously authorized but unissued
capital stock of Nestle, exclusively to San Miguel Corporation and
to Nestle S.A. San Miguel Corporation subscribed to and
completely paid up 168,800 shares, while Nestle S.A. subscribed
to and paid up the balance of 175,700 shares of stock.
On 28 March 1985, petitioner Nestle filed a letter signed by its
Corporate Secretary, M.L. Antonio, with the SEC seeking
exemption of its proposed issuance of additional shares to its
existing principal shareholders, from the registration
requirement of Section 4 of the Revised Securities Act and from
payment of the fee referred to in Section 6(c) of the same Act. In
that letter, Nestle requested confirmation of the correctness of
two (2) propositions submitted by it:
1. That there is no need to file a petition for
exemption under Section 6(b) of the Revised
Securities Act with respect to the issuance of
the said 344,600 additional shares to our
existing stockholders out of our unissued
capital stock; and
2. That the fee provided in Section 6(c) of
[the Revised Securities] Act is not applicable
to the said issuance of additional shares. 2
The principal, indeed the only, argument presented by Nestlewas
that Section 6(a) (4) of the Revised Securities Act which provides
as follows:
Sec. 6. Exempt transactions. — a) The
requirement of registration under subsection
(a) of Section four of this Act shall not apply
to the sale of any security in any of the
following transactions:
xxx xxx xxx
(4) The distribution by a corporation, actively
engaged in the business authorized by its
articles of incorporation, of securities to its
stockholders or other security holders as a
stock dividend or other distribution out of

surplus; or the issuance of securities to the
security holder or other creditors of a
corporation in the process of a bona fide
reorganization of such corporation made in
good faith and not for the purpose of
avoiding the provisions of this Act, either in
exchange for the securities of such security
holders or claims of such creditors or partly
for cash and partly in exchange for the
securities or claims of such security holders
or creditors; or the issuance of additional
capital stock of a corporation sold or
distributed by it among its own stockholders
exclusively, where no commission or other
remuneration is paid or given directly or
indirectly in connection with the sale or
distribution of such increased capital stock.
(Emphasis supplied)
embraces "not only an increase in the authorized capital stock
but also the issuance of additional shares to existing stockholders
of the unissued portion of the unissued capital stock". 3 Nestle
urged that interpretation upon the following argument.
The use of the term "increased capital stock"
should be interpreted to refer to additional
capital stock or equity participation of the
existing stockholders as a consequence of
either an increase of the authorized capital
stock or the issuance of unissued capital
stock. If the intention of the pertinent legal
provision [were] to limit the exemption to
subscription to proposed increases in the
authorized capital stock of a corporation, we
see no reason why the law should not have
been more specific or accurate about it. It
certainly should have mentioned "increase in
the authorized capital stock of the
corporation" rather than merely the
expression "the issuance of additional capital
stock 4 (Emphasis supplied)
38
Nestle expressly represented in the same letter that all the
additional shares proposed to be issued would be issued only to
San Miguel Corporation and Nestle S.A. and that no commission
or other form of remuneration had been given, directly or
indirectly, in connection with the issuance or distribution of such
additional shares of stock.
In respect of its claimed exemption from the fee provided for in
Section 6(c) of the Revised Securities Act, Nestle contended that
since Section 6 (a) (4) of the statute declares (in Nestle's view)
the proposed issuance of 344,500 previously authorized but
unissued shares of Nestle's capital stock to its existing
shareholders as an exempt transaction, the SEC could not collect
fees for "the same transaction" twice. Nestle adverted to its
payment back in 21 February 1983 of the amount of P50,000.00
as filing fees to the SEC when it applied for and eventually
received approval of the increase of its authorized capital stock
effected by Board and shareholder action last 16 December
1983.
In a letter dated 26 June 1986, the SEC through its then Chairman
Julio A. Sulit, Jr. responded adversely to petitioner's requests and
ruled that the proposed issuance of shares did not fall under
Section 6 (a) (4) of the Revised Securities Act, since Section 6 (a)
(4) is applicable only where there is an increase in the authorized
capital stock of a corporation. Chairman Sulit held, however, that
the proposed transaction could be considered by the Commission
under the provisions of Section 6 (b) of the Revised Securities Act
which reads as follows:
(b) The Commission may, from time to time
and subject to such terms and conditions as it
may prescribe, exempt transactions other
than those provided in the preceding
paragraph, if it finds that the enforcement of
the requirements of registration under this
Act with respect to such transactions is not
necessary in the public interest and for the
protection of the investors by reason of the
small amount involved or the limited
character of the public offering.
The Commission then advised petitioner to file the appropriate
request for exemption and to pay the fee required under Section
6 (c) of the statute, which provides:
(c) A fee equivalent to one-tenth of one per
centum of the maximum aggregate price or
issued value of the securities shall be
collected by the Commission for granting a
general or particular exemption from the
registration requirements of this Act.
Petitioner moved for reconsideration of the SEC ruling, without
success.
On 3 July 1987, petitioner sought review of the SEC ruling before
this Court which, however, referred the petition to the Court of
Appeals.
In a decision dated 13 January 1989, the Court of Appeals
sustained the ruling of the SEC.
Dissatisfied with the Decision of the Court of Appeals, Nestle is
now before this Court on a Petition for Review, raising the very
same issues that it had raised before the SEC and the Court of
Appeals.
Examining the words actually used in Section 6 (a) (4) of the
Revised Securities Act, and bearing in mind common corporate
usage in this jurisdiction, it will be seen that the statutory phrase
"issuance of additional capital stock" is indeed infected with a
certain degree of ambiguity. This phrase may refer either to: a)
the issuance of capital stock as part of and in the course of
increasing the authorized capital stock of a corporation; or (b)
issuance of already authorized but still unissued capital stock. By
the same token, the phrase "increased capital stock" found at the
end of Section 6 (a) (4), may refer either: 1) to newly or
contemporaneously authorized capital stock issued in the course
of increasing the authorized capital stock of a corporation; or 2)
to previously authorized but unissued capital stock.

Under Section 38 of the Corporation Code, a corporation
engaged in increasing its authorized capital stock, with the
required vote of its Board of Directors and of its stockholders,
must file a sworn statement of the treasurer of the corporation
showing that at least twenty-five percent (25%) of "such
increased capital stock" has been subscribed and that at least
twenty-five percent (25%) of the amount subscribed has been
paid either in actual cash or in property transferred to the
corporation. In other words, the corporation must issue at least
twenty-five percent (25%) of the newly or contemporaneously
authorized capital stock in the course of complying with the
requirements of the Corporation Code for increasing its
authorized capital stock.
In contrast, after approval by the SEC of the increase of its
authorized capital stock, and from time to time thereafter, the
corporation, by a vote of its Board of Directors, and without need
of either stockholder or SEC approval, may issue and sell shares
of its already authorized but still unissued capital stock to existing
shareholders or to members of the general public. 5
Both the SEC and the Court of Appeals resolved the ambiguity by
construing Section 6 (a) (4) as referring only to the issuance of
shares of stock as part of and in the course of increasing the
authorized capital stock of Nestle. In the case at bar, since the
344,500 shares of Nestle capital stock are proposed to be issued
from already authorized but still unissued capital stock and since
the present authorized capital stock of 6,000,000 shares with a
par value of P100.00 per share is not proposed to be further
increased, the SEC and the Court of Appeals rejected Nestle's
petition.
We believe and so hold that the construction thus given by the
SEC and the Court of Appeals to Section 6 (a) (4) of the Revised
Securities Act must be upheld.
In the first place, it is a principle too well established to require
extensive documentation that the construction given to a statute
by an administrative agency charged with the interpretation and
application of that statute is entitled to great respect and should
be accorded great weight by the courts, unless such construction
39
is clearly shown to be in sharp conflict with the governing statute
or the Constitution and other laws. As long ago as 1903, this
Court said in In re Allen 6 that
[t]he principle that the contemporaneous
construction of a statute by the executive
officers of the government, whose duty is to
execute it, is entitled to great respect, and
should ordinarily control the construction of
the statute by the courts, is so firmly
embedded in our jurisdiction that no
authorities need be cited to support it. 7
The rationale for this rule relates not only to the emergence of
the multifarious needs of a modern or modernizing society and
the establishment of diverse administrative agencies for
addressing and satisfying those needs; it also relates to
accumulation of experience and growth of specialized
capabilities by the administrative agency charged with
implementing a particular statute. 8 In Asturias Sugar Central,
Inc. v. Commissioner of Customs 9 the Court stressed that
executive officials are presumed to have familiarized themselves
with all the considerations pertinent to the meaning and purpose
of the law, and to have formed an independent, conscientious
and competent expert opinion thereon. The courts give much
weight to contemporaneous construction because of the respect
due the government agency or officials charged with the
implementation of the law, their competence, expertness,
experience and informed judgment, and the fact that they
frequently are the drafters of the law they interpret. 10
In the second place, and more importantly, consideration of the
underlying statutory purpose of Section 6(a) (4) compels us to
sustain the view taken by the SEC and the Court of Appeals. The
reading by the SEC of the scope of application of Section 6(a) (4)
permits greater opportunity for the SEC to implement the
statutory objective of protecting the investing public by requiring
proposed issuers of capital stock to inform such public of the true
financial conditions and prospects of the corporation. By limiting
the class of exempt transactions contemplated by the last clause
of Section 6(a) (4) to issuances of stock done in the course of and
as part of the process of increasing the authorized capital stock
of a corporation, the SEC is enabled to examine issuances by a
corporation of previously authorized but theretofore unissued
capital stock, on a case-to-case basis, under Section 6(b); and
thereunder, to grant or withhold exemption from the normal
registration requirements depending upon the perceived level of
need for protection by the investing public in particular cases.
When capital stock is issued in the course of and in compliance
with the requirements of increasing its authorized capital stock
under Section 38 of the Corporation Code, the SEC as a matter of
course examines the financial condition of the corporation, and
hence there is no real need for exercise of SEC authority under
the Revised Securities Act. Thus, one of the multiple
documentation requirements under the current regulations of
the SEC in respect of filing a certificate of increase of authorized
capital stock, is submission of "a financial statement duly
certified by an independent Certified Public Accountant (CPA) as
of the latest date possible or as of the date of the meeting when
stockholders approved the increase/decrease in capital stock or
thereabouts. 11 When all or part of the newly authorized capital
stock is proposed to be issued as stock dividends, the SEC
requirements are even more exacting; they require, in addition
to the regular audited financial statements, the submission by
the corporation of a "detailed or Long Form Report of the
certifying Auditor." Moreover, since approval of an increase in
authorized capital stock by the stockholders holding two-thirds
(2/3) of the outstanding capital stock is required by Section 38 of
the Corporation Code, at a stockholders meeting held for that
purpose, the directors and officers of the corporation may be
expected to take pains to inform the shareholders of the financial
condition and prospects of the corporation and of the proposed
utilization of the fresh capital sought to be raised.
Upon the other hand, as already noted, issuance of previously
authorized but theretofore unissued capital stock by the
corporation requires only Board of Directors approval. Neither
notice to nor approval by the shareholders or the SEC is required
for such issuance. There would, accordingly, under the view
taken by petitioner Nestle, no opportunity for the SEC to see to it
that shareholders (especially the small stockholders) have a
reasonable opportunity to inform themselves about the very fact

of such issuance and about the condition of the corporation and
the potential value of the shares of stock being offered.
Under the reading urged by petitioner Nestle of the reach and
scope of the third clause of Section 6(a) (4), the issuance of
previously authorized but unissued capital stock would
automatically constitute an exempt transaction, without regard
to the length of time which may have intervened between the
last increase in authorized capital stock and the proposed
issuance during which time the condition of the corporation may
have substantially changed, and without regard to whether the
existing stockholders to whom the shares are proposed to be
issued are only two giant corporations as in the instant case, or
are individuals numbering in the hundreds or thousands.
In contrast, under the ruling issued by the SEC, an issuance of
previously authorized but still unissued capital stock may, in a
particular instance, be held to be an exempt transaction by the
SEC under Section 6(b) so long as the SEC finds that the
requirements of registration under the Revised Securities Act are
"not necessary in the public interest and for the protection of the
investors" by reason, inter alia, of the small amount of stock that
is proposed to be issued or because the potential buyers are very
limited in number and are in a position to protect themselves. In
fine, petitioner Nestle's proposed construction of Section 6(a) (4)
would establish an inflexible rule of automatic exemption of
issuances of additional, previously authorized but unissued,
capital stock. We must reject an interpretation which may disable
the SEC from rendering protection to investors, in the public
interest, precisely when such protection may be most needed.
Petitioner Nestle's second claim for exemption is from payment
of the fee provided for in Section 6 (c) of the Revised Securities
Act, a claim based upon petitioner's contention that Section 6 (a)
(4) covers both issuance of stock in the course of complying with
the statutory requirements of increase of authorized capital
stock and issuance of previously authorized and unissued capital
stock. Petitioner claims that to require it now to pay one-tenth of
one percent (1%) of the issued value of the 344,500 shares of
stock proposed to be issued, is to require it to pay a second time
for the same service on the part of the SEC. Since we have above
40
rejected petitioner's reading of Section 6 (a) (4), last clause,
petitioner's claim about the additional fee of one-tenth of one
percent (1%) of the issue value of the proposed issuance of stock
(amounting to P34,450 plus P344.50 for other fees or a total of
P37,794.50) need not detain us for long. We think it clear that
the fee collected in 21 February 1983 by the SEC was assessed in
connection with the examination and approval of the certificate
of increase of authorized capital stock then submitted by
petitioner. The fee, upon the other hand, provided for in Section
6 (c) which petitioner will be required to pay if it does file an
application for exemption under Section 6 (b), is quite different;
this is a fee specifically authorized by the Revised Securities Act,
(not the Corporation Code) in connection with the grant of an
exemption from normal registration requirements imposed by
that Act. We do not find such fee either unreasonable or
exorbitant.
WHEREFORE, for all the foregoing, the Petition for Review on
Certiorari is hereby DENIED for lack of merit and the Decision of
the Court of Appeals dated 13 January 1989 in C.A.-G.R. No. SP-
13522, is hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
THIRD DIVISION
[G.R. No. 99859. September 20, 1996]
PHILIPPINE SCOUT VETERANS SECURITY & INVESTIGATION
AGENCY, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and PORPING REGALADO, respondents.
DECISION
PANGANIBAN, J.:
Does the Labor Code, prior to its amendment by Republic Act No.
7641,i[1] authorize the payment of retirement pay in the absence
of a provision therefor in a collective bargaining agreement or
other applicable employment contract?
The instant petition for certiorari seeks to nullify the Decision of
the National Labor Relations Commissionii[2] promulgated
January 10, 1991, in NLRC Case No. 00-05-02236-89, entitled
“Porping Regalado vs. Phil. Scout Veterans Security &
Investigation Agency, Inc. and/or Col. Cesar Sa Macalalad”,
affirming the labor arbiter’siii[3] award of retirement pay to
private respondent.
The Antecedent Facts
Private respondent worked for the petitioner as a security guard
since September 1963 until his retirement at the age of 60 on
March 20, 1989, with a monthly salary of P1,480.00. He formally
requested petitioner for payment of his retirement pay, but
petitioner refused, stating that it would give him financial
assistance instead, without specifying the amount, which offer
was refused by the private respondent.
On May 11, 1989, private respondent filed a complaint for non-
payment of retirement benefits against petitioner, docketed as
NLRC Case No. 00-05-02236-89. Petitioner, in its position paper,
alleged that private respondent was not entitled to retirement
pay since there was no company policy which provided for nor
any collective bargaining agreement granting it.
On September 19, 1989, the arbiter rendered his decision in
favor of private respondent.iv[4] Inasmuch as his ratiocination
may be indicative of the mind-set of our labor officialdom, we
quote the same below:
“It is admitted that it is provided in Article 287 of the Labor Code
that in case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under
existing laws and any CBA or other agreement. Since there is no
CBA nor company policy granting the same, we have to look into
other articles of the Labor Code. Article 283 of the Labor Code
requires employer to give separation pay to employees who
were retrenched at the rate of one month salary for every year of
service when the termination is a result of installation of labor
saving device and one-half month pay for every year of service in
case of retrenchment due to prevent losses (sic), closure or

cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses. Article 284 of the
Labor Code also requires employer to pay an employee his
separation pay at the rate of one-half month salary for every year
of service when terminated due to incurable disease. An analysis
of this article will reveal that it is the intention of the Code to
provide same financial assistance to these people who are
dislocated either because of loss of employment or due to
disease and yet, an employee who retires and ironically whose
company does not have any CBA nor policy providing for
retirement pay will not receive any retirement pay for him to
augment and supply his needs during his old age. This matter
has to be correct(ed) and it will be an injustice if such retirement
pay will be denied to complainant. After all, the company has
benefitted from the service of the employee, hence, it is only
fitting for the company to provide him some funds for his old
age. Also, equity demands that in cases where there is no CBA
nor company policy providing a retirement pay, an employer
must pay its employee the needed retirement pay.
WHEREFORE, judgment is hereby rendered ordering the
respondent Phil. Scout Veterans Security and Investigation
Agency, Inc. to pay complainant his retirement pay at the rate of
one-half month salary for every year of service, a fraction of at
least six (6) months considered as one year of service.”
Petitioner appealed to the respondent National Labor Relations
Commission, which in its now-assailed Decisionv[5] affirmed the
arbiter:
“An employee is entitled to retirement benefits even in the
absence of a company retirement plan or collective bargaining
agreement. This is the import of Article 287 of the Labor Code,
as amended, and implemented by Sections 13 and 14, Rule I,
Book V (sic) of the Rules Implementing the Labor Code. Thus in a
case, this Commission (1st Division) ruled:
‘With respect to the award of retirement benefits, the contention
of respondent-appellant that complainant is not entitled to his
claim of retirement benefits or to his termination or separation
pay because he was not retired under the bonafide retirement
41
plan or under an individual or collective bargaining agreement or
under company policy, is highly untenable because Rule I,
Sections 13 and 14, Book VI of the Rules Implementing the Labor
Code taken together clearly states that, with or without a
retirement plan, individual or collective bargaining agreement or
company policy, an employee who retires or is retired at the age
of sixty (60) or over, is entitled to termination pay equivalent to
one-half month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year.
Moreover, if social justice and compassion to labor demand that
termination pay be granted to victims of mechanization,
redundancy, retrenchment to avoid losses and which are, from
the standpoint of affected employees usually temporary
contingency that do not prevent them from sooner or later being
gainfully employed again, we feel that there is far greater need
to cushion retired employees from the difficulties attendant to
old age and permanent idleness. And in protecting retired
employees, we are also protecting their dependents. This is the
essence of social justice. (Angel T. Tolentino vs. Standard Wood
Products Company, Inc., NLRC Case No. NCR-5-3847-82, NLRC
First Division, Promulgated July 8, 1987.)’”
Petitioner moved for reconsideration but respondent
Commission denied the same for lack of merit. Hence, this
recourse.
This Court issued a temporary restraining order on June 10, 1991,
enjoining respondent Commission and its representatives from
enforcing its January 10, 1991 Decision. In a Manifestation in
Lieu of Comment dated July 25, 1991, the Solicitor General
agreed with the petitioner’s position.
The Issues
Petitioner alleges that respondent Commission acted with grave
abuse of discretion:
A agreement or other applicable agreement concerning terms and
“x x x IN APPLYING THE PROVISIONS OF ARTICLE 283 AND
ARTICLE 284 OF THE LABOR CODE OF THE PHILIPPINES, AS
AMENDED, AS THE LAW THAT PROVIDE FOR RETIREMENT PAY TO
PRIVATE RESPONDENT.
B
x x x IN ISSUING THE QUESTIONED RESOLUTION WHICH
RESULTED IN ADMINISTRATIVE LEGISLATION.”
In a nutshell, the issue here is whether or not private respondent
is legally entitled to retirement benefits.
The Court’s Ruling
The main contention of both petitioner and the Solicitor General
is that there is no contractual nor statutory basis for the grant of
retirement pay, hence, said award is improper.
The petition is impressed with merit.
The applicable provisions of the Labor Code on the matter of
retirement are Art. 287 of the Labor Code, and Sections 13 and
14(a) of Rule I, Book VI of the Implementing Rules, which read as
follows:
“Article 287. Retirement. Any employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive
such retirement benefits as he may have earned under existing
laws and any collective bargaining or other agreement.”
xxx xxx xxx
“Sec. 13. Retirement. In the absence of any collective bargaining
conditions of employment which provides for retirement at an

older age, an employee may be retired upon reaching the age of
sixty (60) years.
Sec. 14. Retirement Benefits. (a) An employee who is retired
pursuant to a bona-fide retirement plan or in accordance with
the applicable individual or collective agreement or established
employer policy shall be entitled to all the retirement benefits
provided therein or to termination pay equivalent at least to one-
half month salary for every year of service, whichever is higher, a
fraction of at least six (6) months being considered as one whole
year.”
It is at once apparent from a cursory reading of the arbiter’s
decision that, in making the award of retirement pay, he was
confronted by the lack of contractual or statutory basis therefor.
Undaunted, he scavenged for a basis from among the other
provisions of the Labor Code. Seizing upon Articles 283 and 284,
he concluded that it is ironical and unjust that some financial
assistance is provided for people who are dismissed from their
jobs and who can presumably still find other work and continue
to earn a livelihood, but not for those who are retired and facing
the difficulties attendant to old age and permanent idleness.
This reflection exudes wisdom; unfortunately, it lacks legal basis.
Going even deeper, respondent Commission, instead of clearing
up the confusion, added to it by construing Sections 13 and 14(a)
of Rule I, Book VI of the Implementing Rules in relation to Art.
287 as basis for the grant of retirement benefits to private
respondent.
But far from being novel, this issue had already been settled in
Abaquin Security and Detective Agency, Inc. vs. Atienza,vi[6]
where this Court held:
“Construing these provisions in relation to the same issue
presented in this petition, this Court in the case of Llora Motors,
Inc., and/or Constantino Carlota, Jr. vs. Hon. Franklin Drilon, et
al., (G.R. No. 82895, November 7, 1989) clarified that Article 288
(now 287) ‘does not itself purport to impose any obligation upon
employers to set up a retirement scheme for their employees
over and above that already established under existing laws. In
42
other words, Article 287 recognizes that existing laws already Consequently, the Decision in question has to be struck down for
provide for a scheme by which retirement benefits may be being legally indefensible.
earned or accrue in favor of employees, as part of a broader
social security system that provides not only for retirement While Article 287 has since been amended by Republic Act No.
benefits but also death and funeral benefits, permanent disability 7641 (approved on December 9, 1992) to read as follows:
benefits, sickness benefits and maternity leave benefits.”
“x x x xxx xxx
In Llora Motors, Inc. vs. Drilon,vii[7] this Court sought to end the
confusion caused by the wording of Section 14 abovequoted, and
In the absence of a retirement plan or agreement providing for
differentiated between the concepts of “termination pay” and
retirement benefits of employees in the establishment, an
“retirement benefits”. We clarified that the phrase “pay
employee upon reaching the age of sixty (60) years or more, but
equivalent at least one-half month salary for every year of
not beyond sixty-five (65) years which is hereby declared the
service, whichever is higher” pertains to termination pay:
compulsory retirement age, who has served at least five (5) years
in the said establishment, may retire and shall be entitled to
“x x x Section 14 (a) refers to ‘termination pay equivalent to at retirement pay equivalent to at least one-half (1/2) month salary
least one-half (1/2) month for every year of service’ while Section for every year of service, a fraction of at least six (6) months
14 (b) mentions ‘termination pay to which the employee would being considered as one whole year.
have been entitled had there been no such retirement fund’ as
well as ‘termination pay the employee is entitled to receive.’ It
Unless the parties provide for broader inclusions, the term ‘one
should be recalled that Sections 13 and 14 are found in
half (1/2) month salary’ shall mean fifteen (15) days plus one-
Implementing Rule I which deals with both ‘termination of
twelfth (1/12) of the 13th month pay and the cash equivalent of
employment’ and ‘retirement.’ It is important to keep the two
not more than five (5) days of service incentive leaves.
(2) concepts of ‘termination pay’ and ‘retirement benefits’
separate and distinct from each other. Termination pay or
separation pay is required to be paid by an employer in particular xxx xxx x x x”
situations identified by the Labor Code itself or by Implementing
Rule I. Termination pay where properly due and payable under nevertheless, the aforequoted provisions, which could have
some applicable provision of the Labor Code or under Section 4 saved the day for the private respondent, cannot be applied in
(b) of Implementing Rule I, must be paid whether or not an this case, since private respondent retired on March 20, 1989, or
additional retirement plan has been set up under an agreement about three years prior to the approval of the new retirement
with the employer or under an ‘established employer policy.’ law. RA 7641 is to be effective prospectively, absent a clear
intention on the part of the legislature to give it
What needs to be stressed, however, is that Section 14 of retroactivity.viii[8] “It is a rule of statutory construction that all
Implementing Rule I, like Article 287 of the Labor Code, does not statutes are to be construed as having only a prospective
purport to require ‘termination pay’ to be paid to an employee operation unless the purpose and intention of the Legislature to
give them a retrospective effect is expressly declared or is
who may want to retire but for whom no additional retirement
necessarily implied from the language used. In every case of
plan had been set up by prior agreement with the employer.
doubt, the doubt must be resolved against the retrospective
Thus, Section 14 itself speaks of an employee ‘who is retired
effect.”ix[9]
pursuant to a bonafide retirement plan or in accordance with the
applicable individual or collective agreement or established
employer policy’ x x x.” (italics in the original text.)

The fact that respondent Commission had a prior ruling in a
similar casex[10]granting retirement benefits is of no moment.
Although it may be true that the contemporaneous construction
of a statute by executive officers tasked to enforce and
implement said statute should be given great weight by the
courts, nevertheless, if such construction is erroneousxi[11] or is
clearly shown to be in conflict with the governing statute or the
Constitution or other laws,xii[12] the same must be declared null
and void. “It is the role of the Judiciary to refine and, when
necessary, correct constitutional (and/or statutory)
interpretation, in the context of the interactions of the three
branches of the government.”xiii[13]
Had respondent Commission simply followed our ruling in Llora
Motors, this problem would not have reached this far. Besides,
with Llora’s promulgation in 1989, the ruling in the Tolentino
case was effectively superseded.
It has been held that “(i)t is axiomatic that retirement laws are
liberally construed and administered in favor of the persons
intended to be benefited. All doubts as to the intent of the law
should be resolved in favor of the retiree to achieve its
humanitarian purposes.”xiv[14] The intention is to provide for
the retiree’s sustenance and hopefully even comfort, when he no
longer has the stamina to continue earning his livelihood.
Unfortunately, such interpretation cannot be made in this case in
the light of the clear lack of consensual and statutory basis of the
grant of retirement benefits to private respondent.
In all, it has been sufficiently shown that respondent Commission
acted in grave abuse of discretion by affirming the grant of
retirement benefits to private respondent despite our
pronouncements on the matter.
WHEREFORE, the instant petition is hereby GRANTED and the
assailed Decision SET ASIDE. No costs.
SO ORDERED.
43
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168617 February 19, 2007
BERNADETTE L. ADASA, petitioner,
vs.
CECILLE S. ABALOS, Respondent.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review under Rule 45 of the Rules of Court, filed
by petitioner Bernadette L. Adasa, seeks to nullify and set aside
the 21 July 2004 Decision1 and 10 June 2005 Resolution2 of the
Court of Appeals in CA-G.R. SP No. 76396 which nullified the
Resolutions of the Department of Justice (DOJ). The Resolutions
of the DOJ reversed and set aside the Resolution of the Office of
the City Prosecutor of Iligan City, which found on reinvestigation
probable cause against petitioner, and directed the Office of the
City Prosecutor of Iligan City to withdraw the information for
Estafa against petitioner.
The instant case emanated from the two complaints-affidavits
filed by respondent Cecille S. Abalos on 18 January 2001 before
the Office of the City Prosecutor of Iligan City, against petitioner
for Estafa.
Respondent alleged in the complaints-affidavits that petitioner,
through deceit, received and encashed two checks issued in the
name of respondent without respondent’s knowledge and
consent and that despite repeated demands by the latter,
petitioner failed and refused to pay the proceeds of the checks.
On 23 March 2001, petitioner filed a counter-affidavit admitting
that she received and encashed the two checks issued in favor of
respondent.
In her Supplemental Affidavit filed on 29 March 2001, petitioner,
however, recanted and alleged instead that it was a certain Bebie
Correa who received the two checks which are the subject
matter of the complaints and encashed the same; and that said
Bebie Correa left the country after misappropriating the
proceeds of the checks.
On 25 April 2001, a resolution was issued by the Office of the City
Prosecutor of Iligan City finding probable cause against petitioner
and ordering the filing of two separate Informations for Estafa
Thru Falsification of Commercial Document by a Private
Individual, under Article 315 in relation to Articles 171 and 172 of
the Revised Penal Code, as amended.
Consequently, two separate criminal cases were filed against
petitioner docketed as Criminal Cases No. 8781 and No. 8782,
raffled to Branches 4 and 5, Regional Trial Court of Iligan City,
respectively.
This instant petition pertains only to Criminal Case No. 8782.
On 8 June 2001, upon motion of the petitioner, the trial court in
Criminal Case No. 8782 issued an order directing the Office of the
City Prosecutor of Iligan City to conduct a reinvestigation.
After conducting the reinvestigation, the Office of the City
Prosecutor of Iligan City issued a resolution dated 30 August
2001, affirming the finding of probable cause against petitioner.
Meanwhile, during her arraignment on 1 October 2001 in
Criminal Case No. 8782, petitioner entered an unconditional plea
of not guilty.3
Dissatisfied with the finding of the Office of the City Prosecutor
of Iligan City, petitioner filed a Petition for Review before the DOJ
on 15 October 2001.

In a Resolution dated 11 July 2002, the DOJ reversed and set
aside the 30 August 2001 resolution of the Office of the City
Prosecutor of Iligan City and directed the said office to withdraw
the Information for Estafa against petitioner.
The said DOJ resolution prompted the Office of the City
Prosecutor of Iligan City to file a "Motion to Withdraw
Information" on 25 July 2002.
On 26 July 2002, respondent filed a motion for reconsideration of
said resolution of the DOJ arguing that the DOJ should have
dismissed outright the petition for review since Section 7 of DOJ
Circular No. 70 mandates that when an accused has already been
arraigned and the aggrieved party files a petition for review
before the DOJ, the Secretary of Justice cannot, and should not
take cognizance of the petition, or even give due course thereto,
but instead deny it outright. Respondent claimed Section 12
thereof mentions arraignment as one of the grounds for the
dismissal of the petition for review before the DOJ.
In a resolution dated 30 January 2003, the DOJ denied the
Motion for Reconsideration opining that under Section 12, in
relation to Section 7, of DOJ Circular No. 70, the Secretary of
Justice is not precluded from entertaining any appeal taken to
him even where the accused has already been arraigned in court.
This is due to the permissive language "may" utilized in Section
12 whereby the Secretary has the discretion to entertain an
appealed resolution notwithstanding the fact that the accused
has been arraigned.
Meanwhile, on 27 February 2003, the trial court issued an order
granting petitioner’s "Motion to Withdraw Information" and
dismissing Criminal Case No. 8782. No action was taken by
respondent or any party of the case from the said order of
dismissal.
Aggrieved by the resolution of the DOJ, respondent filed a
Petition for Certiorari before the Court of Appeals. Respondent
raised the following issues before the appellate court:
44
1. Whether or not the Department of Justice gravely
abused its discretion in giving due course to
petitioner’s petition for review despite its having been
filed after the latter had already been arraigned;
2. Whether or not there is probable cause that the
crime of estafa has been committed and that petitioner
is probably guilty thereof;
3. Whether or not the petition before the Court of
Appeals has been rendered moot and academic by the
order of the Regional Trial Court dismissing Criminal
Case No. 8782.
The Court of Appeals in a Decision dated 21 July 2004 granted
respondent’s petition and reversed the Resolutions of the DOJ
dated 11 July 2002 and 30 January 2003.
In resolving the first issue, the Court of Appeals, relying heavily
on Section 7 of DOJ Circular No. 70 which states "[i]f an
information has been filed in court pursuant to the appealed
resolution, the petition shall not be given due course if the
accused had already been arraigned," ruled that since petitioner
was arraigned before she filed the petition for review with the
DOJ, it was imperative for the DOJ to dismiss such petition. It
added that when petitioner pleaded to the charge, she was
deemed to have waived her right to reinvestigation and right to
question any irregularity that surrounds it.
Anent the second issue, the Court of Appeals declared that the
existence of probable cause or the lack of it, cannot be dealt with
by it since factual issues are not proper subjects of a Petition for
Certiorari.
In disposing of the last issue, the Court of Appeals held that the
order of the trial court dismissing the subject criminal case
pursuant to the assailed resolutions of the DOJ did not render
the petition moot and academic. It said that since the trial court’s
order relied solely on the resolutions of the DOJ, said order is
void as it violated the rule which enjoins the trial court to assess
the evidence presented before it in a motion to dismiss and not
to rely solely on the prosecutor’s averment that the Secretary of
Justice had recommended the dismissal of the case.
Dissatisfied by the Court of Appeals’ ruling, petitioner filed a
Motion for Reconsideration setting forth the following grounds:
1. that the over-all language of Sections 7 and 12 of
Department Circular No. 70 is permissive and directory
such that the Secretary of Justice may entertain an
appeal despite the fact that the accused had been
arraigned;
2. that the contemporaneous construction by the
Secretary of Justice should be given great weight and
respect;
3. that Section 7 of the Circular applies only to
resolutions rendered pursuant to a preliminary
investigation, not on a reinvestigation;
4. that the trial court’s order of dismissal of the
criminal case has rendered the instant petition moot
and academic;
5. that her arraignment was null and void it being
conducted despite her protestations; and
6. that despite her being arraigned, the supposed
waiver of her right to preliminary investigation has
been nullified or recalled by virtue of the trial court’s
order of reinvestigation.4
The Court of Appeals stood firm by its decision. This time,
however, it tried to construe Section 7 side by side with Section
12 of DOJ Circular No. 70 and attempted to reconcile these two
provisions. According to the appellate court, the phrase "shall
not" in paragraph two, first sentence of Section 7 of subject
circular, to wit:

If an information has been filed in court pursuant to the appealed
resolution, the petition shall not be given due course if the
accused had already been arraigned. x x x. (Emphasis supplied.)
employed in the circular denotes a positive prohibition. Applying
the principle in statutory construction - that when a statute or
provision contains words of positive prohibition, such as "shall
not," "cannot," or "ought not" or which is couched in negative
terms importing that the act shall not be done otherwise than
designated, that statute or provision is mandatory, thus
rendering the provision mandatory – it opined that the subject
provision simply means that the Secretary of Justice has no other
course of action but to deny or dismiss a petition before him
when arraignment of an accused had already taken place prior to
the filing of the petition for review.
On the other hand, reading Section 12 of the same circular which
reads:
The Secretary may reverse, affirm or modify the appealed
resolution. He may, motu proprio or upon motion, dismiss the
petition for review on any of the following grounds:
xxxx
(e) That the accused had already been arraigned when the appeal
was taken; x x x.
the Court of Appeals opined that the permissive word "may" in
Section 12 would seem to imply that the Secretary of Justice has
discretion to entertain an appeal notwithstanding the fact that
the accused has been arraigned. This provision should not be
treated separately, but should be read in relation to Section 7.
The two provisions, taken together, simply meant that when an
accused was already arraigned when the aggrieved party files a
petition for review, the Secretary of Justice cannot, and should
not take cognizance of the petition, or even give due course
thereto, but instead dismiss or deny it outright. The appellate
court added that the word "may" in Section 12 should be read as
"shall" or "must" since such construction is absolutely necessary
45
to give effect to the apparent intention of the rule as gathered
from the context.
As to the contemporaneous construction of the Secretary of
Justice, the Court of Appeals stated that the same should not be
given weight since it was erroneous.
Anent petitioner’s argument that Section 7 of the questioned
circular applies only to original resolutions that brought about
the filing of the corresponding informations in court, but not to
resolutions rendered pursuant to a motion for reinvestigation,
the appellate court simply brushed aside such contention as
having no basis in the circular questioned.
It also rejected petitioner’s protestation that her arraignment
was forced upon her since she failed to present any evidence to
substantiate the same.
It is petitioner’s contention that despite her being arraigned, the
supposed waiver of her right to preliminary investigation has
been nullified by virtue of the trial court’s order or
reinvestigation. On this score, the Court of Appeals rebuffed such
argument stating that there was no "supposed waiver of
preliminary investigation" to speak of for the reason that
petitioner had actually undergone preliminary investigation.
Petitioner remained unconvinced with the explanations of the
Court of Appeals.
Hence, the instant petition.
Again, petitioner contends that the DOJ can give due course to an
appeal or petition for review despite its having been filed after
the accused had already been arraigned. It asserts that the fact
of arraignment of an accused before the filing of an appeal or
petition for review before the DOJ "is not at all relevant" as the
DOJ can still take cognizance of the appeal or Petition for Review
before it. In support of this contention, petitioner set her sights
on the ruling of this Court in Crespo v. Mogul,5 to wit:
The rule therefore in this jurisdiction is that once a complaint or
information is filed in Court any disposition of the case as to its
dismissal or the conviction or acquittal of the accused rests in the
sound discretion of the Court. Although the fiscal retains the
direction and control of the prosecution of criminal cases even
while the case is already in Court he cannot impose his opinion
on the trial court. The Court is the best and sole judge on what to
do with the case before it. The determination of the case is
within its exclusive jurisdiction and competence. A motion to
dismiss the case filed by the fiscal should be addressed to the
Court who has the option to grant or deny the same. It does not
matter if this is done before or after the arraignment of the
accused or that the motion was filed after a reinvestigation or
upon instructions of the Secretary of Justice who reviewed the
records of the investigation. (Emphasis supplied.)
To bolster her position, petitioner cites Roberts v. Court of
Appeals,6 which stated:
There is nothing in Crespo vs. Mogul which bars the DOJ from
taking cognizance of an appeal, by way of a petition for review,
by an accused in a criminal case from an unfavorable ruling of the
investigating prosecutor. It merely advised the DOJ to, "as far as
practicable, refrain from entertaining a petition for review or
appeal from the action of the fiscal, when the complaint or
information has already been filed in Court. x x x. (Emphasis
supplied.)
Petitioner likewise invokes Marcelo v. Court of Appeals7 where
this Court declared:
Nothing in the said ruling forecloses the power or authority of
the Secretary of Justice to review resolutions of his subordinates
in criminal cases. The Secretary of Justice is only enjoined to
refrain as far as practicable from entertaining a petition for
review or appeal from the action of the prosecutor once a
complaint or information is filed in court. In any case, the grant
of a motion to dismiss, which the prosecution may file after the
Secretary of Justice reverses an appealed resolution, is subject to
the discretion of the court.

The Court is unconvinced.
A cursory reading of Crespo v. Mogul reveals that the ruling
therein does not concern the issue of an appeal or petition for
review before the DOJ after arraignment. Verily, the
pronouncement therein has to do with the filing of a motion to
dismiss and the court’s discretion to deny or grant the same. As
correctly pointed out by respondent, the emphasized portion in
the Crespo ruling is a parcel of the entire paragraph which relates
to the duty and jurisdiction of the trial court to determine for
itself whether or not to dismiss a case before it, and which states
that such duty comes into play regardless of whether such
motion is filed before or after arraignment and upon whose
instructions. The allusion to the Secretary of Justice as reviewing
the records of investigation and giving instructions for the filing
of a motion to dismiss in the cited ruling does not take into
consideration of whether the appeal or petition before the
Secretary of Justice was filed after arraignment. Significantly, in
the Crespo case, the accused had not yet been arraigned when
the appeal or petition for review was filed before the DOJ.
Undoubtedly, petitioner’s reliance on the said case is misplaced.
Also unavailing is petitioner’s invocation of the cases of Roberts
v. Court of Appeals and Marcelo v. Court of Appeals. As in Crespo
v. Mogul, neither Roberts v. Court of Appeals nor Marcelo v.
Court of Appeals took into account of whether the appeal or
petition before the Secretary of Justice was filed after
arraignment. Just like in the Crespo case, the accused in both
Roberts v. Court of Appeals and Marcelo v. Court of Appeals had
not yet been arraigned when the appeal or petition for review
was filed before the DOJ.
Moreover, petitioner asserts that the Court of Appeals’
interpretation of the provisions of DOJ Circular No. 70 violated
three basic rules in statutory construction. First, the rule that the
provision that appears last in the order of position in the rule or
regulation must prevail. Second, the rule that the
contemporaneous construction of a statute or regulation by the
officers who enforce it should be given weight. Third, petitioner
lifted a portion from Agpalo’s Statutory Construction8 where the
46
word "shall" had been construed as a permissive, and not a
mandatory language.
The all too-familiar rule in statutory construction, in this case, an
administrative rule9 of procedure, is that when a statute or rule is
clear and unambiguous, interpretation need not be resorted to.10
Since Section 7 of the subject circular clearly and categorically
directs the DOJ to dismiss outright an appeal or a petition for
review filed after arraignment, no resort to interpretation is
necessary.
Petitioner’s reliance to the statutory principle that "the last in
order of position in the rule or regulation must prevail" is not
applicable. In addition to the fact that Section 7 of DOJ Circular
No. 70 needs no construction, the cited principle cannot apply
because, as correctly observed by the Court of Appeals, there is
no irreconcilable conflict between Section 7 and Section 12 of
DOJ Circular No. 70. Section 7 of the circular provides:
SECTION 7. Action on the petition. – The Secretary of Justice may
dismiss the petition outright if he finds the same to be patently
without merit or manifestly intended for delay, or when the
issues raised therein are too unsubstantial to require
consideration. If an information has been filed in court pursuant
to the appealed resolution, the petition shall not be given due
course if the accused had already been arraigned. Any
arraignment made after the filing of the petition shall not bar the
Secretary of Justice from exercising his power of review. (Italics
supplied.)
On the other hand, Section 12 of the same circular states:
SECTION 12. Disposition of the Appeal. – The Secretary may
reverse, affirm or modify the appealed resolution. He may, motu
proprio or upon motion, dismiss the petition for review on any of
the following grounds:
(a) That the petition was filed beyond the period
prescribed in Section 3 hereof;
(b) That the procedure or any of the requirements
herein provided has not been complied with;
(c) That there is no showing of any reversible error;
(d) That the appealed resolution is interlocutory in
nature, except when it suspends the proceedings based
on the alleged existence of a prejudicial question;
(e) That the accused had already been arraigned when
the appeal was taken;
(f) That the offense has already prescribed; and
(g) That other legal or factual grounds exist to warrant
a dismissal. (Emphases supplied.)
It is noteworthy that the principle cited by petitioner reveals
that, to find application, the same presupposes that "one part of
the statute cannot be reconciled or harmonized with another
part without nullifying one in favor of the other." In the instant
case, however, Section 7 is neither contradictory nor
irreconcilable with Section 12. As can be seen above, Section 7
pertains to the action on the petition that the DOJ must take,
while Section 12 enumerates the options the DOJ has with regard
to the disposition of a petition for review or of an appeal.
As aptly observed by respondent, Section 7 specifically applies to
a situation on what the DOJ must do when confronted with an
appeal or a petition for review that is either clearly without
merit, manifestly intended to delay, or filed after an accused has
already been arraigned, i.e., he may dismiss it outright if it is
patently without merit or manifestly intended to delay, or, if it
was filed after the acccused has already been arraigned, the
Secretary shall not give it due course.
Section 12 applies generally to the disposition of an appeal.
Under said section, the DOJ may take any of four actions when
disposing an appeal, namely:

1. reverse the appealed resolution;
2. modify the appealed resolution;
3. affirm the appealed resolution;
4. dismiss the appeal altogether, depending on the
circumstances and incidents attendant thereto.
As to the dismissal of a petition for review or an appeal, the
grounds are provided for in Section 12 and, consequently, the
DOJ must evaluate the pertinent circumstances and the facts of
the case in order to determine which ground or grounds shall
apply.
Thus, when an accused has already been arraigned, the DOJ must
not give the appeal or petition for review due course and must
dismiss the same. This is bolstered by the fact that arraignment
of the accused prior to the filing of the appeal or petition for
review is set forth as one of the grounds for its dismissal.
Therefore, in such instance, the DOJ, noting that the arraignment
of an accused prior to the filing of an appeal or petition for
review is a ground for dismissal under Section 12, must go back
to Section 7 and act upon as mandated therein. In other words,
the DOJ must not give due course to, and must necessarily
dismiss, the appeal.
Likewise, petitioner’s reliance on the principle of contemporary
construction, i.e., the DOJ is not precluded from entertaining
appeals where the accused had already been arraigned, because
it exercises discretionary power, and because it promulgated
itself the circular in question, is unpersuasive. As aptly
ratiocinated by the Court of Appeals:
True indeed is the principle that a contemporaneous
interpretation or construction by the officers charged with the
enforcement of the rules and regulations it promulgated is
entitled to great weight by the court in the latter’s construction
of such rules and regulations. That does not, however, make such
a construction necessarily controlling or binding. For equally
47
settled is the rule that courts may disregard contemporaneous
construction in instances where the law or rule construed
possesses no ambiguity, where the construction is clearly
erroneous, where strong reason to the contrary exists, and
where the court has previously given the statute a different
interpretation.
If through misapprehension of law or a rule an executive or
administrative officer called upon to implement it has
erroneously applied or executed it, the error may be corrected
when the true construction is ascertained. If a contemporaneous
construction is found to be erroneous, the same must be
declared null and void. Such principle should be as it is applied in
the case at bar.11
Petitioner’s posture on a supposed exception to the mandatory
import of the word "shall" is misplaced. It is petitioner’s view that
the language of Section 12 is permissive and therefore the
mandate in Section 7 has been transformed into a matter within
the discretion of the DOJ. To support this stance, petitioner cites
a portion of Agpalo’s Statutory Construction which reads:
For instance, the word "shall" in Section 2 of Republic Act 304
which states that "banks or other financial institutions owned or
controlled by the Government shall, subject to availability of
funds xxx, accept at a discount at not more than two per centum
for ten years such (backpay) certificate" implies not a mandatory,
but a discretionary, meaning because of the phrase "subject to
availability of funds." Similarly, the word "shall" in the provision
to the effect that a corporation violating the corporation law
"shall, upon such violation being proved, be dissolved by quo
warranto proceedings" has been construed as "may."12
After a judicious scrutiny of the cited passage, it becomes
apparent that the same is not applicable to the provision in
question. In the cited passage, the word "shall" departed from its
mandatory import connotation because it was connected to
certain provisos/conditions: "subject to the availability of funds"
and "upon such violation being proved." No such
proviso/condition, however, can be found in Section 7 of the
subject circular. Hence, the word "shall" retains its mandatory
import.
At this juncture, the Court of Appeals’ disquisition in this matter
is enlightening:
Indeed, if the intent of Department Circular No. 70 were to give
the Secretary of Justice a discretionary power to dismiss or to
entertain a petition for review despite its being outrightly
dismissible, such as when the accused has already been
arraigned, or where the crime the accused is being charged with
has already prescribed, or there is no reversible error that has
been committed, or that there are legal or factual grounds
warranting dismissal, the result would not only be incongruous
but also irrational and even unjust. For then, the action of the
Secretary of Justice of giving due course to the petition would
serve no purpose and would only allow a great waste of time.
Moreover, to give the second sentence of Section 12 in relation
to its paragraph (e) a directory application would not only
subvert the avowed objectives of the Circular, that is, for the
expeditious and efficient administration of justice, but would also
render its other mandatory provisions - Sections 3, 5, 6 and 7,
nugatory.13
In her steadfast effort to champion her case, petitioner contends
that the issue as to whether the DOJ rightfully entertained the
instant case, despite the arraignment of the accused prior to its
filing, has been rendered moot and academic with the order of
dismissal by the trial court dated 27 February 2003. Such
contention deserves scant consideration.
It must be stressed that the trial court dismissed the case
precisely because of the Resolutions of the DOJ after it had, in
grave abuse of its discretion, took cognizance of the petition for
review filed by petitioner. Having been rendered in grave abuse
of its discretion, the Resolutions of the DOJ are void. As the order
of dismissal of the trial court was made pursuant to the void
Resolutions of the DOJ, said order was likewise void. The rule in
this jurisdiction is that a void judgment is a complete nullity and
without legal effect, and that all proceedings or actions founded
thereon are themselves regarded as invalid and ineffective for

any purpose.14 That respondent did not file a motion for
reconsideration or appeal from the dismissal order of the trial
court is of no moment. Since the dismissal was void, there was
nothing for respondent to oppose.
Petitioner further asserts that Section 7 of DOJ Circular No. 70
applies only to appeals from original resolution of the City
Prosecutor and does not apply in the instant case where an
appeal is interposed by petitioner from the Resolution of the City
Prosecutor denying her motion for reinvestigation. This claim is
baseless.1avvphi1.net
A reading of Section 7 discloses that there is no qualification
given by the same provision to limit its application to appeals
from original resolutions and not to resolutions on
reinvestigation. Hence, the rule stating that "when the law does
not distinguish, we must not distinguish"15 finds application in
this regard.
Petitioner asserts that her arraignment was null and void as the
same was improvidently conducted. Again, this contention is
without merit. Records reveal that petitioner’s arraignment was
without any restriction, condition or reservation.16 In fact she
was assisted by her counsels Atty. Arthur Abudiente and Atty.
Maglinao when she pleaded to the charge.17
Moreover, the settled rule is that when an accused pleads to the
charge, he is deemed to have waived the right to preliminary
investigation and the right to question any irregularity that
surrounds it.18 This precept is also applicable in cases of
reinvestigation as well as in cases of review of such
reinvestigation. In this case, when petitioner unconditionally
pleaded to the charge, she effectively waived the reinvestigation
of the case by the prosecutor as well as the right to appeal the
result thereof to the DOJ Secretary. Thus, with the arraignment
of the petitioner, the DOJ Secretary can no longer entertain the
appeal or petition for review because petitioner had already
waived or abandoned the same.
Lastly, while there is authority19 permitting the Court to make its
own determination of probable cause, such, however, cannot be
48
made applicable in the instant case. As earlier stated, the
arraignment of petitioner constitutes a waiver of her right to
preliminary investigation or reinvestigation. Such waiver is
tantamount to a finding of probable cause. For this reason, there
is no need for the Court to determine the existence or non-
existence of probable cause.
Besides, under Rule 45 of the Rules of Court, only questions of
law may be raised in, and be subject of, a petition for review on
certiorari since this Court is not a trier of facts. This being the
case, this Court cannot review the evidence adduced by the
parties before the prosecutor on the issue of the absence or
presence of probable cause.20
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals dated 21 July 2004 and its Resolution dated 10 June
2005 in CA-G.R. SP No. 76396 are AFFIRMED. Costs against
petitioner.
SO ORDERED.
SECOND DIVISION
[G.R. No. 98239. April 25, 1996]
CONSUELO VALDERRAMA, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, FIRST DIVISION AND MARIA ANDREA
SAAVEDRA, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; RULE ON FINALITY
OF JUDGMENTS; EXCEPTIONS; WHERE CIRCUMSTANCES
RENDER ITS EXECUTION IMPOSSIBLE. - The rule that once a
judgment becomes final it can no longer be disturbed, altered, or
modified is not an inflexible one. It admits of exceptions, as
where facts and circumstances transpire after a judgment has
become final and executory which render its execution
impossible or unjust. In such a case the modification of the
decision may be sought by the interested party and the court will
modify and alter the judgment to harmonize it with justice and
the facts.
2. ID.; ID.; ID.; ID.; MODIFICATION OF JUDGMENT IN
LABOR CASE APPROPRIATE AS WHERE CLAIM IN COMPANY NO
LONGER FEASIBLE, EMPLOYEE CAN GO AFTER ITS OFFICERS. -
Modification of the judgment is appropriate considering that the
company is no longer in operation and there is no showing that it
has filed bankruptcy proceedings in which private respondent
might file a claim and pursue her remedy under Article 110 of the
Labor Code. Holding petitioner officer personally liable for the
judgment in this case is eminently just and proper considering
that, although the dispositive portion of the decision mentions
only the “respondent company,” the text repeatedly mentions
“respondents” in assessing liability for the illegal dismissal of
private respondent. There can be no doubt of their personal
liability. The mere happenstance that only the company is
mentioned should not, therefore, be allowed to obscure the fact
that in the text of the decision petitioner and her corespondents
below were found guilty of having illegally dismissed private
respondent and of claiming that private respondent’s
employment was terminated because of retrenchment, when the
truth was that she was dismissed for pregnancy. Hence they
should be held personally liable for private respondent’s
reinstatement with backwages. “Indeed it is well said that to get
the true intent and meaning of a decision, no specific portion
thereof should be resorted to but same must be considered in its
entirety.
3. LABOR LAW AND SOCIAL LEGISLATION; EMPLOYER
CORPORATION AND ITS OFFICERS; LIABILITY. - Under the Labor
Code, petitioner officer is herself considered an employer. In A.
C. Ransom Labor Union-CCLU v. NLRC, we held: “Employer”
includes any person acting in the interest of an employer, directly
or indirectly. Since RANSOM is an artificial person, it must have
an officer who can be presumed to be the employer, being the
“person acting in the interest of (the) employer.” The
corporation, only in the technical sense, is the employer. The
responsible officer of an employer corporation can be held
personally, not to say even criminally, liable for the non-payment
of backwages. A corporation can only act through its officers and
agents. Any decision against the company can be enforced

against the officers in their personal capacities should the
corporation fail to satisfy the judgment against it. “Where the
employer corporation is no longer existing and [is] unable to
satisfy the judgment in favor of the employee, the officer should
be held liable for acting on behalf of the corporation.” In this
case, documents show that petitioner controlled the company
owning 1,993 of its 2,000 shares.
4. ID.; TECHNICAL RULES OF PROCEDURE MAY BE
DISREGARDED FOR THE PROTECTION OF LABOR. - There was
really no amendment of the decision but only a clarification. But
even if appeal was required in order to correct the error, in the
interest of substantial justice, especially in cases involving rights
of workers, the procedural lapse in this case may be disregarded.
APPEARANCES OF COUNSEL
Chaves Hechanova Lim Law Offices for petitioner.
Ramon A. Gonzales for private respondent.
DECISION
MENDOZA, J.:
On October 27, 1983, Maria Andrea Saavedra, herein private
respondent, filed a complaint against the COMMODEX (Phils.),
Inc., petitioner Consuelo Valderrama as owner, Tranquilino
Valderrama as executive vice president and Jose Ma. Togle as
vice president and general manager, for reinstatement and
backwages.xv[1] On December 2, 1986, the Labor Arbiter
rendered a decision, finding private respondent to have been
illegally dismissed and holding the respondent COMMODEX
liable. It was shown that private respondent had been dismissed
from her employment due to her pregnancy, contrary to
allegations of petitioner and her corespondents therein that the
termination of her employment was due to redundancy and
retrenchment.xvi[2] The dispositive portion of the Labor Arbiter’s
decision reads:
49
WHEREFORE, judgment is hereby rendered ordering respondent
company:
1. to reinstate complainant to her former position with full
backwages at the rate of P1,474.00 per month from the date she
was illegally dismissed on 16 March 1983 until actually reinstated
without loss of seniority right and other benefits which she could
have earned were it not for her illegal dismissal;
2. to pay complainant moral and exemplary damages in the
amount of P20,000.00 and P5,000.00, respectively; and,
3. to pay complainant attorney’s fees equivalent to ten (10%)
percent of the total award.
A writ of execution was granted, but it was returned
unsatisfied.xvii[3] The sheriff reported that COMMODEX had
ceased operation, while the individual officers, who were
corespondents in the case, took the position that the writ could
not be enforced against them on the ground that the dispositive
portion of the decision mentioned only COMMODEX.
Private respondent filed a Motion for Clarification in which she
prayed:
WHEREFORE, it is most respectfully prayed that the dispositive
part of the decision be clarified to read as follows:
WHEREFORE, judgment is hereby rendered ordering respondents
jointly and severally:
1. to reinstate complainant to her former position with
full backwages at the rate of P 1,474.00 per month from the date
she was illegally dismissed on 16 March 1983 until actually
reinstated without loss of seniority right and other benefits
which she could have earned were it not for her illegal dismissal;
2. to pay complainant moral and exemplary damages in
the amount of P20,000.00 and P5,000.00, respectively; and
3. to pay complainant attorney’s fee equivalent to ten
(10%) percent of the total award.
Private respondent contended that the body of the decision
clearly held the petitioner and her corespondents therein to be
liable and that
[t]herefore, this Office is not precluded from correcting the
inadvertence by clarifying the words “respondent company”
which ought to have been “respondents jointly and severally” in
order to make the fallo or dispositive part correspond or
correlate with the body of the final decision, considering that the
unjust dismissal of the complainant constitutes tort or
quasidelict. (Article 2176, New Civil Code).
Petitioner and her corespondents therein filed an opposition to
the motion for clarification. They contended that the decision of
the Labor Arbiter had become final and executory and could no
longer be amended.xviii[4]
In reply private respondent argued that no amendment of a final
decision was being sought but only the correction of a mistake or
a clarification of an ambiguity because “the exclusion [of the
other respondents] in the dispositive part of the decision is
merely a clerical error or mistake, since in the body of the
decision they [petitioner and corespondents therein] were
included, hence said error or mistake can yet be corrected even if
the decision is already final.”xix[5]
On April 12, 1988, the Labor Arbiter, citing our ruling in A. C.
Ransom Labor Union-CCLU v. NLRC,xx[6] which held the
president of a corporation responsible and personally liable for
payment of backwages, granted the private respondent’s motion
and set it for hearing for reception of evidence of the relationship
of the petitioner and her corespondents therein to COMMODEX.
Private respondent then presented the Articles of Incorporation,
List of Stockholders and the General Information Sheet of
COMMODEX,xxi[7] which showed that of the 2,000 shares of
stocks of the corporation, Consuelo Valderrama owned
1,993xxii[8] and that she was chairman of the board and
president of respondent company.xxiii[9]

On July 25, 1988, the Labor Arbiter declared petitioner Consuelo
Valderrama liable for the payment of the monetary awards
contained in the dispositive portion of the decision dated
December 2, 1986,xxiv[10] thus:
WHEREFORE, respondent Consuelo Valderrama, as Chairman of
the Board and President of respondent COMMODEX (Phils.), Inc.
who is originally impleaded is hereby deemed included as party
respondent and she should, as she is hereby held liable for the
awards to complainant Maria Andrea L. Saavedra.
To obviate the further issuance of a Writ of Execution against
her, she should, as she is hereby ordered to pay aforenamed
complainant the monetary awards ordained in the Decision
herein.
SO ORDERED.
Petitioner appealed to the NLRC. In a resolution dated February
26, 1991, the First Division of the NLRC affirmed the Labor
Arbiter’s order and dismissed the appeal for lack of merit.xxv[11]
Hence, this petition. Petitioner alleges that:
1. The Decision dated 02 December 1986 has become final and
executory, and, hence, can no longer be substantially amended
as to include liability on the part of herein Petitioner, who was
originally not named as liable in the dispositive portion of the
said Decision; and
2. Petitioner cannot and should not be held personally liable
jointly and severally with Commodex (Phils.), Inc. for the awards
adjudged in favor of herein Private Respondent Saavedra.
We find these contentions to be without merit.
First. The rule that once a judgment becomes final it can no
longer be disturbed, altered, or modified is not an inflexible one.
It admits of exceptions, as where facts and circumstances
transpire after a judgment has become final and executory which
render its execution impossible or unjust. In such a case the
50
modification of the decision may be sought by the interested
party and the court will modify and alter the judgment to
harmonize it with justice and the facts.xxvi[12]
In the case at bar, modification of the judgment is appropriate
considering that the company is no longer in operation and there
is no showing that it has filed bankruptcy proceedings in which
private respondent might file a claim and pursue her remedy
under Article 110 of the Labor Code. Holding petitioner
personally liable for the judgment in this case is eminently just
and proper considering that, although the dispositive portion of
the decision mentions only the “respondent company,” the text
repeatedly mentions “respondents” in assessing liability for the
illegal dismissal of private respondent. For indeed petitioner and
others were respondents below and there can be no doubt of
their personal liability. The mere happenstance that only the
company is mentioned should not, therefore, be allowed to
obscure the fact that in the text of the decision petitioner and
her corespondents below were found guilty of having illegally
dismissed private respondent and of claiming that private
respondent’s employment was terminated because of
retrenchment, when the truth was that she was dismissed for
pregnancy. Hence they should be held personally liable for
private respondent’s reinstatement with backwages.xxvii[13]
“Indeed it is well said that to get the true intent and meaning of a
decision, no specific portion thereof should be resorted to but
same must be considered in its entirety (Escarella vs. Director of
Lands, 83 Phil. 491; 46 Off. Gaz. No. 11 p. 5487; I Moran’s
Comments on the Rules of Court, 1957 ed., p. 478).”xxviii[14]
Second. Not only is it clear by reference to the text of the
decision of the Labor Arbiter that COMMODEX as well as its
officers were being held liable so that no substantial amendment
of the decision was really made by the Labor Arbiter in ordering
petitioner to comply with that decision, but under the Labor
Code, petitioner is herself considered an employer. In A. C.
Ransom Labor Union-CCLU v. NLRC,xxix[15] we held:
(a) Article 265 of the Labor Code, in part, expressly provides:
Any worker whose employment has been terminated as a
consequence of an unlawful lockout shall be entitled to
reinstatement with full backwages.
Article 273 of the Code provides that:
Any person violating any of the provisions of Article 265 of this
Code shall be punished by a fine of not exceeding five hundred
pesos and/or imprisonment for not less than one (1) day nor
more than six (6) months.
(b) How can the foregoing provisions be implemented when the
employer is a corporation? The answer is found in Article 212 (c)
of the Labor Code which provides:
(c) “Employer” includes any person acting in the interest of an
employer, directly or indirectly. The term shall not include any
labor organization or any of its officers or agents except when
acting as employer.
The foregoing was culled from Section 2 of RA 602, the Minimum
Wage Law. Since RANSOM is an artificial person, it must have an
officer who can be presumed to be the employer, being the
“person acting in the interest of (the) employer” RANSOM. The
corporation, only in the technical sense, is the employer.
The responsible officer of an employer corporation can be held
personally, not to say even criminally, liable for the non-payment
of back wages. That is the policy of the law. In the Minimum
Wage Law, Section 15 (b) provided:
(b) If any violation of this Act is committed by a
corporation, trust, partnership or association, the manager or in
his default, the person acting as such when the violation took
place, shall be responsible. In the case of a government
corporation, the managing head shall be made responsible,
except when shown that the violation was due to an act or
commission of some other person, over whom he has no control,
in which case the latter shall be held responsible.

In P.D. 525, where a corporation fails to pay the emergency
allowance therein provided, the prescribed penalty “shall be
imposed upon the guilty officer or officers” of the corporation.
(c) If the policy of the law were otherwise, the corporation
employer can have devious ways for evading payment of
backwages. In the instant case, it would appear that RANSOM, in
1969, forseeing the possibility or probability of payment of
backwages to the 22 strikers, organized ROSARIO to replace
RANSOM, with the latter to be eventually phased out if the 22
strikers win their case. RANSOM actually ceased operations on
May 1, 1973, after the December 19, 1972 Decision of the Court
of Industrial Relations was promulgated against RANSOM.
(d) The record does not clearly identify “the officer or
officers” of RANSOM directly responsible for failure to pay the
back wages of the 22 strikers: In the absence of definite proof in
that regard, we believe it should be presumed that the
responsible officer is the President of the corporation who can be
deemed the chief operation officer thereof. Thus, in R.A. 602,
criminal responsibility is with the “Manager or in his default, the
person acting as such.” In RANSOM, the President appears to be
the Manager.
(e) Considering that non-payment of the back wages of the
22 strikers has been a continuing situation, it is our opinion that
the personal liability of the RANSOM President, at the time the
back wages were ordered to be paid should also be a continuing
joint and several personal liabilities of all who may have
thereafter succeeded to the office of president; otherwise the 22
strikers may be deprived of their rights by the election of a
president without leviable assets.
Petitioner seeks to distinguish that case from the one at bar on
the ground that the dispositive portion of the decision in that
case actually ordered the “officers and agents” of A. C. Ransom
to cease and desist from committing further acts of certain labor
practice thus:
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IN VIEW OF ALL THE FOREGOING, . . . the A. C. Ransom Philippine
Corporation is guilty of unfair labor practice of interference and
discrimination hereinabove held and specified, ordering its
officers and agents to cease and desist from committing the
same, finding the strike legal and justified; and to reinstate
immediately . . . to their respective positions with backwages
from July 25, 1969 until actually reinstated, without loss of
seniority rights and other privileges appurtenant to their
employment.xxx[16]
A corporation can only act through its officers and agents. That is
why the cease and desist order was directed to the “officers and
agents” of A. C. Ransom, which was actually found guilty of unfair
labor practice. But that case clearly also holds that any decision
against the company can be enforced against the officers in their
personal capacities should the corporation fail to satisfy the
judgment against it. The quoted portion of that decision
explaining the basis for such ruling makes that clear. Agreeably
with the ruling in A. C. Ransom Labor Union-CCLU it was held in
another case that “where the Employer corporation is no longer
existing and [is] unable to satisfy the judgment in favor of the
employee, the officer should be held liable for acting on behalf of
the corporation.”xxxi[17]
Similarly it was held in Carmeicraft Corp. v. NLRC:xxxii[18]
We also find untenable the contention of Carmen Yulo that she is
not liable for the acts of the petitioner company, assuming it had
acted illegally, because the Carmelcraft Corporation is a distinct
and separate entity with a legal personality of its own. Yulo
claims she is only an agent of the company carrying out the
decisions of its board of directors. We do not agree. Our finding
is that she is in fact and legal effect the corporation, being not
only its president and general manager but also its owner.
In this case, the documents presented by the private respondent
show that petitioner controlled the company owning 1,993 of its
2,000 shares, with the rest of the stockholders owning only
nominal amounts.
Third. Petitioner says the failure of private respondent to make a
timely appeal bars her from enforcing the decision in her favor
against her (petitioner) and the officers of the corporation
because the decision of December 2, 1986 of the Labor Arbiter is
now final and can no longer be amended.
We have already explained that there was really no amendment
of the decision but only a clarification. But even if appeal was
required in order to correct the error, in the interest of
substantial justice, especially in cases involving rights of workers,
the procedural lapse in this case may be disregarded. As held in
General Baptist Bible College v. NLRC:xxxiii[19]
Technicalities have no room in labor cases, where the Rules of
Court are applicable only in order to effectuate the objectives of
the Labor Code and not to defeat them. The pertinent provisions
of the Revised Rules of Court of the Philippines and prevailing
jurisprudence may be applied by analogy or in a suppletory
character to effect an expeditious resolution of labor
controversies in a practical and convenient manner. We are
inclined to overlook a procedural defect if only to promote
substantial justice.
General rules of procedure are merely suppletory in character
vis-a-vis labor disputes which are primarily governed by labor
laws.xxxiv[20] Furthermore, as provided in Art. 4 of the Labor
Code, “all doubts in the implementation and interpretation of
this code, including its implementing rules and regulations shall
be rendered in favor of labor.”xxxv[21] The rule that the NLRC
may disregard technical rules of procedure in order to give life to
the constitutional mandate for the protection of labor is well
settled.xxxvi[22]
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
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