G.R. No.

101083 July 30, 1993

OPOSA VS. FACTORAN

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners
dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically,
it touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation or impairment"
of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and continued rape of
Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the
Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are
all minors duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine
Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources. The original defendant was
the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR).
His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper
motion by the petitioners.1 The complaint2 was instituted as a taxpayers' class suit3 and alleges that the plaintiffs "are all
citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource
treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally concerned
about the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The
minors further asseverate that they "represent their generation as well as generations yet unborn." 4 Consequently, it is prayed
for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty
million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species
of flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they
are also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial;
scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized
on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential,
industrial, commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have
resulted in a host of environmental tragedies, such as (a) water shortages resulting from drying up of the water table,
otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the
intrusion therein of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of
Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of
soil eroded estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the entire island of
Catanduanes, (d) the endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance
and dislocation of cultural communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of
rivers and seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of
typhoon winds which result from the absence of windbreakers, (i) the floodings of lowlands and agricultural plains arising from
the absence of the absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams
constructed and operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric power,
and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic
climatic changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of
unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they
expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the course of
the trial.

As their cause of action, they specifically allege that:

 CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and
uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license agreements
('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for commercial logging
purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour —
nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of forest resources
after the end of this ensuing decade, if not earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued
trend of deforestation to the plaintiff minor's generation and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are
already being felt, experienced and suffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands
will work great damage and irreparable injury to plaintiffs — especially plaintiff minors and their successors
— who may never see, use, benefit from and enjoy this rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he
holds in trust for the benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990,
plaintiffs served upon defendant a final demand to cancel all logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and
devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly
blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the
State —

(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive
and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;
 (c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being.
(P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use
of natural resources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and violative of
plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2)
grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political
question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990 Opposition to
the Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is
dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not
only was the defendant's claim — that the complaint states no cause of action against him and that it raises a political question
— sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of
contracts which is prohibited by the fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court
to rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in
dismissing the action. Again, the parents of the plaintiffs-minors not only represent their children, but have also joined the latter
in this case.8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective
Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners
filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations
concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4
of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine
Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and
healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's inalienable right to self-
preservation and self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation
per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License
Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same
does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be considered
protected by the said clause, it is well settled that they may still be revoked by the State when the public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by
the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and nebulous
allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by the state in its
capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They then reiterate the
theory that the question of whether logging should be permitted in the country is a political question which should be properly
addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' resources is not
to file an action to court, but to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due
process of law. Once issued, a TLA remains effective for a certain period of time — usually for twenty-five (25) years. During
its effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to
have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a
class suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We hereby
rule that the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not
just to several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are
numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the
filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in
the instant petition, the latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as
generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the
succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based
on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a
right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.9 Such rhythm and harmony indispensably
include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral,
land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration, development and
utilization be equitably accessible to the present as well as future generations. 10Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a
little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of
their obligation to ensure the protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and
arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's
challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions
of the said order reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of
alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a
specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court
notes that the Complaint is replete with vague assumptions and vague conclusions based on unverified
data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with political color and
involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to
the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to
cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal
right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions
based on unverified data. A reading of the complaint itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology which, for the
first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987
Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.
 This right unites with the right to health which is provided for in the preceding section of the same article:

Sec. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and
not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the
latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and
self-perpetuation — aptly and fittingly stressed by the petitioners — the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are
assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is
because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are
mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the
state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else
would be lost not only for the present generation, but also for those to come — generations which stand to inherit nothing but
parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment.
During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange
transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in
question:

MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all forms of pollution —
air, water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment necessarily carries with it
the correlative duty of not impairing the same and, therefore, sanctions may be provided
for impairment of environmental balance. 12

The said right implies, among many other things, the judicious management and conservation of the country's forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related
provisions of the Constitution concerning the conservation, development and utilization of the country's natural
resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly
mandates that the Department of Environment and Natural Resources "shall be the primary government agency responsible
for the conservation, management, development and proper use of the country's environment and natural resources,
specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the
public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos." Section 3
thereof makes the following statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of the country's forest, mineral, land, off-shore areas
and other natural resources, including the protection and enhancement of the quality of the environment,
and equitable access of the different segments of the population to the development and the use of the
country's natural resources, not only for the present generation but for future generations as well. It is also
the policy of the state to recognize and apply a true value system including social and environmental cost
implications relative to their utilization, development and conservation of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15 specifically in
Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other
natural resources, consistent with the necessity of maintaining a sound ecological balance and protecting
and enhancing the quality of the environment and the objective of making the exploration, development and
 utilization of such natural resources equitably accessible to the different segments of the present as well as
future generations.

(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the
quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR;
however, it makes particular reference to the fact of the agency's being subject to law and higher authority. Said section
provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the country's
natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy
formulation, and have defined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special
attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine
Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing
policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and
future generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity
and well-being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the environment
for succeeding generations." 17 The latter statute, on the other hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's
duty — under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987
— to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise
to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of
discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further
TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential
elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of
action, 19 the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself.
No other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for the truth
thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be
true, may the court render a valid judgment in accordance with the prayer in the complaint? 20 In Militante vs.
Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in passing
upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct
appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively nullified.
If that happens, there is a blot on the legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as
well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the
claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears
stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party
defendants, the grantees thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by
the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the
enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized
that the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of
section 1, Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of
this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of the authority represents a broadening of judicial
power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of
the political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid
for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the
meaning of "grave abuse of discretion," which is a very elastic phrase that can expand or contract according
to the disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason
is that, even if we were to assume that the issue presented before us was political in nature, we would still
not be precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in
proper cases, even the political question. Article VII, Section 1, of the Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the
Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to
cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first
place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause.
If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits
and advantages to the timber license holders because he would have forever bound the Government to strictly respect the
said licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and
welfare. He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the
Forestry Reform Code (P.D. No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify, replace or
rescind any contract, concession, permit, licenses or any other form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a
property right protested by the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court
held:

. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. A timber license is not a contract within the purview of
the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by
public interest or public welfare as in this case.

A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is
it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this
 Court held that the granting of license does not create irrevocable rights, neither is it property or property
rights (People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by which the State
regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it
can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do
not vest in the latter a permanent or irrevocable right to the particular concession area and the forest
products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive
when national interests so require. Thus, they are not deemed contracts within the purview of the due
process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v.
Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].

Since timber licenses are not contracts, the non-impairment clause, which reads:

27
Sec. 10. No law impairing, the obligation of contracts shall be passed.

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an
executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause
cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such as law could have only been passed in the exercise of the police power of the state for the purpose
of advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general
welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public health, moral,
safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of contract is
limited by the exercise of the police power of the State, in the interest of public health, safety, moral and
general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs.
Auditor General,30 to wit:

Under our form of government the use of property and the making of contracts are normally matters of
private and not of public concern. The general rule is that both shall be free of governmental interference.
But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at
will use his property to the detriment of his fellows, or exercise his freedom of contract to work them harm.
Equally fundamental with the private right is that of the public to regulate it in the common interest.

31
In short, the non-impairment clause must yield to the police power of the state.

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to
enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in
cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the
holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent
Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their
complaint to implead as defendants the holders or grantees of the questioned timber license agreements.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 94723 August 21, 1997

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses FEDERICO
N. SALVACION, JR., and EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y
NORTHCOTT, respondents.

TORRES, JR., J.:

In our predisposition to discover the "original intent" of a statute, courts become the unfeeling pillars of the status quo. Ligle do
we realize that statutes or even constitutions are bundles of compromises thrown our way by their framers. Unless we exercise
vigilance, the statute may already be out of tune and irrelevant to our day.

The petition is for declaratory relief. It prays for the following reliefs:

a.) Immediately upon the filing of this petition, an Order be issued restraining the respondents from applying
and enforcing Section 113 of Central Bank Circular No. 960;

b.) After hearing, judgment be rendered:

1.) Declaring the respective rights and duties of petitioners and respondents;

2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary to the provisions of the Constitution,
hence void; because its provision that "Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever

i.) has taken away the right of petitioners to have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners' favor in
violation of substantive due process guaranteed by the Constitution;

ii.) has given foreign currency depositors an undue favor or a class privilege in violation of
the equal protection clause of the Constitution;

iii.) has provided a safe haven for criminals like the herein respondent Greg Bartelli y
Northcott since criminals could escape civil liability for their wrongful acts by merely
converting their money to a foreign currency and depositing it in a foreign currency deposit
account with an authorized bank.

The antecedent facts:

On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12
years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7,
1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the
Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No.
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account —
China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces;
7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.

On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg Bartelli, Criminal Case No. 801 for
Serious Illegal Detention and Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of Rape. On the same day,
petitioners filed with the Regional Trial Court of Makati Civil Case No. 89-3214 for damages with preliminary attachment
against Greg Bartelli. On February 24, 1989, the day there was a scheduled hearing for Bartelli's petition for bail the latter
escaped from jail.

On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion for the Issuance of Warrant of Arrest and Hold
Departure Order. Pending the arrest of the accused Greg Bartelli y Northcott, the criminal cases were archived in an Order
dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989 granting the application of herein
petitioners, for the issuance of the writ of preliminary attachment. After petitioners gave Bond No. JCL (4) 1981 by FGU
Insurance Corporation in the amount of P100,000.00, a Writ of Preliminary Attachment was issued by the trial court on
February 28, 1989.

On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China Banking Corporation. In a letter
dated March 13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation invoked Republic Act No. 1405 as its
answer to the notice of garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent his
reply to China Banking Corporation saying that the garnishment did not violate the secrecy of bank deposits since the
disclosure is merely incidental to a garnishment properly and legally made by virtue of a court order which has placed the
subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati, China Banking Corporation, in a letter
dated March 20, 1989, invoked Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits or defendant
Greg Bartelli are exempt from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body, whatsoever.

This prompted the counsel for petitioners to make an inquiry with the Central Bank in a letter dated April 25, 1989 on whether
Section 113 of CB Circular No. 960 has any exception or whether said section has been repealed or amended since said
section has rendered nugatory the substantive right of the plaintiff to have the claim sought to be enforced by the civil action
secured by way of the writ of preliminary attachment as granted to the plaintiff under Rule 57 of the Revised Rules of Court.
The Central Bank responded as follows:

May 26, 1989

Ms. Erlinda S. Carolino

12 Pres. Osmena Avenue
South Admiral Village
Paranaque, Metro Manila

Dear Ms. Carolino:

This is in reply to your letter dated April 25, 1989 regarding your inquiry on Section 113, CB Circular No. 960
(1983).

The cited provision is absolute in application. It does not admit of any exception, nor has the same been
repealed nor amended.

The purpose of the law is to encourage dollar accounts within the country's banking system which would
help in the development of the economy. There is no intention to render futile the basic rights of a person as
was suggested in your subject letter. The law may be harsh as some perceive it, but it is still the law.
Compliance is, therefore, enjoined.

Very truly yours,

(SGD) AGAPITO S. FAJARDO

Director1

Meanwhile, on April 10, 1989, the trial court granted petitioners' motion for leave to serve summons by publication in the Civil
Case No. 89-3214 entitled "Karen Salvacion, et al. vs. Greg Bartelli y Northcott." Summons with the complaint was a published
in the Manila Times once a week for three consecutive weeks. Greg Bartelli failed to file his answer to the complaint and was
declared in default on August 7, 1989. After hearing the case ex-parte, the court rendered judgment in favor of petitioners on
March 29, 1990, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendant, ordering the latter:

1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral damages;

2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and Evelina E. Salvacion the amount of
P150,000.00 each or a total of P300,000.00 for both of them;

3. To pay plaintiffs exemplary damages of P100,000.00; and

4. To pay attorney's fees in an amount equivalent to 25% of the total amount of damages herein awarded;
 5. To pay litigation expenses of P10,000.00; plus

6. Costs of the suit.

SO ORDERED.

The heinous acts of respondent Greg Bartelli which gave rise to the award were related in graphic detail by the trial court in its
decision as follows:

The defendant in this case was originally detained in the municipal jail of Makati but was able to escape
therefrom on February 24, 1989 as per report of the Jail Warden of Makati to the Presiding Judge,
Honorable Manuel M. Cosico of the Regional Trial Court of Makati, Branch 136, where he was charged with
four counts of Rape and Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly, upon motion
of plaintiffs, through counsel, summons was served upon defendant by publication in the Manila Times, a
newspaper of general circulation as attested by the Advertising Manager of the Metro Media Times, Inc., the
publisher of the said newspaper. Defendant, however, failed to file his answer to the complaint despite the
lapse of the period of sixty (60) days from the last publication; hence, upon motion of the plaintiffs, through
counsel, defendant was declared in default and plaintiffs were authorized to present their evidence ex parte.

In support of the complaint, plaintiffs presented as witnesses the minor Karen E. Salvacion, her father,
Federico N. Salvacion, Jr., a certain Joseph Aguilar and a certain Liberato Madulio, who gave the following
testimony:

Karen took her first year high school in St. Mary's Academy in Pasay City but has recently transferred to
Arellano University for her second year.

In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati Cinema Square, with her friend
Edna Tangile whiling away her free time. At about 3:30 p.m. while she was finishing her snack on a concrete
bench in front of Plaza Fair, an American approached her. She was then alone because Edna Tangile had
already left, and she was about to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)

The American asked her name and introduced himself as Greg Bartelli. He sat beside her when he talked to
her. He said he was a Math teacher and told her that he has a sister who is a nurse in New York. His sister
allegedly has a daughter who is about Karen's age and who was with him in his house along Kalayaan
Avenue. (TSN, Aug. 15, 1989, pp. 4-5)

The American asked Karen what was her favorite subject and she told him it's Pilipino. He then invited her to
go with him to his house where she could teach Pilipino to his niece. He even gave her a stuffed toy to
persuade her to teach his niece. (Id., pp. 5-6)

They walked from Plaza Fair along Pasong Tamo, turning right to reach the defendant's house along
Kalayaan Avenue. (Id., p. 6)

When they reached the apartment house, Karen noticed that defendant's alleged niece was not outside the
house but defendant told her maybe his niece was inside. When Karen did not see the alleged niece inside
the house, defendant told her maybe his niece was upstairs, and invited Karen to go upstairs. (Id., p. 7)

Upon entering the bedroom defendant suddenly locked the door. Karen became nervous because his niece
was not there. Defendant got a piece of cotton cord and tied Karen's hands with it, and then he undressed
her. Karen cried for help but defendant strangled her. He took a packing tape and he covered her mouth
with it and he circled it around her head. (Id., p. 7)

Then, defendant suddenly pushed Karen towards the bed which was just near the door. He tied her feet and
hands spread apart to the bed posts. He knelt in front of her and inserted his finger in her sex organ. She felt
severe pain. She tried to shout but no sound could come out because there were tapes on her mouth. When
defendant withdrew his finger it was full of blood and Karen felt more pain after the withdrawal of the finger.
(Id., p. 8)

He then got a Johnson's Baby Oil and he applied it to his sex organ as well as to her sex organ. After that he
forced his sex organ into her but he was not able to do so. While he was doing it, Karen found it difficult to
breathe and she perspired a lot while feeling severe pain. She merely presumed that he was able to insert
his sex organ a little, because she could not see. Karen could not recall how long the defendant was in that
position. (Id. pp. 8-9)
After that, he stood up and went to the bathroom to wash. He also told Karen to take a shower and he untied
her hands. Karen could only hear the sound of the water while the defendant, she presumed, was in the
bathroom washing his sex organ. When she took a shower more blood came out from her. In the meantime,
defendant changed the mattress because it was full of blood. After the shower, Karen was allowed by
defendant to sleep. She fell asleep because she got tired crying. The incident happened at about 4:00 p.m.
Karen had no way of determining the exact time because defendant removed her watch. Defendant did not
care to give her food before she went to sleep. Karen woke up at about 8:00 o'clock the following morning.
(Id., pp. 9-10)

The following day, February 5, 1989, a Sunday, after a breakfast of biscuit and coke at about 8:30 to 9:00
a.m. defendant raped Karen while she was still bleeding. For lunch, they also took biscuit and coke. She
was raped for the second time at about 12:00 to 2:00 p.m. In the evening, they had rice for dinner which
defendant had stored downstairs; it was he who cooked the rice that is why it looks like "lugaw". For the third
time, Karen was raped again during the night. During those three times defendant succeeded in inserting his
sex organ but she could not say whether the organ was inserted wholly.

Karen did not see any firearm or any bladed weapon. The defendant did not tie her hands and feet nor put a
tape on her mouth anymore but she did not cry for help for fear that she might be killed; besides, all the
windows and doors were closed. And even if she shouted for help, nobody would hear her. She was so
afraid that if somebody would hear her and would be able to call the police, it was still possible that as she
was still inside the house, defendant might kill her. Besides, the defendant did not leave that Sunday, ruling
out her chance to call for help. At nighttime he slept with her again. (TSN, Aug. 15, 1989, pp. 12-14)

On February 6, 1989, Monday, Karen was raped three times, once in the morning for thirty minutes after a
breakfast of biscuits; again in the afternoon; and again in the evening. At first, Karen did not know that there
was a window because everything was covered by a carpet, until defendant opened the window for around
fifteen minutes or less to let some air in, and she found that the window was covered by styrofoam and
plywood. After that, he again closed the window with a hammer and he put the styrofoam, plywood, and
carpet back. (Id., pp. 14-15)

That Monday evening, Karen had a chance to call for help, although defendant left but kept the door closed.
She went to the bathroom and saw a small window covered by styrofoam and she also spotted a small hole.
She stepped on the bowl and she cried for help through the hole. She cried: "Maawa no po kayo so
akin. Tulungan n'yo akong makalabas dito. Kinidnap ako!" Somebody heard her. It was a woman, probably a
neighbor, but she got angry and said she was "istorbo". Karen pleaded for help and the woman told her to
sleep and she will call the police. She finally fell asleep but no policeman came. (TSN, Aug. 15, 1989, pp.
15-16)

She woke up at 6:00 o'clock the following morning, and she saw defendant in bed, this time sleeping. She
waited for him to wake up. When he woke up, he again got some food but he always kept the door locked.
As usual, she was merely fed with biscuit and coke. On that day, February 7, 1989, she was again raped
three times. The first at about 6:30 to 7:00 a.m., the second at about 8:30 — 9:00, and the third was after
lunch at 12:00 noon. After he had raped her for the second time he left but only for a short while. Upon his
return, he caught her shouting for help but he did not understand what she was shouting about. After she
was raped the third time, he left the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to the bathroom
and shouted for help. After shouting for about five minutes, she heard many voices. The voices were asking
for her name and she gave her name as Karen Salvacion. After a while, she heard a voice of a woman
saying they will just call the police. They were also telling her to change her clothes. She went from the
bathroom to the room but she did not change her clothes being afraid that should the neighbors call for the
police and the defendant see her in different clothes, he might kill her. At that time she was wearing a T-shirt
of the American because the latter washed her dress. (Id., p. 16)

Afterwards, defendant arrived and he opened the door. He asked her if she had asked for help because
there were many policemen outside and she denied it. He told her to change her clothes, and she did
change to the one she was wearing on Saturday. He instructed her to tell the police that she left home and
willingly; then he went downstairs but he locked the door. She could hear people conversing but she could
not understand what they were saying. (Id., p. 19)

When she heard the voices of many people who were conversing downstairs, she knocked repeatedly at the
door as hard as she could. She heard somebody going upstairs and when the door was opened, she saw a
policeman. The policeman asked her name and the reason why she was there. She told him she was
kidnapped. Downstairs, he saw about five policemen in uniform and the defendant was talking to them.
"Nakikipag-areglo po sa mga pulis," Karen added. "The policeman told him to just explain at the precinct.
(Id., p. 20)
 They went out of the house and she saw some of her neighbors in front of the house. They rode the car of a
certain person she called Kuya Boy together with defendant, the policeman, and two of her neighbors whom
she called Kuya Bong Lacson and one Ate Nita. They were brought to Sub-Station I and there she was
investigated by a policeman. At about 2:00 a.m., her father arrived, followed by her mother together with
some of their neighbors. Then they were brought to the second floor of the police headquarters. (Id., p. 21)

At the headquarters, she was asked several questions by the investigator. The written statement she gave
to the police was marked as Exhibit A. Then they proceeded to the National Bureau of Investigation together
with the investigator and her parents. At the NBI, a doctor, a medico-legal officer, examined her private
parts. It was already 3:00 in the early morning of the following day when they reached the NBI. (TSN, Aug.
15, 1989, p. 22) The findings of the medico-legal officer has been marked as Exhibit B.

She was studying at the St. Mary's Academy in Pasay City at the time of the incident but she subsequently
transferred to Apolinario Mabini, Arellano University, situated along Taft Avenue, because she was ashamed
to be the subject of conversation in the school. She first applied for transfer to Jose Abad Santos, Arellano
University along Taft Avenue near the Light Rail Transit Station but she was denied admission after she told
the school the true reason for her transfer. The reason for their denial was that they might be implicated in
the case. (TSN, Aug. 15, 1989, p. 46)

xxx xxx xxx

After the incident, Karen has changed a lot. She does not play with her brother and sister anymore, and she
is always in a state of shock; she has been absent-minded and is ashamed even to go out of the house.
(TSN, Sept. 12, 1989, p. 10) She appears to be restless or sad, (Id., p. 11) The father prays for P500,000.00
moral damages for Karen for this shocking experience which probably, she would always recall until she
reaches old age, and he is not sure if she could ever recover from this experience. (TSN, Sept. 24, 1989, pp.
10-11)

Pursuant to an Order granting leave to publish notice of decision, said notice was published in the Manila Bulletin once a week
for three consecutive weeks. After the lapse of fifteen (15) days from the date of the last publication of the notice of judgment
and the decision of the trial court had become final, petitioners tried to execute on Bartelli's dollar deposit with China Banking
Corporation. Likewise, the bank invoked Section 113 of Central Bank Circular No. 960.

Thus, petitioners decided to seek relief from this Court.

The issues raised and the arguments articulated by the parties boil down to two:

May this Court entertain the instant petition despite the fact that original jurisdiction in petitions for declaratory relief rests with
the lower court? Should Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246,
otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient?

Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No. 960 providing that "Foreign currency
deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever." should be adjudged as unconstitutional on the grounds that: 1.) it
has taken away the right of petitioners to have the bank deposit of defendant Greg Bartelli y Northcott garnished to satisfy the
judgment rendered in petitioners' favor in violation of substantive due process guaranteed by the Constitution; 2.) it has given
foreign currency depositors an undue favor or a class privilege in violation of the equal protection clause of the Constitution; 3.)
it has provided a safe haven for criminals like the herein respondent Greg Bartelli y Northcott since criminals could escape civil
liability for their wrongful acts by merely converting their money to a foreign currency and depositing it in a foreign currency
deposit account with an authorized bank; and 4.) The Monetary Board, in issuing Section 113 of Central Bank Circular No. 960
has exceeded its delegated quasi-legislative power when it took away: a.) the plaintiffs substantive right to have the claim
sought to be enforced by the civil action secured by way of the writ of preliminary attachment as granted by Rule 57 of the
Revised Rules of Court; b.) the plaintiffs substantive right to have the judgment credit satisfied by way of the writ of execution
out of the bank deposit of the judgment debtor as granted to the judgment creditor by Rule 39 of the Revised Rules of Court,
which is beyond its power to do so.

On the other hand, respondent Central Bank, in its Comment alleges that the Monetary Board in issuing Section 113 of CB
Circular No. 960 did not exceed its power or authority because the subject Section is copied verbatim from a portion of R.A.
No. 6426 as amended by P.D. 1246. Hence, it was not the Monetary Board that grants exemption from attachment or
garnishment to foreign currency deposits, but the law (R.A. 6426 as amended) itself; that it does not violate the substantive
due process guaranteed by the Constitution because a.) it was based on a law; b.) the law seems to be reasonable; c.) it is
enforced according to regular methods of procedure; and d.) it applies to all members of a class.

Expanding, the Central Bank said; that one reason for exempting the foreign currency deposits from attachment, garnishment
or any other order or process of any court, is to assure the development and speedy growth of the Foreign Currency Deposit
System and the Offshore Banking System in the Philippines; that another reason is to encourage the inflow of foreign currency
deposits into the banking institutions thereby placing such institutions more in a position to properly channel the same to loans
and investments in the Philippines, thus directly contributing to the economic development of the country; that the subject
section is being enforced according to the regular methods of procedure; and that it applies to all foreign currency deposits
made by any person and therefore does not violate the equal protection clause of the Constitution.

Respondent Central Bank further avers that the questioned provision is needed to promote the public interest and the general
welfare; that the State cannot just stand idly by while a considerable segment of the society suffers from economic distress;
that the State had to take some measures to encourage economic development; and that in so doing persons and property
may be subjected to some kinds of restraints or burdens to secure the general welfare or public interest. Respondent Central
Bank also alleges that Rule 39 and Rule 57 of the Revised Rules of Court provide that some properties are exempted from
execution/attachment especially provided by law and R.A. No. 6426 as amended is such a law, in that it specifically provides,
among others, that foreign currency deposits shall be exempted from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any administrative body whatsoever.

For its part, respondent China Banking Corporation, aside from giving reasons similar to that of respondent Central Bank, also
stated that respondent China Bank is not unmindful of the inhuman sufferings experienced by the minor Karen E. Salvacion
from the beastly hands of Greg Bartelli; that it is only too willing to release the dollar deposit of Bartelli which may perhaps
partly mitigate the sufferings petitioner has undergone; but it is restrained from doing so in view of R.A. No. 6426 and Section
113 of Central Bank Circular No. 960; and that despite the harsh effect of these laws on petitioners, CBC has no other
alternative but to follow the same.

This Court finds the petition to be partly meritorious.

Petitioner deserves to receive the damages awarded to her by the court. But this petition for declaratory relief can only be
entertained and treated as a petition for mandamus to require respondents to honor and comply with the writ of execution in
Civil Case No. 89-3214.

This Court has no original and exclusive jurisdiction over a petition for declaratory relief. 2 However, exceptions to this rule have
been recognized. Thus, where the petition has far-reaching implications and raises questions that should be resolved, it may
be treated as one for mandamus.3

Here is a child, a 12-year old girl, who in her belief that all Americans are good and in her gesture of kindness by teaching his
alleged niece the Filipino language as requested by the American, trustingly went with said stranger to his apartment, and
there she was raped by said American tourist Greg Bartelli. Not once, but ten times. She was detained therein for four (4)
days. This American tourist was able to escape from the jail and avoid punishment. On the other hand, the child, having
received a favorable judgment in the Civil Case for damages in the amount of more than P1,000,000.00, which amount could
alleviate the humiliation, anxiety, and besmirched reputation she had suffered and may continue to suffer for a long, long time;
and knowing that this person who had wronged her has the money, could not, however get the award of damages because of
this unreasonable law. This questioned law, therefore makes futile the favorable judgment and award of damages that she and
her parents fully deserve. As stated by the trial court in its decision,

Indeed, after hearing the testimony of Karen, the Court believes that it was undoubtedly a shocking and
traumatic experience she had undergone which could haunt her mind for a long, long time, the mere recall of
which could make her feel so humiliated, as in fact she had been actually humiliated once when she was
refused admission at the Abad Santos High School, Arellano University, where she sought to transfer from
another school, simply because the school authorities of the said High School learned about what happened
to her and allegedly feared that they might be implicated in the case.

xxx xxx xxx

The reason for imposing exemplary or corrective damages is due to the wanton and bestial manner
defendant had committed the acts of rape during a period of serious illegal detention of his hapless victim,
the minor Karen Salvacion whose only fault was in her being so naive and credulous to believe easily that
defendant, an American national, could not have such a bestial desire on her nor capable of committing
such a heinous crime. Being only 12 years old when that unfortunate incident happened, she has never
heard of an old Filipino adage that in every forest there is a
snake, . . . .4

If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom how the incentive for foreign
currency deposit could be more important than his child's rights to said award of damages; in this case, the victim's claim for
damages from this alien who had the gall to wrong a child of tender years of a country where he is a mere visitor. This further
illustrates the flaw in the questioned provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's economy was in a shambles;
when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of
the present times show that the country has recovered economically; and even if not, the questioned law still denies those
entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when
enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before
us.

It has thus been said that —

But I also know,5 that laws and institutions must go hand in hand with the progress of the human mind. As
that becomes more developed, more enlightened, as new discoveries are made, new truths are disclosed
and manners and opinions change with the change of circumstances, institutions must advance also, and
keep pace with the times. . . We might as well require a man to wear still the coat which fitted him when a
boy, as civilized society to remain ever under the regimen of their barbarous ancestors.

In his Comment, the Solicitor General correctly opined, thus:

The present petition has far-reaching implications on the right of a national to obtain redress for a wrong
committed by an alien who takes refuge under a law and regulation promulgated for a purpose which does
not contemplate the application thereof envisaged by the alien. More specifically, the petition raises the
question whether the protection against attachment, garnishment or other court process accorded to foreign
currency deposits by PD No. 1246 and CB Circular No. 960 applies when the deposit does not come from a
lender or investor but from a mere transient or tourist who is not expected to maintain the deposit in the bank
for long.

The resolution of this question is important for the protection of nationals who are victimized in the forum by
foreigners who are merely passing through.

xxx xxx xxx

. . . Respondents China Banking Corporation and Central Bank of the Philippines refused to honor the writ of
execution issued in Civil Case No. 89-3214 on the strength of the following provision of Central Bank
Circular No. 960:

Sec. 113. Exemption from attachment. — Foreign currency deposits shall be exempt from
attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever.

Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426:

Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall promulgate
such rules and regulations as may be necessary to carry out the provisions of this Act
which shall take effect after the publication of such rules and regulations in the Official
Gazette and in a newspaper of national circulation for at least once a week for three
consecutive weeks. In case the Central Bank promulgates new rules and regulations
decreasing the rights of depositors, the rules and regulations at the time the deposit was
made shall govern.

The aforecited Section 113 was copied from Section 8 of Republic Act NO. 6426, as amended by P.D. 1246,
thus:

Sec. 8. Secrecy of Foreign Currency Deposits. — All foreign currency deposits authorized
under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency
deposits authorized under Presidential Decree No. 1034, are hereby declared as and
considered of an absolutely confidential nature and, except upon the written permission of
the depositor, in no instance shall such foreign currency deposits be examined, inquired or
looked into by any person, government official, bureau or office whether judicial or
administrative or legislative or any other entity whether public or private: Provided,
however, that said foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government
agency or any administrative body whatsoever.

The purpose of PD 1246 in according protection against attachment, garnishment and other court process to
foreign currency deposits is stated in its whereases, viz.:
 WHEREAS, under Republic Act No. 6426, as amended by Presidential Decree No. 1035,
certain Philippine banking institutions and branches of foreign banks are authorized to
accept deposits in foreign currency;

WHEREAS, under the provisions of Presidential Decree No. 1034 authorizing the
establishment of an offshore banking system in the Philippines, offshore banking units are
also authorized to receive foreign currency deposits in certain cases;

WHEREAS, in order to assure the development and speedy growth of the Foreign
Currency Deposit System and the Offshore Banking System in the Philippines, certain
incentives were provided for under the two Systems such as confidentiality of deposits
subject to certain exceptions and tax exemptions on the interest income of depositors who
are nonresidents and are not engaged in trade or business in the Philippines;

WHEREAS, making absolute the protective cloak of confidentiality over such foreign
currency deposits, exempting such deposits from tax, and guaranteeing the vested rights
of depositors would better encourage the inflow of foreign currency deposits into the
banking institutions authorized to accept such deposits in the Philippines thereby placing
such institutions more in a position to properly channel the same to loans and investments
in the Philippines, thus directly contributing to the economic development of the country;

Thus, one of the principal purposes of the protection accorded to foreign currency deposits is "to assure the
development and speedy growth of the Foreign Currency Deposit system and the Offshore Banking in the
Philippines" (3rd Whereas).

The Offshore Banking System was established by PD No. 1034. In turn, the purposes of PD No. 1034 are as
follows:

WHEREAS, conditions conducive to the establishment of an offshore banking system,

such as political stability, a growing economy and adequate communication facilities,
among others, exist in the Philippines;

WHEREAS, it is in the interest of developing countries to have as wide access as possible

to the sources of capital funds for economic development;

WHEREAS, an offshore banking system based in the Philippines will be advantageous

and beneficial to the country by increasing our links with foreign lenders, facilitating the
flow of desired investments into the Philippines, creating employment opportunities and
expertise in international finance, and contributing to the national development effort.

WHEREAS, the geographical location, physical and human resources, and other positive
factors provide the Philippines with the clear potential to develop as another financial
center in Asia;

On the other hand, the Foreign Currency Deposit system was created by PD. No. 1035. Its purposes are as
follows:

WHEREAS, the establishment of an offshore banking system in the Philippines has been
authorized under a separate decree;

WHEREAS, a number of local commercial banks, as depository bank under the Foreign
Currency Deposit Act (RA No. 6426), have the resources and managerial competence to
more actively engage in foreign exchange transactions and participate in the grant of
foreign currency loans to resident corporations and firms;

WHEREAS, it is timely to expand the foreign currency lending authority of the said
depository banks under RA 6426 and apply to their transactions the same taxes as would
be applicable to transaction of the proposed offshore banking units;

It is evident from the above [Whereas clauses] that the Offshore Banking System and the Foreign Currency
Deposit System were designed to draw deposits from foreign lenders and investors (Vide second Whereas
of PD No. 1034; third Whereas of PD No. 1035). It is these deposits that are induced by the two laws and
given protection and incentives by them.
 Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged
by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays
only for a few days in the country and, therefore, will maintain his deposit in the bank only for a short time.

Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his dollars with respondent
China Banking Corporation only for safekeeping during his temporary stay in the Philippines.

For the reasons stated above, the Solicitor General thus submits that the dollar deposit of respondent Greg
Bartelli is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246
against attachment, garnishment or other court processes. 6

In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of
Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice
would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the
New Civil Code which provides that "in case of doubt in the interpretation or application of laws, it is presumed that the
lawmaking body intended right and justice to prevail. "Ninguno non deue enriquecerse tortizeramente con dano de otro."
Simply stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that would respond to the
vehement urge of conscience. (Padilla vs. Padilla, 74 Phil. 377).

It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused Greg
Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.

Call it what it may — but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory
judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the
dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for fairness
against legal tyranny.

We definitely cannot have both ways and rest in the belief that we have served the ends of justice.

IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of
R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are
hereby REQUIRED to COMPLY with the writ of execution issued in Civil Case No. 89-3214, "Karen Salvacion, et al. vs. Greg
Bartelli y Northcott, by Branch CXLIV, RTC Makati and to RELEASE to petitioners the dollar deposit of respondent Greg
Bartelli y Northcott in such amount as would satisfy the judgment.

SO ORDERED.