Republic vs Yahon
Before the Court is a petition for review on certiorari under Rule 45 which
seeks to nullify and set aside the Decision1 dated November 29, 2011 and
Resolution2 dated March 9, 2012 of the Court of Appeals (CA) Mindanao
Station in CA-G.R. SP No. 02953-MIN. The CA affirmed the orders and decision
of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 22 granting
temporary and permanent protection orders, and denying the motion to lift
the said temporary protection order (TPO).
Daisy R. Yahon (respondent) filed a petition for the issuance of protection
order under the provisions of Republic Act (R.A.) No. 9262,3 otherwise known
as the "Anti-Violence Against Women and Their Children Act of 2004," against
her husband, S/Sgt. Charles A. Yahon (S/Sgt. Yahon), an enlisted personnel of
the Philippine Army who retired in January 2006. Respondent and S/Sgt.
Yahon were married on June 8, 2003. The couple did not have any child but
respondent has a daughter with her previous live-in partner.
On September 28, 2006, the RTC issued a TPO, as follows:
Finding the herein petition for the Issuance of Protection Order to be
sufficient in form and substance and to prevent great and irreparable injury
to the petitioner, a TEMPORARY PROTECTION ORDER is forthwith issued to
respondent, S/SGT. CHARLES A. YAHON directing him to do the following acts:
1. Respondent is enjoined from threatening to commit or committing further
acts of physical abuse and violence against the petitioner;
2. To stay away at a distance of at least 500 meters from petitioner, her
residence or her place of work;
3. To refrain from harassing, annoying, intimidating, contacting or
communicating with petitioner; 4. Respondent is prohibited from using or
possessing any firearm or deadly weapon on occasions not related to his job;
5. To provide reasonable financial spousal support to the petitioner.
The Local Police Officers and the Barangay Officials through the Chairman in
the area where the petitioner and respondent live at Poblacion, Claveria,
Misamis Oriental and Bobuntogan, Jasaan, Misamis Oriental are directed to
respond to any request for assistance from the petitioner for the
implementation of this order. They are also directed to accompany the
petitioner to their conjugal abode at Purok 2, Bobuntogan, Jasaan, Misamis
Oriental to get her personal belongings in order to insure the safety of the
petitioner.
The Deputy Sheriff of this Court is ordered to immediately serve the
Temporary Protection Order (TPO) upon the respondent personally and to
seek and obtain the assistance of law enforcement agents, if needed, for
purposes of effecting the smooth implementation of this order.
In the meantime, let copy of this order and petition be served upon the
respondent for him to file an OPPOSITION within a period of five (5) days from
receipt hereof and let a Preliminary Conference and hearing on the merits be
set on October 17, 2006 at 2:00 o’clock in the afternoon.
To insure that petitioner can receive a fair share of respondent’s retirement
and other benefits, the following agencies thru their heads are directed to
WITHHOLD any retirement, pension and other benefits of respondent, S/SGT.
CHARLES A. YAHON, a member of the Armed Forces of the Philippines
assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro City until further
orders from the court:
1. Commanding General/Officer of the Finance Center of the Armed Forces
of the Philippines, Camp Emilio Aguinaldo, Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.
VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
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IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE OF THE
PRELIMINARYCONFERENCE AND HEARING ON THE MERITS OF THE ISSUANCE
OF A PERMANENT PROTECTION ORDER, THE COURT SHALL NOT RESCHEDULE
OR POSTPONE THE PRELIMINARY CONFERENCE AND HEARING BUT SHALL
APPOINT A LAWYER FOR THE RESPONDENT AND IMMEDIATELY PROCEED
WITH THE SAID HEARING.
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE PRELIMINARY
CONFERENCE AND HEARING ON THE MERITS DESPITE PROPER NOTICE, THE
COURT SHALL ALLOW EX-PARTE PRESENTATION OF EVIDENCE BY THE
PETITIONER AND RENDER JUDGMENT ON THE BASIS OF THE PLEADINGS AND
EVIDENCE ON RECORD. NO DELEGATION OF THE RECEPTION OF EVIDENCE
SHALL BE ALLOWED.
SO ORDERED.4 (Emphasis supplied.)
S/Sgt. Yahon, having been personally served with copy of the TPO, appeared
during the scheduled pre-trial but informed the court that he did not yet have
a counsel and requested for time to hire his own counsel. However, he did
not hire a counsel nor file an opposition or answer to the petition. Because of
his failure to appear in the subsequent hearings of the case, the RTC allowed
the ex-parte presentation of evidence to determine the necessity of issuance
of a Permanent Protection Order (PPO).
Meanwhile, as prayed for by respondent who manifested that S/Sgt. Yahon
deliberately refused to give her spousal support as directed in the TPO (she
claimed that she had no source of livelihood since he had told her to resign
from her job and concentrate on keeping their house), the RTC issued another
order directing S/Sgt. Yahon to give respondent spousal support in the
amount of ₱4,000.00 per month and fifty percent (50%) of his retirement
benefits which shall be automatically deducted and given directly to
respondent.5
In her testimony, respondent also said that S/Sgt. Yahon never complied with
the TPO as he continued making threats and inflicting physical abuse on her
person, and failed to give her spousal support as ordered by the court.
On July 23, 2007, the RTC rendered its Decision,6 as follows:
After careful review and scrutiny of the evidence presented in this case, this
court finds that there is a need to permanently protect the applicant, Daisy
R. Yahon from further acts of violence that might be committed by
respondent against her. Evidences showed that respondent who was a
member of the Armed Forces of the Philippines assigned at the Headquarters
4ID Camp Evangelista, Cagayan de Oro City had been repeatedly inflicting
physical, verbal, emotional and economic abuse and violence upon the
petitioner. Respondent in several instances had slapped, mauled and
punched petitioner causing her physical harm. Exhibits G and D are medical
certificates showing physical injuries suffered by petitioner inflicted by the
respondent at instances of their marital altercations. Respondent at the
height of his anger often poked a gun on petitioner and threatened to
massacre her and her child causing them to flee for their lives and sought
refuge from other people. He had demanded sex from petitioner at an
unreasonable time when she was sick and chilling and when refused poked a
gun at her. Several police blotters were offered as evidence by petitioner
documenting the incidents when she was subjected to respondent’s ill
temper and ill treatment. Verbally, petitioner was not spared from
respondent’s abuses by shouting at her that he was wishing she would die
and he would celebrate if it happens and by calling and sending her
threatening text messages. These incidents had caused petitioner great
psychological trauma causing her [to] fear for her life and these forced her to
seek refuge from the court for protection. Economically, petitioner was also
deprived by respondent of her spousal support despite order of the court
directing him to give a monthly support of Php4,000.00. In view of the
foregoing, this court finds a need to protect the life of the petitioner not only
physically but also emotionally and psychologically.
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Based on the evidence presented, both oral and documentary, and there
being no controverting evidence presented by respondent, this Court finds
that the applicant has established her case by preponderance of evidence.
WHEREFORE, premises considered, judgment is hereby rendered GRANTING
the petition, thus, pursuant to Sec. 30 of A.M. No. 04-10-1-SC, let a
PERMANENT PROTECTION ORDER be issued immediately and respondent,
S/Sgt. CHARLES A.YAHON is ordered to give to petitioner, DAISY R. YAHON the
amount of FOUR THOUSAND PESOS (Php4,000.00) per month by way of
spousal support.
Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt.
Charles A. Yahon is directed to give it to petitioner 50% of whatever
retirement benefits and other claims that may be due or released to him from
the government and the said share of petitioner shall be automatically
deducted from respondent’s benefits and claims and be given directly to the
petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding General/Officer of
Finance Center of the Armed Forces of the Philippines, Camp Emilio
Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio Aguinaldo,
Quezon City and the Regional Manager of PAG-IBIG, Mortola St., Cagayan de
Oro City for their guidance and strict compliance.
SO ORDERED.7 (Emphasis supplied.)
Herein petitioner Armed Forces of the Philippines Finance Center (AFPFC),
assisted by the Office of the Judge Advocate General (OTJAG), AFP, filed
before the RTC a Manifestation and Motion (To Lift Temporary Protection
Order Against the AFP)8 dated November 10, 2008. Stating that it was making
a limited and special appearance, petitioner manifested that on August 29,
2008, it furnished the AFP Pension and Gratuity Management Center (PGMC)
copy of the TPO for appropriate action. The PGMC, on September 2, 2008,
requested the Chief, AFPFC the temporary withholding of the thirty-six (36)
Months Lump Sum (MLS) due to S/Sgt. Yahon. Thereafter, on October 29,
2008, PGMC forwarded a letter to the Chief of Staff, AFP for the OTJAG for
appropriate action on the TPO, and requesting for legal opinion as to the
propriety of releasing the 36 MLS of S/Sgt. Yahon. Petitioner informed the
RTC that S/Sgt. Yahon’s check representing his 36 MLS had been processed
and is ready for payment by the AFPFC, but to date said check has not been
claimed by respondent.
Petitioner further asserted that while it has initially discharged its obligation
under the TPO, the RTC had not acquired jurisdiction over the military
institution due to lack of summons, and hence the AFPFC cannot be bound by
the said court order. Additionally, petitioner contended that the AFPFC is not
a party-in-interest and is a complete stranger to the proceedings before the
RTC on the issuance of TPO/PPO. Not being impleaded in the case, petitioner
lamented that it was not afforded due process and it was thus improper to
issue execution against the AFPFC. Consequently, petitioner emphasized its
position that the AFPFC cannot be directed to comply with the TPO without
violating its right to procedural due process.
In its Order9 dated December 17, 2008, the RTC denied the aforesaid motion
for having been filed out of time. It noted that the September 28, 2006 TPO
and July 23, 2007 Decision granting Permanent Protection Order (PPO) to
respondent had long become final and executory.
Petitioner’s motion for reconsideration was likewise denied under the RTC’s
Order10 dated March 6, 2009.
On May 27, 2009, petitioner filed a petition for certiorari before the CA
praying for the nullification of the aforesaid orders and decision insofar as it
directs the AFPFC to automatically deduct from S/Sgt. Yahon’s retirement and
pension benefits and directly give the same to respondent as spousal support,
allegedly issued with grave abuse of discretion amounting to lack of
jurisdiction. Respondent filed her Comment with Prayer for Issuance of
Preliminary Injunction, manifesting that there is no information as to whether
S/Sgt. Yahon already received his retirement benefit and that the latter has
repeatedly violated the TPO, particularly on the provision of spousal support.
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After due hearing, the CA‘s Twenty-Second Division issued a Resolution11
granting respondent’s application, viz:
Upon perusal of the respective pleadings filed by the parties, the Court finds
meritorious private respondent’s application for the issuance of an injunctive
relief. While the 36-month lump sum retirement benefits of S/Sgt. Charles A.
Yahon has already been given to him, yet as admitted by petitioner itself, the
monthly pension after the mentioned retirement benefits has not yet been
released to him. It appears that the release of such pension could render
ineffectual the eventual ruling of the Court in this Petition.
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY INJUNCTION issue
enjoining the Armed Forces of the Philippines Finance Center, its employees,
agents, representatives, and any all persons acting on its behalf, from
releasing the remaining pension that may be due to S/Sgt. Charles A. Yahon.
SO ORDERED.12
By Decision dated November 29, 2011, the CA denied the petition for
certiorari and affirmed the assailed orders and decision of the RTC. The CA
likewise denied petitioner’s motion for reconsideration.
In this petition, the question of law presented is whether petitioner military
institution may be ordered to automatically deduct a percentage from the
retirement benefits of its enlisted personnel, and to give the same directly to
the latter’s lawful wife as spousal support in compliance with a protection
order issued by the RTC pursuant to R.A. No. 9262.
A protection order is an order issued by the court to prevent further acts of
violence against women and their children, their family or household
members, and to grant other necessary relief. Its purpose is to safeguard the
offended parties from further harm, minimize any disruption in their daily life
and facilitate the opportunity and ability to regain control of their life.13 The
protection orders issued by the court may be a Temporary Protection Order
(TPO) or a Permanent Protection Order (PPO), while a protection order that
may be issued by the barangay shall be known as a Barangay Protection Order
(BPO).14
Section 8 of R.A. No. 9262 enumerates the reliefs that may be included in the
TPO, PPO or BPO, to wit:
(a) Prohibition of the respondent from threatening to commit or committing,
personally or through another, any of the acts mentioned in Section 5 of this
Act;
(b) Prohibition of the respondent from harassing, annoying, telephoning,
contacting or otherwise communicating with the petitioner, directly or
indirectly;
(c) Removal and exclusion of the respondent from the residence of the
petitioner, regardless of ownership of the residence, either temporarily for
the purpose of protecting the petitioner, or permanently where no property
rights are violated, and if respondent must remove personal effects from the
residence, the court shall direct a law enforcement agent to accompany the
respondent to the residence, remain there until respondent has gathered his
things and escort respondent from the residence;
(d) Directing the respondent to stay away from petitioner and any designated
family or household member at a distance specified by the court, and to stay
away from the residence, school, place of employment, or any specified place
frequented by the petitioner and any designated family or household
member;
(e) Directing lawful possession and use by petitioner of an automobile and
other essential personal effects, regardless of ownership, and directing the
appropriate law enforcement officer to accompany the petitioner to the
residence of the parties to ensure that the petitioner is safely restored to the
possession of the automobile and other essential personal effects, or to
supervise the petitioner’s or respondent’s removal of personal belongings;
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(f) Granting a temporary or permanent custody of a child/children to the
petitioner;
(g) Directing the respondent to provide support to the woman and/or her
child if entitled to legal support. Notwithstanding other laws to the contrary,
the court shall order an appropriate percentage of the income or salary of the
respondent to be withheld regularly by the respondent's employer for the
same to be automatically remitted directly to the woman. Failure to remit
and/or withhold or any delay in the remittance of support to the woman
and/or her child without justifiable cause shall render the respondent or his
employer liable for indirect contempt of court;
(h) Prohibition of the respondent from any use or possession of any firearm
or deadly weapon and order him to surrender the same to the court for
appropriate disposition by the court, including revocation of license and
disqualification to apply for any license to use or possess a firearm. If the
offender is a law enforcement agent, the court shall order the offender to
surrender his firearm and shall direct the appropriate authority to investigate
on the offender and take appropriate action on matter;
(i) Restitution for actual damages caused by the violence inflicted, including,
but not limited to, property damage, medical expenses, child care expenses
and loss of income;
(j) Directing the DSWD or any appropriate agency to provide petitioner
temporary shelter and other social services that the petitioner may need; and
(k) Provision of such other forms of relief as the court deems necessary to
protect and provide for the safety of the petitioner and any designated family
or household member, provided petitioner and any designated family or
household member consents to such relief. (Emphasis supplied.)
Petitioner argues that it cannot comply with the RTC’s directive for the
automatic deduction of 50% from S/Sgt. Yahon’s retirement benefits and
pension to be given directly to respondent, as it contravenes an explicit
mandate under the law governing the retirement and separation of military
personnel.
The assailed provision is found in Presidential Decree (P.D.) No. 1638,15
which states: Section 31. The benefits authorized under this Decree, except
as provided herein, shall not be subject to attachment, garnishment, levy,
execution or any tax whatsoever; neither shall they be assigned, ceded, or
conveyed to any third person: Provided, That if a retired or separated officer
or enlisted man who is entitled to any benefit under this Decree has unsettled
money and/or property accountabilities incurred while in the active service,
not more than fifty per centum of the pension gratuity or other payment due
such officer or enlisted man or his survivors under this Decree may be
withheld and be applied to settle such accountabilities. (Emphasis supplied.)
A similar provision is found in R.A. No. 8291, otherwise known as the
"Government Service Insurance System Act of 1997," which reads:
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
xxxx
The funds and/or the properties referred to herein as well as the benefits,
sums or monies corresponding to the benefits under this Act shall be exempt
from attachment, garnishment, execution, levy or other processes issued by
the courts, quasi-judicial agencies or administrative bodies including
Commission on Audit (COA) disallowances and from all financial obligations
of the members, including his pecuniary accountability arising from or caused
or occasioned by his exercise or performance of his official functions or
duties, or incurred relative to or in connection with his position or work
except when his monetary liability, contractual or otherwise, is in favor of the
GSIS.
In Sarmiento v. Intermediate Appellate Court,16 we held that a court order
directing the Philippine National Bank to refrain from releasing to petitioner
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all his retirement benefits and to deliver one-half of such monetary benefits
to plaintiff as the latter’s conjugal share is illegal and improper, as it violates
Section 26 of CA 186 (old GSIS Law) which exempts retirement benefits from
execution.
The foregoing exemptions have been incorporated in the 1997 Rules of Civil
Procedure, as amended, which governs execution of judgments and court
orders. Section 13 of Rule 39 enumerates those properties which are exempt
from execution:
SEC. 13. Property exempt from execution.– Except as otherwise expressly
provided by law, the following property, and no other, shall be exempt from
execution:
xxxx
(l) The right to receive legal support, or money or property obtained as such
support, or any pension or gratuity from the Government;(Emphasis
supplied.)
It is basic in statutory construction that in case of irreconcilable conflict
between two laws, the later enactment must prevail, being the more recent
expression of legislative will.17 Statutes must be so construed and
harmonized with other statutes as to form a uniform system of
jurisprudence.18 However, if several laws cannot be harmonized, the earlier
statute must yield to the later enactment. The later law is the latest
expression of the legislative will.19
We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should
be construed as laying down an exception to the general rule above-stated
that retirement benefits are exempt from execution. The law itself declares
that the court shall order the withholding of a percentage of the income or
salary of the respondent by the employer, which shall be automatically
remitted directly to the woman "[n]otwithstanding other laws to the
contrary."
Petitioner further contends that the directive under the TPO to segregate a
portion of S/Sgt. Yahon’s retirement benefits was illegal because said moneys
remain as public funds, citing the case of Pacific Products v. Ong.20 In that
case, this Court sustained the CA when it held that the garnishment of the
amount of ₱10,500 payable to BML Trading and Supply while it was still in the
possession of the Bureau of Telecommunications was illegal and therefore,
null and void. The CA therein relied on the previous rulings in Director of
Commerce and Industry v. Concepcion21 and Avendano v. Alikpala, et al.22
wherein this Court declared null and void the garnishment of the salaries of
government employees.
Citing the two aforementioned cases, we thus declared in Pacific Products:
A rule, which has never been seriously questioned, is that money in the hands
of public officers, although it may be due government employees, is not liable
to the creditors of these employees in the process of garnishment. One
reason is, that the State, by virtue of its sovereignty may not be sued in its
own courts except by express authorization by the Legislature, and to subject
its officers to garnishment would be to permit indirectly what is prohibited
directly. Another reason is that moneys sought to be garnished, as long as
they remain in the hands of the disbursing officer of the Government, belong
to the latter, although the defendant in garnishment may be entitled to a
specific portion thereof. And still another reason which covers both of the
foregoing is that every consideration of public policy forbids it.23
We disagree.
Section 8(g) of R.A. No. 9262 used the general term "employer," which
includes in its coverage the military institution, S/Sgt. Yahon’s employer.
Where the law does not distinguish, courts should not distinguish. Thus,
Section 8(g) applies to all employers, whether private or government.
It bears stressing that Section 8(g) providing for spousal and child support, is
a support enforcement legislation.1âwphi1 In the United States, provisions of
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the Child Support Enforcement Act24 allow garnishment of certain federal
funds where the intended recipient has failed to satisfy a legal obligation of
child support. As these provisions were designed "to avoid sovereign
immunity problems" and provide that "moneys payable by the Government
to any individual are subject to child support enforcement proceedings," the
law is clearly intended to "create a limited waiver of sovereign immunity so
that state courts could issue valid orders directed against Government
agencies attaching funds in their possession."25
This Court has already ruled that R.A. No. 9262 is constitutional and does not
violate the equal protection clause. In Garcia v. Drilon26 the issue of
constitutionality was raised by a husband after the latter failed to obtain an
injunction from the CA to enjoin the implementation of a protection order
issued against him by the RTC. We ruled that R.A. No. 9262 rests on real
substantial distinctions which justify the classification under the law: the
unequal power relationship between women and men; the fact that women
are more likely than men to be victims of violence; and the widespread bias
and prejudice against women.
We further held in Garcia that the classification is germane to the purpose of
the law, viz:
The distinction between men and women is germane to the purpose of R.A.
9262, which is to address violence committed against women and children,
spelled out in its Declaration of Policy, as follows:
SEC. 2. Declaration of Policy.– It is hereby declared that the State values the
dignity of women and children and guarantees full respect for human rights.
The State also recognizes the need to protect the family and its members
particularly women and children, from violence and threats to their personal
safety and security.
Towards this end, the State shall exert efforts to address violence committed
against women and children in keeping with the fundamental freedoms
guaranteed under the Constitution and the provisions of the Universal
Declaration of Human Rights, the Convention on the Elimination of All Forms
of Discrimination Against Women, Convention on the Rights of the Child and
other international human rights instruments of which the Philippines is a
party.27
Under R.A. No. 9262, the provision of spousal and child support specifically
address one form of violence committed against women – economic abuse.
D. "Economic abuse" refers to acts that make or attempt to make a woman
financially dependent which includes, but is not limited to the following:
1. Withdrawal of financial support or preventing the victim from engaging in
any legitimate profession, occupation, business or activity, except in cases
wherein the other spouse/partner objects on valid, serious and moral
grounds as defined in Article 73 of the Family Code;
2. Deprivation or threat of deprivation of financial resources and the right to
the use and enjoyment of the conjugal, community or property owned in
common;
3. Destroying household property;
4. Controlling the victims' own money or properties or solely controlling the
conjugal money or properties.28
The relief provided in Section 8(g) thus fulfills the objective of restoring the
dignity of women who are victims of domestic violence and provide them
continued protection against threats to their personal safety and security.
"The scope of reliefs in protection orders is broadened to ensure that the
victim or offended party is afforded all the remedies necessary to curtail
access by a perpetrator to the victim. This serves to safeguard the victim from
greater risk of violence; to accord the victim and any designated family or
household member safety in the family residence, and to prevent the
perpetrator from committing acts that jeopardize the employment and
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support of the victim. It also enables the court to award temporary custody
of minor children to protect the children from violence, to prevent their
abduction by the perpetrator and to ensure their financial support."29

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated
November 29, 2011 and Resolution dated March 9, 2012 of the Court of
Appeals Mindanao Station in CA-G.R. SP No. 02953-MIN are AFFIRMED and
UPHELD.

No costs.

SO ORDERED.

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Pilar vs COMELEC
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court
assailing the Resolution dated April 28, 1994 of the Commission on Elections
(COMELEC) in UND No. 94-040.
I of the Commission the full, true and itemized statement of all contributions
On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of candidacy
for the position of member of the Sangguniang Panlalawigan of the Province
of Isabela.
On March 25, 1992, petitioner withdrew his certificate of candidacy.
In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993 and February 13,
1994 respectively, the COMELEC imposed upon petitioner the fine of Ten
Thousand Pesos (P10,000.00) for failure to file his statement of contributions
and expenditures.
In M.R. No. 94-0594 dated February 24, 1994, the COMELEC denied the
motion for reconsideration of petitioner and deemed final M.R. Nos. 93-2654
and 94-0065 (Rollo, p. 14).
Petitioner went to the COMELEC En Banc (UND No. 94-040), which denied the
petition in a Resolution dated April 28, 1994 (Rollo, pp. 10-13).
Hence, this petition for certiorari.
We dismiss the petition.
II
Section 14 of R.A. No. 7166 entitled "An Act Providing for Synchronized
National and Local Elections and for Electoral Reforms, Authorizing
Appropriations Therefor, and for Other Purposes" provides as follows:
Statement of Contributions and Expenditures: Effect of Failure to File
Statement. Every candidate and treasurer of the political party shall, within
thirty (30) days after the day of the election, file in duplicate with the offices
and expenditures in connection with the election.
No person elected to any public office shall enter upon the duties of his office
until he has filed the statement of contributions and expenditures herein
required.
The same prohibition shall apply if the political party which nominated the
winning candidate fails to file the statement required herein within the period
prescribed by this Act.
Except candidates for elective barangay office, failure to file the statements
or reports in connection with electoral contributions and expenditures as
required herein shall constitute an administrative offense for which the
offenders shall be liable to pay an administrative fine ranging from One
Thousand Pesos ( P1,000.00) to Thirty Thousand Pesos (P30,000.00), in the
discretion of the Commission.
The fine shall be paid within thirty (30) days from receipt of notice of such
failure; otherwise, it shall be enforceable by a writ of execution issued by the
Commission against the properties of the offender.
It shall be the duty of every city or municipal election registrar to advise in
writing, by personal delivery or registered mail, within five (5) days from the
date of election all candidates residing in his jurisdiction to comply with their
obligation to file their statements of contributions and expenditures.
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For the commission of a second or subsequent offense under this Section, the
administrative fine shall be from Two Thousand Pesos (P2,000.00) to Sixty
Thousand Pesos (P60,000.00), in the discretion of the Commission. In
addition, the offender shall be subject to perpetual disqualification to hold
public office (Emphasis supplied).
To implement the provisions of law relative to election contributions and
expenditures, the COMELEC promulgated on January 13, 1992 Resolution No.
2348 (Re: Rules and Regulations Governing Electoral Contributions and
Expenditures in Connection with the National and Local Elections on
May 11, 1992). The pertinent provisions of said Resolution are:
Sec. 13. Statement of contributions and expenditures: Reminders to
candidates to file statements. Within five (5) days from the day of the
election, the Law Department of the Commission, the regional election
director of the National Capital Region, the provincial election supervisors
and the election registrars shall advise in writing by personal delivery or
registered mail all candidates who filed their certificates of candidacy with
them to comply with their obligation to file their statements of contributions
and expenditures in connection with the elections. Every election registrar
shall also advise all candidates residing in his jurisdiction to comply with said
obligation (Emphasis supplied).
Sec. 17. Effect of failure to file statement. (a) No person elected to any public
office shall enter upon the duties of his office until he has filed the statement
of contributions and expenditures herein required.
The same prohibition shall apply if the political party which nominated the
winning candidates fails to file the statement required within the period
prescribed by law.
(b) Except candidates for elective barangay office, failure to file statements
or reports in connection with the electoral contributions and expenditures as
required herein shall constitute an administrative offense for which the
offenders shall be liable to pay an administrative fine ranging from One
Thousand Pesos (P1,000) to Thirty Thousand Pesos (P30,000), in the
discretion of the Commission.
The fine shall be paid within thirty (30) days from receipt of notice of such
failure; otherwise, it shall be enforceable by a writ of execution issued by the
Commission against the properties of the offender.
For the commission of a second or subsequent offense under this section, the
administrative fine shall be from Two Thousand Pesos (P2,000) to Sixty
Thousand Pesos (P60,000), in the discretion of the Commission. In addition,
the offender shall be subject to perpetual disqualification to hold public
office.
Petitioner argues that he cannot be held liable for failure to file a statement
of contributions and expenditures because he was a "non-candidate," having
withdrawn his certificates of candidacy three days after its filing. Petitioner
posits that "it is . . . clear from the law that candidate must have entered the
political contest, and should have either won or lost" (Rollo, p. 39).
Petitioner's argument is without merit.
Section 14 of R.A. No. 7166 states that "every candidate" has the obligation
to file his statement of contributions and expenditures.
Well-recognized is the rule that where the law does not distinguish, courts
should not distinguish, Ubi lex non distinguit nec nos distinguere debemos
(Philippine British Assurance Co. Inc. v. Intermediate Appellate Court, 150
SCRA 520 [1987]; cf Olfato v. Commission on Elections, 103 SCRA 741 [1981]).
No distinction is to be made in the application of a law where none is
indicated (Lo Cham v. Ocampo, 77 Phil. 636 [1946]).
In the case at bench, as the law makes no distinction or qualification as to
whether the candidate pursued his candidacy or withdrew the same, the term
"every candidate" must be deemed to refer not only to a candidate who
pursued his campaign, but also to one who withdrew his candidacy.
10 | P a g e

The COMELEC, the body tasked with the enforcement and administration of
all laws and regulations relative to the conduct of an election, plebiscite,
initiative, referendum, and recall (The Constitution of the Republic of the
Philippines, Art. IX(C), Sec. 2[1]), issued Resolution No. 2348 in
implementation or interpretation of the provisions of Republic Act No. 7166
on election contributions and expenditures. Section 13 of Resolution No.
2348 categorically refers to "all candidates who filed their certificates of
candidacy."
Furthermore, Section 14 of the law uses the word "shall." As a general rule,
the use of the word "shall" in a statute implies that the statute is mandatory,
and imposes a duty which may be enforced , particularly if public policy is in
favor of this meaning or where public interest is involved. We apply the
general rule (Baranda v. Gustilo, 165 SCRA 757 [1988]; Diokno v.
Rehabilitation Finance Corporation, 91 Phil. 608 [1952]).
The state has an interest in seeing that the electoral process is clean, and
ultimately expressive of the true will of the electorate. One way of attaining
such objective is to pass legislation regulating contributions and expenditures
of candidates, and compelling the publication of the same. Admittedly,
contributions and expenditures are made for the purpose of influencing the
results of the elections (B.P. Blg. 881, Sec. 94; Resolution No. 2348, Sec. 1).
Thus, laws and regulations prescribe what contributions are prohibited (B.P.
Blg. 881, Sec. 95, Resolution No. 2348, Sec. 4), or unlawful (B.P. Blg. 881, Sec.
96), and what expenditures are authorized (B.P. Blg. 881, Sec. 102; R.A. No.
7166, Sec. 13; Resolution No. 2348, Sec. 7) or lawful (Resolution No. 2348,
Sec. 8).
Such statutes are not peculiar to the Philippines. In "corrupt and illegal
practices acts" of several states in the United States, as well as in federal
statutes, expenditures of candidates are regulated by requiring the filing of
statements of expenses and by limiting the amount of money that may be
spent by a candidate. Some statutes also regulate the solicitation of campaign
contributions (26 Am Jur 2d, Elections § 287). These laws are designed to
compel publicity with respect to matters contained in the statements and to
prevent, by such publicity, the improper use of moneys devoted by
candidates to the furtherance of their ambitions (26 Am Jur 2d, Elections §
289). These statutes also enable voters to evaluate the influences exerted on
behalf of candidates by the contributors, and to furnish evidence of corrupt
practices for annulment of elections (Sparkman v. Saylor [Court of Appeals of
Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
State courts have also ruled that such provisions are mandatory as to the
requirement of filing (State ex rel. Butchofsky v. Crawford [Court of Civil
Appeals of Texas], 269 S.W. 2d 536 [1954]; Best v. Sidebottom, 270 Ky.
423,109 S.W. 2d 826 [1937]; Sparkman v. Saylor, supra.)
It is not improbable that a candidate who withdrew his candidacy has
accepted contributions and incurred expenditures, even in the short span of
his campaign. The evil sought to be prevented by the law is not all too remote.
It is notesworthy that Resolution No. 2348 even contemplates the situation
where a candidate may not have received any contribution or made any
expenditure. Such a candidate is not excused from filing a statement, and is
in fact required to file a statement to that effect. Under Section 15 of
Resolution No. 2348, it is provided that "[i]f a candidate or treasurer of the
party has received no contribution, made no expenditure, or has no pending
obligation, the statement shall reflect such fact."
Lastly, we note that under the fourth paragraph of Section 73 of the B.P. Blg.
881 or the Omnibus Election Code of the Philippines, it is provided that "[t]he
filing or withdrawal of certificate of candidacy shall not affect whatever civil,
criminal or administrative liabilities which a candidate may have incurred."
Petitioner's withdrawal of his candidacy did not extinguish his liability for the
administrative fine.
WHEREFORE, the petition is DISMISSED.
Separate Opinions
11 | P a g e
MELO, J., dissenting:

The majority opinion is to the effect that every candidate, including one who
has withdrawn his certificate of candidacy, is obliged to file his statement of
contributions and expenditures in line with Section 14 of Republic Act No.
7166 vis-a-vis the pertinent portions of Comelec Resolution No. 2348. I must
concede that the use of the word "shall" in the main statute as well as the
implementing rules generally suggest mandatoriness as to cover all
candidates.

But is an anspirant for public office who had a sudden change of heart, so to
speak, still considered a candidate to begin with? I am of the impression that
he is not and is thus not bound to render an accounting subsequent to
election for the simple reason that the term 'candidate' is used to designate
a person who actually submits himself and is voted for at our election (Santos
vs. Miranda, 35 Phil. 643, 648 (1916) citing State vs. Hirsch, 125 Ind., 207; 9
L.R.A. 107; Moreno, Philippine Law Dictionary, 1972 2nd ed., p. 84) Certainly,
one who withdraws his certificate of candidacy 3 days after the filing thereof,
can not be voted for at an election. And considering the shortness of the
period of 3 days from the filing to the withdrawal of the certificate of
candidacy, petitioner cannot be accused, as indeed there is no such charge,
of utilizing his aborted candidacy for purposes to raise funds or to extort
money from other candidates in exchange for the withdrawal.

I, therefore, vote to grant the petition.

12 | P a g e
People vs Evangelista
MENDOZA, J.:
Private respondent Grildo S. Tugonan was charged with frustrated homicide
in the Regional Trial Court of Misamis Oriental (Branch 21), the information
against him alleging
That on or about the 26th day of May, 1988, at more or less 9:00 o'clock in
the evening at Barangay Publican+.3, Municipality of Villanueva, Province of
Misamis Oriental, Republic of the Philippines and within the jurisdiction of
this Honorable Court, the above-named accused with intent to kill and with
the use of a knife, which he was then conveniently provided of, did then and
there willfully, unlawfully and feloniously assault, attack and stab Roque T.
Bade thereby inflicting upon him the following injuries, to wit:
Stab wound, right iliac area,
0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.
thus performing all the acts of execution which would produce the crime of
Homicide as a consequence but which, nevertheless, did not produce it by
reason of causes independent of the will of the accused, that is by timely
medical attendance which prevented his death.
CONTRARY TO and in violation of Article 249 in relation to Article 6 of the
Revised Penal Code.
After trial he was found guilty and sentenced to one year of prision
correccional in its minimum period and ordered to pay to the offended party
P5,000.00 for medical expense, without subsidiary imprisonment, and the
costs. The RTC appreciated in his favor the privileged mitigating
circumstances of incomplete self-defense and the mitigating circumstance of
voluntary surrender.
On appeal the Court of Appeals affirmed private respondent's conviction but
modified his sentence by imposing on him an indeterminate penalty of 2
months of arresto mayor, as minimum, to 2 years and 4 months of prision
correccional, as maximum.1
On December 21, 1992, respondent Judge Antonio C. Evangelista of the RTC
set the case for repromulgation on January 4, 1993.
On December 28, 1992, private respondent filed a petition for probation,2
alleging that (1) he possessed all the qualifications and none of the
disqualifications for probation under P.D. No. 968, as amended; (2) the Court
of Appeals has in fact reduced the penalty imposed on him by the trial court;
(3) in its resolution, the Court of Appeals took no action on a petition for
probation which he had earlier filed with it so that the petition could be filed
with the trial court; (4) in the trial court's decision, two mitigating
circumstances of incomplete self-defense and voluntarily surrender were
appreciated in his favor; and (5) in Santos To v. Paño,3 the Supreme Court
upheld the right of the accused to probation notwithstanding the fact that he
had appealed from his conviction by the trial court.
On February 2, 1993, the RTC ordered private respondent to report for
interview to the Provincial Probation Officer. The Provincial Probation Officer
on the other hand was required to submit his report with recommendation
to the court within 60 days.4
On February 18, 1993, Chief Probation and Parole Officer Isias B. Valdehueza
recommended denial of private respondent's application for probation on the
ground that by appealing the sentence of the trial court, when he could have
then applied for probation, private respondent waived the right to make his
application. The Probation Officer thought the present case to be
distinguishable from Santos To v. Paño in the sense that in this case the
original sentence imposed on private respondent by the trial court (1 year of
imprisonment) was probationable and there was no reason for private
respondent not to have filed his application for probation then, whereas in
13 | P a g e
Santos To v. Paño the penalty only became probationable after it had been
reduced as a result of the appeal.
On April 16, 1993 Valdehueza reiterated5 his "respectful recommendation
that private respondent's application for probation be denied and that a
warrant of arrest be issued for him to serve his sentence in jail."
The RTC set aside the Probation Officer's recommendation and granted
private respondent's application for probation in its order of April 23, 1993,6
Hence this petition by the prosecution.
The issue in this case is whether the RTC committed a grave abuse of its
discretion by granting private respondent's application for probation despite
the fact that he had appealed from the judgment of his conviction of the trial
court.
The Court holds that it did.
Until its amendment by P.D. No. 1990 in 1986, it was possible under P.D. No.
986, otherwise known as the Probation Law, for the accused to take his
chances on appeal by allowing probation to be granted even after an accused
had appealed his sentence and failed to obtain an acquittal, just so long as he
had not yet started to serve the sentence.7 Accordingly, in Santos To v. Paño,
it was held that the fact that the accused had appealed did not bar him from
applying for probation especially because it was as a result of the appeal that
his sentence was reduced and made the probationable limit.
The law was, however, amended by P.D. No. 1990 which took effect on
January 15, 19868 precisely to put a stop to the practice of appealing from
judgments of conviction even if the sentence is probationable for the purpose
of securing an acquittal and applying for probation only if the accused fails in
his bid. Thus, as amended by P.D. No, 1990, §4 of the Probation Law now
reads:
§4. Grant of Probation. Subject to the provisions of this Decree, the trial court
may, after it shall have convicted and sentenced a defendant, and upon
application by said defendant within the period for perfecting an appeal,
suspend the execution of the sentence and place the defendant on probation
for such period and upon such terms and conditions as it may deem best;
Provided, That no application for probation shall be entertained or granted if
the defendant has perfected the appeal from the judgment of conviction.
Probation may be granted whether the sentence imposes a term of
imprisonment or a fine only. An application for probation shall be filed with
the trial court. The filing of the application shall be deemed a waiver of the
right to appeal.
An order granting or denying probation shall not be appealable. (Emphasis
added).
Since private respondent filed his application for probation on December 28,
1992, after P.D. No. 1990 had taken effect,9 it is covered by the prohibition
that "no application for probation shall be entertained or granted if the
defendant has perfected the appeal from the judgment of conviction" and
that "the filing of the application shall be deemed a waiver of the right to
appeal," Having appealed from the judgment of the trial court and having
applied for probation only after the Court of Appeals had affirmed his
conviction, private respondent was clearly precluded from the benefits of
probation.
Private respondent argues, however, that a distinction should be drawn
between meritorious appeals (like his appeal notwithstanding the appellate
court's affirmance of his conviction) and unmeritorious appeals. But the law
does not make any distinction and so neither should the Court. In fact if an
appeal is truly meritorious the accused would be set free and not only given
probation. Private respondent's original sentence (1 year of prision
correccional in its minimum period) and the modified sentence imposed by
the Court of Appeals (2 months of arresto mayor, as minimum, to 2 years and
4 months of prision correccional, as maximum) are probationable. Thus the
14 | P a g e
fact that he appealed meant that private respondent was taking his chances
which the law precisely frowns upon. This is precisely the evil that the
amendment in P.D. No. 1990 sought to correct, since in the words of the
preamble to the amendatory law, "probation was not intended as an escape
hatch and should not be used to obstruct and delay the administration of
justice, but should be availed of at the first opportunity by offenders who are
willing to be reformed and rehabilitated."

The ruling of the RTC that "[h]aving not perfected an appeal against the Court
of Appeals decision, [private respondent] is, therefore, not covered by [the
amendment in] P.D. 1990" is an obvious misreading of the law. The perfection
of the appeal referred in the law refers to the .appeal taken from a judgment
of conviction by the trial court and not that of the appellate court, since under
the law an application for probation is filed with the trial court which can only
grant the same "after it shall have convicted and sentenced [the] defendant,
and upon application by said defendant within the period for perfecting an
appeal. "Accordingly, in Llamado v. Court of Appeals, 10 it was held that the
petitioner who had appealed his sentence could not subsequently apply for
probation.

WHEREFORE, the petition is GRANTED and the order of April 23, 1993 of the
Regional Trial Court of Misamis Oriental (Branch 21) granting probation to
private respondent Grildo S. Tugonon is SET ASIDE.

SO ORDERED.

15 | P a g e
De Villa vs CA
PARAS, J.:
This petition for review on certiorari seeks to reverse and set aside the
decision* of the Court of Appeals promulgated on February 1, 1989 in CA-G.R.
SP No. 16071 entitled "Cecilio S. de Villa vs. Judge Job B. Madayag, etc. and
Roberto Z. Lorayes," dismissing the petition for certiorari filed therein.
The factual backdrop of this case, as found by the Court of Appeals, is as
follows:
On October 5, 1987, petitioner Cecilio S. de Villa was charged before the
Regional Trial Court of the National Capital Judicial Region (Makati, Branch
145) with violation of Batas Pambansa Bilang 22, allegedly committed as
follows:
That on or about the 3rd day of April 1987, in the municipality of Makati,
Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the above-named accused, did, then and there willfully, unlawfully and
feloniously make or draw and issue to ROBERTO Z. LORAYEZ, to apply on
account or for value a Depositors Trust Company Check No. 3371 antedated
March 31, 1987, payable to herein complainant in the total amount of U.S.
$2,500.00 equivalent to P50,000.00, said accused well knowing that at the
time of issue he had no sufficient funds in or credit with drawee bank for
payment of such check in full upon its presentment which check when
presented to the drawee bank within ninety (90) days from the date thereof
was subsequently dishonored for the reason "INSUFFICIENT FUNDS" and
despite receipt of notice of such dishonor said accused failed to pay said
ROBERTO Z. LORAYEZ the amount of P50,000.00 of said check or to make
arrangement for full payment of the same within five (5) banking days after
receiving said notice.
After arraignment and after private respondent had testified on direct
examination, petitioner moved to dismiss the Information on the following
grounds: (a) Respondent court has no jurisdiction over the offense charged;
and (b) That no offense was committed since the check involved was payable
in dollars, hence, the obligation created is null and void pursuant to Republic
Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency).
On July 19, 1988, respondent court issued its first questioned orders stating:
Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit.
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they
are either drawn and issued in the Philippines though payable outside
thereof, or made payable and dishonored in the Philippines though drawn
and issued outside thereof, are within the coverage of said law. The law
likewise applied to checks drawn against current accounts in foreign
currency.
Petitioner moved for reconsideration but his motion was subsequently
denied by respondent court in its order dated September 6, 1988, and which
reads:
Accused's motion for reconsideration, dated August 9, 1988, which was
opposed by the prosecution, is denied for lack of merit.1âwphi1
The Bouncing Checks Law is applicable to checks drawn against current
accounts in foreign currency (Proceedings of the Batasang Pambansa,
February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City Fiscal)
Jesus F. Guerrero's The Ramifications of the Law on Bouncing Checks, p. 5).
(Rollo, Annex "A", Decision, pp. 20-22).
A petition for certiorari seeking to declare the nullity of the aforequoted
orders dated July 19, 1988 and September 6, 1988 was filed by the petitioner
in the Court of Appeals wherein he contended:
(a) That since the questioned check was drawn against the dollar account of
petitioner with a foreign bank, respondent court has no jurisdiction over the
same or with accounts outside the territorial jurisdiction of the Philippines
16 | P a g e
and that Batas Pambansa Bilang 22 could have not contemplated extending
its coverage over dollar accounts;
(b) That assuming that the subject check was issued in connection with a
private transaction between petitioner and private respondent, the payment
could not be legally paid in dollars as it would violate Republic Act No. 529;
and
(c) That the obligation arising from the issuance of the questioned check is
null and void and is not enforceable with the Philippines either in a civil or
criminal suit. Upon such premises, petitioner concludes that the dishonor of
the questioned check cannot be said to have violated the provisions of Batas
Pambansa Bilang 22. (Rollo, Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the decretal
portion of which reads:
WHEREFORE, the petition is hereby dismissed. Costs against petitioner.
SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
A motion for reconsideration of the said decision was filed by the petitioner
on February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the
Court of Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p.
26).
Hence, this petition.
In its resolution dated November 13, 1989, the Second Division of this Court
gave due course to the petition and required the parties to submit
simultaneously their respective memoranda (Rollo, Resolution, p. 81).
The sole issue in this case is whether or not the Regional Trial Court of Makati
has jurisdiction over the case in question.
The petition is without merit.
Jurisdiction is the power with which courts are invested for administering
justice, that is, for hearing and deciding cases (Velunta vs. Philippine
Constabulary, 157 SCRA 147 [1988]).
Jurisdiction in general, is either over the nature of the action, over the subject
matter, over the person of the defendant, or over the issues framed in the
pleadings (Balais vs. Balais, 159 SCRA 37 [1988]).
Jurisdiction over the subject matter is determined by the statute in force at
the time of commencement of the action (De la Cruz vs. Moya, 160 SCRA 538
[1988]).
The trial court's jurisdiction over the case, subject of this review, can not be
questioned.
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:
Sec. 10. Place of the commission of the offense. The complaint or information
is sufficient if it can be understood therefrom that the offense was committed
or some of the essential ingredients thereof occured at some place within the
jurisdiction of the court, unless the particular place wherein it was committed
constitutes an essential element of the offense or is necessary for identifying
the offense charged.
Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in
all criminal prosecutions the action shall be instituted and tried in the court
of the municipality or territory where the offense was committed or any of
the essential ingredients thereof took place.
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the
case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that
jurisdiction or venue is determined by the allegations in the information."
17 | P a g e
The information under consideration specifically alleged that the offense was
committed in Makati, Metro Manila and therefore, the same is controlling
and sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The
Court acquires jurisdiction over the case and over the person of the accused
upon the filing of a complaint or information in court which initiates a criminal
action (Republic vs. Sunga, 162 SCRA 191 [1988]).
Moreover, it has been held in the case of Que v. People of the Philippines
(154 SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154
[1988]) that "the determinative factor (in determining venue) is the place of
the issuance of the check."
On the matter of venue for violation of Batas Pambansa Bilang 22, the
Ministry of Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977],
laid down the following guidelines in Memorandum Circular No. 4 dated
December 15, 1981, the pertinent portion of which reads:
(1) Venue of the offense lies at the place where the check was executed and
delivered; (2) the place where the check was written, signed or dated does
not necessarily fix the place where it was executed, as what is of decisive
importance is the delivery thereof which is the final act essential to its
consummation as an obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp.
vs. Manuel Chua, October 28, 1980)." (See The Law on Bouncing Checks
Analyzed by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11
& 12, October-December, 1983, p. 14).
It is undisputed that the check in question was executed and delivered by the
petitioner to herein private respondent at Makati, Metro Manila.
However, petitioner argues that the check in question was drawn against the
dollar account of petitioner with a foreign bank, and is therefore, not covered
by the Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not distinguish the currency involved in
the case. As the trial court correctly ruled in its order dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they
are either drawn and issued in the Philippines though payable outside thereof
. . . are within the coverage of said law.
It is a cardinal principle in statutory construction that where the law does not
distinguish courts should not distinguish.1âwphi1 Parenthetically, the rule is
that where the law does not make any exception, courts may not except
something unless compelling reasons exist to justify it (Phil. British Assurance
Co., Inc. vs. IAC, 150 SCRA 520 [1987]).
More importantly, it is well established that courts may avail themselves of
the actual proceedings of the legislative body to assist in determining the
construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41
Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a
statute means, the meaning put to the provision during the legislative
deliberation or discussion on the bill may be adopted (Arenas vs. City of San
Carlos, 82 SCRA 318 [1978]).
The records of the Batasan, Vol. III, unmistakably show that the intention of
the lawmakers is to apply the law to whatever currency may be the subject
thereof. The discussion on the floor of the then Batasang Pambansa fully
sustains this view, as follows:
xxx xxx xxx
THE SPEAKER. The Gentleman from Basilan is recognized.
MR. TUPAY. Parliamentary inquiry, Mr. Speaker.
THE SPEAKER. The Gentleman may proceed.
MR. TUPAY. Mr. Speaker, it has been mentioned by one of the Gentlemen
who interpellated that any check may be involved, like U.S. dollar checks, etc.
18 | P a g e
We are talking about checks in our country. There are U.S. dollar checks,
checks, in our currency, and many others.

THE SPEAKER. The Sponsor may answer that inquiry.

MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check may
be a check in whatever currency. This would not even be limited to U.S. dollar
checks. The check may be in French francs or Japanese yen or deutschunorhs.
(sic.) If drawn, then this bill will apply.

MR TUPAY. So it include U.S. dollar checks.

MR. MENDOZA. Yes, Mr. Speaker.

xxx xxx xxx

(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

19 | P a g e
Colgate – Palmolive vs Gimenez
GUTIERREZ DAVID, J.:
The petitioner Colgate-Palmolive Philippines, Inc. is a corporation duly
organized and existing under Philippine laws engaged in the manufacture of
toilet preparations and household remedies. On several occasions, it
imported from abroad various materials such as irish moss extract, sodium
benzoate, sodium saccharinate precipitated calcium carbonate and dicalcium
phosphate, for use as stabilizers and flavoring of the dental cream it
manufactures. For every importation made of these materials, the petitioner
paid to the Central Bank of the Philippines the 17% special excise tax on the
foreign exchange used for the payment of the cost, transportation and other
charges incident thereto, pursuant to Republic Act No. 601, as amended,
commonly known as the Exchange Tax Law.
On March 14, 1956, the petitioner filed with the Central Bank three
applications for refund of the 17% special excise tax it had paid in the
aggregate sum of P113,343.99. The claim for refund was based on section 2
of Republic Act 601, which provides that "foreign exchange used for the
payment of the cost, transportation and/or other charges incident to the
importation into the Philippines of . . . stabilizer and flavors . . . shall be
refunded to any importer making application therefor, upon satisfactory
proof of actual importation under the rules and regulations to be
promulgated pursuant to section seven thereof." After the applications were
processed by the officer-in-charge of the Exchange Tax Administration of the
Central Bank, that official advised, the petitioner that of the total sum of
P113,343.99 claimed by it for refund, the amount of P23,958.13 representing
the 17% special excise tax on the foreign exchange used to import irish moss
extract, sodium benzoate and precipitated calcium carbonate had been
approved. The auditor of the Central Bank, however, refused to pass in audit
its claims for refund even for the reduced amount fixed by the Officer-in-
Charge of the Exchange Tax Administration, on the theory that toothpaste
stabilizers and flavors are not exempt under section 2 of the Exchange Tax
Law.
Petitioner appealed to the Auditor General, but the latter or, December 4,
1958 affirmed the ruling of the auditor of the Central Bank, maintaining that
the term "stabilizer and flavors" mentioned in section 2 of the Exchange Tax
Law refers only to those used in the preparation or manufacture of food or
food products. Not satisfied, the petitioner brought the case to this Court thru
the present petition for review.
The decisive issue to be resolved is whether or not the foreign exchange used
by petitioner for the importation of dental cream stabilizers and flavors is
exempt from the 17% special excise tax imposed by the Exchange Tax Law,
(Republic Act No. 601) so as to entitle it to refund under section 2 thereof,
which reads as follows:
SEC, 2. The tax collected under the preceding section on foreign exchange
used for the payment of the cost, transportation and/or other charges
incident to importation into the Philippines of rice, flour, canned milk, cattle
and beef, canned fish, soya beans, butterfat, chocolate, malt syrup, tapioca,
stabilizer and flavors, vitamin concentrate, fertilizer, poultry feed; textbooks,
reference books, and supplementary readers approved by the Board of
Textbooks and/or established public or private educational institutions;
newsprint imported by or for publishers for use in the publication of books,
pamphlets, magazines and newspapers; book paper, book cloth, chip board
imported for the printing of supplementary readers (approved by the Board
of Textbooks) to be supplied to the Government under contracts perfected
before the approval of this Act, the quantity thereof to be certified by the
Director of Printing; anesthetics, anti-biotics, vitamins, hormones, x-ray films,
laboratory reagents, biologicals, dental supplies, and pharmaceutical drugs
necessary for compounding medicines; medical and hospital supplies listed in
the appendix to this Act, in quantities to be certified by the Director of
Hospitals as actually needed by the hospitals applying therefor; drugs and
medicines listed in the said appendix; and such other drugs and medicines as
may be certified by the Secretary of Health from time to time to promote and
protect the health of the people of the Philippines shall be refunded to any
importer making application therefor, upon satisfactory proof of actual
20 | P a g e
importation under the rules and regulations to be promulgated pursuant to used in the manufacture of toothpaste or dental cream, we are not
section seven thereof." (Emphasis supplied.) authorized to make any distinction and must construe the words in their
general sense. The rule of construction that general and unlimited terms are
The ruling of the Auditor General that the term "stabilizer and flavors" as used restrained and limited by particular recitals when used in connection with
in the law refers only to those materials actually used in the preparation or them, does not require the rejection of general terms entirely. It is intended
manufacture of food and food products is based, apparently, on the principle merely as an aid in ascertaining the intention of the legislature and is to be
of statutory construction that "general terms may be restricted by specific taken in connection with other rules of construction. (See Handbook of the
words, with the result that the general language will be limited by the specific Construction and Interpretation of Laws by Black, p. 215.216, 2nd ed.)
language which indicates the statute's object and purpose." (Statutory
Construction by Crawford, 1940 ed. p. 324-325.) The rule, however, is, in our Having arrived at the above conclusion, we deem it now idle to pass upon the
opinion, applicable only to cases where, except for one general term, all the other questions raised by the parties.
items in an enumeration belong to or fall under one specific class. In the case
at bar, it is true that the term "stabilizer and flavors" is preceded by a number WHEREFORE, the decision under review is reversed and the respondents are
of articles that may be classified as food or food products, but it is likewise hereby ordered to audit petitioners applications for refund which were
true that the other items immediately following it do not belong to the same approved by the Officer-in-Charge of the Exchange Tax Administration in the
classification. Thus "fertilizer" and "poultry feed" do not fall under the total amount of P23,958.13.
category of food or food products because they are used in the farming and
poultry industries, respectively. "Vitamin concentrate" appears to be more of
a medicine than food or food product, for, as matter of fact, vitamins are
among those enumerated in the list of medicines and drugs appearing in the
appendix to the law. It should also here be stated that "cattle", which is
among those listed preceding the term in question, includes not only those
intended for slaughter but also those for breeding purposes. Again, it is
noteworthy that under, Republic Act No. 814 amending the above-quoted
section of Republic Act No. 601, "industrial starch", which does not always
refer to food for human consumption, was added among the items grouped
with "stabilizer and flavors". Thus, on the basis of the grouping of the articles
alone, it cannot validly be maintained that the term "stabilizer and flavors" as
used in the above-quoted provision of the Exchange Tax Law refers only to
those used in the manufacture of food and food products. This view is
supported by the principle "Ubi lex non distinguish nec nos distinguire
debemos", or "where the law does not distinguish, neither do we
distinguish". (Ligget & Myers Tobacco Company vs. Collector of Internal
Revenue, 53 Off. Gaz. No. 15, page 4831). Since the law does not distinguish
between "stabilizer and flavors" used in the preparation of food and those
21 | P a g e
Republic vs Migrino
CORTES, J.:
This case puts in issue the authority of the Presidential Commission on Good
Government (PCGG), through the New Armed Forces of the Philippines Anti-
Graft Board (hereinafter referred to as the "Board"), to investigate and cause
the prosecution of petitioner, a retired military officer, for violation of
Republic Acts Nos. 3019 and 1379.
Assailed by the Republic in this petition for certiorari, prohibition and/or
mandamus with prayer for the issuance of a writ of preliminary injunction
and/or temporary restraining order are the orders of respondent judge in
Civil Case No. 57092 Branch 151 of the Regional Trial Court of Pasig, Metro
Manila: (1) dated June 23, 1989, denying petitioners’ Motion to Dismiss and
Opposition, and (2) dated June 26, 1989, granting private respondent’s
application for the issuance of a writ of preliminary injunction. Thus, the
petition seeks the annulment of the two orders, the issuance of an injunction
to enjoin respondent judge from proceeding with Civil Case No. 57092 and,
finally, the dismissal of the case before the trial court.
The controversy traces its roots to the order of then PCGG Chairman Jovito R.
Salonga, dated May 13, 1986, which created the New Armed Forces of the
Philippines Anti-Graft Board. The Board was created to "investigate the
unexplained wealth and corrupt practices of AFP personnel, both retired and
in active service." The order further stated that" [t]he Board shall be primarily
charged with the task of investigating cases of alleged violations of the Anti-
Graft and Corrupt Practices Act (Republic Act No. 3019, as amended) and shall
make the necessary recommendations to appropriate government agencies
and instrumentalities with respect to the action to be taken thereon based
on its findings."cralaw virtua1aw library
Acting on information received by the Board, which indicated the acquisition
of wealth beyond his lawful income, private respondent Lt. Col. Troadio
Tecson (ret.) was required by the Board to submit his explanation/comment
together with his supporting evidence by October 31, 1987 [Annex "B",
Petition]. Private respondent requested, and was granted, several
postponements, but was unable to produce his supporting evidence because
they were allegedly in the custody of his bookkeeper who had gone abroad.
Just the same, the Board proceeded with its investigation and submitted its
resolution, dated June 30, 1988, recommending that private respondent be
prosecuted and tried for violation of Rep. Act No. 3019, as amended, and Rep.
Act No. 1379, as amended.chanrobles lawlibrary : rednad
The case was set for preliminary investigation by the PCGG. Private
respondent moved to dismiss the case on the following grounds: (1) that the
PCGG has no jurisdiction over his person; (2) that the action against him under
Rep. Act No. 1379 has already prescribed; (3) that E.O. No. 14, insofar as it
suspended the provisions of Rep. Act No. 1379 on prescription of actions, was
inapplicable to his case; and (4) that having retired from the AFP on May 9,
1984, he was now beyond the reach of Rep. Act No. 3019. The Board opposed
the motion to dismiss.
In a resolution dated February 8, 1989, the PCGG denied the motion to
dismiss for lack of merit. Private respondent moved for reconsideration but
this was denied by the PCGG in a resolution dated March 8, 1989. Private
respondent was directed to submit his counter-affidavit and other
controverting evidence on March 20, 1989 at 2:00 p.m.
On March 13, 1989, private respondent filed a petition for prohibition with
preliminary injunction with the Regional Trial Court in Pasig, Metro Manila.
The case was docketed as Case No. 57092 and raffled to Branch 151,
respondent judge’s court. Petitioner filed a motion to dismiss and opposed
the application for the issuance of a writ of preliminary injunction on the
principal ground that the Regional Trial Court had no jurisdiction over the
Board, citing the case of PCGG v. Peña, G.R. No. 77663, April 12, 1988, 159
SCRA 556. Private respondent opposed the motion to dismiss. Petitioner
replied to the opposition.
On June 23, 1989, respondent judge denied petitioner’s motion to dismiss.
On June 26, 1989, respondent judge granted the application for the issuance
22 | P a g e
of a writ of preliminary injunction, enjoining petitioners from investigating or
prosecuting private respondent under Rep. Acts Nos. 3019 and 1379 upon
the filing of a bond in the amount of Twenty Thousand Pesos (P20,000.00).
Hence, the instant petition.
On August 29, 1989, the Court issued a restraining order enjoining
respondent judge from enforcing his orders dated June 23, 1989 and June 26,
1989 and from proceeding with Civil Case No. 57092.
Private respondent filed his comment, to which petitioners filed a reply. A
rejoinder to the reply was filed by private Respondent. The Court gave due
course to the petition and the parties filed their memoranda. Thereafter, the
case was deemed submitted.
The issues raised in the petition are as follows:chanrob1es virtual 1aw library
I.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION
OR ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ASSUMING
JURISDICTION OVER AND INTERFERING WITH THE ORDERS AND FUNCTIONS
OF THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT.
II.
WHETHER, OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION
OR ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ISSUING THE
ASSAILED ORDER DATED JUNE 26, 1989 ENJOINING PETITIONERS FROM
INVESTIGATING AND PROSECUTING PRIVATE RESPONDENT FOR VIOLATION
OF REPUBLIC ACT NO. 3019, OTHERWISE KNOWN AS ANTI-GRAFT AND
CORRUPT PRACTICES ACT AND REPUBLIC ACT NO. 1379, OTHERWISE KNOWN
AS AN ACT FOR THE FORFEITURE OF UNLAWFULLY ACQUIRED PROPERTY
[Rollo, p. 19].
As to the first issue, petitioner contends that following the ruling of the Court
in PCGG v. Peña the Board, being a creation and/or extension of the PCGG, is
beyond the jurisdiction of the Regional Trial Court. On the second issue,
petitioner strongly argues that the private respondent’s case falls within the
jurisdiction of the PCGG.
The pivotal issue is the second one. On this point, private respondent’s
position is as follows:chanrob1es virtual 1aw library
1. . . . he is not one of the subordinates contemplated in Executive Orders 1 ,
2 , 14 and 14-A as the alleged illegal acts being imputed to him, that of alleged
amassing wealth beyond his legal means while Finance Officer of the
Philippine Constabulary, are acts of his own alone, not connected with his
being a crony, business associate, etc. or subordinate as the petition does not
allege so. Hence the PCGG has no jurisdiction to investigate him.
If indeed private respondent amassed wealth beyond his legal means, the
procedure laid down by Rep. Act 1379 as already pointed out before be
applied. And since, he has been separated from the government more than
four years ago, the action against him under Republic Act 1379 has already
prescribed.
2. . . . no action can be filed anymore against him now under Republic Act
1379 for recovery of unexplained wealth for the reason that he has retired
more than four years ago.
3. . . . The order creating the AFP Anti-Graft Board (Annex "A", Petition) is null
and void. Nowhere in Executive Orders 1, 2, 14 and 14-A is there any authority
given to the commission, its chairman and members, to create Boards or
bodies to be invested with powers similar to the powers invested with the
commission .. [Comment, pp. 6-7; Rollo, pp. 117-118].
23 | P a g e
1. The most important question to be resolved in this case is whether or not
private respondent may be investigated and caused to be prosecuted by the
Board, an agency of the PCGG, for violation of Rep. Acts Nos. 3019 and 1379.
According to petitioners, the PCGG has the power to investigate and cause
the prosecution of private respondent because he is a "subordinate" of
former President Marcos. They cite the PCGG’s jurisdiction over —
(a) The recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and close
associates, whether located in the Philippines or abroad, including the
takeover or sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through nominees,
by taking undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship. [E.O. No. 1, sec. 2.].
Undoubtedly, the alleged unlawful accumulation of wealth was done during
the administration of Pres. Marcos. However, what has to be inquired into is
whether or not private respondent acted as a "subordinate" of Pres. Marcos
within the contemplation of E.O. No. 1, the law creating the PCGG, when he
allegedly unlawfully acquired the properties.
A close reading of E. O. No. 1 and related executive orders will readily show
what is contemplated within the term "subordinate."cralaw virtua1aw library
The Whereas Clauses of E. O. No. 1 express the urgent need to recover the ill-
gotten wealth amassed by former President Ferdinand E. Marcos, his
immediate family, relatives, and close associates both here and abroad.
E.O. No. 2 freezes "all assets and properties in the Philippines in which former
President Marcos and/or his wife, Mrs. Imelda Romualdez Marcos, their close
relatives, subordinates, business associates, dummies, agents, or nominees
have any interest or participation."cralaw virtua1aw library
Applying the rule in statutory construction known as ejusdem generis, that is
— Romualdez Marcos, their close relatives, subordinates, business associates,
[W]here general words follow an enumeration of persons or things, by words
of a particular and specific meaning, such general words are not to be
construed in their widest extent, but are to be held as applying only to
persons or things of the same kind or class as those specifically mentioned
[Smith, Bell & Co., Ltd. v. Register of Deeds of Davao, 96 Phil. 53, 58 (1954),
citing Black on Interpretation of Laws, 2nd Ed., 203].
the term "subordinate" as used in E.O. Nos. 1 and 2 would refer to one who
enjoys a close association or relation with former Pres. Marcos and/or his
wife, similar to the immediate family member, relative, and close associate in
E.O. No. 1 and the close relative, business associate, dummy, agent, or
nominee in E.O. No. 2.
Thus, as stated by the Court in Bataan Shipyard & Engineering Co., Inc. v.
PCGG, G.R. No. 75885, May 27, 1987, 150 SCRA 181, 205-206.
The situations envisaged and sought to be governed [by Proclamation No. 3
and E.O. Nos. 1, 2 and 14] are self-evident, these being:chanrob1es virtual
1aw library
1) that" (i)ll gotten properties (were) amassed by the leaders and supporters
of the previous regime" ;
a) more particularly, that" (i)ll-gotten wealth (was) accumulated by former
President Ferdinand E. Marcos, his immediate family, relatives, subordinates,
and close associates, . . . located in the Philippines or abroad, xx (and)
business enterprises and entities (came to be) owned or controlled by them,
during . . . (the Marcos) administration, directly or through nominees, by
taking undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship;"
b) otherwise stated, that "there are assets and properties pertaining to
former President Ferdinand E. Marcos, and/or his wife Mrs. Imelda
24 | P a g e
dummies, agents or nominees which had been or were acquired by them
directly or indirectly, through or as a result of the improper or illegal use of
funds or properties owned by the Government of the Philippines or any of its
branches, instrumentalities, enterprises, banks or financial institutions, or by
taking undue advantage of their office, authority, influence, connections or
relationship, resulting in their unjust enrichment and causing grave damage
and prejudice to the Filipino people and the Republic of the Philippines" ;
c) that "said assets and properties are in the form of bank accounts, deposits,
trust accounts, shares of stocks, buildings, shopping centers, condominiums,
mansions, residences, estates, and other kinds of real and personal
properties in the Philippines and in various countries of the world;" and.
2) that certain "business enterprises and properties (were) taken over by the
government of the Marcos Administration or by entities or persons close to
former President Marcos." [Footnotes deleted].
It does not suffice, as in this case, that the respondent is or was a government
official or employee during the administration of former Pres. Marcos. There
must be a prima facie showing that the respondent unlawfully accumulated
wealth by virtue of his close association or relation with former Pres. Marcos
and/or his wife. This is so because otherwise the respondent’s case will fall
under existing general laws and procedures on the matter. Rep. Act No. 3019,
the Anti-Graft and Corrupt Practices Act, penalizes the corrupt practices of
any public officer. Under Rep. Act No. 1379 (An Act Declaring Forfeited in
Favor of the State Any Property Found to Have Been Unlawfully Acquired By
Any Public Officer or Employee and Providing for the Procedure Therefor),
whenever any public officer or employee has acquired during his incumbency
an amount of property which is manifestly out of proportion to his salary as
such public officer or employee and to his other lawful income and the
income from legitimately acquired property, said property shall be presumed
prima facie to have been unlawfully acquired [Sec. 2]. The Solicitor General
shall file the petition and prosecute the case in behalf of the Republic, after
preliminary investigation by the provincial or city prosecutor [Ibid].
Moreover, the record shows that private respondent was being investigated
for unlawfully acquired wealth under Rep. Acts Nos. 3019 and 1379, and not
under E.O. Nos. 1, 2, 14 and 14-A.
Since private respondent was being investigated by the PCGG through the
AFP Anti-Graft Board it would have been presumed that this was under Rep.
Acts Nos. 3019 and 1379 in relation to E.O. Nos. 1, 2, 14 and 14-A. But the
record itself belies this presumption:chanrob1es virtual 1aw library
(a) The letter of the chairman of the AFP Anti-Graft Board to private
respondent, dated October 16, 1987, states: "This letter is in connection with
the alleged information received by the AFP Anti-Graft Board indicating your
acquisition of wealth beyond legal means of income in violation of Rep. Act
No. 3019 known as the Anti-Graft and Corrupt Practices Act." [Rollo, p. 39].
(b) The Resolution dated June 30, 1988 of the Board categorically
states:chanrob1es virtual 1aw library
I. PRELIMINARY STATEMENT:chanrob1es virtual 1aw library
This refers to the case against Col Troadio B. Tecson PC (Ret) for alleged
unexplained wealth pursuant to R.A. 3019, as amended, otherwise known as
Anti-Graft and Corrupt Practices Act and R.A. 1379, as amended, otherwise
known as the "Act for Forfeiture of Unlawfully Acquired Property." [Rollo, p.
43].
The resolution alleges that private respondent unlawfully accumulated
wealth by taking advantage of his office as Finance Officer of the Philippine
Constabulary. No attempt is made in the Board’s resolution to link him or his
accumulation of wealth to former Pres. Marcos and/or his wife.
(c) The letter of the Board chairman to the chairman of the PCGG, dated July
28, 1988, is clear:chanrob1es virtual 1aw library
25 | P a g e
Respectfully transmitted herewith for the prosecution before the
Sandiganbayan is the case folder of COLONEL TROADIO TECSON (Ret) who
after preliminary investigation of the case by the Board, found a prima facie
evidence against subject officer for violating Section 8, R.A. 3019, as amended
by BP 195, otherwise known as the Anti-Graft and Corrupt Practices Act and
R.A. 1379, otherwise known as an Act for the Forfeiture of Unlawfully
Acquired Property." [Rollo, p. 46].
Moreover, from the allegations of petitioner in its memorandum, it would
appear that private respondent accumulated his wealth for his own account.
Petitioner quoted the letter of Ignacio Datahan, a retired PC sergeant, to
General Fidel Ramos, the material portion of which reads:chanrob1es virtual
1aw library
. . . After an official in the military unit received an Allotment Advice the same
signed a cash advance voucher, let us say in the amount of P5,000.00.
Without much ado, outright, Col. Tecson paid the amount. The official
concerned was also made to sign the receipt portion on the voucher the
amount of which was left blank. Before the voucher is passed for routine
processing by Mrs. Leonor Cagas, clerk of Col. Tecson and its facilitator, the
maneuver began. The amount on the face of the cash advance voucher is
altered or superimposed. The original amount of P5,000.00 was now made
say, P95,000.00. So it was actually the amount of P95,000.00 that appeared
on the records. The difference of P90,000.00 went to the syndicate.
. . . Boy Tanyag, bookkeeper in Col. Tecson’s office took care of the work.
. . . In the liquidation of the altered cash advance amount, names of persons
found in the Metropolitan Manila Telephone Directory with fictitious
addresses appeared as recipients or payees. Leonor and Boy got their shares
on commission basis of the looted amount while the greater part went to Col.
Tecson. [Rollo, pp. 184-185.].
Clearly, this alleged unlawful accumulation of wealth is not that
contemplated in E.O. Nos. 1, 2, 14 and 14-A.
2. It will not do to cite the order of the PCGG Chairman, dated May 13, 1986,
creating the Board and authorizing it to investigate the unexplained wealth
and corrupt practices of AFP personnel, both retired and in active service, to
support the contention that PCGG has jurisdiction over the case of private
Respondent. The PCGG cannot do more than what it was empowered to do.
Its powers are limited. Its task is limited to the recovery of the ill-gotten
wealth of the Marcoses, their relatives and cronies. The PCGG cannot,
through an order of its chairman, grant itself additional powers — powers not
contemplated in its enabling law.
3. Petitioner assails the trial court’s cognizance of the petition filed by private
Respondent. Particularly, petitioner argues that the trial court cannot acquire
jurisdiction over the PCGG. This matter has already been settled in Peña,
supra, where the Court ruled that those who wish to question or challenge
the PCGG’s acts or orders must seek recourse in the Sandiganbayan, which is
vested with exclusive and original jurisdiction. The Sandiganbayan’s decisions
and final orders are in turn subject to review on certiorari exclusively by this
Court. [Ibid, at pp. 564-565].
The ruling in Peña was applied in PCGG v. Aquino, G.R. No. 77816, June 30,
1988, 163 SCRA 363, Soriano III v. Yuson, G.R. No. 74910 (and five other
cases), August 10, 1988, 164 SCRA 226 and Olaguer v. RTC, NCJR, Br. 48, G.R.
No. 81385, February 21, 1989, 170 SCRA 478, among others, to enjoin the
regional trial courts from interfering with the actions of the PCGG.
Respondent judge clearly acted without or in excess of his jurisdiction when
he took cognizance of Civil Case No. 57092 and issued the writ of preliminary
injunction against the PCGG.
4. Thus, we are confronted with a situation wherein the PCGG acted in excess
of its jurisdiction and, hence, may be enjoined from doing so, but the court
that issued the injunction against the PCGG has not been vested by law with
jurisdiction over it and, thus, the injunction issued was null and void.
26 | P a g e
The nullification of the assailed order of respondent judge issuing the writ of
preliminary injunction is therefore in order. Likewise, respondent judge must
be enjoined from proceeding with Civil Case No. 57092.
But in view of the patent lack of authority of the PCGG to investigate and
cause the prosecution of private respondent for violation of Rep. Acts Nos.
3019 and 1379, the PCGG must also be enjoined from proceeding with the
case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of government
be allowed to exercise only the powers granted it.
5. The pronouncements made above should not be taken to mean that the
PCGG’s creation of the AFP Anti-Graft Board is a nullity and that the PCGG has
no authority to investigate and cause the prosecution of members and former
members of the Armed Forces of the Philippines for violations of Rep. Acts
Nos. 3019 and 1379. The PCGG may investigate and cause the prosecution of
active and retired members of the AFP for violations of Rep. Acts Nos. 3019
and 1379 only in relation to E.O. Nos. 1, 2, 14 and 14-A, i.e., insofar as they
involve the recovery of the ill-gotten wealth of former Pres. Marcos and his
family and "cronies." But the PCGG would not have jurisdiction over an
ordinary case falling under Rep. Acts Nos. 3019 and 1379, as in the case at
bar. E.O. Nos. 1, 2, 14 and 14-A did not envision the PCGG as the investigator
and prosecutor of all unlawful accumulations of wealth. The PCGG was
created for a specific and limited purpose, as we have explained earlier, and
necessarily its powers must be construed with this in mind.
6. n his pleadings, private respondent contends that he may no longer be
prosecuted because of prescription. He relies on section 2 of Rep. Act No.
1379 which provides that" [t]he right to file such petition [for forfeiture of
unlawfully acquired wealth] shall prescribe within four years from the date of
resignation, dismissal or separation or expiration of the term of the officer or
employee concerned." He retired on May 9, 1984, or more than six (6) years
ago. However, it must be pointed out that section 2 of Rep. Act No. 1379
should be deemed amended or repealed by Article XI, section 15 of the 1987
Constitution which provides that" [t]he right of the State to recover
properties unlawfully acquired by public officials or employees, from them or
from their nominees or transferees, shall not be barred by prescription,
laches, or estoppel." Considering that sec. 2 of Rep. Act No. 1379 was deemed
amended or repealed before the prescriptive period provided therein had
lapsed insofar as private respondent is concerned, we cannot say that he had
already acquired a vested right that may not be prejudiced by a subsequent
enactment.
Moreover, to bar the Government from recovering ill-gotten wealth would
result in the validation or legitimization of the unlawful acquisition, a
consequence at variance with the clear intent of Rep. Act No. 1379, which
provides:chanrobles virtual lawlibrary
SEC. 11. Laws on prescription. — The laws concerning acquisitive prescription
and limitation of actions cannot be invoked by, nor shall they benefit the
respondent, in respect to any property unlawfully acquired by him.
Thus, we hold that the appropriate prosecutory agencies, i.e., the city or
provincial prosecutor and the Solicitor General under sec. 2 of Rep. Act No.
1379, may still investigate the case and file the petition for the forfeiture of
unlawfully acquired wealth against private respondent, now a private citizen.
(On the other hand, as regards respondents for violations of Rep. Acts Nos.
3019 and 1379 who are still in the government service, the agency granted
the power to investigate and prosecute them is the Office of the Ombudsman
[Rep. Act No. 6770]). Under Presidential Decree No. 1606, as amended, and
Batas Pambansa Blg. 195 violations of Rep. Acts Nos. 3019 and 1379 shall be
tried by the Sandiganbayan.
7. The Court hastens to add that this decision is without prejudice to the
prosecution of private respondent under the pertinent provisions of the
Revised Penal Code and other related penal laws.
WHEREFORE, the order of respondent judge dated June 26, 1989 in Civil Case
No. 57092 is NULLIFIED and SET ASIDE. Respondent judge is ORDERED to
dismiss Civil Case No. 57092. The temporary restraining order issued by the
27 | P a g e
Court on August 29, 1989 is MADE PERMANENT. The PCGG is ENJOINED from
proceeding with the investigation and prosecution of private respondent in
I.S. No. 37, without prejudice to his investigation and prosecution by the
appropriate prosecutory agency.

SO ORDERED.

28 | P a g e
People vs Echavez, Jr., et. al
AQUINO, J.:p
The legal issue in this case is whether Presidential Decree No. 772, which
penalizes squatting and similar acts, applies to agricultural lands. The decree
(which took effect on August 20, 1975) provides:
SECTION 1. Any person who, with the use of force, intimidation or threat, or
taking advantage of the absence or tolerance of the landowner, succeeds in
occupying or possessing the property of the latter against his will for
residential, commercial or any other purposes, shall be punished by an
imprisonment ranging from six months to one year or a fine of not less than
one thousand nor more than five thousand pesos at the discretion of the
court, with subsidiary imprisonment in case of insolvency. (2nd paragraph is
omitted.)
The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with
the lower court separate informations against sixteen persons charging them
with squatting as penalized by Presidential Decree No. 772. The information
against Mario Aparici which is similar to the other fifteen informations, reads:
That sometime in the year 1974 continuously up to the present at barangay
Magsaysay, municipality of Talibon, province of Bohol, Philippines and within
the jurisdiction of this Honorable Court, the above-named accused, with
stealth and strategy, enter into, occupy and cultivate a portion of a grazing
land physically occupied, possessed and claimed by Atty. Vicente de la Serna,
Jr. as successor to the pasture applicant Celestino de la Serna of Pasture Lease
Application No. 8919, accused's entrance into the area has been and is still
against the win of the offended party; did then and there willfully, unlawfully,
and feloniously squat and cultivate a portion of the said grazing land; said
cultivating has rendered a nuisance to and has deprived the pasture applicant
from the full use thereof for which the land applied for has been intended,
that is preventing applicant's cattle from grazing the whole area, thereby
causing damage and prejudice to the said applicant-possessor-occupant,
Atty. Vicente de la Serna, Jr. (sic)
Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario
Aparici, Ruperto Cajes and Modesto Suello were the accused, were raffled to
Judge Vicente B. Echaves, Jr. of Branch II (Criminal Cases Nos. 1824, 1828,
1832, 1833 and 1839, respectively).
Before the accused could be arraigned, Judge Echaves motu proprio issued
an omnibus order dated December 9, 1977 dismissing the five informations
on the grounds (1) that it was alleged that the accused entered the land
through "stealth and strategy", whereas under the decree the entry should
be effected "with the use of force, intimidation or threat, or taking advantage
of the absence or tolerance of the landowner", and (2) that under the rule of
ejusdem generis the decree does not apply to the cultivation of a grazing land.
Because of that order, the fiscal amended the informations by using in lieu of
"stealth and strategy" the expression "with threat, and taking advantage of
the absence of the ranchowner and/or tolerance of the said ranchowner".
The fiscal asked that the dismissal order be reconsidered and that the
amended informations be admitted.
The lower court denied the motion. It insisted that the phrase "and for other
purposes" in the decree does not include agricultural purposes because its
preamble does not mention the Secretary of Agriculture and makes reference
to the affluent class.
From the order of dismissal, the fiscal appealed to this Court under Republic
Act No. 5440. The appeal is devoid of merit.
We hold that the lower court correctly ruled that the decree does not apply
to pasture lands because its preamble shows that it was intended to apply to
squatting in urban communities or more particularly to illegal constructions
in squatter areas made by well-to-do individuals. The squating complained of
involves pasture lands in rural areas.
The preamble of the decree is quoted below:
29 | P a g e

WHEREAS, it came to my knowledge that despite the issuance of Letter of
Instruction No. 19 dated October 2, 1972, directing the Secretaries of
National Defense, Public Work. 9 and communications, Social Welfare and
the Director of Public Works, the PHHC General Manager, the Presidential
Assistant on Housing and Rehabilitation Agency, Governors, City and
Municipal Mayors, and City and District Engineers, "to remove an illegal
constructions including buildings on and along esteros and river banks, those
along railroad tracks and those built without permits on public and private
property." squatting is still a major problem in urban communities all over the
country;
WHEREAS, many persons or entities found to have been unlawfully occupying
public and private lands belong to the affluent class;
WHEREAS, there is a need to further intensify the government's drive against
this illegal and nefarious practice.
the fact that title thereto still remains in the Government or for any person,
natural or judicial to investigate induce or force another to commit such acts.
Violations of the law are punished by a fine of not exceeding one thousand or
imprisonment for not more than one year, or both such fine and
imprisonment in the discretion of the court, with subsidiary imprisonment in
case of insolvency. (See People vs. Lapasaran 100 Phil. 40.)
The rule of ejusdem generis (of the same kind or species) invoked by the trial
court does not apply to this case. Here, the intent of the decree is
unmistakable. It is intended to apply only to urban communities, particularly
to illegal constructions. The rule of ejusdem generis is merely a tool of
statutory construction which is resorted to when the legislative intent is
uncertain (Genato Commercial Corp. vs. Court of Tax Appeals, 104 Phil.
615,618; 28 C.J.S. 1049-50).
WHEREFORE, the trial court's order of dismissal is affirmed. No costs.

It should be stressed that Letter of Instruction No. 19 refers to illegal SO ORDERED.

constructions on public and private property. It is complemented by Letter of
Instruction No. 19-A which provides for the relocation of squatters in the
interest of public health, safety and peace and order.

On the other hand, it should be noted that squatting on public agricultural

lands, like the grazing lands involved in this case, is punished by Republic Act
No. 947 which makes it unlawful for any person, corporation or association
to forcibly enter or occupy public agricultural lands. That law provides:

SECTION 1. It shall be unlawful for any person corporation or association to

enter or occupy, through force, intimidation, threat, strategy or stealth, any
public agriculture land including such public lands as are granted to private
individuals under the provision of the Public Land Act or any other laws
providing for the of public agriculture lands in the Philippines and are duly
covered by the corresponding applications for the notwithstanding standing

30 | P a g e
Alta Vista Golf and Country Club vs City of Cebu
LEONARDO-DE CASTRO, J.:
Before the Court is a Petition for Review on Certiorari of the Resolution1
dated March 14, 2007 and the Order2 dated October 3, 2007 of the Regional
Trial Court (RTC), Cebu City, Branch 9 in Civil Case No. CEB-31988, dismissing
the Petition for Injunction, Prohibition, Mandamus, Declaration of Nullity of
Closure Order, Declaration of Nullity of Assessment, and Declaration of
Nullity of Section 42 of Cebu City Tax: Ordinance, with Prayer for Temporary
Restraining Order and Writ of Preliminary Injunction3 filed by petitioner Alta
Vista Golf and Country Club against respondents City of Cebu (Cebu City),
then Cebu City Mayor Tomas R. Osmeña (Osmeña), and then Cebu City
Treasurer Teresita Camarillo (Camarillo).
Petitioner is a non-stock and non-profit corporation operating a golf course
in Cebu City.
On June 21, 1993, the Sangguniang Panlungsod of Cebu City enacted City Tax:
Ordinance No. LXIX, otherwise known as the "Revised Omnibus Tax:
Ordinance of the City of Cebu" (Revised Omnibus Tax: Ordinance). Section 42
of the said tax ordinance on amusement tax was amended by City Tax
Ordinance Nos. LXXXII4 and LXXXIV5 (which were enacted by the Sangguniang
Panlungsod of Cebu City on December 2, 1996 and April 20, 1998,
respectively6) to read as follows:
Section 42. Rate of Tax. - There shall be paid to the Office of the City Treasurer
by the proprietors, lessees or operators of theaters, cinemas, concert halls,
circuses and other similar places of entertainment, an amusement tax at the
rate of thirty percent (30%), golf courses and polo grounds at the rate of
twenty percent (20% ), of their gross receipts on entrance, playing green,
and/or admission fees; PROVIDED, HOWEVER, That in case of movie
premieres or gala shows for the benefit of a charitable institution/foundation
or any government institution where higher admission fees are charged, the
aforementioned rate of thirty percent (30%) shall be levied against the gross
receipts based on the regular admission fees, subject to the approval of the
Sangguniang Panlungsod; PROVIDED FURTHER, That in case payment of the
amusement tax is made promptly on or before the date hereinbelow
prescribed, a rebate of five percent (5%) on the aforementioned gross
receipts shall be given to the proprietors, lessees or operators of theaters;
PROVIDED FURTHERMORE, that as an incentive to theater operators who
own the real property and/or building where the theater is located, an
additional one percent (1 %) rebate shall be given to said operator/real
property owner concerned for as long as their theater/movie houses are then
(10) years old or older or the theater or movie house is located at the city's
redevelopment area bounded on the north by Gen. Maxilom Street up to the
port area; on the south by V. Rama Avenue up to San Nicolas area; and on the
west by B. Rodriguez St. and General Maxilom Avenue; PROVIDED FINALLY,
that the proceeds of this additional one percent (1 %) rebate shall be used by
the building/property owner-theater operator to modernize their theater
facilities. (Emphases supplied.)
In an Assessment Sheet7 dated August 6, 1998, prepared by Cebu City
Assessor Sandra I. Po, petitioner was originally assessed deficiency business
taxes, fees, and other charges for the year 1998, in the total amount of
P3,820,095.68, which included amusement tax on its golf course amounting
to P2,612,961.24 based on gross receipts of P13,064,806.20.8
Through the succeeding years, respondent Cebu City repeatedly attempted
to collect from petitioner its deficiency business taxes, fees, and charges for
1998, a substantial portion of which consisted of the amusement tax on the
golf course. Petitioner steadfastly refused to pay the amusement tax arguing
that the imposition of said tax by Section 42 of the Revised Omnibus Tax
Ordinance, as amended, was irregular, improper, and illegal. Petitioner
reasoned that under the Local Government Code, amusement tax can only
be imposed on operators of theaters, cinemas, concert halls, or places where
one seeks to entertain himself by seeing or viewing a show or performance.
Petitioner further cited the ruling in Philippine Basketball Association (PBA) v.
Court of Appeals9 that under Presidential Decree No. 231, otherwise known
as the Lo.cal Tax Code of 1973, the province could only impose amusement
tax on admission from the proprietors, lessees, or operators of theaters,
31 | P a g e
cinematographs, concert halls, circuses, and other places of amusement, but course for 1998 for being illegal. Petitioner, in a subsequent letter dated
not professional basketball games. Professional basketball games did not fall November 30, 2005, proposed that:
under the same category as theaters, cinematographs, concert halls, and
circuses as the latter basically belong to artistic forms of entertainment while While the question of the legality of the amusement tax on golf courses is still
the former catered to sports and gaming. unresolved, may we propose that Alta Vista Golf and Country Club settle first
the other assessments contained in your Assessment Sheet issued on October
Through a letter dated October 11, 2005, respondent Camarillo sought to 11, 2005.
collect once more from petitioner deficiency business taxes, fees, and charges
for the year 1998, totaling P2,981,441.52, computed as follows: At this early stage, we also request that pending resolution of the legality of
the amusement tax imposition on golf courses in [the Revised Omnibus Tax
Restaurant - P4,021,830.65 P 40,950.00 Ordinance, as amended], Alta Vista Golf and Country Club be issued the
Permit Fee 2,000.00 required Mayor's and/or Business Permit.12
Liquor-Pl,940,283.80 20,160.00
Permit Fee 2,000.00 Respondent Camarillo treated the letter dated October 17, 2005 of petitioner
Commission/Other Income 14,950.00 as a Protest of Assessment and rendered on December 5, 2005 her ruling
P 1,262,764.28 denying said Protest on the following grounds: (a) a more thorough and
Permit Fee 1,874.00 comprehensive reading of the PBA case would reveal that the Court actually
Retail Cigarettes - P42,076. 11 - Permit 84.15 ruled therein that PBA was liable to pay amusement tax, but to the national
Non-Securing of Permit 979.33 government, not the local government; (b) section 42 of the Revised Omnibus
Sub-Total P 82,997.98 Tax Ordinance, as amended, enjoyed the presumption of constitutionality
Less: Payment based on computer assessment 74,858.61 and petitioner failed to avail itself of the remedy under Section 187 of the
Short payment P 12,723.18 Local Government Code to challenge the legality or validity of Section 42 of
25% surcharge 3,180.80 the Revised Omnibus Tax Ordinance, as amended, by filing an appeal with the
72% interest 11,450.00 Secretary of Justice within 30 days from effectivity of said ordinance; and ( c)
Penalty for understatement 500.00 the Office of the City Attorney issued a letter dated July 9, 2004 affirming
Amount Due P 27 ,854.85 respondent Camarillo's position that petitioner was liable to pay amusement
Add: Amusement Tax on golf course P 1,373,761.24 tax on its golf course.13 Ultimately, respondent Camarillo held:
25% surcharge (P6,868,806.20 x 20%) 343,440.31
72% Interest 1,236,385.12 WHEREFORE, upon consideration of the legal grounds as above-mentioned,
2,953,586.67 we reiterate our previous stand on the validity of the ASSESSMENT SHEET
GRAND TOTAL P 2,981,441.5210 pertaining to the Tax Deficiencies for CY 1998 and this ruling serve as the
(Emphasis supplied.) FINAL DEMAND for immediate settlement and payment of your amusement
tax liabilities and/or delinquencies otherwise we will constrained (sic) the
Petitioner, through counsel, wrote respondent Camarillo a letter11 dated non-issuance of a Mayor's Business Permit for nonpayment of the said
October 17, 2005 still disputing the amusement tax assessment on its golf deficiency on amusement tax and/or other tax liabilities as well as to file the
32 | P a g e
appropriate filing of administrative and judicial remedies for the collection of
the said tax liability and the letter treated as a Protest of Assessment that was
duly submitted before this office is hereby DENIED.14
Shortly after, on January 12, 2006, petitioner was served with a Closure
Order15 dated December 28, 2005 issued by respondent City Mayor Osmeña.
According to the Closure Order, petitioner committed blatant violations of
the laws and Cebu City Ordinances, to wit:
1. Operating a business without a business permit for five (5) years, from year
2001-2005, in relation to Chapters I and II and the penalty clauses under
Sections 4, 6, 8, 66 (f) and 114 of the City Tax Ordinance No. 69, otherwise
known as the REVISED CITY TAX ORDINANCE OF THE CITY OF CEBU, as
amended By C.O. 75;
2. Nonpayment of deficiency on Business Taxes and Fees amounting to
Seventeen Thousand Four Hundred Ninety-Nine Pesos and Sixty-Four
Centavos (Php17,499.64), as adjusted, despite repeated demands in violation
[of] Sections 4 and 8 of City Tax Ordinance No. 69, as amended;
3. Nonpayment of deficiency on Amusement Tax and the penalties relative
therewith totaling Two Million Nine Hundred Fifty-Three Thousand Five
Hundred Eighty-Six Pesos and Eighty-Six Centavos (Php2,953,586.86) in
violation of Sections 4 and 8 in relation to Section 42 of City Tax Ordinance
No. 69, as amended, business permit-violation of the Article 172, Revised
Penal Code of the Philippines. (Emphases supplied.)
The Closure Order established respondent Mayor Osmeña's authority for
issuance of the same and contained the following directive:
As the chief executive of the City, the Mayor has the power and duty to:
Enforce all laws and ordinances relative to the governance of the city x x x
and, in addition to the foregoing, shall x x x Issue such executive orders for
the faithful and appropriate enforcement and execution of laws and
ordinances x x x.1âwphi1 These are undeniable in the LOCAL GOVERNMENT
CODE, Section 455, par. (2) and par. (2)(iii).
Not only that, these powers can be exercised under the general welfare
clause of the Code, particularly Section 16 thereof, where it is irrefutable that
"every government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental of its efficient and effective governance, and those which are
essential to the promotion of the general welfare."
This CLOSURE ORDER precisely satisfies these legal precedents. Hence now,
in view whereof, your business establishment is hereby declared closed in
direct contravention of the above-specified laws and city ordinances. Please
cease and desist from further operating your business immediately upon
receipt of this order.
This closure order is without prejudice to the constitutional/statutory right of
the City to file criminal cases against corporate officers, who act for and its
behalf, for violations of Section 114 of the REVISED CITY TAX ORDINANCE OF
THE CITY OF CEBU and Section 516 of the LOCAL GOVERNMENT CODE, with
penalties of imprisonment and/or fine.
FOR STRICT AND IMMEDIATE COMPLIANCE.16
The foregoing developments prompted petitioner to file with the RTC on
January 13, 2006 a Petition for Injunction, Prohibition, Mandamus,
Declaration of Nullity of Closure Order, Declaration of Nullity of Assessment,
and Declaration of Nullity of Section 42 of Cebu City Tax Ordinance, with
Prayer for Temporary Restraining Order and Writ of Preliminary Injunction,
against respondents, which was docketed as Civil Case No. CEB-31988.17
Petitioner eventually filed an Amended Petition on January 19, 2006.18
Petitioner argued that the Closure Order is unconstitutional as it had been
summarily issued in violation of its right to due process; a city mayor has no
power under the Local Government Code to deny the issuance of a business
permit and order the closure of a business for nonpayment of taxes; Section
33 | P a g e
42 of the Revised Omnibus Tax Ordinance, as amended, is null and void for
being ultra vires or beyond the taxing authority of respondent Cebu City, and
consequently, the assessment against petitioner for amusement tax for 1998
based on said Section 42 is illegal and unconstitutional; and assuming
arguendo that respondent Cebu City has the power to impose amusement
tax on petitioner, such tax for 1998 already prescribed and could no longer
be enforced.
Respondents filed a Motion to Dismiss based on the grounds of (a) lack of
jurisdiction of the RTC over the subject matter; (b) non-exhaustion of
administrative remedies; (c) noncompliance with Section 187 of the Local
Government Code, which provides the procedure and prescriptive periods for
challenging the validity of a local tax ordinance; (d) noncompliance with
Section 252 of the Local Government Code and Section 75 of Republic Act No.
3857, otherwise known as the Revised Charter of the City of Cebu, requiring
payment under protest of the tax assessed; and (e) failure to establish the
authority of Ma. Theresa Ozoa (Ozoa) to institute the case on behalf of
petitioner.19
In its Opposition to the Motion to Dismiss, petitioner countered that the RTC,
a court of general jurisdiction, could take cognizance of its Petition in Civil
Case No. CEB-31988, which not only involved the issue of legality or illegality
of a tax ordinance, but also sought the declaration of nullity of the Closure
Order and the issuance of writs of injunction and prohibition. Petitioner
likewise asserted that Section 195 of the Local Government Code on the
protest of assessment does not require payment under protest. Section 252
of the same Code invoked by respondents applies only to real property taxes.
In addition, petitioner maintained that its Petition in Civil Case No. CEB-31988
could not be barred by prescription. There is nothing in the Local Government
Code that could deprive the courts of the power to determine the
constitutionality or validity of a tax ordinance due to prescription. It is the
constitutional duty of the courts to pass upon the validity of a tax ordinance
and such duty cannot be limited or restricted. Petitioner further contended
that there is no need for exhaustion of administrative remedies given that the
issues involved are purely legal; the notice of closure is patently illegal for
having been issued without due process; and there is an urgent need for
judicial intervention. Lastly, petitioner pointed out that there were sufficient
allegations in the Petition that its filing was duly authorized by petitioner. At
any rate, petitioner already attached to its Opposition its Board Resolution
No. 104 authorizing Ozoa to file a case to nullify the Closure Order. Thus,
petitioner prayed for the denial of the Motion to Dismiss.20
Respondents, in their Rejoinder to Petitioner's Opposition to the Motion to
Dismiss,21 asserted that the Closure Order was just a necessary consequence
of the nonpayment by petitioner of the amusement tax assessed against it.
The Revised Omnibus Tax Ordinance of respondent Cebu City directs that no
permit shall be issued to a business enterprise which made no proper
payment of tax and, correspondingly, no business enterprise may be allowed
to operate or continue to operate without a business permit. The
fundamental issue in the case was still the nonpayment by petitioner of
amusement tax. Respondents relied on Reyes v. Court of Appeals,22 in which
the Court categorically ruled that the prescriptive periods fixed in Section 187
of the Local Government Code are mandatory and prerequisites before
seeking redress from a competent court. Section 42 of the Revised Omnibus
Tax Ordinance, as amended, was passed on April 20, 1998, so the institution
by petitioner of Civil Case No. CEB-31988 before the RTC on January 13, 2006
- without payment under protest of the assessed amusement tax and filing of
an appeal before the Secretary of Justice within 30 days from the effectivity
of the Ordinance - was long barred by prescription.
After filing by the parties of their respective Memorandum, the RTC issued an
Order23 dated March 16, 2006 denying the prayer of petitioner for issuance
of a Temporary Restraining Order (TRO). The RTC found that when the
business permit of petitioner expired and it was operating without a business
permit, it ceased to have a legal right to do business. The RTC affirmed
respondent Mayor Osmeña's authority to issue or grant business licenses and
permits pursuant to the police power inherent in his office; and such
authority to issue or grant business licenses and permits necessarily included
the authority to suspend or revoke or even refuse the issuance of the said
34 | P a g e
business licenses and permits in case of violation of the conditions for the
issuance of the same. The RTC went on to hold that:
[Petitioner] was given opportunities to be heard when it filed a protest [of]
the assessment which was subsequently denied. To the mind of this court,
this already constitutes the observance of due process and that [petitioner]
had already been given the opportunity to be heard. Due process and
opportunity to be heard does not necessarily mean winning the argument in
one's favor but to be given the fair chance to explain one's side or views with
regards [to] the matter in issue, which in this case is the legality of the tax
assessment.
It is therefore clear that when this case was filed, [petitioner] had no more
legal right in its favor for the courts to protect. It would have been a different
story altogether had [petitioner] paid the tax assessment for the green fees
even under protest and despite payment and [respondent] Mayor refused
the issuance of the business permit because all the requisites for the issuance
of the said permit are all complied with.24
On March 20, 2006, petitioner paid under protest to respondent Cebu City,
through respondent Camarillo, the assessed amusement tax, plus penalties,
interest, and surcharges, in the total amount of P2,750,249.17.25
Since the parties agreed that the issues raised in Civil Case No. CEB-31988
were all legal in nature, the RTC already considered the case submitted for
resolution after the parties filed their respective Memorandum.26
On March 14, 2007, the R TC issued a Resolution granting the Motion to
Dismiss of respondents. Quoting from Reyes and Hagonoy Market Vendor
Association v. Municipality of Hagonoy, Bulacan,27 the RTC sustained the
position of respondents that Section 187 of the Local Government Code is
mandatory. Thus, the RTC adjudged:
From the above cited cases, it can be gleaned that the period in the filing of
the protests is important. In other words, it is the considered opinion of this
court [that] when a taxpayer questions the validity of a tax ordinance passed
by a local government legislative body, a different procedure directed in
Section 187 is to be followed. The reason for this could be because the tax
ordinance is clearly different from a law passed by Congress. The local
government code has set several limitations on the taxing power of the local
government legislative bodies including the issue of what should be taxed.
In this case, since the Petitioner failed to comply with the procedure outlined
in Section 187 of the Local Government Code and the fact that this case was
filed way beyond the period to file a case in court, then this court believes
that the action must fail.
Because of the procedural infirmity in bringing about this case to the court,
then the substantial issue of the propriety of imposing amusement taxes on
the green fees could no longer be determined.
WHEREFORE, in view of the aforegoing, this case is hereby DISMISSED.28
The RTC denied the Motion for Reconsideration of petitioner in an Order
dated October 3, 2007.
Petitioner is presently before the Court on pure questions of law, viz.:
I. WHETHER OR NOT THE POWER OF JUDICIAL REVIEW OVER THE VALIDITY
OF A LOCAL TAX ORDINANCE HAS BEEN RESTRICTED BY SECTION 187 OF THE
LOCAL GOVERNMENT CODE.
II. WHETHER OR NOT THE CITY OF CEBU OR ANY LOCAL GOVERNMENT CAN
VALIDLY IMPOSE AMUSEMENT TAX TO THE ACT OF PLAYING GOLF.29
There is merit in the instant Petition.
The RTC judgment on pure questions of law may be directly appealed to this
Court via a petition for review on certiorari.
35 | P a g e
Even before the RTC, the parties already acknowledged that the case
between them involved only questions of law; hence, they no longer
presented evidence and agreed to submit the case for resolution upon
submission of their respective memorandum.
It is incontestable that petitioner may directly appeal to this Court from the
judgment of the RTC on pure questions of law via its Petition for Review on
Certiorari. Rule 41, Section 2(c) of the Rules of Court provides that "[i]n all
cases where only questions of law are raised or involved, the appeal shall be
to the Supreme Court by petition for review on certiorari in accordance with
Rule 45." As the Court declared in Bonifacio v. Regional Trial Court of Makati,
Branch 14930:
The established policy of strict observance of the judicial hierarchy of courts,
as a rule, requires that recourse must first be made to the lowerranked court
exercising concurrent jurisdiction with a higher court. A regard for judicial
hierarchy clearly indicates that petitions for the issuance of extraordinary
writs against first level courts should be filed in the RTC and those against the
latter should be filed in the Court of Appeals. The rule is not iron-clad,
however, as it admits of certain exceptions.
Thus, a strict application of the rule is unnecessary when cases brought
before the appellate courts do not involve factual but purely legal questions.
(Citations omitted.)
"A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue
does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted[;]" and it may be
brought directly before this Court, the undisputed final arbiter of all questions
of law.31
The present case is an exception to Section 187 of the Local Government Code
and the doctrine of exhaustion of administrative remedies.
Section 187 of the Local Government Code reads:
Sec. 187. Procedure ·for Approval and Effectivity of Tax Ordinances and
Revenue Measures; Mandatory Public Hearings. – The procedure for approval
of local tax ordinances and revenue measures shall be in accordance with the
provisions of this Code: Provided, That public hearings shall be conducted for
the purpose prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or revenue
measures may be raised on appeal within thirty (30) days from the effectivity
thereof to the Secretary of Justice who shall render a decision within sixty
(60) days from the date of receipt of the appeal: Provided, however, That such
appeal shall not have the effect of suspending the effectivity of the ordinance
and the accrual and payment of the tax, fee, or charge levied therein:
Provided, finally, That within thirty (30) days after receipt of the decision or
the lapse of the sixty-day period without the Secretary of Justice acting upon
the appeal, the aggrieved party may file appropriate proceedings with a court
of competent jurisdiction.
Indeed, the Court established in Reyes that the aforequoted provision is a
significant procedural requisite and, therefore, mandatory:
Clearly, the law requires that the dissatisfied taxpayer who questions the
validity or legality of a tax ordinance must file his appeal to the Secretary of
Justice, within 30 days from effectivity thereof. In case the Secretary decides
the appeal, a period also of 30 days is allowed for an aggrieved party to go to
court. But if the Secretary does not act thereon, after the lapse of 60 days, a
party could already proceed to seek relief in court. These three separate
periods are clearly given for compliance as a prerequisite before seeking
redress in a competent court. Such statutory periods are set to prevent delays
as well as enhance the orderly and speedy discharge of judicial functions. For
this reason the courts construe these provisions of statutes as mandatory.
A municipal tax ordinance empowers a local government unit to impose
taxes. The power to tax is the most effective instrument to raise needed
revenues to finance and support the myriad activities of local government
36 | P a g e
units for the delivery of basic services essential to the promotion of the
general welfare and enhancement of peace, progress, and prosperity of the
people. Consequently, any delay in implementing tax measures would be to
the detriment of the public. It is for this reason that protests over tax
ordinances are required to be done within certain time frames. In the instant
case, it is our view that the failure of petitioners to appeal to the Secretary of
Justice within 30 days as required by Sec. 187 of R.A. 7160 is fatal to their
cause.32 (Citations omitted.)
The Court further affirmed in Hagonoy that:
At this point, it is apropos to state that the timeframe fixed by law for parties
to avail of their legal remedies before competent courts is not a "mere
technicality" that can be easily brushed aside. The periods stated in Section
187 of the Local Government Code are mandatory. Ordinance No. 28 is a
revenue measure adopted by the municipality of Hagonoy to fix and collect
public market stall rentals. Being its lifeblood, collection of revenues by the
government is of paramount importance. The funds for the operation of its
agencies and provision of basic services to its inhabitants are largely derived
from its revenues and collections. Thus, it is essential that the validity of
revenue measures is not left uncertain for a considerable length of time.
Hence, the law provided a time limit for an aggrieved party to assail the
legality of revenue measures and tax ordinances.33 (Citations omitted.)
Nevertheless, in later cases, the Court recognized exceptional circumstances
that justify noncompliance by a taxpayer with Section 187 of the Local
Government Code.
The Court ratiocinated in Ongsuco v. Malones,34 thus:
It is true that the general rule is that before a party is allowed to seek the
intervention of the court, he or she should have availed himself or herself of
all the means of administrative processes afforded him or her. Hence, if resort
to a remedy within the administrative machinery can still be made by giving
the administrative officer concerned every opportunity to decide on a matter
that comes within his or her jurisdiction, then such remedy should be
exhausted first before the court's judicial power can be sought. The
premature invocation of the intervention of the court is fatal to one's cause
of action. The doctrine of exhaustion of administrative remedies is based on
practical and legal reasons. The availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies.
Furthermore, the courts of justice, for reasons of comity and convenience,
will shy away from a dispute until the system of administrative redress has
been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case.
However, there are several exceptions to this rule.
The rule on the exhaustion of administrative remedies is intended to preclude
a court from arrogating unto itself the authority to resolve a controversy, the
jurisdiction over which is initially lodged with an administrative body of
special competence. Thus, a case where the issue raised is a purely legal
question, well within the competence; and the jurisdiction of the court and
not the administrative agency, would clearly constitute an exception.
Resolving questions of law, which involve the interpretation and application
of laws, constitutes essentially an exercise of judicial power that is exclusively
allocated to the Supreme Court and such lower courts the Legislature may
establish.
In this case, the parties are not disputing any factual matter on which they
still need to present evidence. The sole issue petitioners raised before the
RTC in Civil Case No. 25843 was whether Municipal Ordinance No. 98-01 was
valid and enforceable despite the absence, prior to its enactment, of a public
hearing held in accordance with Article 276 of the Implementing Rules and
Regulations of the Local Government Code. This is undoubtedly a pure
question of law, within the competence and jurisdiction of the RTC to resolve.
Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly
establishes the appellate jurisdiction of this Court, and impliedly recognizes
the original jurisdiction of lower courts over cases involving the
constitutionality or validity of an ordinance:
37 | P a g e
Section 5. The Supreme Court shall have the following powers:
xxxx
(2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law
or the Rules of Court may provide, final judgments and orders of lower courts
in:
(a) All cases in which the constitutionality or validity of any treaty,
international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.
In J.M Tuason and Co., Inc. v. Court of Appeals, Ynot v. Intermediate Appellate
Court, and Commissioner of Internal Revenue v. Santos, the Court has
affirmed the jurisdiction of the RTC to resolve questions of constitutionality
and validity of laws (deemed to include local ordinances) in the first instance,
without deciding questions which pertain to legislative policy. (Emphases
supplied, citations omitted.)
In Cagayan Electric Power and Light Co., Inc. (CEPALCO) v. City of Cagayan De
Oro,35 the Court initially conceded that as in Reyes, the failure of taxpayer
CEPALCO to appeal to the Secretary of Justice within the statutory period of
30 days from the effectivity of the ordinance should have been fatal to its
cause. However, the Court purposefully relaxed the application of the rules
in view of the more substantive matters.
Similar to Ongsuco and CEPALCO, the case at bar constitutes an exception to
the general rule. Not only does the instant Petition raise pure questions of
law, but it also involves substantive matters imperative for the Court to
resolve.
Section 42 of the Revised Omnibus Tax Ordinance, as amended, imposing
amusement tax on golf courses is null and void as it is beyond the authority
of respondent Cebu City to enact under the Local Government Code.
The Local Government Code authorizes the imposition by local government
units of amusement tax under Section 140, which provides:
Sec. 140. Amusement Tax. - (a) The province may levy an amusement tax to
be collected from the proprietors, lessees, or operators of theaters, cinemas,
concert halls, circuses, boxing stadia, and other places of amusement at a rate
of not more than thirty percent (30%) of the gross receipts from admission
fees.
(b) In the case of theaters or cinemas, the tax shall first be deducted and
withheld by their proprietors, lessees, or operators and paid to the provincial
treasurer before the gross receipts are divided between said proprietors,
lessees, or operators and the distributors of the cinematographic films.
(c) The holding of operas, concerts, dramas, recitals, painting, and art
exhibitions, flower shows, musical programs, literary and oratorical
presentations, except pop, rock, or similar concerts shall be exempt from the
payment of the tax hereon imposed.
(d) The sangguniang panlalawigan may prescribe the time, manner, terms and
conditions for the payment of tax. In case of fraud or failure to pay the tax,
the sangguniang panlalawigan may impose such surcharges, interests and
penalties as it may deem appropriate.
(e) The proceeds from the amusement tax shall be shared equally by the
province and "the municipality where such amusement places are located.
(Emphasis supplied.)
"Amusement places," as defined in Section 13l(c) of the Local Government
Code, "include theaters, cinemas, concert halls, circuses and other places of
amusement where one seeks admission to entertain oneself by seeing or
viewing the show or performance."
38 | P a g e
The pronouncements of the Court in Pelizloy Realty Corporation v. The
Province of Benguet36 are of particular significance to this case. The Court, in
Pelizloy Realty, declared null and void the second paragraph of Article X,
Section 59 of the Benguet Provincial Code, in so far as it imposes amusement
taxes on admission fees to resorts, swimming pools, bath houses, hot springs,
and tourist spots. Applying the principle of ejusdem generis, as well as the
ruling in the PBA case, the Court expounded on the authority of local
government units to impose amusement tax under Section 140, in relation to
Section 131(c), of the Local Government Code, as follows:
Under the principle of ejusdem generis, "where a general word or phrase
follows an enumeration of particular and specific words of the same class or
where the latter follow the former, the general word or phrase is to be
construed to include, or to be restricted to persons, things or cases akin to,
resembling, or of the same kind or class as those specifically mentioned."
The purpose and rationale of the principle was explained by the Court in
National Power Corporation v. Angas as follows:
The purpose of the rule on ejusdem generis is to give effect to both the
particular and general words, by treating the particular words as indicating
the class and the general words as including all that is embraced in said class,
although not specifically named by the particular words. This is justified on
the ground that if the lawmaking body intended the general terms to be used
in their unrestricted sense, it would have not made an enumeration of
particular subjects but would have used only general terms. [2 Sutherland,
Statutory Construction, 3rd ed., pp. 395-400].
In Philippine Basketball Association v. Court of Appeals, the Supreme Court
had an opportunity to interpret a starkly similar provision or the counterpart
provision of Section 140 of the LGC in the Local Tax Code then in effect.
Petitioner Philippine Basketball Association (PBA) contended that it was
subject to the imposition by LGUs of amusement taxes (as opposed to
amusement taxes imposed by the national government). In support of its
contentions, it cited Section 13 of Presidential Decree No. 231, otherwise
known as the Local Tax Code of 1973, (which is analogous to Section 140 of
the LGC) providing the following:
Section 13. Amusement tax on admission. – The province shall impose a tax
on admission to be collected from the proprietors, lessees, or operators of
theaters, cinematographs, concert halls, circuses and other places of
amusement x x x.
Applying the principle of ejusdem generis, the Supreme Court rejected PBA's
assertions and rioted that:
[I]n determining the meaning of the phrase 'other places of amusement', one
must refer to the prior enumeration of theaters, cinematographs, concert
halls and circuses with artistic expression as their common characteristic.
Professional basketball games do not fall under the same category as
theaters, cinematographs, concert halls and circuses as the latter basically
belong to artistic forms of entertainment while the former caters to sports
and gaming.
However, even as the phrase 'other places of amusement' was already
clarified in Philippine Basketball Association, Section 140 of the LGC adds to
the enumeration of 'places of amusement' which may properly be subject to
amusement tax. Section 140 specifically mentions 'boxing stadia' in addition
to "theaters, cinematographs, concert halls [and] circuses" which were
already mentioned in PD No. 231. Also, 'artistic expression' as a characteristic
does not pertain to 'boxing stadia'.
In the present case, the Court need not embark on a laborious effort at
statutory construction. Section 131 (c) of the LGC already provides a clear
definition of' amusement places':
xxxx
Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are
bound by a common typifying characteristic in that they are all venues
39 | P a g e
primarily for the staging of spectacles or the holding of public shows,
exhibitions, performances, and other events meant to be viewed by an
audience. Accordingly, 'other places of amusement' must be interpreted in
light of the typifying characteristic of being venues "where one seeks
admission to entertain oneself by seeing or viewing the show or
performances" or being venues primarily used to stage spectacles or hold
public shows, exhibitions, performances, and other events meant to be
viewed by an audience.
As defined in The New Oxford American Dictionary, 'show' means "a
spectacle or display of something, typically an impressive one"; while
'performance' means "an act of staging or presenting a play, a concert, or
other form of entertainment." As such, the ordinary definitions of the words
'show' and 'performance' denote not only visual engagement (i.e., the seeing
or viewing of things) but also active doing (e.g., displaying, staging or
presenting) such that actions are manifested to, and (correspondingly)
perceived by an audience.
Considering these, it is clear that resorts, swimming pools, bath houses, hot
springs and tourist spots cannot be considered venues primarily "where one
seeks admission to entertain oneself by seeing or viewing the show or
performances". While it is true that they may be venues where people are
visually engaged, they are not primarily venues for their proprietors or
operators to actively display, stage or present shows and/or performances.
Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do
not belong to the same category or class as theaters, cinemas, concert halls,
circuses, and boxing stadia. It follows that they cannot be considered as
among the 'other places of amusement' contemplated by Section 140 of the
LGC and which may properly be subject to amusement taxes.37 (Emphases
supplied, citations omitted.)
In light of Pelizloy Realty, a golf course cannot be considered a place of
amusement. As petitioner asserted, people do not enter a golf course to see
or view a show or performance. Petitioner also, as proprietor or operator of
the golf course, does not actively display, stage, or present a show or
performance. People go to a golf course to engage themselves in a physical
sport activity, i.e., to play golf; the same reason why people go to a gym or
court to play badminton or tennis or to a shooting range for target practice,
yet there is no showing herein that such gym, court, or shooting range is
similarly considered an amusement place subject to amusement tax. There is
no basis for singling out golf courses for amusement tax purposes from other
places where people go to play sports. This is in contravention of one of the
fundamental principles of local taxation: that the "[t]axation shall be uniform
in each local government unit."38 Uniformity of taxation, like the kindred
concept of equal protection, requires that all subjects or objects of taxation,
similarly situated, are to be treated alike both in privileges and liabilities.39
Not lost on the Court is its declaration in Manila Electric Co. v. Province of
Laguna40 that under the 1987 Constitution, "where there is neither a grant
nor a prohibition by statute, the tax power [of local government units] must
be deemed to exist although Congress may provide statutory limitations and
guidelines." Section 186 of the Local Government Code also expressly grants
local government units the following residual power to tax:
Sec. 186. Power to Levy Other Taxes; Fees, or Charges. – Local government
units may exercise the power to levy taxes, fees, or charges on any base or
subject not otherwise specifically enumerated herein or taxed under the
provisions of the National Internal Revenue Code, as amended, or other
applicable laws: Provided, that the taxes, fees, or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared national policy:
Provided, further, That the ordinance levying such taxes, fees or charges shall
not be enacted without any prior public hearing conducted for the
purpose.1awp++i1 (Emphasis supplied.)
Respondents, however, cannot claim that Section 42 of the Revised Omnibus
Tax Ordinance, as amended, imposing amusement tax on golf courses, was
enacted pursuant to the residual power to tax of respondent Cebu City. A
local government unit may exercise its residual power to tax when there is
neither a grant nor a prohibition by statute; or when such taxes, fees, or
40 | P a g e
charges are not otherwise specifically enumerated in the Local Government
Code, National Internal Revenue Code, as amended, or other applicable laws.
In the present case, Section 140, in relation to Section 131 (c), of the Local
Government Code already explicitly and clearly cover amusement tax and
respondent Cebu City must exercise its authority to impose amusement tax
within the limitations and guidelines as set forth in said statutory provisions.

WHEREFORE, in view of all the foregoing, the Court GRANTS the instant
Petition, and REVERSES and SETS ASIDE the Resolution dated March 14, 2007
and the Order dated October 3, 2007 of the Regional Trial Court, Cebu City,
Branch 9 in Civil Case No. CEB-31988. The Court DECLARES NULL and VOID
the following: (a) Section 42 of the Revised Omnibus Tax Ordinance of the
City of Cebu, as amended by City Tax Ordinance Nos. LXXXII and LXXXIV,
insofar as it imposes amusement tax of 20% on the gross receipts on
entrance, playing green, and/or admission fees of golf courses; (b) the tax
assessment against petitioner for amusement tax on its golf course for the
year 1998 in the amount of Pl,373,761.24, plus surcharges and interest
pertaining to said amount, issued by the Office of the City Treasurer, City of
Cebu; and (c) the Closure Order dated December 28, 2005 issued against Alta
Vista Golf and Country Club by the Office of the Mayor, City of Cebu. The
Court also ORDERS the City of Cebu to refund to Alta Vista Golf and Country
Club the amusement tax, penalties, surcharge, and interest paid under
protest by the latter in the total amount of P2, 750,249 .17 or to apply the
same amount as tax credit against existing or future tax liability of said Club.

SO ORDERED.

41 | P a g e
Municipality of Nueva Era vs Municipality of Marcos
REYES, R.T., J.:
AS the law creating a municipality fixes its boundaries, settlement of
boundary disputes between municipalities is facilitated by carrying into effect
the law that created them.
Any alteration of boundaries that is not in accordance with the law creating a
municipality is not the carrying into effect of that law but its amendment,
which only the Congress can do.1
For Our review on certiorari is the Decision2 of the Court of Appeals (CA)
reversing to a certain extent that3 of the Regional Trial Court (RTC), Branch
12, Laoag City, Ilocos Norte, in a case that originated from the Sangguniang
Panlalawigan (SP) of Ilocos Norte about the boundary dispute between the
Municipalities of Marcos and Nueva Era in Ilocos Norte.
The CA declared that Marcos is entitled to have its eastern boundary
extended up "to the boundary line between the province of Ilocos Norte and
Kalinga-Apayao."4 By this extension of Marcos' eastern boundary, the CA
allocated to Marcos a portion of Nueva Era's territory.
The Facts
The Municipality of Nueva Era was created from the settlements of Bugayong,
Cabittaoran, Garnaden, Padpadon, Padsan, Paorpatoc, Tibangran, and Uguis
which were previously organized as rancherias, each of which was under the
independent control of a chief. Governor General Francis Burton Harrison,
acting on a resolution passed by the provincial government of Ilocos Norte,
united these rancherias and created the township of Nueva Era by virtue of
Executive Order (E.O.) No. 66 5 dated September 30, 1916.
The Municipality of Marcos, on the other hand, was created on June 22, 1963
pursuant to Republic Act (R.A.) No. 3753 entitled "An Act Creating the
Municipality of Marcos in the Province of Ilocos Norte." Section 1 of R.A. No.
3753 provides:
SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas
and Agunit in the Municipality of Dingras, Province of Ilocos Norte, are hereby
separated from the said municipality and constituted into a new and separate
municipality to be known as the Municipality of Marcos, with the following
boundaries:
On the Northwest, by the barrios Biding-Rangay boundary going down to the
barrios Capariaan-Gabon boundary consisting of foot path and feeder road;
on the Northeast, by the Burnay River which is the common boundary of
barrios Agunit and Naglayaan; on the East, by the Ilocos Norte-Mt. Province
boundary; on the South, by the Padsan River which is at the same time the
boundary between the municipalities of Banna and Dingras; on the West and
Southwest, by the boundary between the municipalities of Batac and Dingras.
The Municipality of Marcos shall have its seat of government in the barrio of
Biding.
Based on the first paragraph of the said Section 1 of R.A. No. 3753, it is clear
that Marcos shall be derived from the listed barangays of Dingras, namely:
Capariaan, Biding, Escoda, Culao, Alabaan, Ragas and Agunit. The
Municipality of Nueva Era or any of its barangays was not mentioned. Hence,
if based only on said paragraph, it is clear that Nueva Era may not be
considered as a source of territory of Marcos.
There is no issue insofar as the first paragraph is concerned which named only
Dingras as the mother municipality of Marcos. The problem, however, lies in
the description of Marcos' boundaries as stated in the second paragraph,
particularly in the phrase: "on the East, by the Ilocos Norte-Mt. Province
boundary."
42 | P a g e
It must be noted that the term "Mt. Province" stated in the above phrase
refers to the present adjoining provinces of Benguet, Mountain Province,
Ifugao, Kalinga and Apayao, which were then a single province.
Mt. Province was divided into the four provinces of Benguet, Mountain
Province, Ifugao, and Kalinga-Apayao by virtue of R.A. No. 4695 which was
enacted on June 18, 1966. On February 14, 1995, the province of Kalinga-
Apayao, which comprises the sub-provinces of Kalinga and Apayao, was
further converted into the regular provinces of Kalinga and Apayao pursuant
to R.A. No. 7878.
The part of then Mt. Province which was at the east of Marcos is now the
province of Apayao. Hence, the eastern boundary referred to by the second
paragraph of Section 1 of R.A. No. 3753 is the present Ilocos Norte-Apayao
boundary.
On the basis of the said phrase, which described Marcos' eastern boundary,
Marcos claimed that the middle portion of Nueva Era, which adjoins its
eastern side, formed part of its territory. Its reasoning was founded upon the
fact that Nueva Era was between Marcos and the Ilocos Norte-Apayao
boundary such that if Marcos was to be bounded on the east by the Ilocos
Norte-Apayao boundary, part of Nueva Era would consequently be obtained
by it.6
Marcos did not claim any part of Nueva Era as its own territory until after
almost 30 years,7 or only on March 8, 1993, when its Sangguniang Bayan
passed Resolution No. 93-015.8 Said resolution was entitled: "Resolution
Claiming an Area which is an Original Part of Nueva Era, But Now Separated
Due to the Creation of Marcos Town in the Province of Ilocos Norte."
Marcos submitted its claim to the SP of Ilocos Norte for its consideration and
approval. The SP, on the other hand, required Marcos to submit its position
paper.9
In its position paper, Marcos alleged that since its northeastern and eastern
boundaries under R.A. No. 3753 were the Burnay River and the Ilocos Norte-
Mountain Province boundary, respectively, its eastern boundary should not
be limited to the former Dingras-Nueva Era boundary, which was
coterminous and aligned with the eastern boundary of Dingras. According to
Marcos, its eastern boundary should extend further to the east or up to the
Ilocos-Norte-Mt. Province boundary pursuant to the description of its eastern
boundary under R.A. No. 3753.10
In view of its claim over the middle portion of Nueva Era, Marcos posited that
Nueva Era was cut into two parts. And since the law required that the land
area of a municipality must be compact and contiguous, Nueva Era's northern
isolated portion could no longer be considered as its territory but that of
Marcos'. Thus, Marcos claimed that it was entitled not only to the middle
portion11 of Nueva Era but also to Nueva Era's isolated northern portion.
These areas claimed by Marcos were within Barangay Sto. Niño, Nueva Era.
Nueva Era reacted to the claim of Marcos through its Resolution No. 1, Series
of 1993. It alleged that since time immemorial, its entire land area was an
ancestral domain of the "tinguians," an indigenous cultural community. It
argued to the effect that since the land being claimed by Marcos must be
protected for the tinguians, it must be preserved as part of Nueva Era.12
According to Nueva Era, Marcos was created out of the territory of Dingras
only. And since R.A. No. 3753 specifically mentioned seven (7) barrios of
Dingras to become Marcos, the area which should comprise Marcos should
not go beyond the territory of said barrios.13
From the time Marcos was created in 1963, its eastern boundary had been
considered to be aligned and coterminous with the eastern boundary of the
adjacent municipality of Dingras. However, based on a re-survey in 1992,
supposedly done to conform to the second paragraph of Section 1 of R.A. No.
3753, an area of 15,400 hectares of Nueva Era was alleged to form part of
Marcos.14 This was the area of Barangay Sto. Niño, Nueva Era that Marcos
claimed in its position paper.
43 | P a g e

On March 29, 2000, the SP of Ilocos Norte ruled in favor of Nueva Era. The
fallo of its decision15 reads:
WHEREFORE, in view of all the foregoing, this Body has no alternative but to
dismiss, as it hereby DISMISSES said petition for lack of merit. The disputed
area consisting of 15,400 hectares, more or less, is hereby declared as part
and portion of the territorial jurisdiction of respondent Nueva Era.16
R.A. No. 3753 expressly named the barangays that would comprise Marcos,
but none of Nueva Era's barangays were mentioned. The SP thus construed,
applying the rule of expressio unius est exclusio alterius, that no part of Nueva
Era was included by R.A. No. 3753 in creating Marcos.17
The SP ratiocinated that if Marcos was to be bounded by Mt. Province, it
would encroach upon a portion, not only of Nueva Era but also of Abra. Thus:
x x x Even granting, for the sake of argument, that the eastern boundary of
Marcos is indeed Mountain Province, Marcos will then be claiming a portion
of Abra because the province, specifically Barangay Sto. Niño, Nueva Era, is
actually bounded on the East by the Province of Abra. Abra is situated
between and separates the Provinces of Ilocos Norte and Mountain Province.
This is precisely what this body would like to avoid. Statutes should be
construed in the light of the object to be achieved and the evil or mischief to
be suppressed, and they should be given such construction as will advance
the object, suppress the mischief and secure the benefits intended.18
(Citations omitted)
The SP further explained:
Invariably, it is not the letter, but the spirit of the law and the intent of the
legislature that is important. When the interpretation of the statute
according to the exact and literal import of its words would lead to absurdity,
it should be construed according to the spirit and reason, disregarding if
necessary the letters of the law. It is believed that congress did not intend to
have this absurd situation to be created when it created the Municipality of
Marcos. This body, by the mandate given to it by the RA 7160 otherwise
known Local Government Code, so believes that respondent Nueva Era or any
portion thereof has been excluded from the ambit of RA 3753. Under the
principle of "espressio (sic) unios (sic) est exclusio alterius," by expressly
naming the barangays that will comprise the town of Marcos, those not
mentioned are deemed excluded. In Republic Act 4354, where Section 2
thereof enumerated the barrios comprising the City of Davao excluding the
petitioner Barrio Central as part of the said City, the court held that there
arose a prima facie conclusion that the said law abolished Barrio Central as
part of Davao City.
Historically, the hinterlands of Nueva Era have been known to be the home
of our brothers and sisters belonging to peculiar groups of non-(C)hristian
inhabitants with their own rich customs and traditions and this body takes
judicial notice that the inhabitants of Nueva Era have proudly claimed to be a
part of this rich culture. With this common ancestral heritage which
unfortunately is absent with Marcos, let it not be disturbed.19 (Emphasis ours
and citations omitted)
RTC Decision
On appeal by Marcos, the RTC affirmed the decision of the SP in its decision20
of March 19, 2001. The dispositive part of the RTC decision reads:
WHEREFORE, the instant appeal is hereby DISMISSED. The questioned
decision of the Sangguniang Panlalawigan of Ilocos Norte is hereby
AFFIRMED.
No costs.
SO ORDERED.21
The RTC reasoned out in this wise:
44 | P a g e

The position of the Municipality of Marcos is that the provision of R.A. 3753
as regards its boundary on the East which is the "Ilocos Norte-Mt. Province"
should prevail.
On the other hand, the Municipality of Nueva Era posits the theory that only
the barrios of the Municipality of Dingras as stated in R.A. 3753 should be
included in the territorial jurisdiction of the Municipality of Marcos. The
Sangguniang Panlalawigan agreed with the position of Nueva Era.
xxxx
An examination of the Congressional Records during the deliberations of the
R.A. 3753 (House Bill No. 3721) shows the Explanatory Note of Congressman
Simeon M. Valdez, 2nd District, Ilocos Norte, to wit:
EXPLANATORY NOTE
This bill seeks to create in the Province of Ilocos Norte a new municipality to
be known as the Municipality of Marcos, to be comprised by the present
barrios of Capariaan, Biding Escoda, Culao, Alabaan, Ragas and Agunit, all in
the Municipality of Dingras of the same province. The seat of government will
be in the sitio of San Magro in the present barrio of Ragas.
xxxx
On the other hand, the Municipality of Dingras will not be adversely affected
too much because its finances will still be sound and stable. Its capacity to
comply with its obligations, especially to its employees and personnel, will
not be diminished nor its operations paralyzed. On the contrary, economic
development in both the mother and the proposed municipalities will be
accelerated.
In view of the foregoing, approval of this bill is earnestly requested.
(Sgd.) SIMEON M. VALDEZ
Congressman, 2nd District
Ilocos Norte22
Parenthetically, the legislative intent was for the creation of the Municipality
of Marcos, Ilocos Norte from the barrios (barangays) of the Municipality of
Dingras, Ilocos Norte only. Hence, the Municipality of Marcos cannot add any
area beyond the territorial jurisdiction of the Municipality of Dingras, Ilocos
Norte. This conclusion might have been different only if the area being
claimed by the Municipality of Marcos is within the territorial jurisdiction of
the Municipality of Dingras and not the Municipality of Nueva Era. In such
case, the two conflicting provisions may be harmonized by including such
area within the territorial jurisdiction of the Municipality of Dingras as within
the territorial jurisdiction of the Municipality of Marcos.23 (Emphasis ours)
CA Disposition
Still determined to have a more extensive eastern boundary, Marcos filed a
petition for review24 of the RTC decision before the CA. The issues raised by
Marcos before the CA were:
1. Whether or not the site of Hercules Minerals and Oil, Inc. which is within a
Government Forest Reservation in Barangay Sto. Niño, formerly of Nueva Era,
is a part of the newly created Municipality of Marcos, Ilocos Norte.
2. Whether or not the portion of Barangay Sto. Niño on the East which is
separated from Nueva Era as a result of the full implementation of the
boundaries of the new Municipality of Marcos belongs also to Marcos or to
Nueva Era.25
The twin issues involved two portions of Nueva Era, viz.: (1) middle portion,
where Hercules Minerals and Oil, Inc. is located; and (2) northern portion of
Nueva Era, which, according to Marcos, was isolated from Nueva Era in view
of the integration to Marcos of said middle portion.
45 | P a g e
Marcos prayed before the CA that the above two portions of Nueva Era be
declared as part of its own territory. It alleged that it was entitled to the
middle portion of Nueva Era in view of the description of Marcos' eastern
boundary under R.A. No. 3753. Marcos likewise contended that it was
entitled to the northern portion of Nueva Era which was allegedly isolated
from Nueva Era when Marcos was created. It posited that such isolation of
territory was contrary to law because the law required that a municipality
must have a compact and contiguous territory.26
In a Decision27 dated June 6, 2005, the CA partly reversed the RTC decision
with the following disposition:
WHEREFORE, we partially GRANT the petition treated as one for certiorari.
The Decisions of both the Sangguniang Panlalawigan and Regional Trial Court
of Ilocos Norte are REVERSED and SET ASIDE insofar as they made the eastern
boundary of the municipality of Marcos co-terminous with the eastern
boundary of Dingras town, and another is rendered extending the said
boundary of Marcos to the boundary line between the province of Ilocos
Norte and Kalinga-Apayao, but the same Decisions are AFFIRMED with
respect to the denial of the claim of Marcos to the detached northern portion
of barangay Sto. Niño which should, as it is hereby ordered to, remain with
the municipality of Nueva Era. No costs.
SO ORDERED.28
In concluding that the eastern boundary of Marcos was the boundary line
between Ilocos Norte and Kalinga-Apayao, the CA gave the following
explanation:
Clearly then, both the SP and the RTC erred when they ruled that the eastern
boundary of Marcos is only coterminous with the eastern boundary of the
adjacent municipality of Dingras and refused to extend it up to the boundary
line between the provinces of Ilocos Norte and Mountain Province (Kalinga-
Apayao). R.A. No. 3753, the law creating Marcos, is very explicit and leaves
no room for equivocation that the boundaries of Marcos town are:
"On the Northwest by the barrios Biding-Rangay boundary going down to the
barrios Capariaan-Gabon boundary consisting of foot path and feeder road;
on the Northeast, by the Burnay River which is the common boundary of
barrios Agunit and Naglayaan; on the East, by the Ilocos Norte-Mt. Province
boundary; on the South by the Padsan River, which is at the same time the
boundary between the municipalities of Banna and Dingras; on the West and
Southwest by the boundary between the municipalities of Batac and
Dingras."
To stop short at the eastern boundary of Dingras as the eastern boundary also
of Marcos and refusing to go farther to the boundary line between Ilocos
Norte and Mountain Province (Kalinga-Apayao) is tantamount to amending
the law which Congress alone can do. Both the SP and RTC have no
competence to undo a valid act of Congress.
It is not correct to say that Congress did not intend to take away any part of
Nueva Era and merge it with Marcos for it is chargeable with conclusive
knowledge that when it provided that the eastern boundary of Marcos is the
boundary line between Ilocos Norte and Mountain Province, (by the time of
both the SB and RTC Decision was already Kalinga-Apayao), it would be
cutting through a portion of Nueva Era. As the law is written so must it be
applied. Dura lex sed lex!29
The CA likewise held that the province Abra was not located between Marcos
and Kalinga-Apayao; and that Marcos would not encroach upon a portion of
Abra for it to be bounded by Kalinga-Apayao, to wit:
Nueva Era's contention that to lay out the eastern jurisdiction of Marcos to
the boundary line between Ilocos Norte and Mountain Province (Kalinga-
Apayao) would mean annexing part of the municipality of Itnig, province of
Abra to Marcos as Abra is between Ilocos Norte and Mountain Province is
geographically erroneous. From Nueva Era's own map of Region 1, which also
depicts the locations of Kalinga-Apayao, Abra, Mountain Province, Benguet
and Nueva Vizcaya after the partition of the old Mountain Province into the
46 | P a g e
provinces of Kalinga-Apayao, Ifugao, Mountain Province and Benguet, the
province of Abra is situated far to the south of Kalinga Apayao and is between
the latter and the present Mountain Province, which is farther south of Abra.
Abra is part of the eastern boundary of Ilocos Sur while Kalinga-Apayao is the
eastern boundary of Ilocos Norte. Hence, in no way will the eastern boundary
of the municipality of Marcos encroach upon a portion of Abra.30
However, Marcos' claim over the alleged isolated northern portion of Nueva
Era was denied. The CA ruled:
Going now to the other area involved, i.e., the portion of Sto. Niño that is
separated from its mother town Nueva Era and now lies east of the
municipalities of Solsona and Dingras and north of Marcos, it bears stressing
that it is not included within the area of Marcos as defined by law. But since
it is already detached from Sto. Niño, Marcos is laying claim to it to be
integrated into its territory by the SP because it is contiguous to a portion of
said municipality.
We hold that the SP has no jurisdiction or authority to act on the claim, for it
will necessarily substantially alter the north eastern and southern boundaries
of Marcos from that defined by law and unduly enlarge its area. Only
Congress can do that. True, the SP may substantially alter the boundary of a
barangay within its jurisdiction. But this means the alteration of the boundary
of a barangay in relation to another barangay within the same municipality
for as long as that will not result in any change in the boundary of that
municipality. The area in dispute therefore remains to be a part of Sto. Niño,
a barangay of Nueva Era although separated by the newly created Marcos
town pursuant to Section 7(c) of the 1991 Local Government Code which
states:
SEC. 7. Creation and Conversion. - As a general rule, the creation of a local
government unit or its conversion from one level to another shall be based
on verifiable indicators of viability and projected capacity to provide services,
to wit:
xxxx
(c) Land Area. - It must be contiguous, unless it comprises two or more islands
or is separated by a local government unit independent of the others;
properly identified by metes and bounds with technical descriptions; and
sufficient to provide for such basic services and facilities to meet the
requirements of its populace.31
The CA also expressed the view that Marcos adopted the wrong mode of
appeal in bringing the case to it. The case, according to the CA, was
appealable only to the RTC. Nonetheless, despite its pronouncement that the
case was dismissible, the CA took cognizance of the same by treating it as one
for certiorari, to wit:
A final word. At the outset, we agonized over the dilemma of choosing
between dismissing outright the petition at bar or entertaining it. This is for
the simple reason that a petition for review is a mode of appeal and is not
appropriate as the Local Government Code provides for the remedy of appeal
in boundary disputes only to the Regional Trial Court but not any further
appeal to this Court. Appeal is a purely statutory right. It cannot be exercised
unless it is expressly granted by law. This is too basic to require the citation
of supporting authority.
xxxx
By the same token, since the Local Government Code does not explicitly grant
the right of further appeal from decisions of the RTCs in boundary disputes
between or among local government units, Marcos town cannot exercise that
right from the adverse decision of the RTC of Ilocos Norte. Nonetheless,
because of the transcendental legal and jurisdictional issues involved, we
solved our inceptive dilemma by treating the petition at bar as a special civil
action for certiorari.32
Nueva Era was not pleased with the decision of the CA. Hence, this petition
for review on certiorari under Rule 45.
47 | P a g e

Issues
Nueva Era now raises the following issues:
a) Whether or not, the Court of Appeals has jurisdiction on the Petition for
Review on Appeal, since Sec. 119 of the Local Government Code, which
provides that "An appeal to the Decision of the Sangguniang Panlalawigan is
exclusively vested to the Regional Trial Court, without further Appeal to the
Court of Appeals";
b) Whether or not, the Court of Appeals gravely abused its discretion, in
treating the Petition for Review On Appeal, filed under Rule 45, Revised Rules
of Court, as a Petition for Certiorari, under Rule 65 of the Revised Rules of
Court;
c) Whether or not, the Court of Appeals erred in its appreciation of facts, in
declaring that MARCOS East is not coterminous with the Eastern boundary of
its mother town-Dingras. That it has no factual and legal basis to extend
MARCOS territory beyond Brgys. Agunit (Ferdinand) and Culao (Elizabeth) of
Marcos, and to go further East, by traversing and disintegrating Brgy. Sto.
Niño, and drawing parallel lines from Sto. Niño, there lies Abra, not Mt.
Province or Kalinga-Apayao.33
Basically, there are two (2) issues to resolve here: (1) whether or not the
mode of appeal adopted by Marcos in bringing the case to the CA is proper;
and (2) whether or not the eastern boundary of Marcos extends over and
covers a portion of Nueva Era.
Our Ruling
Marcos correctly appealed the RTC judgment via petition for review under
Rule 42.
Under Section 118(b) of the Local Government Code, "(b)oundary disputes
involving two (2) or more municipalities within the same province shall be
referred for settlement to the sangguniang panlalawigan concerned." The
dispute shall be formally tried by the said sanggunian in case the disputing
municipalities fail to effect an amicable settlement.34
The SP of Ilocos validly took cognizance of the dispute between the parties.
The appeal of the SP judgment to the RTC was likewise properly filed by
Marcos before the RTC. The problem, however, lies in whether the RTC
judgment may still be further appealed to the CA.
The CA pronounced that the RTC decision on the boundary dispute was not
appealable to it. It ruled that no further appeal of the RTC decision may be
made pursuant to Section 119 of the Local Government Code35 which
provides:
SECTION 119. Appeal. - Within the time and manner prescribed by the Rules
of Court, any party may elevate the decision of the sanggunian concerned to
the proper Regional Trial Court having jurisdiction over the area in dispute.
The Regional Trial Court shall decide the appeal within one (1) year from the
filing thereof. Pending final resolution of the disputed area prior to the
dispute shall be maintained and continued for all legal purposes.
The CA concluded that since only the RTC was mentioned as appellate court,
the case may no longer be further appealed to it. The CA stated that "(a)ppeal
is a purely statutory right. It cannot be exercised unless it is expressly granted
by law. This is too basic to require the citation of supporting authority."36
The CA, however, justified its taking cognizance of the case by declaring that:
"because of the transcendental legal and jurisdictional issues involved, we
solved our inceptive dilemma by treating the petition at bar as a special civil
action for certiorari."37
The CA erred in declaring that only the RTC has appellate jurisdiction over the
judgment of the SP.
48 | P a g e

True, appeal is a purely statutory right and it cannot be exercised unless it is
expressly granted by law. Nevertheless, the CA can pass upon the petition for
review precisely because the law allows it.
Batas Pambansa (B.P.) Blg. 129 or the Judiciary Reorganization Act of 1980,
as amended by R.A. No. 7902,38 vests in the CA the appellate jurisdiction over
all final judgments, decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or commissions,
among others.39 B.P. Blg. 129 has been further supplemented by the 1997
Rules of Civil Procedure, as amended, which provides for the remedy of
appeal via petition for review under Rule 42 to the CA in cases decided by the
RTC in the exercise of its appellate jurisdiction.
Thus, the CA need not treat the appeal via petition for review filed by Marcos
as a petition for certiorari to be able to pass upon the same. B.P. Blg. 129, as
amended, which is supplemented by Rule 42 of the Rules of Civil Procedure,
gives the CA the authority to entertain appeals of such judgments and final
orders rendered by the RTC in the exercise of its appellate jurisdiction.
At the time of creation of Marcos, approval in a plebiscite of the creation of
a local government unit is not required.
Section 10, Article X of the 1987 Constitution provides that:
No province, city, municipality, or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with
the criteria established in the local government code and subject to approval
by a majority of the votes cast in a plebiscite in the political units directly
affected.40
The purpose of the above constitutional provision was acknowledged by the
Court through Justice Reynato S. Puno in Miranda v. Aguirre,41 where it was
held that:
The 1987 Constitution, more than any of our previous Constitutions, gave
more reality to the sovereignty of our people for it was borne out of the
people power in the 1986 EDSA revolution. Its Section 10, Article X addressed
the undesirable practice in the past whereby local government units were
created, abolished, merged or divided on the basis of the vagaries of politics
and not of the welfare of the people. Thus, the consent of the people of the
local government unit directly affected was required to serve as a checking
mechanism to any exercise of legislative power creating, dividing, abolishing,
merging or altering the boundaries of local government units. It is one
instance where the people in their sovereign capacity decide on a matter that
affects them - direct democracy of the people as opposed to democracy thru
people's representatives. This plebiscite requirement is also in accord with
the philosophy of the Constitution granting more autonomy to local
government units.42
Nueva Era contends that the constitutional and statutory43 plebiscite
requirement for the creation of a local government unit is applicable to this
case. It posits that the claim of Marcos to its territory should be denied due
to lack of the required plebiscite.
We agree with Nueva Era's contention that Marcos' claim over parts of its
territory is not tenable. However, the reason is not the lack of the required
plebiscite under the 1987 and 1973 constitutions and the Local Government
Code of 1991 but other reasons as will be discussed below.
At the time Marcos was created, a plebiscite was not required by law to
create a local government unit. Hence, Marcos was validly created without
conducting a plebiscite. As a matter of fact, no plebiscite was conducted in
Dingras, where it was derived.
Lex prospicit, non respicit. The law looks forward, not backward.44 It is the
basic norm that provisions of the fundamental law should be given
prospective application only, unless legislative intent for its retroactive
application is so provided.45
49 | P a g e
In the comparable case of Ceniza v. Commission on Elections46 involving the
City of Mandaue, the Court has this to say:
Petitioners assail the charter of the City of Mandaue as unconstitutional for
not having been ratified by the residents of the city in a plebiscite. This
contention is untenable. The Constitutional requirement that the creation,
division, merger, abolition, or alteration of the boundary of a province, city,
municipality, or barrio should be subject to the approval by the majority of
the votes cast in a plebiscite in the governmental unit or units affected is a
new requirement that came into being only with the 1973 Constitution. It is
prospective in character and therefore cannot affect the creation of the City
of Mandaue which came into existence on June 21, 1969.47 (Citations
omitted and underlining supplied).
Moreover, by deciding this case, We are not creating Marcos but merely
interpreting the law that created it. Its creation was already a fait accompli.
Therefore, there is no reason for Us to further require a plebiscite.
As pointed out by Justice Isagani Cruz, to wit:
Finally, it should be observed that the provisions of the Constitution should
be given only a prospective application unless the contrary is clearly intended.
Were the rule otherwise, rights already acquired or vested might be unduly
disturbed or withdrawn even in the absence of an unmistakable intention to
place them within the scope of the Constitution.48
No part of Nueva Era's territory was taken for the creation of Marcos under
R.A. No. 3753.
Only the barrios (now barangays) of Dingras from which Marcos obtained its
territory are named in R.A. No. 3753. To wit:
SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas
and Agunit in the Municipality of Dingras, Province of Ilocos Norte, are hereby
separated from the said municipality and constituted into a new and separate
municipality to be known as the Municipality of Marcos, with the following
boundaries:
Since only the barangays of Dingras are enumerated as Marcos' source of
territory, Nueva Era's territory is, therefore, excluded.
Under the maxim expressio unius est exclusio alterius, the mention of one
thing implies the exclusion of another thing not mentioned. If a statute
enumerates the things upon which it is to operate, everything else must
necessarily and by implication be excluded from its operation and effect.49
This rule, as a guide to probable legislative intent, is based upon the rules of
logic and natural workings of the human mind.50
Had the legislature intended other barangays from Nueva Era to become part
of Marcos, it could have easily done so by clear and concise language. Where
the terms are expressly limited to certain matters, it may not by
interpretation or construction be extended to other matters.51 The rule
proceeds from the premise that the legislature would not have made
specified enumerations in a statute had the intention been not to restrict its
meaning and to confine its terms to those expressly mentioned.52
Moreover, since the barangays of Nueva Era were not mentioned in the
enumeration of barangays out of which the territory of Marcos shall be set,
their omission must be held to have been done intentionally. This conclusion
finds support in the rule of casus omissus pro omisso habendus est, which
states that a person, object or thing omitted from an enumeration must be
held to have been omitted intentionally.53
Furthermore, this conclusion on the intention of the legislature is bolstered
by the explanatory note of the bill which paved the way for the creation of
Marcos. Said explanatory note mentioned only Dingras as the mother
municipality of Marcos.
Where there is ambiguity in a statute, as in this case, courts may resort to the
explanatory note to clarify the ambiguity and ascertain the purpose and
intent of the statute.54
50 | P a g e

Despite the omission of Nueva Era as a mother territory in the law creating
Marcos, the latter still contends that said law included Nueva Era. It alleges
that based on the description of its boundaries, a portion of Nueva Era is
within its territory.
The boundaries of Marcos under R.A. No. 3753 read:
On the Northwest, by the barrios Biding-Rangay boundary going down to the
barrios Capariaan-Gabon boundary consisting of foot path and feeder road;
on the Northeast, by the Burnay River which is the common boundary of
barrios Agunit and Naglayaan; on the East, by the Ilocos Norte-Mt. Province
boundary; on the South, by the Padsan River which is at the same time the
boundary between the municipalities of Banna and Dingras; on the West and
Southwest, by the boundary between the municipalities of Batac and Dingras.
Marcos contends that since it is "bounded on the East, by the Ilocos Norte-
Mt. Province boundary," a portion of Nueva Era formed part of its territory
because, according to it, Nueva Era is between the Marcos and Ilocos Norte-
Mt. Province boundary. Marcos posits that in order for its eastern side to
reach the Ilocos Norte-Mt. Province boundary, it will necessarily traverse the
middle portion of Nueva Era.
Marcos further claims that it is entitled not only to the middle portion of
Nueva Era but also to its northern portion which, as a consequence, was
isolated from the major part of Nueva Era.
We cannot accept the contentions of Marcos.
Only Dingras is specifically named by law as source territory of Marcos.
Hence, the said description of boundaries of Marcos is descriptive only of the
listed barangays of Dingras as a compact and contiguous territory.
Considering that the description of the eastern boundary of Marcos under
R.A. No. 3753 is ambiguous, the same must be interpreted in light of the
legislative intent.
The law must be given a reasonable interpretation, to preclude absurdity in
its application.55 We thus uphold the legislative intent to create Marcos out
of the territory of Dingras only.
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.56 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.57
It is axiomatic that laws should be given a reasonable interpretation, not one
which defeats the very purpose for which they were passed. This Court has in
many cases involving the construction of statutes always cautioned against
narrowly interpreting a statute as to defeat the purpose of the legislature and
stressed that it is of the essence of judicial duty to construe statutes so as to
avoid such a deplorable result (of injustice or absurdity) and that therefore "a
literal interpretation is to be rejected if it would be unjust or lead to absurd
results."58
Statutes are to be construed in the light of the purposes to be achieved and
the evils sought to be remedied. Thus, in construing a statute, the reason for
its enactment should be kept in mind and the statute should be construed
with reference to the intended scope and purpose. The court may consider
the spirit and reason of the statute, where a literal meaning would lead to
absurdity, contradiction, injustice, or would defeat the clear purpose of the
lawmakers.59
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
is partly REVERSED. The Decision of the Regional Trial Court in Ilocos Norte is
Reinstated.
SO ORDERED.
51 | P a g e
Buenaseda, et. al vs Flavier, et. al.
QUIASON, J.:
This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for
Preliminary Injunction or Temporary Restraining Order, under Rule 65 of the
Revised Rules of Court.
Principally, the petition seeks to nullify the Order of the Ombudsman dated
January 7, 1992, directing the preventive suspension of petitioners,
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).
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
52 | P a g e
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
53 | P a g e
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.
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
54 | P a g e
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.
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
55 | P a g e
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.
56 | P a g e
The Motion for Contempt, which charges the lawyers of petitioners with
unlawfully causing or otherwise inducing their 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
57 | P a g e
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.

58 | P a g e
Fule vs CA
MELENCIO-HERRERA, J.:
This is a Petition for Review on certiorari of the Decision of respondent
Appellate Court, which affirmed the judgment of the Regional Trial Court,
Lucena City, Branch LIV, convicting petitioner (the accused-appellant) of
Violation of Batas Pambansa Blg. 22 (The Bouncing Checks Law) on the basis
of the Stipulation of Facts entered into between the prosecution and the
defense during the pre-trial conference in the Trial Court. The facts stipulated
upon read:
a) That this Court has jurisdiction over the person and subject matter of this
case;
b) That the accused was an agent of the Towers Assurance Corporation on or
before January 21, 1981;
c) That on January 21, 1981, the accused issued and made out check No.
26741, dated January 24, 1981 in the sum of P2,541.05;
d) That the said check was drawn in favor of the complaining witness, Roy
Nadera;
e) That the check was drawn in favor of the complaining witness in remittance
of collection;
f) That the said check was presented for payment on January 24, 1981 but the
same was dishonored for the reason that the said checking account was
already closed;
g) That the accused Manolo Fule has been properly Identified as the accused
party in this case.
At the hearing of August 23, 1985, only the prosecution presented its
evidence consisting of Exhibits "A," "B" and "C." At the subsequent hearing
on September 17, 1985, petitioner-appellant waived the right to present
evidence and, in lieu thereof, submitted a Memorandum confirming the
Stipulation of Facts. The Trial Court convicted petitioner-appellant.
On appeal, respondent Appellate Court upheld the Stipulation of Facts and
affirmed the judgment of conviction. 1
Hence, this recourse, with petitioner-appellant contending that:
The Honorable Respondent Court of Appeals erred in the decision of the
Regional Trial Court convicting the petitioner of the offense charged, despite
the cold fact that the basis of the conviction was based solely on the
stipulation of facts made during the pre-trial on August 8, 1985, which was
not signed by the petitioner, nor by his counsel.
Finding the petition meritorious, we resolved to give due course.
The 1985 Rules on Criminal Procedure, which became effective on January 1,
1985, applicable to this case since the pre-trial was held on August 8, 1985,
provides:
SEC. 4. Pre-trial agreements must be signed. — No agreement or admission
made or entered during the pre-trial conference shall be used in evidence
against the accused unless reduced to writing and signed by him and his
counsel. (Rule 118) [Emphasis supplied]
By its very language, the Rule is mandatory. Under the rule of statutory
construction, negative words and phrases are to be regarded as mandatory
while those in the affirmative are merely directory (McGee vs. Republic, 94
Phil. 820 [1954]). The use of the term "shall" further emphasizes its
mandatory character and means that it is imperative, operating to impose a
duty which may be enforced (Bersabal vs. Salvador, No. L-35910, July 21,
1978, 84 SCRA 176). And more importantly, penal statutes whether
substantive and remedial or procedural are, by consecrated rule, to be strictly
59 | P a g e
applied against the government and liberally in favor of the accused (People
vs. Terrado No. L-23625, November 25, 1983, 125 SCRA 648).

The conclusion is inevitable, therefore, that the omission of the signature of

the accused and his counsel, as mandatorily required by the Rules, renders
the Stipulation of Facts inadmissible in evidence. The fact that the lawyer of
the accused, in his memorandum, confirmed the Stipulation of Facts does not
cure the defect because Rule 118 requires both the accused and his counsel
to sign the Stipulation of Facts. What the prosecution should have done, upon
discovering that the accused did not sign the Stipulation of Facts, as required
by Rule 118, was to submit evidence to establish the elements of the crime,
instead of relying solely on the supposed admission of the accused in the
Stipulation of Facts. Without said evidence independent of the admission, the
guilt of the accused cannot be deemed established beyond reasonable doubt.

Consequently, under the circumstances obtaining in this case, the ends of

justice require that evidence be presented to determine the culpability of the
accused. When a judgment has been entered by consent of an attorney
without special authority, it will sometimes be set aside or reopened
(Natividad vs. Natividad, 51 Phil. 613 [1928]).

WHEREFORE, the judgment of respondent Appellate Court is REVERSED and

this case is hereby ordered RE-OPENED and REMANDED to the appropriate
Branch of the Regional Trial Court of Lucena City, for further reception of
evidence.

SO ORDERED.

60 | P a g e
Bersabal vs Judge Salvador
MAKASIAR, J.:
On March 23, 1972, petitioner Purita Bersabal seeks to annul the orders of
respondent Judge of August 4, 1971, October 30, 1971 and March 15, 1972
and to compel said respondent Judge to decide petitioner's perfected appeal
on the basis of the evidence and records of the case submitted by the City
Court of Caloocan City plus the memorandum already submitted by the
petitioner and respondents.
Since only questions of law were raised therein, the Court of Appeals, on
October 13, 1972, issued a resolution certifying said case to this Court
pursuant to Section 17, paragraph (4) of the Judiciary Act of 1948, as
amended.
As found by the Court of Appeals, the facts of this case are as follows:
It appears that private respondents Tan That and Ong Pin Tee filed an
ejectment suit, docketed as Civil Case No. 6926 in the City Court of Caloocan
City, against the petitioner. A decision was rendered by said Court on
November 25, 1970, which decision was appealed by the petitioner to the
respondent Court and docketed therein as Civil Case No. C-2036.
During the pendency of the appeal the respondent court issued on March 23,
1971 an order which reads:
Pursuant to the provisions of Rep. Act No. 6031, the Clerk of Court of
Caloocan City, is hereby directed to transmit to this Court within fifteen (15)
days from receipt hereof the transcripts of stenographic notes taken down
during the hearing of this case before the City Court of Caloocan City, and
likewise, counsels for both parties are given thirty (30) days from receipt of
this order within which to file their respective memoranda, and thereafter,
this case shall be deemed submitted for decision by this Court.
which order was apparently received by petitioner on April 17, 1971.
The transcript of stenographic notes not having yet been forwarded to the
respondent court, petitioner filed on May 5, 1971 a 'MOTION EX-PARTE TO
SUBMIT MEMORANDUM WITHIN 30 DAYS FROM RECEIPT OF NOTICE OF
SUBMISSION OF THE TRANSCRIPT OF STENOGRAPHIC NOTES TAKEN DURING
THE HEARING OF THE CASE BEFORE THE CITY COURT OF CALOOCAN CITY'
which was granted by respondent court on May 7, 1971. However, before the
petitioner could receive any such notice from the respondent court, the
respondent Judge issued an order on August 4, 1971 which says:
For failure of the defendant-appellant to prosecute her appeal the same is
hereby ordered DISMISSED with costs against her.
Petitioner filed a motion for reconsideration of the order on September 28,
1971, citing as a ground the granting of his ex-parte motion to submit
memorandum within 30 days from notice of the submission of the
stenographic notes taken before the City Court. Private respondents filed
their opposition to the motion on September 30,1971. In the meantime, on
October 20,1971, petitioner filed her memorandum dated October 18, 1971.
On October 30, 1971 the respondent Court denied the motion for
reconsideration. Then on January 25, 1972, petitioner filed a motion for leave
to file second motion for reconsideration which was likewise denied by the
respondent court on March 15, 1972. Hence this petition.
The sole inquiry in the case at bar can be stated thus: Whether, in the light of
the provisions of the second paragraph of Section 45 of Republic Act No. 296,
as amended by R.A. No. 6031, the mere failure of an appellant to submit on
nine the memorandum mentioned in the same paragraph would empower
the Court of First Instance to dismiss the appeal on the ground of failure to
Prosecute; or, whether it is mandatory upon said Court to proceed to decide
the appealed case on the basis of the evidence and records transmitted to it,
the failure of the appellant to submit a memorandum on time
notwithstanding.
61 | P a g e
The second paragraph of Section 45 of R.A. No. 296, otherwise known as the
Philippine Judiciary Act of 1948, as amended by R.A. No. 6031 provides, in
part, as follows:
Courts of First Instance shall decide such appealed cases on the basis of the
evidence and records transmitted from the city or municipal courts: Provided,
That the parties may submit memoranda and/or brief with oral argument if
so requested ... . (Emphasis supplied).
The foregoing provision is clear and leaves no room for doubt. It cannot be
interpreted otherwise than that the submission of memoranda is optional on
the part of the parties. Being optional on the part of the parties, the latter
may so choose to waive submission of the memoranda. And as a logical
concomitant of the choice given to the Parties, the Court cannot dismiss the
appeal of the party waiving the submission of said memorandum the
appellant so chooses not to submit the memorandum, the Court of First
Instance is left with no alternative but to decide the case on the basis of the
evidence and records transmitted from the city or municipal courts. In other
words, the Court is not empowered by law to dismiss the appeal on the mere
failure of an appellant to submit his memorandum, but rather it is the Court's
mandatory duty to decide the case on the basis of the available evidence and
records transmitted to it.
As a general rule, the word "may" when used in a statute is permissive only
and operates to confer discretion; while the word "shall" is imperative,
operating to impose a duty which may be enforced (Dizon vs. Encarnacion, L-
18615, Dec. 24, 1963, 9 SCRA 714, 716-717). The implication is that the Court
is left with no choice but to decide the appealed case either on the basis of
the evidence and records transmitted to it, or on the basis of the latter plus
memoranda and/or brief with oral argument duly submitted and/or made on
request.
Moreover, memoranda, briefs and oral arguments are not essential
requirements. They may be submitted and/or made only if so requested.
Finally, a contrary interpretation would be unjust and dangerous as it may
defeat the litigant's right to appeal granted to him by law. In the case of
Republic vs. Rodriguez
(L-26056, May 29, 1969, 28 SCRA 378) this Court underscored "the need of
proceeding with caution so that a party may not be deprived of its right to
appeal except for weighty reasons." Courts should heed the rule in
Municipality of Tiwi, Albay vs. Cirujales
(L-37520, Dec. 26, 1973, 54 SCRA 390, 395), thus:
The appellate court's summary dismissal of the appeal even before receipt of
the records of the appealed case as ordered by it in a prior mandamus case
must be set aside as having been issued precipitously and without an
opportunity to consider and appreciate unavoidable circumstances of record
not attributable to petitioners that caused the delay in the elevation of the
records of the case on appeal.
In the instant case, no notice was received by petitioner about the submission
of the transcript of the stenographic notes, so that his 30-day period to
submit his memorandum would commence to run. Only after the expiration
of such period can the respondent Judge act on the case by deciding it on the
merits, not by dismissing the appeal of petitioner.
WHEREFORE, THE CHALLENGED ORDERS OF RESPONDENT JUDGE DATED
AUGUST 4, 1971, OCTOBER 30, 1971 AND MARCH 15, 1971 ARE HEREBY SET
ASIDE AS NULL AND VOID AND THE RESPONDENT COURT IS HEREBY
DIRECTED TO DECIDE CIVIL CASE NO. C-2036 ON THE MERITS. NO COSTS.
Muñoz Palma, Fernandez and Guerrero, JJ., concur.
Separate Opinions
62 | P a g e
TEEHANKEE, J, concurring:

I concur with the setting aside of the questioned dismissal of petitioner's

appeal on the ground that the record shows quite clearly that there was no
failure on part of petitioner-appellant to prosecute her appeal in respondent
judge's court. Petitioner had been granted in respondent judge's Order of
May 7, 1971, 30 days from notice of submission of the transcripts within
which to file her memorandum on appeal, yet her appeal was dismissed per
his Order of August 4, 1971 for alleged failure to prosecute (by failure to file
the memorandum) even before she had received any such notice. Upon
receipt of the dismissal order, petitioner had promptly moved for
reconsideration and filed her memorandum on appeal.

I am not prepared at this stage to concur with the ratio decidendi of the
decision penned by Mr. Justice Makasiar that the Court is not empowered by
law to dismiss the appeal on the mere failure of an appellant to submit his
memorandum, but rather it is the Court's mandatory duty to decide the case
on the basis of the available evidence and records transmitted to it." I
entertain serious doubts about such pronouncement, once when the court of
first instance "requests" the party-appellant to submit a memorandum or
brief on appeal under the provisions of Republic Act No. 6031 amending
section 45 of Republic Act No. 296, such "request" is tantamount to a
requirement for the proper prosecution of the appeal; thus, when the
appellant willfuly fails to file such memorandum or brief, the judge should be
empowered to dismiss the appeal, applying suppletorily the analogous
provisions of Rule 50, section 1 for dismissal of appeal by the higher appellate
courts and taking into account that Rule 40, section 9 of the Rules of Court
now expressly authorizes the court of first instance to dismiss an appeal
before it "for failure to prosecute."

63 | P a g e
Ombudsman vs De Sahagun
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the Decision1 dated April 28, 2005 of the Court of
Appeals (CA) in CA-G.R. SP No. 78008 which set aside the Orders dated March
10, 2003 and June 24, 2003 of the petitioner Office of the Ombudsman in
OMB-ADM-0-00-0721.
The material antecedents are as follows:
On November 13, 1992, respondent Raidis J. Bassig, Chief of the Research and
Publications Division of the Intramuros Administration, submitted a
Memorandum to then Intramuros Administrator Edda V. Henson (Henson)
recommending that Brand Asia, Ltd. be commissioned to produce a video
documentary for a television program, as well implement a media plan and
marketing support services for Intramuros.
On November 17, 1992, the Bids and Awards Committee (BAC) of the
Intramuros Administration, composed of respondent Merceditas de Sahagun,
as Chairman, with respondent Manuela T. Waquiz and Dominador C. Ferrer,
Jr. (Ferrer), as members, submitted a recommendation to Henson for the
approval of the award of said contract to Brand Asia, Ltd. On the same day,
Henson approved the recommendation and issued a Notice of Award to
Brand Asia, Ltd.
On November 23, 1992, a contract of service to produce a video documentary
on Intramuros for TV program airing was executed between Henson and
Brand Asia, Ltd. On December 1, 1992, a Notice to Proceed was issued to
Brand Asia, Ltd.
On June 2, 1993, the BAC, with Augusto P. Rustia (Rustia) as additional
member, recommended to Henson the approval of the award of contract for
print collaterals to Brand Asia, Ltd. On the same day, Henson approved the
recommendation and issued a Notice of Award/Notice to Proceed to Brand
Asia, Ltd.
On June 22, 1993, a contract of services to produce print collaterals was
entered between Henson and Brand Asia, Ltd.
On March 7, 1995, an anonymous complaint was filed with the Presidential
Commission Against Graft and Corruption (PGAC) against Henson in relation
to the contracts entered into with Brand Asia, Ltd.
On November 30, 1995, Henson was dismissed from the service by the Office
of the President upon recommendation of the PGAC which found that the
contracts were entered into without the required public bidding and in
violation of Section 3 (a) and (e) of Republic Act (R.A.) No. 3019, or the Anti-
Graft and Corrupt Practices Act.
On August 8, 1996, an anonymous complaint was filed with the Ombudsman
against the BAC in relation to the latter’s participation in the contracts with
Brand Asia, Ltd. for which Henson was dismissed from service.
On September 5, 2000, Fact-Finding Intelligence Bureau (FFIB) filed criminal
and administrative charges against respondents, along with Ferrer and Rustia,
for violation of Section 3 (a) and (c) of R.A. No. 3019 in relation to Section 1
of Executive Order No. 302 and grave misconduct, conduct grossly prejudicial
to the best interest of the service and gross violation of Rules and Regulations
pursuant to the Administrative Code of 1987, docketed as OMB-0-00-1411
and OMB-ADM-0-00-0721, respectively.2 OMB-0-00-1411 was dismissed on
February 27, 2002 for lack of probable cause.3
In his proposed Decision4 dated June 19, 2002, Graft Investigation Officer II
Joselito P. Fangon recommended the dismissal of OMB-ADM-0-00-0721.
However, then Ombudsman Simeon V. Marcelo disapproved the
recommendation. In an Order5 dated March 10, 2003, he held that there was
substantial evidence to hold respondents administratively liable since the
64 | P a g e
contracts awarded to Brand Asia, Ltd. failed to go through the required
procedure for public bidding under Executive Order No. 301 dated July 26,
1987. Respondents and Ferrer were found guilty of grave misconduct and
dismissed from service. Rustia was found guilty of simple misconduct and
suspended for six months without pay.
On March 17, 2003, respondents, along with Rustia, filed a Motion for
Reconsideration.6
On June 24, 2003, Ombudsman Marcelo issued an Order7 partially granting
the motion for reconsideration. Respondents and Ferrer were found guilty of
the lesser offense of simple misconduct and suspended for six months
without pay. Rustia's suspension was reduced to three months.
Dissatisfied, respondents filed a Petition for Review8 with the CA assailing the
Orders dated March 10, 2003 and June 24, 2003 of the Ombudsman.
On April 28, 2005, the CA rendered a Decision9 setting aside the Orders dated
March 10, 2003 and June 24, 2003 of the Ombudsman. The CA held that
respondents may no longer be prosecuted since the complaint was filed more
than seven years after the imputed acts were committed which was beyond
the one year period provided for by Section 20 (5) of Republic Act (R.A.) No.
6770, otherwise known as "The Ombudsman Act of 1989"; and that the
nature of the function of the Ombudsman was purely recommendatory and
it did not have the power to penalize erring government officials and
employees. The CA relied on the following statement made by the Court in
Tapiador v. Office of the Ombudsman,10 to wit:
x x x Besides, assuming arguendo, that petitioner [Tapiador] was
administratively liable, the Ombudsman has no authority to directly dismiss
the petitioner from the government service, more particularly from his
position in the BID. Under Section 13, subparagraph 3, of Article XI of the 1987
Constitution, the Ombudsman can only "recommend" the removal of the
public official or employee found to be at fault, to the public official
concerned.11 (Emphasis supplied)
Hence, the present petition raising the following issues (1) whether Section
20 (5) of R.A. No. 6770 prohibits administrative investigations in cases filed
more than one year after commission, and (2) whether the Ombudsman only
has recommendatory, not punitive, powers against erring government
officials and employees.
The Court rules in favor of the petitioner.
The issues in the present case are settled by precedents.
On the first issue, well-entrenched is the rule that administrative offenses do
not prescribe.12 Administrative offenses by their very nature pertain to the
character of public officers and employees. In disciplining public officers and
employees, the object sought is not the punishment of the officer or
employee but the improvement of the public service and the preservation of
the public’s faith and confidence in our government.13
Respondents insist that Section 20 (5) of R.A. No. 6770, to wit:
SEC. 20. Exceptions. – The Office of the Ombudsman may not conduct the
necessary investigation of any administrative act or omission complained of
if it believes that:
xxx
(5) The complaint was filed after one year from the occurrence of the act or
omission complained of. (Emphasis supplied)
proscribes the investigation of any administrative act or omission if the
complaint was filed after one year from the occurrence of the complained act
or omission.
In Melchor v. Gironella,14 the Court held that the period stated in Section
20(5) of R.A. No. 6770 does not refer to the prescription of the offense but to
65 | P a g e
the discretion given to the Ombudsman on whether it would investigate a
particular administrative offense. The use of the word "may" in the provision
is construed as permissive and operating to confer discretion.15 Where the
words of a statute are clear, plain and free from ambiguity, they must be
given their literal meaning and applied without attempted interpretation.16
In Filipino v. Macabuhay,17 the Court interpreted Section 20 (5) of R.A. No.
6770 in this manner:
Petitioner argues that based on the abovementioned provision [Section 20(5)
of RA 6770)], respondent's complaint is barred by prescription considering
that it was filed more than one year after the alleged commission of the acts
complained of.
Petitioner's argument is without merit.
The use of the word "may" clearly shows that it is directory in nature and not
mandatory as petitioner contends. When used in a statute, it is permissive
only and operates to confer discretion; while the word "shall" is imperative,
operating to impose a duty which may be enforced. Applying Section 20(5),
therefore, it is discretionary upon the Ombudsman whether or not to conduct
an investigation on a complaint even if it was filed after one year from the
occurrence of the act or omission complained of. In fine, the complaint is not
barred by prescription.18 (Emphasis supplied)
The declaration of the CA in its assailed decision that while as a general rule
the word "may" is directory, the negative phrase "may not" is mandatory in
tenor; that a directory word, when qualified by the word "not," becomes
prohibitory and therefore becomes mandatory in character, is not plausible.
It is not supported by jurisprudence on statutory construction.
As the Court recently held in Office of the Ombudsman v. Court of Appeals,19
Section 20 of R.A. No. 6770 has been clarified by Administrative Order No.
17,20 which amended Administrative Order No. 07, otherwise known as the
Rules of Procedure of the Office of the Ombudsman. Section 4, Rule III21 of
the amended Rules of Procedure of the Office of the Ombudsman reads:
Section 4. Evaluation. - Upon receipt of the complaint, the same shall be
evaluated to determine whether the same may be:
a) dismissed outright for any grounds stated under Section 20 of Republic Act
No. 6770, provided, however, that the dismissal thereof is not mandatory and
shall be discretionary on the part of the Ombudsman or the Deputy
Ombudsman concerned;
b) treated as a grievance/request for assistance which may be referred to the
Public Assistance Bureau, this Office, for appropriate action under Section 2,
Rule IV of this Rules;
c) referred to other disciplinary authorities under paragraph 2, Section 23,
R.A. 6770 for the taking of appropriate administrative proceedings;
d) referred to the appropriate office/agency or official for the conduct of
further fact-finding investigation; or
e) docketed as an administrative case for the purpose of administrative
adjudication by the Office of the Ombudsman. (Emphasis supplied)
It is, therefore, discretionary upon the Ombudsman whether or not to
conduct an investigation of a complaint even if it was filed after one year from
the occurrence of the act or omission complained of.
Thus, while the complaint herein was filed only on September 5, 2000, or
more than seven years after the commission of the acts imputed against
respondents in November 1992 and June 1993, it was within the authority of
the Ombudsman to conduct the investigation of the subject complaint.
On the second issue, the authority of the Ombudsman to determine the
administrative liability of a public official or employee, and to direct and
66 | P a g e
compel the head of the office or agency concerned to implement the penalty
imposed is likewise settled.
In Ledesma v. Court of Appeals,22 the Court has ruled that the statement in
Tapiador that made reference to the power of the Ombudsman to impose an
administrative penalty was merely an obiter dictum and could not be cited as
a doctrinal declaration of this Court, thus:
x x x [A] cursory reading of Tapiador reveals that the main point of the case
was the failure of the complainant therein to present substantial evidence to
prove the charges of the administrative case. The statement that made
reference to the power of the Ombudsman is, at best, merely an obiter
dictum and, as it is unsupported by sufficient explanation, is susceptible to
varying interpretations, as what precisely is before us in this case. Hence, it
cannot be cited as a doctrinal declaration of this Court nor is it safe from
judicial examination.23 (Emphasis supplied)
In Estarija v. Ranada,24 the Court reiterated its pronouncements in Ledesma
and categorically stated:
x x x [T]he Constitution does not restrict the powers of the Ombudsman in
Section 13, Article XI of the 1987 Constitution, but allows the Legislature to
enact a law that would spell out the powers of the Ombudsman. Through the
enactment of Rep. Act No. 6770, specifically Section 15, par. 3, the lawmakers
gave the Ombudsman such powers to sanction erring officials and employees,
except members of Congress, and the Judiciary. To conclude, we hold that
Sections 15, 21, 22 and 25 of Republic Act No. 6770 are constitutionally
sound. The powers of the Ombudsman are not merely recommendatory. His
office was given teeth to render this constitutional body not merely
functional but also effective. Thus, we hold that under Republic Act No. 6770
and the 1987 Constitution, the Ombudsman has the constitutional power to
directly remove from government service an erring public official other than
a member of Congress and the Judiciary.25 (Emphasis supplied)
The power of the Ombudsman to directly impose administrative sanctions
has been repeatedly reiterated in the subsequent cases of Barillo v.
Gervasio,26 Office of the Ombudsman v. Madriaga,27 Office of the
Ombudsman v. Court of Appeals,28 Balbastro v. Junio,29 Commission on
Audit, Regional Office No. 13, Butuan City v. Hinampas,30 Office of the
Ombudsman v. Santiago,31 Office of the Ombudsman v. Lisondra,32 and
most recently in Deputy Ombudsman for the Visayas v. Abugan33 and
continues to be the controlling doctrine.
In fine, it is already well-settled that the Ombudsman's power as regards the
administrative penalty to be imposed on an erring public officer or employee
is not merely recommendatory. The Ombudsman has the power to directly
impose the penalty of removal, suspension, demotion, fine, censure, or
prosecution of a public officer or employee, other than a member of Congress
and the Judiciary, found to be at fault, within the exercise of its administrative
disciplinary authority as provided in the Constitution, R.A. No. 6770, as well
as jurisprudence. This power gives the said constitutional office teeth to
render it not merely functional, but also effective.34
Thus, the CA committed a reversible error in holding that the case had already
prescribed and that the Ombudsman does not have the power to penalize
erring government officials and employees.
WHEREFORE, the petition is GRANTED. The Decision dated April 28, 2005 of
the Court of Appeals in CA-G.R. SP No. 78008 is REVERSED and SET ASIDE. The
Order dated June 24, 2003 of the Office of the Ombudsman is REINSTATED.
SO ORDERED.
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Loyola Grand Villas vs CA
ROMERO, J.:
May the failure of a corporation to file its by-laws within one month from the
date of its incorporation, as mandated by Section 46 of the Corporation Code,
result in its automatic dissolution?
This is the issue raised in this petition for review on certiorari of the Decision1
of the Court of Appeals affirming the decision of the Home Insurance and
Guaranty Corporation (HIGC). This quasi-judicial body recognized Loyola
Grand Villas Homeowners Association (LGVHA) as the sole homeowners'
association in Loyola Grand Villas, a duly registered subdivision in Quezon City
and Marikina City that was owned and developed by Solid Homes, Inc. It
revoked the certificates of registration issued to Loyola Grand Villas
homeowners (North) Association Incorporated (the North Association for
brevity) and Loyola Grand Villas Homeowners (South) Association
Incorporated (the South Association).
LGVHAI was organized on February 8, 1983 as the association of homeowners
and residents of the Loyola Grand Villas. It was registered with the Home
Financing Corporation, the predecessor of herein respondent HIGC, as the
sole homeowners' organization in the said subdivision under Certificate of
Registration No. 04-197. It was organized by the developer of the subdivision
and its first president was Victorio V. Soliven, himself the owner of the
developer. For unknown reasons, however, LGVHAI did not file its corporate
by-laws.
Sometime in 1988, the officers of the LGVHAI tried to register its by-laws.
They failed to do so. 2 To the officers' consternation, they discovered that
there were two other organizations within the subdivision — the North
Association and the South Association. According to private respondents, a
non-resident and Soliven himself, respectively headed these associations.
They also discovered that these associations had five (5) registered
homeowners each who were also the incorporators, directors and officers
thereof. None of the members of the LGVHAI was listed as member of the
North Association while three (3) members of LGVHAI were listed as
members of the South Association.3 The North Association was registered
with the HIGC on February 13, 1989 under Certificate of Registration No. 04-
1160 covering Phases West II, East III, West III and East IV. It submitted its by-
laws on December 20, 1988.
In July, 1989, when Soliven inquired about the status of LGVHAI, Atty. Joaquin
A. Bautista, the head of the legal department of the HIGC, informed him that
LGVHAI had been automatically dissolved for two reasons. First, it did not
submit its by-laws within the period required by the Corporation Code and,
second, there was non-user of corporate charter because HIGC had not
received any report on the association's activities. Apparently, this
information resulted in the registration of the South Association with the
HIGC on July 27, 1989 covering Phases West I, East I and East II. It filed its by-
laws on July 26, 1989.
These developments prompted the officers of the LGVHAI to lodge a
complaint with the HIGC. They questioned the revocation of LGVHAI's
certificate of registration without due notice and hearing and concomitantly
prayed for the cancellation of the certificates of registration of the North and
South Associations by reason of the earlier issuance of a certificate of
registration in favor of LGVHAI.
On January 26, 1993, after due notice and hearing, private respondents
obtained a favorable ruling from HIGC Hearing Officer Danilo C. Javier who
disposed of HIGC Case No. RRM-5-89 as follows:
WHEREFORE, judgment is hereby rendered recognizing the Loyola Grand
Villas Homeowners Association, Inc., under Certificate of Registration No. 04-
197 as the duly registered and existing homeowners association for Loyola
Grand Villas homeowners, and declaring the Certificates of Registration of
Loyola Grand Villas Homeowners (North) Association, Inc. and Loyola Grand
Villas Homeowners (South) Association, Inc. as hereby revoked or cancelled;
that the receivership be terminated and the Receiver is hereby ordered to
render an accounting and turn-over to Loyola Grand Villas Homeowners
68 | P a g e
Association, Inc., all assets and records of the Association now under his
custody and possession.
The South Association appealed to the Appeals Board of the HIGC. In its
Resolution of September 8, 1993, the Board 4 dismissed the appeal for lack
of merit.
Rebuffed, the South Association in turn appealed to the Court of Appeals,
raising two issues. First, whether or not LGVHAI's failure to file its by-laws
within the period prescribed by Section 46 of the Corporation Code resulted
in the automatic dissolution of LGVHAI. Second, whether or not two
homeowners' associations may be authorized by the HIGC in one "sprawling
subdivision." However, in the Decision of August 23, 1994 being assailed here,
the Court of Appeals affirmed the Resolution of the HIGC Appeals Board.
In resolving the first issue, the Court of Appeals held that under the
Corporation Code, a private corporation commences to have corporate
existence and juridical personality from the date the Securities and Exchange
Commission (SEC) issues a certificate of incorporation under its official seal.
The requirement for the filing of by-laws under Section 46 of the Corporation
Code within one month from official notice of the issuance of the certificate
of incorporation presupposes that it is already incorporated, although it may
file its by-laws with its articles of incorporation. Elucidating on the effect of a
delayed filing of by-laws, the Court of Appeals said:
We also find nothing in the provisions cited by the petitioner, i.e., Section 46
and 22, Corporation Code, or in any other provision of the Code and other
laws which provide or at least imply that failure to file the by-laws results in
an automatic dissolution of the corporation. While Section 46, in prescribing
that by-laws must be adopted within the period prescribed therein, may be
interpreted as a mandatory provision, particularly because of the use of the
word "must," its meaning cannot be stretched to support the argument that
automatic dissolution results from non-compliance.
We realize that Section 46 or other provisions of the Corporation Code are
silent on the result of the failure to adopt and file the by-laws within the
required period. Thus, Section 46 and other related provisions of the
Corporation Code are to be construed with Section 6 (1) of P.D. 902-A. This
section empowers the SEC to suspend or revoke certificates of registration on
the grounds listed therein. Among the grounds stated is the failure to file by-
laws (see also II Campos: The Corporation Code, 1990 ed., pp. 124-125). Such
suspension or revocation, the same section provides, should be made upon
proper notice and hearing. Although P.D. 902-A refers to the SEC, the same
principles and procedures apply to the public respondent HIGC as it exercises
its power to revoke or suspend the certificates of registration or homeowners
association. (Section 2 [a], E.O. 535, series 1979, transferred the powers and
authorities of the SEC over homeowners associations to the HIGC.)
We also do not agree with the petitioner's interpretation that Section 46,
Corporation Code prevails over Section 6, P.D. 902-A and that the latter is
invalid because it contravenes the former. There is no basis for such
interpretation considering that these two provisions are not inconsistent with
each other. They are, in fact, complementary to each other so that one cannot
be considered as invalidating the other.
The Court of Appeals added that, as there was no showing that the
registration of LGVHAI had been validly revoked, it continued to be the duly
registered homeowners' association in the Loyola Grand Villas. More
importantly, the South Association did not dispute the fact that LGVHAI had
been organized and that, thereafter, it transacted business within the period
prescribed by law.
On the second issue, the Court of Appeals reiterated its previous ruling 5 that
the HIGC has the authority to order the holding of a referendum to determine
which of two contending associations should represent the entire
community, village or subdivision.
Undaunted, the South Association filed the instant petition for review on
certiorari. It elevates as sole issue for resolution the first issue it had raised
69 | P a g e
before the Court of Appeals, i.e., whether or not the LGVHAI's failure to file
its by-laws within the period prescribed by Section 46 of the Corporation
Code had the effect of automatically dissolving the said corporation.
Petitioner contends that, since Section 46 uses the word "must" with respect
to the filing of by-laws, noncompliance therewith would result in "self-
extinction" either due to non-occurrence of a suspensive condition or the
occurrence of a resolutory condition "under the hypothesis that (by) the
issuance of the certificate of registration alone the corporate personality is
deemed already formed." It asserts that the Corporation Code provides for a
"gradation of violations of requirements." Hence, Section 22 mandates that
the corporation must be formally organized and should commence
transaction within two years from date of incorporation. Otherwise, the
corporation would be deemed dissolved. On the other hand, if the
corporation commences operations but becomes continuously inoperative
for five years, then it may be suspended or its corporate franchise revoked.
Petitioner concedes that Section 46 and the other provisions of the
Corporation Code do not provide for sanctions for non-filing of the by-laws.
However, it insists that no sanction need be provided "because the
mandatory nature of the provision is so clear that there can be no doubt
about its being an essential attribute of corporate birth." To petitioner, its
submission is buttressed by the facts that the period for compliance is
"spelled out distinctly;" that the certification of the SEC/HIGC must show that
the by-laws are not inconsistent with the Code, and that a copy of the by-laws
"has to be attached to the articles of incorporation." Moreover, no sanction
is provided for because "in the first place, no corporate identity has been
completed." Petitioner asserts that "non-provision for remedy or sanction is
itself the tacit proclamation that non-compliance is fatal and no corporate
existence had yet evolved," and therefore, there was "no need to proclaim its
demise." 6 In a bid to convince the Court of its arguments, petitioner stresses
that:
. . . the word MUST is used in Sec. 46 in its universal literal meaning and
corollary human implication — its compulsion is integrated in its very essence
— MUST is always enforceable by the inevitable consequence — that is, "OR
ELSE". The use of the word MUST in Sec. 46 is no exception — it means file
the by-laws within one month after notice of issuance of certificate of
registration OR ELSE. The OR ELSE, though not specified, is inextricably a part
of MUST . Do this or if you do not you are "Kaput". The importance of the by-
laws to corporate existence compels such meaning for as decreed the by-laws
is "the government" of the corporation. Indeed, how can the corporation do
any lawful act as such without by-laws. Surely, no law is indeed to create
chaos. 7
Petitioner asserts that P.D. No. 902-A cannot exceed the scope and power of
the Corporation Code which itself does not provide sanctions for non-filing of
by-laws. For the petitioner, it is "not proper to assess the true meaning of Sec.
46 . . . on an unauthorized provision on such matter contained in the said
decree."
In their comment on the petition, private respondents counter that the
requirement of adoption of by-laws is not mandatory. They point to P.D. No.
902-A as having resolved the issue of whether said requirement is mandatory
or merely directory. Citing Chung Ka Bio v. Intermediate Appellate Court, 8
private respondents contend that Section 6(I) of that decree provides that
non-filing of by-laws is only a ground for suspension or revocation of the
certificate of registration of corporations and, therefore, it may not result in
automatic dissolution of the corporation. Moreover, the adoption and filing
of by-laws is a condition subsequent which does not affect the corporate
personality of a corporation like the LGVHAI. This is so because Section 9 of
the Corporation Code provides that the corporate existence and juridical
personality of a corporation begins from the date the SEC issues a certificate
of incorporation under its official seal. Consequently, even if the by-laws have
not yet been filed, a corporation may be considered a de facto corporation.
To emphasize the fact the LGVHAI was registered as the sole homeowners'
association in the Loyola Grand Villas, private respondents point out that
membership in the LGVHAI was an "unconditional restriction in the deeds of
sale signed by lot buyers."
70 | P a g e
In its reply to private respondents' comment on the petition, petitioner
reiterates its argument that the word " must" in Section 46 of the Corporation
Code is mandatory. It adds that, before the ruling in Chung Ka Bio v.
Intermediate Appellate Court could be applied to this case, this Court must
first resolve the issue of whether or not the provisions of P.D. No. 902-A
prescribing the rules and regulations to implement the Corporation Code can
"rise above and change" the substantive provisions of the Code.
The pertinent provision of the Corporation Code that is the focal point of
controversy in this case states:
Sec. 46. Adoption of by-laws. — Every corporation formed under this Code,
must within one (1) month after receipt of official notice of the issuance of its
certificate of incorporation by the Securities and Exchange Commission,
adopt a code of by-laws for its government not inconsistent with this Code.
For the adoption of by-laws by the corporation, the affirmative vote of the
stockholders representing at least a majority of the outstanding capital stock,
or of at least a majority of the members, in the case of non-stock
corporations, shall be necessary. The by-laws shall be signed by the
stockholders or members voting for them and shall be kept in the principal
office of the corporation, subject to the stockholders or members voting for
them and shall be kept in the principal office of the corporation, subject to
inspection of the stockholders or members during office hours; and a copy
thereof, shall be filed with the Securities and Exchange Commission which
shall be attached to the original articles of incorporation.
Notwithstanding the provisions of the preceding paragraph, by-laws may be
adopted and filed prior to incorporation; in such case, such by-laws shall be
approved and signed by all the incorporators and submitted to the Securities
and Exchange Commission, together with the articles of incorporation.
In all cases, by-laws shall be effective only upon the issuance by the Securities
and Exchange Commission of a certification that the by-laws are not
inconsistent with this Code.
The Securities and Exchange Commission shall not accept for filing the by-
laws or any amendment thereto of any bank, banking institution, building and
loan association, trust company, insurance company, public utility,
educational institution or other special corporations governed by special
laws, unless accompanied by a certificate of the appropriate government
agency to the effect that such by-laws or amendments are in accordance with
law.
As correctly postulated by the petitioner, interpretation of this provision of
law begins with the determination of the meaning and import of the word
"must" in this section Ordinarily, the word "must" connotes an imperative act
or operates to impose a duty which may be enforced. 9 It is synonymous with
"ought" which connotes compulsion or mandatoriness. 10 However, the
word "must" in a statute, like "shall," is not always imperative. It may be
consistent with an exercise of discretion. In this jurisdiction, the tendency has
been to interpret "shall" as the context or a reasonable construction of the
statute in which it is used demands or requires. 11 This is equally true as
regards the word "must." Thus, if the languages of a statute considered as a
whole and with due regard to its nature and object reveals that the legislature
intended to use the words "shall" and "must" to be directory, they should be
given that meaning.12
In this respect, the following portions of the deliberations of the Batasang
Pambansa No. 68 are illuminating:
MR. FUENTEBELLA. Thank you, Mr. Speaker.
On page 34, referring to the adoption of by-laws, are we made to understand
here, Mr. Speaker, that by-laws must immediately be filed within one month
after the issuance? In other words, would this be mandatory or directory in
character?
MR. MENDOZA. This is mandatory.
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MR. FUENTEBELLA. It being mandatory, Mr. Speaker, what would be the
effect of the failure of the corporation to file these by-laws within one month?
MR. MENDOZA. There is a provision in the latter part of the Code which
identifies and describes the consequences of violations of any provision of
this Code. One such consequences is the dissolution of the corporation for its
inability, or perhaps, incurring certain penalties.
MR. FUENTEBELLA. But it will not automatically amount to a dissolution of
the corporation by merely failing to file the by-laws within one month.
Supposing the corporation was late, say, five days, what would be the
mandatory penalty?
MR. MENDOZA. I do not think it will necessarily result in the automatic or ipso
facto dissolution of the corporation. Perhaps, as in the case, as you suggested,
in the case of El Hogar Filipino where a quo warranto action is brought, one
takes into account the gravity of the violation committed. If the by-laws were
late — the filing of the by-laws were late by, perhaps, a day or two, I would
suppose that might be a tolerable delay, but if they are delayed over a period
of months — as is happening now — because of the absence of a clear
requirement that by-laws must be completed within a specified period of
time, the corporation must suffer certain consequences. 13
This exchange of views demonstrates clearly that automatic corporate
dissolution for failure to file the by-laws on time was never the intention of
the legislature. Moreover, even without resorting to the records of
deliberations of the Batasang Pambansa, the law itself provides the answer
to the issue propounded by petitioner.
Taken as a whole and under the principle that the best interpreter of a statute
is the statute itself (optima statuli interpretatix est ipsum statutum), 14
Section 46 aforequoted reveals the legislative intent to attach a directory, and
not mandatory, meaning for the word "must" in the first sentence thereof.
Note should be taken of the second paragraph of the law which allows the
filing of the by-laws even prior to incorporation. This provision in the same
section of the Code rules out mandatory compliance with the requirement of
filing the by-laws "within one (1) month after receipt of official notice of the
issuance of its certificate of incorporation by the Securities and Exchange
Commission." It necessarily follows that failure to file the by-laws within that
period does not imply the "demise" of the corporation. By-laws may be
necessary for the "government" of the corporation but these are subordinate
to the articles of incorporation as well as to the Corporation Code and related
statutes.15 There are in fact cases where by-laws are unnecessary to
corporate existence or to the valid exercise of corporate powers, thus:
In the absence of charter or statutory provisions to the contrary, by-laws are
not necessary either to the existence of a corporation or to the valid exercise
of the powers conferred upon it, certainly in all cases where the charter
sufficiently provides for the government of the body; and even where the
governing statute in express terms confers upon the corporation the power
to adopt by-laws, the failure to exercise the power will be ascribed to mere
nonaction which will not render void any acts of the corporation which would
otherwise be valid. 16 (Emphasis supplied.)
As Fletcher aptly puts it:
It has been said that the by-laws of a corporation are the rule of its life, and
that until by-laws have been adopted the corporation may not be able to act
for the purposes of its creation, and that the first and most important duty of
the members is to adopt them. This would seem to follow as a matter of
principle from the office and functions of by-laws. Viewed in this light, the
adoption of by-laws is a matter of practical, if not one of legal, necessity.
Moreover, the peculiar circumstances attending the formation of a
corporation may impose the obligation to adopt certain by-laws, as in the
case of a close corporation organized for specific purposes. And the statute
or general laws from which the corporation derives its corporate existence
may expressly require it to make and adopt by-laws and specify to some
extent what they shall contain and the manner of their adoption. The mere
fact, however, of the existence of power in the corporation to adopt by-laws
72 | P a g e
does not ordinarily and of necessity make the exercise of such power
essential to its corporate life, or to the validity of any of its acts. 17
Although the Corporation Code requires the filing of by-laws, it does not
expressly provide for the consequences of the non-filing of the same within
the period provided for in Section 46. However, such omission has been
rectified by Presidential Decree No. 902-A, the pertinent provisions on the
jurisdiction of the SEC of which state:
Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall
possess the following powers:
xxx xxx xxx
(1) To suspend, or revoke, after proper notice and hearing, the franchise or
certificate of registration of corporations, partnerships or associations, upon
any of the grounds provided by law, including the following:
xxx xxx xxx
5. Failure to file by-laws within the required period;
xxx xxx xxx
In the exercise of the foregoing authority and jurisdiction of the Commission
or by a Commissioner or by such other bodies, boards, committees and/or
any officer as may be created or designated by the Commission for the
purpose. The decision, ruling or order of any such Commissioner, bodies,
boards, committees and/or officer may be appealed to the Commission
sitting en banc within thirty (30) days after receipt by the appellant of notice
of such decision, ruling or order. The Commission shall promulgate rules of
procedures to govern the proceedings, hearings and appeals of cases falling
with its jurisdiction.
The aggrieved party may appeal the order, decision or ruling of the
Commission sitting en banc to the Supreme Court by petition for review in
accordance with the pertinent provisions of the Rules of Court.
Even under the foregoing express grant of power and authority, there can be
no automatic corporate dissolution simply because the incorporators failed
to abide by the required filing of by-laws embodied in Section 46 of the
Corporation Code. There is no outright "demise" of corporate existence.
Proper notice and hearing are cardinal components of due process in any
democratic institution, agency or society. In other words, the incorporators
must be given the chance to explain their neglect or omission and remedy the
same.
That the failure to file by-laws is not provided for by the Corporation Code
but in another law is of no moment. P.D. No. 902-A, which took effect
immediately after its promulgation on March 11, 1976, is very much apposite
to the Code. Accordingly, the provisions abovequoted supply the law
governing the situation in the case at bar, inasmuch as the Corporation Code
and P.D. No. 902-A are statutes in pari materia. Interpretare et concordare
legibus est optimus interpretandi. Every statute must be so construed and
harmonized with other statutes as to form a uniform system of jurisprudence.
18
As the "rules and regulations or private laws enacted by the corporation to
regulate, govern and control its own actions, affairs and concerns and its
stockholders or members and directors and officers with relation thereto and
among themselves in their relation to it," 19 by-laws are indispensable to
corporations in this jurisdiction. These may not be essential to corporate birth
but certainly, these are required by law for an orderly governance and
management of corporations. Nonetheless, failure to file them within the
period required by law by no means tolls the automatic dissolution of a
corporation.
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In this regard, private respondents are correct in relying on the
pronouncements of this Court in Chung Ka Bio v. Intermediate Appellate
Court, 20 as follows:
. . . . Moreover, failure to file the by-laws does not automatically operate to
dissolve a corporation but is now considered only a ground for such
dissolution.
Section 19 of the Corporation Law, part of which is now Section 22 of the
Corporation Code, provided that the powers of the corporation would cease
if it did not formally organize and commence the transaction of its business
or the continuation of its works within two years from date of its
incorporation. Section 20, which has been reproduced with some
modifications in Section 46 of the Corporation Code, expressly declared that
"every corporation formed under this Act, must within one month after the
filing of the articles of incorporation with the Securities and Exchange
Commission, adopt a code of by-laws." Whether this provision should be
given mandatory or only directory effect remained a controversial question
until it became academic with the adoption of PD 902-A. Under this decree,
it is now clear that the failure to file by-laws within the required period is only
a ground for suspension or revocation of the certificate of registration of
corporations.
Non-filing of the by-laws will not result in automatic dissolution of the
corporation. Under Section 6(I) of PD 902-A, the SEC is empowered to
"suspend or revoke, after proper notice and hearing, the franchise or
certificate of registration of a corporation" on the ground inter alia of "failure
to file by-laws within the required period." It is clear from this provision that
there must first of all be a hearing to determine the existence of the ground,
and secondly, assuming such finding, the penalty is not necessarily revocation
but may be only suspension of the charter. In fact, under the rules and
regulations of the SEC, failure to file the by-laws on time may be penalized
merely with the imposition of an administrative fine without affecting the
corporate existence of the erring firm.
It should be stressed in this connection that substantial compliance with
conditions subsequent will suffice to perfect corporate personality.
Organization and commencement of transaction of corporate business are
but conditions subsequent and not prerequisites for acquisition of corporate
personality. The adoption and filing of by-laws is also a condition subsequent.
Under Section 19 of the Corporation Code, a Corporation commences its
corporate existence and juridical personality and is deemed incorporated
from the date the Securities and Exchange Commission issues certificate of
incorporation under its official seal. This may be done even before the filing
of the by-laws, which under Section 46 of the Corporation Code, must be
adopted "within one month after receipt of official notice of the issuance of
its certificate of incorporation." 21
That the corporation involved herein is under the supervision of the HIGC
does not alter the result of this case. The HIGC has taken over the specialized
functions of the former Home Financing Corporation by virtue of Executive
Order No. 90 dated December 17, 1989. 22 With respect to homeowners
associations, the HIGC shall "exercise all the powers, authorities and
responsibilities that are vested on the Securities and Exchange Commission .
. . , the provision of Act 1459, as amended by P.D. 902-A, to the contrary
notwithstanding." 23
WHEREFORE, the instant petition for review on certiorari is hereby DENIED
and the questioned Decision of the Court of Appeals AFFIRMED. This Decision
is immediately executory. Costs against petitioner.
SO ORDERED.
74 | P a g e
Roos Industrial Construction, Inc. vs NLRC
TINGA, J.:
In this Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of
Civil Procedure, petitioners Roos Industrial Construction, Inc. and Oscar
Tocmo assail the Court of Appeals’2 Decision dated 12 January 2006 in C.A.
G.R. SP No. 87572 and its Resolution3 dated 10 April 2006 denying their
Motion for Reconsideration.4
The following are the antecedents.
On 9 April 2002, private respondent Jose Martillos (respondent) filed a
complaint against petitioners for illegal dismissal and money claims such as
the payment of separation pay in lieu of reinstatement plus full backwages,
service incentive leave, 13th month pay, litigation expenses, underpayment
of holiday pay and other equitable reliefs before the National Capital
Arbitration Branch of the National Labor Relations Commission (NLRC),
docketed as NLRC NCR South Sector Case No. 30-04-01856-02.
Respondent alleged that he had been hired as a driver-mechanic sometime
in 1988 but was not made to sign any employment contract by petitioners.
As driver mechanic, respondent was assigned to work at Carmona, Cavite and
he worked daily from 7:00 a.m. to 10:00 p.m. at the rate of P200.00 a day. He
was also required to work during legal holidays but was only paid an
additional 30% holiday pay. He likewise claimed that he had not been paid
service incentive leave and 13th month pay during the entire course of his
employment. On 16 March 2002, his employment was allegedly terminated
without due process.5
Petitioners denied respondent’s allegations. They contended that
respondent had been hired on several occasions as a project employee and
that his employment was coterminous with the duration of the projects. They
also maintained that respondent was fully aware of this arrangement.
Considering that respondent’s employment had been validly terminated after
the completion of the projects, petitioners concluded that he is not entitled
to separation pay and other monetary claims, even attorney’s fees.6
The Labor Arbiter ruled that respondent had been illegally dismissed after
finding that he had acquired the status of a regular employee as he was hired
as a driver with little interruption from one project to another, a task which
is necessary to the usual trade of his employer.7 The Labor Arbiter pertinently
stated as follows:
x x x If it were true that complainant was hired as project employee, then
there should have been project employment contracts specifying the project
for which complainant’s services were hired, as well as the duration of the
project as required in Art. 280 of the Labor Code. As there were four (4)
projects where complainant was allegedly assigned, there should have been
the equal number of project employment contracts executed by the
complainant. Further, for every project termination, there should have been
the equal number of termination report submitted to the Department of
Labor and Employment. However, the record shows that there is only one
termination [report] submitted to DOLE pertaining to the last project
assignment of complainant in Carmona, Cavite.
In the absence of said project employment contracts and the corresponding
Termination Report to DOLE at every project termination, the inevitable
conclusion is that the complainant was a regular employee of the
respondents.
In the case of Maraguinot, Jr. v. NLRC, 284 SCRA 539, 556 [1998], citing capital
Industrial Construction Group v. NLRC, 221 SCRA 469, 473-474 [1993], it was
ruled therein that a project employee may acquire the status of a regular
employee when the following concurs: (1) there is a continuous rehiring of
project employees even after the cessation of a project; and (2) the tasks
performed by the alleged "project employee" are vital, necessary and
indispensable to the usual business or trade of the employer. Both factors are
present in the instant case. Thus, even granting that complainant was hired
75 | P a g e
as a project employee, he eventually became a regular employee as there
was a continuous rehiring of this services.
xxx
In the instant case, apart from the fact that complainant was not made to sign
any project employment contract x x x he was successively transferred from
one project after another, and he was made to perform the same kind of work
as driver.8
The Labor Arbiter ordered petitioners to pay respondent the aggregate sum
of P224,647.17 representing backwages, separation pay, salary differential,
holiday pay, service incentive leave pay and 13th month pay.9
Petitioners received a copy of the Labor Arbiter’s decision on 17 December
2003. On 29 December 2003, the last day of the reglementary period for
perfecting an appeal, petitioners filed a Memorandum of Appeal10 before
the NLRC and paid the appeal fee. However, instead of posting the required
cash or surety bond within the reglementary period, petitioners filed a
Motion for Extension of Time to Submit/Post Surety Bond.11 Petitioners
stated that they could not post and submit the required surety bond as the
signatories to the bond were on leave during the holiday season, and made a
commitment to post and submit the surety bond on or before 6 January 2004.
The NLRC did not act on the motion. Thereafter, on 6 January 2004,
petitioners filed a surety bond equivalent to the award of the Labor Arbiter.12
In a Resolution13 dated July 29, 2004, the Second Division of the NLRC
dismissed petitioners’ appeal for lack of jurisdiction. The NLRC stressed that
the bond is an indispensable requisite for the perfection of an appeal by the
employer and that the perfection of an appeal within the reglementary
period and in the manner prescribed by law is mandatory and jurisdictional.
In addition, the NLRC restated that its Rules of Procedure proscribes the filing
of any motion for extension of the period within which to perfect an appeal.
The NLRC summed up that considering that petitioners’ appeal had not been
perfected, it had no jurisdiction to act on said appeal and the assailed
decision, as a consequence, has become final and executory.14 The NLRC
likewise denied petitioners’ Motion for Reconsideration15 for lack of merit in
another Resolution.16 On 11 November 2004, the NLRC issued an entry of
judgment declaring its resolution final and executory as of 9 October 2004.
On respondent’s motion, the Labor Arbiter ordered that the writ of execution
be issued to enforce the award. On 26 January 2005, a writ of execution was
issued.17
Petitioners elevated the dismissal of their appeal to the Court of Appeals by
way of a special civil action of certiorari. They argued that the filing of the
appeal bond evinced their willingness to comply and was in fact substantial
compliance with the Rules. They likewise maintained that the NLRC gravely
abused its discretion in failing to consider the meritorious grounds for their
motion for extension of time to file the appeal bond. Lastly, petitioners
contended that the NLRC gravely erred in issuing an entry of judgment as the
assailed resolution is still open for review.18 On 12 January 2006, the Court
of Appeals affirmed the challenged resolution of the NLRC. Hence, the instant
petition.
Before this Court, petitioners reiterate their previous assertions. They insist
on the application of Star Angel Handicraft v. National Labor Relations
Commission, et al.19where it was held that a motion for reduction of bond
may be filed in lieu of the bond during the period for appeal. They aver that
Borja Estate v. Ballad,20which underscored the importance of the filing of a
cash or surety bond in the perfection of appeals in labor cases, had not been
promulgated yet in 2003 when they filed their appeal. As such, the doctrine
in Borja could not be given retroactive effect for to do so would prejudice and
impair petitioners’ right to appeal. Moreover, they point out that judicial
decisions have no retroactive effect.21
The Court denies the petition.
The Court reiterates the settled rule that an appeal from the decision of the
Labor Arbiter involving a monetary award is only deemed perfected upon the
76 | P a g e
posting of a cash or surety bond within ten (10) days from such decision.22
Article 223 of the Labor Code states:
ART. 223. Appeal.—Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards, or
orders. …
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment appealed from.
xxx
Contrary to petitioners’ assertion, the appeal bond is not merely procedural
but jurisdictional. Without said bond, the NLRC does not acquire jurisdiction
over the appeal.23 Indeed, non-compliance with such legal requirements is
fatal and has the effect of rendering the judgment final and executory.24 It
must be stressed that there is no inherent right to an appeal in a labor case,
as it arises solely from the grant of statute.25
Evidently, the NLRC did not acquire jurisdiction over petitioners’ appeal
within the ten (10)-day reglementary period to perfect the appeal as the
appeal bond was filed eight (8) days after the last day thereof. Thus, the Court
cannot ascribe grave abuse of discretion to the NLRC or error to the Court of
Appeals in refusing to take cognizance of petitioners’ belated appeal.
While indeed the Court has relaxed the application of this requirement in
cases where the failure to comply with the requirement was justified or
where there was substantial compliance with the rules,26 the overpowering
legislative intent of Article 223 remains to be for a strict application of the
appeal bond requirement as a requisite for the perfection of an appeal and
as a burden imposed on the employer.27 As the Court held in the case of
Borja Estate v. Ballad:28
The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer is underscored by the
provision that an appeal may be perfected "only upon the posting of a cash
or surety bond." The word "only" makes it perfectly clear that the
LAWMAKERS intended the posting of a cash or surety bond by the employer
to be
the exclusive means by which an employer’s appeal may be considered
completed. The law however does not require its outright payment, but only
the posting of a bond to ensure that the award will be eventually paid should
the appeal fail. What petitioners have to pay is a moderate and reasonable
sum for the premium of such bond.29
Moreover, no exceptional circumstances obtain in the case at bar which
would warrant a relaxation of the bond requirement as a condition for
perfecting the appeal. It is only in highly meritorious cases that this Court opts
not to strictly apply the rules and thus prevent a grave injustice from being
done30 and this is not one of those cases.
In addition, petitioners cannot take refuge behind the Court’s ruling in Star
Angel. Pertinently, the Court stated in Computer Innovations Center v.
National Labor Relations Commission:31
Moreover, the reference in Star Angel to the distinction between the period
to file the appeal and to perfect the appeal has been pointedly made only
once by this Court in Gensoli v. NLRC thus, it has not acquired the sheen of
venerability reserved for repeatedly-cited cases. The distinction, if any, is not
particularly evident or material in the Labor Code; hence, the reluctance of
the Court to adopt such doctrine. Moreover, the present provision in the
NLRC Rules of Procedure, that "the filing of a motion to reduce bond shall not
stop the running of the period to perfect appeal" flatly contradicts the notion
expressed in Star Angel that there is a distinction between filing an appeal
and perfecting an appeal.
77 | P a g e
Ultimately, the disposition of Star Angel was premised on the ruling that a
motion for reduction of the appeal bond necessarily stays the period for
perfecting the appeal, and that the employer cannot be expected to perfect
the appeal by posting the proper bond until such time the said motion for
reduction is resolved. The unduly stretched-out distinction between the
period to file an appeal and to perfect an appeal was not material to the
resolution of Star Angel, and thus could properly be considered as obiter
dictum.32

Lastly, the Court does not agree that the Borja doctrine should only be applied
prospectively. In the first place, Borja is not a ground-breaking precedent as
it is a reiteration, emphatic though, of long standing jurisprudence.33 It is well
to recall too our pronouncement in Senarillos v. Hermosisima, et al.34 that
the judicial interpretation of a statute constitutes part of the law as of the
date it was originally passed, since the Court’s construction merely
establishes the contemporaneous legislative intent that the interpreted law
carried into effect. Such judicial doctrine does not amount to the passage of
a new law but consists merely of a construction or interpretation of a pre-
existing one, as is the situation in this case.35

At all events, the decision of the Labor Arbiter appears to be well-founded

and petitioners’ ill-starred appeal untenable.

WHEREFORE, the Petition is DENIED. Costs against petitioners.

SO ORDERED.

78 | P a g e
PNB vs CA
MELO, J.:
The notices of sale under Section 3 of Act No. 3135, as amended by Act No.
4118, on extra-judicial foreclosure of real estate mortgage are required to be
posted for not less than twenty days in at least three public places of the
municipality or city where the property is situated, and if such property is
worth more than four hundred pesos, such notices shall also be published
once a week for at least three consecutive weeks in a newspaper of general
circulation in the municipality or city.
Respondent court, through Justice Filemon Mendoza with whom Justices
Campos, Jr. and Aldecoa, Jr. concurred, construed the publication of the
notices on March 28, April 11 and l2, 1969 as a fatal announcement and
reversed the judgment appealed from by declaring void, inter alia, the
auction sale of the foreclosed pieces of realty, the final deed of sale, and the
consolidation of ownership (p. 27, Rollo).
Hence, the petition at bar, premised on the following backdrop lifted from
the text of the challenged decision:
The facts of the case as related by the trial court are, as follows:
This is a verified complaint brought by the plaintiff for the reconveyance to
him (and resultant damages) of two (2) parcels of land mortgaged by him to
the defendant Philippine National Bank (Manila), which the defendant
allegedly unlawfully foreclosed. The defendant then consolidated ownership
unto itself, and subsequently sold the parcels to third parties. The amended
Answer of the defendant states on the other hand that the extrajudicial
foreclosure, consolidation of ownership, and subsequent sale to the third
parties were all valid, the bank therefore counterclaims for damages and
other equitable remedies.
xxx xxx xxx
From the evidence and exhibits presented by both parties, the Court is of the
opinion that the following facts have been proved: Two lots, located at Bunlo,
Bocaue, Bulacan (the first covered by Torrens Certificate No. 16743 and
possessed of an area of approximately 3,109 square meters: the second
covered by Torrens Certificate No. 5787, possessed of an area of around 610
square meters, and upon which stood a residential-commercial building were
mortgaged to the defendant Philippine National Bank. The lots were under
the common names of the plaintiff (Epifanio dela Cruz), his brother (Delfin)
and his sister (Maria). The mortgage was made possible because of the grant
by the latter two to the former of a special power of attorney to mortgage
the lots to the defendant. The lots were mortgaged to guarantee the
following promissory notes:
(1) a promissory note for Pl2,000.00, dated September 2, 1958, and payable
within 69 days (date of maturity — Nov. l0, 1958);
(2) a promissory note for P4,000.00, dated September 22, 1958, and payable
within 49 days (date of maturity — Nov. 10, 1958);
(3) a promissory note for P4,000.00, dated June 30, 1.9581 and payable within
120 days (date of maturity — Nov. 10, 1958) See also Annex C of the
complaint itself).
[1 This date of June 30, 1958 is disputed by the plaintiff who claims that the
correct date is June 30, 1961, which is the date actually mentioned in the
promissory note. It is however difficult to believe the plaintiff's contention
since if it were true and correct, this would mean that nearly three (3) years
elapsed between the second and the third promissory note; that at the time
the third note was executed, the first two had not yet been paid by the
plaintiff despite the fact that the first two were supposed to be payable within
69 and 49 days respectively. This state of affairs would have necessitated the
renewal of said two promissory notes. No such renewal was proved, nor was
the renewal ever alleged. Finally, and this is very significant: the third
mentioned promissory note states that the maturity date is Nov. 10, 1958.
Now then, how could the loan have been contracted on June 30, 1961? It will
79 | P a g e
be observed that in the bank records, the third mentioned promissory note
was really executed on June 30, 1958 (See Exhs. 9 and 9-A). The Court is
therefore inclined to believe that the date "June 30, 1961" was a mere clerical
error and hat the true and correct date is June 1958. However, even assuming
that the true and correct date is June 30, 1961, the fact still remains that the
first two promissory notes had been guaranteed by the mortgage of the two
lots, and therefore, it was legal and proper to foreclose on the lots for failure
to pay said two promissory notes.
On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB) presented
under Act No. 3135 a foreclosure petition of the two mortgaged lots before
the Sheriff's Office at Malolos, Bulacan; accordingly, the two lots were sold or
auctioned off on October 20, 1961 with the defendant PNB as the highest
bidder for P28,908.46. On March 7, 1963, Sheriff Leopoldo Palad executed a
Final Deed of Sale, in response to a letter-request by the Manager of the PNB
(Malolos Branch). On January 15, 1963 a Certificate of Sale in favor of the
defendant was executed by Sheriff Palad. The final Deed of Sale was
registered in the Bulacan Registry of Property on March 19, 1963. Inasmuch
as the plaintiff did not volunteer to buy back from the PNB the two lots, the
PNB sold on June 4, 1970 the same to spouses Conrado de Vera and Marina
de Vera in a "Deed of Conditional Sale". (Decision, pp.3-5; Amended Record
on Appeal, pp. 96-98).
After due consideration of the evidence, the CFI on January 22, 1978
rendered its Decision, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, the instant complaint against the
defendant Philippine National Bank is hereby ordered DISMISSED, with costs
against the plaintiff. The Counterclaim against the plaintiff is likewise
DISMISSED, for the Court does not believe that the complaint had been made
in bad faith.
SO ORDERED. (Decision, p. B.; Amended Record on Appeal, p. 100)
Not satisfied with the judgment, plaintiff interposed the present appeal
assigning as errors the following:
I.
THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE I OF ITS DECISION THAT
IT IS THEREFORE INCLINED TO BELIEVE THAT THE DATE "JUNE 30, 1962" WAS
A MERE CLERICAL ERROR AND THAT THE TRUE AND CORRECT DATE IS JUNE
30, 1958. IT ALSO ERRED IN HOLDING IN THE SAME FOOTNOTE I THAT
"HOWEVER, EVEN ASSUMING THAT THE TRUE AND CORRECT DATE IS JUNE
30, 1961, THE FACT STILL REMAINS THAT THE FIRST TWO PROMISSORY
NOTES HAD BEEN GUARANTEED BY THE MORTGAGE OF THE TWO LOTS, AND
THEREFORE, IT WAS LEGAL AND PROPER TO FORECLOSE ON THE LOTS FOR
FAILURE TO PAY SAID TWO PROMISSORY NOTES". (page 115, Amended
Record on Appeal)
II.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE PETITION FOR
EXTRAJUDICIAL FORECLOSURE WAS PREMATURELY FILED AND IS A MERE
SCRAP OF PAPER BECAUSE IT MERELY FORECLOSED THE ORIGINAL AND NOT
THE AMENDED MORTGAGE.
III.
THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THAT THE AUCTION
SALE WAS NOT PREMATURE". (page 117, Amended Record on Appeal)
IV.
THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO STATE THAT
ACTUALLY THE POWER OF ATTORNEY GIVEN TO THE PNB WAS EMBODIED IN
THE REAL ESTATE MORTGAGE (EXB. 10) WHICH WAS REGISTERED IN THE
REGISTRY OF PROPERTY OF BULACAN AND WAS ANNOTATED ON THE TWO
TORRENS CERTIFICATES INVOLVED" (page 118, Amended Record on Appeal).
80 | P a g e

V.
THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES REQUIRED
UNDER SEC. 3 OF ACT NO. 3135 WERE ALL COMPLIED WITH" AND "THAT THE
DAILY RECORD . . . IS A NEWSPAPER OF GENERAL CIRCULATION (pages 117-
118, Amended Record on Appeal).
VI.
THE LOWER COURT ERRED IN NOT DECLARING THE CERTIFICATE OF SALE,
FINAL DEED OF SALE AND AFFIDAVIT OF CONSOLIDATION, NULL AND VOID.
VII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO RECONVEY TO
PLAINTIFF THE PARCELS OF LAND COVERED BY T.C.T. NOS. 40712 AND 40713
OF BULACAN (page 8, Amended Record on Appeal)
VIII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO PAY TO
PLAINTIFF REASONABLE AMOUNTS OF MORAL AND EXEMPLARY DAMAGES
AND ATTORNEY'S FEES (page 8. Amended Record on Appeal).
IX.
THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT
AGAINST THE PHILIPPINE NATIONAL BANK WITH COSTS AGAINST THE
PLAINTIFF. (page 118, Amended Record on Appeal)." (Brief for Plaintiff-
Appellant, pp. 1-4) (pp. 17-21, Rollo)
With reference to the pertinent issue at hand, respondent court opined:
The Notices of Sale of appellant's foreclosed properties were published on
March 228, April 11 and April 12, 1969 issues of the newspaper "Daily Record"
(Amended Record on Appeal, p. 108). The date March 28, 1969 falls on a
Friday while the dates April 11 and 12, 1969 are on a Friday and Saturday,
respectively. Section 3 of Act No. 3135 requires that the notice of auction sale
shall be "published once a week for at least three consecutive weeks".
Evidently, defendant-appellee bank failed to comly with this legal
requirement. The Supreme Court has held that:
The rule is that statutory provisions governing publication of notice of
mortgage foreclosure sales must be strictly complied with, and that even
slight deviations therefrom will invalidate the notice and render the sale at
least voidable (Jalandoni vs. Ledesma, 64 Phil. l058. G.R. No. 42589, August
1937 and October 29, 1937). Interpreting Sec. 457 of the Code of Civil
Procedure (reproduced in Sec. 18(c) of Rule 39, Rules of Court and in Sec. 3
of Act No. 3135) in Campomanes vs. Bartolome and German & Co. (38 Phil.
808, G.R. No. 1309, October 18, 1918), this Court held that if a sheriff sells
without notice prescribed by the Code of Civil Procedure induced thereto by
the judgment creditor, and the purchaser at the sale is the judgment creditor,
the sale is absolutely void and no title passes. This is regarded as the settled
doctrine in this jurisdiction whatever the rule may be elsewhere (Boria vs.
Addison, 14 Phil. 895, G.R. No. 18010, June 21, 1922).
. . . It has been held that failure to advertise a mortgage foreclosure sale in
compliance with statutory requirements constitutes a jurisdictional defect
invalidating the sale and that a substantial error or omission in a notice of sale
will render the notice insufticient and vitiate the sale (59 C.J.S. 1314).
(Tambunting vs. Court of Appeals, L-48278, November 8, 1988; 167 SCRA 16,
23-24).
In view of the admission of defendant-appellee in its pleading showing that
there was no compliance of the notice prescribed in Section 3 of Act No. 3135,
as amended by Act 4118, with respect to the notice of sale of the foreclosed
real properties in this case, we have no choice but to declare the auction sale
as absolutely void in view of the fact that the highest bidder and purchaser in
81 | P a g e
said auction sale was defendant-appellee bank. Consequently, the Certificate
of Sale, the Final Deed of Sale and Affidavit of Consolidation are likewise of
no legal efffect. (pp. 24-25, Rollo)
Before we focus our attention on the subject of whether or not there was
valid compliance in regard to the required publication, we shall briefly discuss
the other observations of respondent court vis-a-vis herein private
respondent's ascriptions raised with the appellate court when his suit for
reconveyance was dismissed by the court of origin even as private
respondent does not impugn the remarks of respondent court along this line.
Although respondent court acknowledged that there was an ambiguity on the
date of execution of the third promissory note (June 30, 1961) and the date
of maturity thereof (October 28, 1958), it was nonetheless established that
the bank introduced sufficient proof to show that the discrepancy was a mere
clerical error pursuant to Section 7, Rule l30 of the Rules of Court. Anent the
second disputation aired by private respondent, the appellate court observed
that inasmuch as the original as well as the subsequent mortgage were
foreclosed only after private respondent's default, the procedure pursued by
herein petitioner in foreclosing the collaterals was thus appropriate albeit the
petition therefor contained only a copy of the original mortgage.
It was only on the aspect of publication of the notices of sale under Act No.
3135, as amended, and attorney's fees where herein private respondent
scored points which eliminated in the reversal of the trial court's decision.
Respondent court was of the impression that herein petitioner failed to
comply with the legal requirement and the sale effected thereafter must be
adjudged invalid following the ruling of this Court in Tambunting vs. Court of
Appeals (167 SCRA 16 [1988]); p. 8, Decision, p. 24, Rollo). In view of
petitioner's so-called indifference to the rules set forth under Act No. 3135,
as amended, respondent court expressly authorized private respondent to
recover attorney's fees because he was compelled to incur expenses to
protect his interest.
Immediately upon the submission of a supplemental petition, the spouses
Conrado and Marina De Vera filed a petition in intervention claiming that the
two parcels of land involved herein were sold to them on June 4, 1970 by
petitioner for which transfer certificates of title were issued in their favor (p.
40, Rollo). On the other hand, private respondent pressed the idea that the
alleged intervenors have no more interest in the disputed lots in view of the
sale effected by them to Teresa Castillo, Aquilino and Antonio dela Cruz in
1990 (pp. 105-106, Rollo).
On March 9, 1992, the Court resolved to give due course to the petition and
required the parties to submit their respective memoranda (p. 110, Rollo).
Now, in support of the theory on adherence to the conditions spelled in the
preliminary portion of this discourse, the pronouncement of this Court in
Bonnevie vs. Court of Appeals (125 SCRA [1983]; p. 135, Rollo) is sought to be
utilized to press the point that the notice need not be published for three full
weeks. According to petitioner, there is no breach of the proviso since after
the first publication on March 28, 1969, the second notice was published on
April 11, 1969 (the last day of the second week), while the third publication
on April 12, 1969 was announced on the first day of the third week. Petitioner
thus concludes that there was no violation from the mere happenstance that
the third publication was made only a day after the second publication since
it is enough that the second publication be made on any day within the
second week and the third publication, on any day within the third week.
Moreover, in its bid to rectify its admission in judicio, petitioner asseverates
that said admission alluded to refers only to the dates of publications, not
that there was non-compliance with the publication requirement.
Private respondent, on the other hand, views the legal question from a
different perspective. He believes that the period between each publication
must never be less than seven consecutive days (p. 4, Memorandum; p. 124,
Rollo).
We are not convinced by petitioner's submissions because the disquisition in
support thereof rests on the erroneous impression that the day on which the
82 | P a g e
first publication was made, or on March 28, 1969, should be excluded
pursuant to the third paragraph of Article 17 of the New Civil Code.
It must be conceded that Article 17 is completely silent as to the definition of
what is a "week". In Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno,
Philippine Law Dictionary, Second Ed., 1972, p. 660), this term was
interpreted to mean as a period of time consisting of seven consecutive days
— a definition which dovetails with the ruling in E.M. Derby and Co. vs. City
of Modesto, et al. (38 Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the
Philippines Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino, Commentaries
and Jurisprudence on th Civil Code, 1990, p. 46). Following the interpretation
in Derby as to the publication of an ordinance for "at least two weeks" in
some newspaper that:
. . . here there is no date or event suggesting the exclusion of the first day's
publication from the computation, and the cases above cited take this case
out of the rule stated in Section 12, Code Civ. Proc. which excludes the first
day and includes the last;
unwritten intention of the lawmakers when Act No. 3135 was enacted. Verily,
inclusion of the first day of publication is in keeping with the computation in
Bonnevie vs. Court of Appeals (125 SCRA 122 [1983]) where this Court had
occasion to pronounce, through Justice Guerrero, that the publication of
notice on June 30, July 7 and July 14, 1968 satisfied the publication
requirement under Act No. 3135. Respondent court cannot, therefore, be
faulted for holding that there was no compliance with the strict requirements
of publication independently of the so- called admission in judicio.
WHEREFORE, the petitions for certiorari and intervention are hereby
dismissed and the decision of the Court of Appeals dated April 17, 1991 is
hereby affirmed in toto.
SO ORDERED.

the publication effected on April 11, 1969 cannot be construed as sufficient

advertisement for the second week because the period for the first week
should be reckoned from March 28, 1969 until April 3, 1969 while the second
week should be counted from April 4, 1969 until April 10, 1969. It is clear that
the announcement on April 11, 1969 was both theoretically and physically
accomplished during the first day of the third week and cannot thus be
equated with compliance in law. Indeed, where the word is used simply as a
measure of duration of time and without reference to the calendar, it means
a period of seven consecutive days without regard to the day of the week on
which it begins (1 Tolentino, supra at p. 467 citing Derby).

Certainly, it would have been absurd to exclude March 28, 1969 as reckoning
point in line with the third paragraph of Article 13 of the New Civil Code, for
the purpose of counting the first week of publication as to the last day thereof
fall on April 4, 1969 because this will have the effect of extending the first
week by another day. This incongruous repercussion could not have been the
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ALU-TUCP vs NLRC and National Steel Corporation
FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the National
Labor Relations Commission ("NLRC") dated 8 January 1993 which declared
petitioners to be project employees of private respondent National Steel
Corporation ("NSC"), and the NLRC's subsequent Resolution of 15 February
1993, denying petitioners' motion for reconsideration.
Petitioners plead that they had been employed by respondent NSC in
connection with its Five Year Expansion Program (FAYEP I & II) 1 for varying
lengths of time when they were separated from NSC's service:
Employee Date Nature of Separated
Employed Employment
1. Alan Barinque 5-14-82 Engineer 1 8-31-91
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992
13. Romeo Sarona 2-26-83 Machine Operator 8-31-912
On 5 July 1990, petitioners filed separate complaints for unfair labor practice,
regularization and monetary benefits with the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter in a
Decision dated 7 June 1991, declared petitioners "regular project employees
who shall continue their employment as such for as long as such [project]
activity exists," but entitled to the salary of a regular employee pursuant to
the provisions in the collective bargaining agreement. It also ordered
payment of salary differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners argued that
they were regular, not project, employees. Private respondent, on the other
hand, claimed that petitioners are project employees as they were employed
to undertake a specific project — NSC's Five Year Expansion Program (FAYEP
I & II).
The NLRC in its questioned resolutions modified the Labor Arbiter's decision.
It affirmed the Labor Arbiter's holding that petitioners were project
employees since they were hired to perform work in a specific undertaking
— the Five Years Expansion Program, the completion of which had been
determined at the time of their engagement and which operation was not
directly related to the business of steel manufacturing. The NLRC, however,
set aside the award to petitioners of the same benefits enjoyed by regular
employees for lack of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court considers that
petitioners have failed to show any grave abuse of discretion or any act
without or in excess of jurisdiction on the part of the NLRC in rendering its
questioned resolutions of 8 January 1993 and 15 February 1993.
The law on the matter is Article 280 of the Labor Code which reads in full:
Art. 280. Regular and Casual Employment — The provisions of the written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, and employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or
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undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services
to be performed is seasonal in nature and the employment is for the duration
of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at
least one year service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such actually exists.
(Emphasis supplied)
Petitioners argue that they are "regular" employees of NSC because: (i) their
jobs are "necessary, desirable and work-related to private respondent's main
business, steel-making"; and (ii) they have rendered service for six (6) or more
years to private respondent NSC. 4
The basic issue is thus whether or not petitioners are properly characterized
as "project employees" rather than "regular employees" of NSC. This issue
relates, of course, to an important consequence: the services of project
employees are co-terminous with the project and may be terminated upon
the end or completion of the project for which they were hired. 5 Regular
employees, in contract, are legally entitled to remain in the service of their
employer until that service is terminated by one or another of the recognized
modes of termination of service under the Labor Code. 6
It is evidently important to become clear about the meaning and scope of the
term "project" in the present context. The "project" for the carrying out of
which "project employees" are hired would ordinarily have some relationship
to the usual business of the employer. Exceptionally, the "project"
undertaking might not have an ordinary or normal relationship to the usual
business of the employer. In this latter case, the determination of the scope
and parameeters of the "project" becomes fairly easy. It is unusual (but still
conceivable) for a company to undertake a project which has absolutely no
relationship to the usual business of the company; thus, for instance, it would
be an unusual steel-making company which would undertake the breeding
and production of fish or the cultivation of vegetables. From the viewpoint,
however, of the legal characterization problem here presented to the Court,
there should be no difficulty in designating the employees who are retained
or hired for the purpose of undertaking fish culture or the production of
vegetables as "project employees," as distinguished from ordinary or "regular
employees," so long as the duration and scope of the project were
determined or specified at the time of engagement of the "project
employees." 7 For, as is evident from the provisions of Article 280 of the Labor
Code, quoted earlier, the principal test for determining whether particular
employees are properly characterized as "project employees" as
distinguished from "regular employees," is whether or not the "project
employees" were assigned to carry out a "specific project or undertaking,"
the duration (and scope) of which were specified at the time the employees
were engaged for that project.
In the realm of business and industry, we note that "project" could refer to
one or the other of at least two (2) distinguishable types of activities. Firstly,
a project could refer to a particular job or undertaking that is within the
regular or usual business of the employer company, but which is distinct and
separate, and identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is a
particular construction job or project of a construction company. A
construction company ordinarily carries out two or more discrete identifiable
construction projects: e.g., a twenty-five- storey hotel in Makati; a residential
condominium building in Baguio City; and a domestic air terminal in Iloilo City.
Employees who are hired for the carrying out of one of these separate
projects, the scope and duration of which has been determined and made
known to the employees at the time of employment, are properly treated as
"project employees," and their services may be lawfully terminated at
completion of the project.
The term "project" could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation. Such a
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job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or
undertaking also begins and ends at determined or determinable times. The
case at bar presents what appears to our mind as a typical example of this
kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II with the
ultimate end in view of expanding the volume and increasing the kinds of
products that it may offer for sale to the public. The Five Year Expansion
Program had a number of component projects: e.g., (a) the setting up of a
"Cold Rolling Mill Expansion Project"; (b) the establishment of a "Billet Steel-
Making Plant" (BSP); (c) the acquisition and installation of a "Five Stand TDM";
and (d) the "Cold Mill Peripherals Project." 8 Instead of contracting out to an
outside or independent contractor the tasks of constructing the buildings
with related civil and electrical works that would house the new machinery
and equipment, the installation of the newly acquired mill or plant machinery
and equipment and the commissioning of such machinery and equipment,
NSC opted to execute and carry out its Five Yeear Expansion Projects "in
house," as it were, by administration. The carrying out of the Five Year
Expansion Program (or more precisely, each of its component projects)
constitutes a distinct undertaking identifiable from the ordinary business and
activity of NSC. Each component project, of course, begins and ends at
specified times, which had already been determined by the time petitioners
were engaged. We also note that NSC did the work here involved — the
construction of buildings and civil and electrical works, installation of
machinery and equipment and the commissioning of such machinery — only
for itself. Private respondent NSC was not in the business of constructing
buildings and installing plant machinery for the general business community,
i.e., for unrelated, third party, corporations. NSC did not hold itself out to the
public as a construction company or as an engineering corporation.
Which ever type of project employment is found in a particular case, a
common basic requisite is that the designation of named employees as
"project employees" and their assignment to a specific project, are effected
and implemented in good faith, and not merely as a means of evading
otherwise applicable requirements of labor laws.
Thus, the particular component projects embraced in the Five Year Expansion
Program, to which petitioners were assigned, were distinguishable from the
regular or ordinary business of NSC which, of course, is the production or
making and marketing of steel products. During the time petitioners rendered
services to NSC, their work was limited to one or another of the specific
component projects which made up the FAYEP I and II. There is nothing in the
record to show that petitioners were hired for, or in fact assigned to, other
purposes, e.g., for operating or maintaining the old, or previously installed
and commissioned, steel-making machinery and equipment, or for selling the
finished steel products.
We, therefore, agree with the basic finding of the NLRC (and the Labor
Arbiter) that the petitioners were indeed "project employees:"
It is well established by the facts and evidence on record that herein 13
complainants were hired and engaged for specific activities or undertaking
the period of which has been determined at time of hiring or engagement. It
is of public knowledge and which this Commission can safely take judicial
notice that the expansion program (FAYEP) of respondent NSC consist of
various phases [of] project components which are being executed or
implemented independently or simultaneously from each other . . .
In other words, the employment of each "project worker" is dependent and
co-terminous with the completion or termination of the specific activity or
undertaking [for which] he was hired which has been pre-determined at the
time of engagement. Since, there is no showing that they (13 complainants)
were engaged to perform work-related activities to the business of
respondent which is steel-making, there is no logical and legal sense of
applying to them the proviso under the second paragraph of Article 280 of
the Labor Code, as amended.
86 | P a g e
The present case therefore strictly falls under the definition of "project
employees" on paragraph one of Article 280 of the Labor Code, as amended.
Moreover, it has been held that the length of service of a project employee is
not the controlling test of employment tenure but whether or not "the
employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee". (See Hilario Rada v. NLRC, G.R. No. 96078,
January 9, 1992; and Sandoval Shipping, Inc. v. NLRC, 136 SCRA 674 (1985). 9

Petitioners next claim that their service to NSC of more than six (6) years
should qualify them as regular employees. We believe this claim is without
legal basis. The simple fact that the employment of petitioners as project
employees had gone beyond one (1) year, does not detract from, or legally
dissolve, their status as project employees. 10 The second paragraph of
Article 280 of the Labor Code, quoted above, providing that an employee who
has served for at least one (1) year, shall be considered a regular employee,
relates to casual employees, not to project employees.

In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this
Court ruled that the proviso in the second paragraph of Article 280 relates
only to casual employees and is not applicable to those who fall within the
definition of said Article's first paragraph, i.e., project employees. The familiar
grammatical rule is that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not
to other sections thereof, unless the clear legislative intent is to restrict or
qualify not only the phrase immediately preceding the proviso but also earlier
provisions of the statute or even the statute itself as a whole. No such intent
is observable in Article 280 of the Labor Code, which has been quoted earlier.

ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby

DISMISSED for lack of merit. The Resolutions of the NLRC dated 8 January
1993 and 15 February 1993 are hereby AFFIRMED. No pronouncement as to
costs.

SO ORDERED.
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