April 24, 2018

G.R. No. 221029

REPUBLIC OF THE PHILIPPINES, Petitioner

vs
MARELYN TANEDO MANALO, Respondent

RESOLUTION

peralta, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court (Rules) seeks to
reverse and set aside the September 18, 2014 Decision1 and October 12, 2015
Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 100076. The dispositive
portion of the Decision states:

WHEREFORE, the instant appeal is GRANTED. The Decision dated 15 October 2012 of
the Regional Trial Court of Dagupan City, First Judicial Region, Branch 43, in SPEC.
PROC. NO. 2012-0005 is REVERSED and SET ASIDE.

Let a copy of this Decision be served on the Local Civil Registrar of San Juan, Metro
Manila.

SO ORDERED.3

The facts are undisputed.

On January 10, 2012, respondent Marelyn Tanedo Manalo (Manalo) filed a petition for
cancellation of

Entry of marriage in the Civil Registry of San Juan , Metro Manila, by virtueof a judgment
of divorce Japanese court.

Finding the petition to be sufficient in form and in substance, Branch 43 of the Regional
Trial Court (RTC) of Dagupan City set the case for initial hearing on April 25, 2012. The
petition and the notice of initial hearing were published once a week for three
consecutive weeks in newspaper of general circulation. During the initial hearing,
counsel for Manalo marked the documentary evidence (consisting of the trial courts
Order dated January 25, 2012, affidavit of publication, and issues of the Northern
Journal dated February 21-27, 2012, February 28 - March 5, 2012, and March 6-12,
2012) for purposes of compliance with the jurisdictional requirements.

The Office of the Solicitor General (OSG) entered its appearance for petitioner Republic
of the Philippines authorizing the Office of the City Prosecutor of Dagupan to appear on
its behalf. Likewise, a Manifestation and Motion was filed questioning the title and/or
caption of the petition considering that based on the allegations therein, the proper
action should be a petition for recognition and enforcement of a foreign judgment.
As a result, Manalo moved to admit an Amended Petition, which the court granted. The
Amended Petition, which captioned that if it is also a petition for recognition and
enforcement of foreign judgment alleged:

2. That petitioner is previously married in the Philippines to a Japanese national named

YOSHINO MINORO as shown by their Marriage Contract xxx;

3. That recently, a case for divorce was filed by herein [petitioner] in Japan and after die
proceedings, a divorce decree dated December 6, 2011 was rendered by the Japanese
Court x x x;

4. That at present, by virtue of the said divorce decree, petitioner and her divorce
Japanese husband are no longer living together and in fact, petitioner and her daughter
are living separately from said Japanese former husband;

5. That there is an imperative need to have the entry of marriage in Civil Registry of San
Juan, Metro Manila cancelled, where the petitioner and the former Japanese husband's
marriage was previously registered, in order that it would not appear anymore that
petitioner is still married to the said Japanese national who is no longer her husband or
is no longer married to her, she shall not be bothered and disturbed by aid entry of
marriage;

6. That this petition is filed principally for the purpose of causing the cancellation of entry
of the marriage between the petitioner and the said Japanese national, pursuant to Rule
108 of the Revised Rules of Court, which marriage was already dissolved by virtue of the
aforesaid divorce decree; [and]

7. That petitioner prays, among others, that together with the cancellation of the said
entry of her marriage, that she be allowed to return and use her maiden surname,
MANALO.4

Manalo was allowed to testify in advance as she was scheduled to leave for Japan for
her employment. Among the documents that were offered and admitted were:

1. Court Order dated January 25, 2012, finding the petition and its attachments to be
sufficient in form and in substance;

2. Affidavit of Publication;

3. Issues of the Northern Journal dated February 21-27, 2012, February 28 - March 5,
2012, and March 6-12, 2012;

4. Certificate of Marriage between Manalo and her former Japanese husband;

5. Divorce Decree of Japanese court;

6. Authentication/Certificate issued by the Philippine Consulate General in Osaka, Japan

of the Notification of Divorce; and
7. Acceptance of Certificate of Divorce.5

The OSG did not present any controverting evidence to rebut the allegations of Manalo.

On October 15, 2012, the trial court denied the petition for lack of merit. In ruling that the
divorce obtained by Manalo in Japan should not be recognized, it opined that, based on
Article 15 of the New Civil Code, the Philippine law "does not afford Filipinos the right to
file for a divorce whether they are in the country or living abroad, if they are married to
Filipinos or to foreigners, or if they celebrated their marriage in the Philippines or in
another country" and that unless Filipinos "are naturalized as citizens of another country,
Philippine laws shall have control over issues related to Filipinos' family rights and
duties, together with the determination of their condition and legal capacity to enter into
contracts and civil relations, inclusing marriages."6

On appeal, the CA overturned the RTC decision. It held that Article 26 of the Family
Code of the Philippines (Family Code) is applicable even if it was Manalo who filed for
divorce against her Japanese husband because the decree may obtained makes the
latter no longer married to the former, capacitating him to remarry. Conformably
with Navarro, et al. V. Exec. Secretary Ermita, et al.7 ruling that the meaning of the law
should be based on the intent of the lawmakers and in view of the legislative intent
behind Article 26, it would be height of injustice to consider Manalo as still married to the
Japanese national, who, in turn, is no longer married to her. For the appellate court, the
fact that it was Manalo who filed the divorce case is inconsequential. Cited as similar to
this case was Van Dorn v. Judge Romilo, Jr.8 where the mariage between a foreigner an
a Filipino was dissolved filed abroad by the latter.

The OSG filed a motion for reconsideration, but it was denied; hence, this petition.

We deny the petition and partially affirm the CA decision.

Divorce, the legal dissolution of a lawful union for a cause arising after the marriage, are
of two types: (1) absolute divorce or a vinculo matrimonii, which terminates the marriage,
and (2) limited divorce or a mensa et thoro, which suspends it and leaves the bond in full
force.9 In this jurisdiction, the following rules exist:

1. Philippine law does not provide for absolute divorce; hence, our courts cannot
grant it.10

2. Consistent with Articles 1511 and 1712 of the New Civil Code, the marital bond
between two Filipinos cannot be dissolved even by an absolute divorce obtained
abroad.13

3. An absolute divorce obtained abroad by a couple, who both aliens, may be

recognized in the Philippines, provided it is consistent with their respective
national laws.14

4. In mixed marriages involving a Filipino and a foreigner, the former is allowed to

contract a subsequent marriage in case the absolute divorce is validly obtained
abroad by the alien spouse capacitating him or her to remarry.15
On July 6, 1987, then President Corazon C. Aquino signed into law Executive Order
(E.O.) No. 209, otherwise known as the Family Code of the Philippines, which took effect
on August 3, 1988.16 Shortly thereafter , E.O. No. 227 was issued on July 17,
1987.17 Aside from amending Articles 36 and 39 of the Family Code, a second
paragraph was added to Article 26.18 This provision was originally deleted by the Civil
Code Revision Committee (Committee),but it was presented and approved at a Cabinet
meeting after Pres. Aquino signed E.O. No. 209.19 As modified, Article 26 now states:

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in
force in the where country where they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6),
36, 37 and 38.

Where a marriage between Filipino citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by the alien spouse capacitating him her to
remarry under Philippine law.

Paragraph 2 of Article 26 confers jurisdiction on Philippine courts to extend the effect of

a foreign divorce decree to a Filipino spouse without undergoing trial to determine the
validity of the dissolution of the marriage.20 It authorizes our courts to adopt the effects of
a foreign divorce decree precisely because the Philippines does not allow
divorce.21 Philippine courts cannot try the case on the merits because it is tantamount to
trying a divorce case.22Under the principles of comity, our jurisdiction recognizes a valid
divorce obtained by the spouse of foreign nationality, but the legal effects thereof, e.g.,
on custody, care and support of the children or property relations of the spouses, must
still be determined by our courts.23

According to Judge Alicia Sempio-Diy, a member of the Committee, the idea of the
amendment is to avoid the absurd situation of a Filipino as still being married to his or
her alien spouse, although the latter is no longer married to the former because he or
she had obtained a divorce abroad that is recognized by his or national law.24 The aim
was that it would solved the problem of many Filipino women who, under the New Civil
Code, are still considered married to their alien husbands even after the latter have
already validly divorced them under their (the husbands') national laws and perhaps
have already married again.25

In 2005, this Court concluded that Paragraph 2 of Article 26 applies to a case where, at
the time of the celebration of the marriage, the parties were Filipino citizens, but later on,
one of them acquired foreign citizenship by naturalization, initiated a divorce proceeding,
and obtained a favorable decree. We held in Republic of the Phils. v. Orbecido III:26

The jurisprudential answer lies latent in the 1998 case of Quita v. Court of
Appeals. In Quita, the parties were, as in this case, Filipino citizens when they got
married. The wife became naturalized American citizen n 1954 and obtained a divorce in
the same year. The court therein hinted, by the way of obiter dictum, that a Filipino
divorced by his naturalized foreign spouse is no longer married under Philippine law and
can thus remarry.

Thus, taking into consideration the legislative intent and applying the rule of reason, we
hold that Paragraph 2 of Article 26 should be interpreted to include cases involving
parties who, at the time of the celebration of the marriage were Filipino citizens, but later
on, one of them becomes naturalized as foreign citizen and obtains divorce decree. The
Filipino spouse should likewise be allowed to remarry as if the other party were foreigner
at the time of the solemnization of the marriage. To rule otherwise would be to sanction
absurdity and injustice. x x x

If we are to give meaning to the legislative intent to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who after obtaining a divorce is no
longer married to the Filipino spouse, then the instant case must be deemed as coming
within the contemplation of Paragraph 2 of Article 26.

In view of the foregoing, we state the twin elements for the application of Paragraph 2 of
Article 26 as follows:

1. There is a valid marriage that has been celebrated between a Filipino citizen and a
foreigner; and

2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to
remarry.

The reckoning point is not the citizenship of the parties at the time of the celebration of
marriage, but their citizenship at the time valid divorced obtained abroad by the alien
spouse capacitating the latter to remarry.

Now, the Court is tasked to resolve whether, under the same provision, a Filipino citizen
has the capacity to remarry under Philippine law after initiating a divorce proceeding
abroad and obtaining a favorable judgment against his or her alien spouse who is
capacitated to remarry. Specifically, Manalo pleads for the recognition of enforcement of
the divorced decree rendered by the Japanese court and for the cancellation of the entry
of marriage in the local civil registry " in order that it would not appear anymore that she
is still married to the said Japanese national who is no longer her husband or is no
longer married to her; [and], in the event that [she] decides to be remarried, she shall not
be bothered and disturbed by said entry of marriage," and to use her maiden surname.

We rule in the affirmative.

Both Dacasin v. Dacasin28 and Van Dorn29 already recognized a foreign divorce decree
that was initiated and obtained by the Filipino spouse and extended its legal effects on
the issues of child custody and property relation,respectively.

In Dacasin, post-divorce, the former spouses executed an Agreement for the joint
custody of their minor daughter. Later on, the husband who is a US citizen, sued his
Filipino wife enforce the Agreement, alleging that it was only the latter who exercised
sole custody of their child. The trial court dismissed the action for lack of jurisdiction, on
the ground, among others, that the divorce decree is binding following the "nationality
rule" prevailing in this jurisdiction. The husband moved to reconsider, arguing that the
divorce decree obtained by his former wife is void, but it was denied. In ruling that the
trial court has jurisdiction to entertain the suit bu not to enforce the Agreement, which is
void, this Court said:
Nor can petitioner rely on the divorce decree's alleged invalidity - not because the Illinois
court lacked jurisdiction or that the divorced decree violated Illinois law, but because the
divorce was obtained by his Filipino spouse - to support the Agreement's enforceability .
The argument that foreigners in this jurisdiction are not bound by foreign divorce decrees
is hardly novel. Van Dron v. Romillo settled the matter by holding that an alien spouse of
a Filipino is bound by a divorce decree obtained abroad. There, we dismissed the alien
divorcee's Philippine suit for accounting of alleged post-divorce conjugal property and
rejected his submission that the foreign divorce (obtained by the Filipino spouse) is not
valid in this jurisdiction x x x.30

Van Dorn was decided before the Family Code took into effect. There, a complaint was
filed by the ex-husband , who is a US citizen, against his Filipino wife to render an
accounting of a business that was alleged to be a conjugal property and to be declared
with right to manage the same. Van Dorn moved to dismiss the case on the ground that
the cause of action was barred by previous judgment in the divorce proceedings that she
initiated, but the trial court denied the motion. On his part, her ex-husband averred that
the divorce decree issued by the Nevada court could not prevail over the prohibitive laws
of the Philippines and its declared national policy; that the acts and declaration of a
foreign court cannot, especially if the same is contrary to public policy, divest Philippine
courts of jurisdiction to entertain matters within its jurisdiction . In dismissing the case
filed by the alien spouse, the Court discussed the effect of the foreign divorce on the
parties and their conjugal property in the Philippines. Thus:

There can be no question as to the validity of that Nevada divorce in any of the States of
the United States. The decree is binding on private respondent as an American citizen.
For instance, private respondent cannot sue petitioner, as her husband, in any State of
the Union. What he is contending in this case is that the divorce is not valid and binding
in this jurisdiction, the same being contrary to local law and public policy.

Is it true that owing to the nationality principle embodied in Article 15 of the Civil Code,
only Philippine nationals are covered by the policy and morality. However, aliens may
obtain divorce abroad, which may be recognized in the Philippines, provided they are
valid according to their national law. In this case, the divorce in Nevada released private
respondent from the marriage from standards of American law, under which divorce
dissolves the marriage. As stated by the Federal Supreme Court of the United States
in Atherton vs. Atherton, 45 L. Ed. 794,799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a court of
competent jurisdiction are to change the existing status or domestic relation of husband
and wife, and to free them both from the bond. The marriage tie, when thus severed as
stone party, ceases to bind either. A husband without a wife, or a wife without a
husband, is unknown to the law. When the law provides in the nature of penalty, that the
guilty party shall not marry again, that party, as well as the other, is still absolutely feed
from the bond of the former marriage."

Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's husband
entitled to exercise control over conjugal assets. As he is estopped by his own
representation before said court from asserting his right over the alleged conjugal
property.
To maintain, as private respondent does, that under our laws, petitioner has to be
considered still married to private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be
obliged to live together with, observe respect and fidelity, and render support to private
respondent. The latter should not continue to be one of her heirs with possible rights to
conjugal property. She should not be discriminated against in her own country if the
ends of justice are to be served.31

In addition, the fact that a validity obtained foreign divorce initiated by the Filipino spouse
can be recognized and given legal effects in the Philippines is implied from Our rulings
in Fujiki v. Marinay, et al.32 and Medina v. Koike.33

In Fujiki, the Filipino wife, with the help of her husband, who is a Japanese national, was
able to obtain a judgment from Japan's family court. Which declared the marriage
between her and her second husband, who is a Japanese national, void on the ground
of bigamy. In resolving the issue of whether a husband or wife of a prior marriage can
file a petition to recognize a foreign judgment nullifying the subsequent marriage
between his her spouse and a foreign citizen on the ground of bigamy, We ruled:

Fujiki has the personality to file a petition to recognize the Japanese Family Court
judgment nullifying the marriage between Marinay and Maekara on the ground of bigamy
because the judgment concerns his civil status as married to Marinay. For the same
reason he has the personality to file a petition under Rule 108 to cancel the entry of
marriage between Marinay and Maekara in the civil registry on the basis of the decree of
the Japanese Family Court.

There is no doubt that the prior spouse has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations arising
from it. There is also no doubt that he is interested in the cancellation of an entry of a
bigamous marriage in the civil registry, which compromises the public record of his
marriage. The interest derives from the substantive right of the spouse not only to
preserve (or dissolve, in limited instances) his most intimate human relation, but also to
protect his property interests that arise by operation of law the moment he contracts
marriage. These property interests in marriage included the right to be supported "in
keeping with the financial capacity of the family" and preserving the property regime of
the marriage.

Property rights are already substantive rights protected by the Constitution, but a
spouse's right in a marriage extends further to relational rights recognized under Title III
("Rights and Obligations between Husband and Wife") of the Family Code. x x x34

On the other hand, in Medina, the Filipino wife and her Japanese husband jointly filed for
divorce, which was granted.1âwphi1 Subsequently, she filed a petition before the RTC
for judicial recognition of foreign divorce and declaration of capacity to remarry pursuant
to Paragraph 2 of Article 26. The RTC denied the petition on the ground that the foreign
divorce decree and the national law of the alien spouse recognizing his capacity to
obtain a divorce must be proven in accordance with Sections 24 and 25 of Rule 132 of
the Revised Rules on Evidence. This Court agreed and ruled that, consistent
with Corpuz v. Sto. Tomas, et al.35 and Garcia v. Recio,36 the divorce decree and the
national law of the alien spouse must be proven. Instead of dismissing the case, We
referred it to the CA for appropriate action including the reception of evidence to
determine and resolve the pertinent factual issues.

There is no compelling reason to deviate from the above-mentioned rulings. When this
Court recognized a foreign divorce decree that was initiated and obtained by the Filipino
spouse and extended its legal effects on the issues of child custody and property
relation, it should not stop short in a likewise acknowledging that one of the usual and
necessary consequences of absolute divorce is the right to remarry. Indeed, there is no
longer a mutual obligation to live together and observe fidelity. When the marriage tie is
severed and ceased to exist, the civil status and the domestic relation of the former
spouses change as both of them are freed from the marital bond.

The dissent is of the view that, under the nationality principle, Manalo's personal status
is subject to Philippine law, which prohibits absolute divorce. Hence, the divorce decree
which she obtained under Japanese law cannot be given effect, as she is, without
dispute, a national not of Japan, bit of the Philippines. It is said that that a contrary ruling
will subvert not only the intention of the framers of the law, but also that of the Filipino
peopl, as expressed in the Constitution. The Court is, therefore, bound to respect the
prohibition until the legislature deems it fit to lift the same.

We beg to differ.

Paragraph 2 of Artilce 26 speaksof "a divorce x x x validly obtained abroad by the alien
spouse capacitating him or her to remarry." Based on a clear and plain reading of the
provision, it only requires that there be a divorce validly obtained abroad. The letter of
the law does not demand that the alien spouse should be the one who initiated the
proceeding wherein the divorce decree was granted. It does not distinguish whether the
Filipino spouse is the petitioner or the respondent in the foreign divorce proceeding. The
Court is bound by the words of the statute; neither can We put words in the mouth of
lawmakers.37 The legislature is presumed to know the meaning of the words to have
used words advisely and to have expressed its intent by the use of such words as are
found in the statute. Verba legis non est recedendum, or from the words if a statute there
should be departure."38

Assuming, for the sake of argument, that the word "obtained" should be interpreted to
mean that the divorce proceeding must be actually initiated by the alien spouse, still, the
Court will not follow the letter of the statute when to do so would depart from the true
intent of the legislature or would otherwise yield conclusions inconsistent with the
general purpose of the act.39 Law have ends to achieve, and statutes should be so
construed as not to defeat but to carry out such ends and purposes.40 As held in League
of Cities of the Phils. et al. v. COMELEC et. al.:41

The legislative intent is not at all times accurately reflected in the manner in which the
resulting law is couched. Thus, applying a verba legis or strictly literal interpretation of a
statute may render it meaningless and lead to inconvience, an absurd situation or
injustice. To obviate this aberration, and bearing in mind the principle that the intent or
the spirit of the law is the law itself, resort should be to the rule that the spirit of the law
control its letter.
To reiterate, the purpose of Paragraph 2 of Article 26 is to avoid the absurd situation
where the Filipino spouse remains married to the alien spouse who, after a foreign
divorce decree that is effective in the country where it was rendered, is no longer
married to the Filipino spouse. The provision is a corrective measure is free to marry
under the laws of his or her countr.42 Whether the Filipino spouse initiated the foreign
divorce proceeding or not, a favorable decree dissolving the marriage bond and
capacitating his or her alien spouse to remarry will have the same result: the Filipino
spouse will effectively be without a husband or wife. A Filipino who initiated a foreign
divorce proceeding is in the same place and in like circumstances as a Filipino who is at
the receiving end of an alien initiated proceeding. Therefore, the subject provision should
not make a distinction. In both instance, it is extended as a means to recognize the
residual effect of the foreign divorce decree on a Filipinos whose marital ties to their
alien spouses are severed by operations of their alien spouses are severed by operation
on the latter's national law.

Conveniently invoking the nationality principle is erroneous. Such principle, found under
Article 15 of the City Code, is not an absolute and unbending rule. In fact, the mer e
existence of Paragraph 2 of Article 26 is a testament that the State may provide for an
exception thereto. Moreover, blind adherence to the nationality principle must be
disallowed if it would cause unjust discrimination and oppression to certain classes of
individuals whose rights are equally protected by law. The courts have the duty to
enforce the laws of divorce as written by the Legislature only if they are constitutional.43

While the Congress is allowed a wide leeway in providing for a valid classification and
that its decision is accorded recognition and respect by the court of justice, such
classification may be subjected to judicial review.44 The deference stops where the
classification violates a fundamental right, or prejudices persons accorded special
protection by the Constitution.45 When these violations arise, this Court must discharge
its primary role as the vanguard of constitutional guaranties, and require a stricter and
more exacting adherence to constitutional limitations.46 If a legislative classification
impermissibly interferes with the exercise of a fundamental right or operates to the
peculiar disadvantage of a suspect class strict judicial scrutiny is required since it is
presumed unconstitutional, and the burden is upon the government to prove that the
classification is necessary to achieve a compelling state interest and that it is the least
restrictive means to protect such interest.47

"Fundamental rights" whose infringement leads to strict scrutiny under the equal
protection clause are those basic liberties explicitly or implicitly guaranteed in the
Constitution.48 It includes the right to free speech, political expression, press, assembly,
and forth, the right to travel, and the right to vote.49 On the other hand, what constitutes
compelling state interest is measured by the scale rights and powers arrayed in the
Constitution and calibrated by history.50 It is akin to the paramount interest of the state
for which some individual liberties must give way, such as the promotion of public
interest, public safety or the general welfare.51 It essentially involves a public right or
interest that, because of its primacy, overrides individual rights, and allows the former to
take precedence over the latter.52

Although the Family Code was not enacted by the Congress, the same principle applies
with respect to the acts of the President which have the force and effect of law unless
declared otherwise by the court. In this case, We find that Paragraph 2 of Article 26
violates one of the essential requisites53 of the equal protection clause.54 Particularly, the
limitation of the provision only to a foreign divorce decree initiated by the alien spouse is
unreasonable as it is based on superficial, arbitrary, and whimsical classification.

A Filipino who is married to another Filipino is not similarly situated with a Filipino who is
married to a foreign citizen. There are real, material and substantial differences between
them. Ergo, they should not be treated alike, both as to rights conferred and liabilities
imposed. Without a doubt, there are political, economic cultural, and religious
dissimilarities as well as varying legal systems and procedures, all too unfamiliar, that a
Filipino national who is married to an alien spouse has to contend with. More
importantly, while a divorce decree obtained abroad by a Filipino against another Filipino
is null and void, a divorce decree obtained by an alien against his her Filipino spouse is
recognized if made in accordance with the national law of the foreigner.55

On the contrary, there is no real and substantial difference between a Filipino who
initiated a foreign divorce proceedings a Filipino who obtained a divorce decree upon the
instance of his or her alien spouse . In the eyes of the Philippine and foreign laws, both
are considered as Filipinos who have the same rights and obligations in a alien land.
The circumstances surrounding them are alike. Were it not for Paragraph 2 of Article 26,
both are still married to their foreigner spouses who are no longer their wives/husbands.
Hence, to make a distinction between them based merely on the superficial difference of
whether they initiated the divorce proceedings or not is utterly unfair. Indeed, the
treatment gives undue favor to one and unjustly discriminate against the other.

Further, the differentiation in Paragraph 2 Article 26 is arbitrary. There is inequality in

treatment because a foreign divorce decree that was initiated and obtained by a Filipino
citizen against his or her alien spouse would not be recognized even if based on
grounds similar to Articles 35, 36, 37 and 38 of the Family Code.56 In filing for divorce
based on these grounds, the Filipino spouse cannot be accused of invoking foreign law
at whim, tantamount to insisting that he or she should be governed with whatever law he
or she chooses. The dissent's comment that Manalo should be "reminded that all is not
lost, for she may still pray for the severance of her martial ties before the RTC in
accordance with the mechanism now existing under the Family Code" is anything but
comforting. For the guidance of the bench and the bar, it would have been better if the
dissent discussed in detail what these "mechanism" are and how they specifically apply
in Manalo's case as well as those who are similarly situated. If the dissent refers to a
petition for declaration of nullity or annulment of marriage, the reality is that there is no
assurance that our courts will automatically grant the same. Besides, such proceeding is
duplicitous, costly, and protracted. All to the prejudice of our kababayan.

It is argued that the Court's liberal interpretation of Paragraph 2 of Artilce 26 encourages

Filipinos to marry foreigners, opening the floodgate to the indiscriminate practice of
Filipinos marrying foreign nationals or initiating divorce proceedings against their alien
spouses.

The supposition is speculative and unfounded.

First, the dissent falls into a hasty generalization as no data whatsoever was sworn to
support what he intends to prove. Second, We adhere to the presumption of good faith
in this jurisdiction. Under the rules on evidence, it is disputable presumed (i.e.,
satisfactory if uncontradicted and overcome by other evidence) that a person is innocent
of crime or wrong,57 that a person takes ordinary care of his concerns,59 that
acquiescence resulted from a belief that the thing acquiesced in was conformable to the
law and fact, 60 that a man and woman deporting themselves as husband and wife have
entered into a lawful contract of marriage,61 and that the law has been obeyed.62 It is
whimsical to easily attribute any illegal, irregular or immoral conduct on the part of a
Filipino just because he or she opted to marry a foreigner instead of a fellow Filipino. It is
presumed that interracial unions are entered into out of genuine love and affection,
rather than prompted by pure lust or profit. Third, We take judicial notice of the fact that
Filipinos are relatively more forbearing and conservative in nature and that they are
more often the victims or losing end of mixed marriages. And Fourth, it is not for Us to
prejudge the motive behind Filipino's decision to marry an alien national. In one case, it
was said:

Motive for entering into a marriage are varied and complex. The State does not and
cannot dictated on the kind of life that a couple chooses to lead. Any attempt to regulate
their lifestyle would go into the realm of their right to privacy and would raise serious
constitutional questions. The right marital privacy allows married couples to structure
their marriages in almost any way they see it fit, to live together or live apart, to have
children or no children, to love one another or not, and so on. Thus, marriages entered
into for other purposes, limited or otherwise, such as convenience, companionship,
money, status, and title, provided that they comply with all the legal requisites, are
equally valid. Love, though the ideal consideration in a marriage contract, is not the only
valid cause for marriage. Other considerations, not precluded by law, may validly
support a marriage.63

The 1987 Constitution expresses that marriage, as an inviolable social institution, is the
foundation of the family and shall be protected by the State.64 Nevertheless, it was not
meant to be a general prohibition on divorce because Commissioner Jose Luis Martin C.
Gascon, in response to a question by Father Joaquin G. Bernas during the deliberations
of the 1986 Constitutional Commission, was categorical about this point.65 Their
exchange reveal as follows:

MR. RAMA. Mr. Presiding Officer, may I ask that Commissioner Bernas be recognized.

THE PRESIDING OFFICER (Mr. Colayco). Commissioner Bernas is recognized.

FR. BERNAS. Just one question, and I am not sure if it has been categorically
answered. I refer specifically to the proposal of Commissioner Gascon. Is this be
understood as a prohibition of a general law on divorce? His intention is to make this a
prohibition so that the legislature cannot pass a divorce law.

MR. GASCON. Mr. Presding Officer, that was not primarily my intention. My intention
was primarily to encourage the social institution of marriage, but not necessarily
discourage divorce. But now that the mentioned the issue of divorce, my personal
opinion is to discourage it. Mr. Presiding Officer.

FR. BERNAS. No my question is more categorical. Does this carry the meaning of
prohibiting a divorce law?
MR. GASCON. No Mr. Presiding Officer.

FR. BERNAS. Thank you.66

Notably, a law on absolute divorce is not new in our country. Effectivity March 11, 1917,
Philippine courts could grant an absolute divorce in the grounds of adultery on the part of
the wife or concubinage on the part of the husband by virtue of Act No. 2710 of the
Philippine Legislature.67 On March 25, 1943, pursuant to the authority conferred upon
him by the Commander-in-Chief fo the Imperial Japanese Forces in the Philippines and
with the approval of the latter, the Chairman of the Philippine Executive Commission
promulgated an E.O. No. 141 ("New Divorce Law"), which repealed Act No. 2710 and
provided eleven ground for absolute divorce, such as intentional or unjustified desertion
continuously for at least one year prior to the filing of the action, slander by deed or
gross insult by one spouse against the other to such an extent as to make further living
together impracticable, and a spouse's incurable insanity.68 When the Philippines was
liberated and the Commonwealth Government was restored, it ceased to have force and
effect and Act No. 2710 again prevailed.69 From August 30, 1950, upon the effectivity of
Republic Act No. 836 or the New Civil Code, an absolute divorce obatined by Filipino
citizens, whether here or abroad, is no longer recognized.70

Through the years, there has been constant clamor from various sectors of the
Philippine society to re-institute absolute divorce. As a matte of fcat, in the currnet
17th Congress, House Bill (H.B.) Nos. 11671 106272 238073 and 602774 were filed in the
House of representatives. In substitution of these bills, H.B. No. 7303 entitled "An Act
Instituting Absolute Divorce and Dissolution of Marriage in the Philippines" or
the Absolute Divorce Act of 2018 was submitted by the House Committee on Population

And Family Relations of February 8, 2018. It was approved on March 19, 2018 on Third
Reading - with 134 in favor, 57 against, and 2 absentations. Under the bill, the grounds
for a judicial decree of absolute divorce are as follows:

1. The grounds for legal separation under Article 55 of the Family Code, modified or
amended, as follows:

a. Physical violence or grossly abusive conduct directed against the petitioner, a

common child, or a child of the petitioner;

b. Physical violence or moral pressure to compel the petitioner to change

religious or political affiliation;

c. Attempt of respondent to corrupt or induce the petitioner, a common child, or a

child of a petitioner, to engage in prostitution, or connivance in such corruption or
inducement;

d. Final judgment sentencing the respondent to imprisonment of more than six

(6) years, even if pardoned;

e. Drug addiction or habitual alchoholism ro chronic gambling of respondent;

f. Homosexuality of the respondent;

 g. Contracting by the respondent of a subsequent bigamous marriage, whether in
the Philippines or abroad;

h. Marital infidelity or perversion or having a child with another person other than
one's spouse during the marriage, except when upon the mutual agreement of
the spouses, a child is born to them by in vitro or a similar procedure or when the
wife bears a child after being a victim of rape;

i. attempt by the respondent against the life of the petitioner, a common child or a
child of a petitioner; and

j. Abandonment of petitioner by respondent without justifiable cause for more

than one (1) year.

When the spouses are legally separated by judicial decree for more thath two (2) years,
either or both spouses can petition the proper court for an absolute divorce based on
said judicial decree of legal separation.

1. Grounds for annulment of marriage under Article 45 of the Family Code restated as
follows:

a. The party in whose behalf it is sought to have the marriage annulled was
eighteen (18) years of age or over but below twety-one (21), and the marriage
was solemnized without the consent of the parents guradian or personl having
substitute parental authority over the party, in that order, unless after attaining
the age of twenty-one (21) such party freely cohabited with the other and both
lived together as husband and wife;

b. either party was of unsound mind, unless such party after coming to reason,
freely cohabited with the other as husband and wife;

c. The consent of either party was obtained by fraud, unless such party
afterwards with full knowledge of the facts constituting the fraud, freely cohabited
with the other husband and wife;

d. consent of either party was obtained by force, intimidation or undue influence,

unless the same having disappeared or ceased, such party thereafter freely
cohabited with the other as husband and wife;

e. Either party was physically incapable of consummating the marriage with the
other and such incapacity continues or appears to be incurable; and

f. Either part was afflicted with the sexually transmissible infection found to be
serious or appears to be incurable.

Provided, That the ground mentioned in b, e and f existed either at the time of the
marriage or supervening after the marriage.
1. When the spouses have been separated in fact for at least five (5) years at the time
the petition for absolute divorce is filed, and the reconciliation is highly improbable;

2. Psychological incapacity of either spouse as provided for in Article 36 of the Family

Code, whether or not the incapacity was present at the time of the celebration of the
marriage or later;

3. When one of the spouses undergoes a gender reassignment surgery or transition

from one sex to another, the other spouse is entitled to petition for absolute divorce with
the transgender or transsexual as respondent, or vice-versa;

4. Irreconcilable marital differences and conflicts which have resulted in the total
breakdown of the marriage beyond repair, despite earnest and repeated efforts at
reconciliation.

To be sure, a good number of Filipinos led by the Roman Catholic Church react
adversely to any attempt to enact a law on absolute divorce, viewing it as contrary to our
customs, morals, and traditions that has looked upon marriage and family as an
institution and their nature of permanence,

In the same breath that the establishment clause restricts what the government can do
with religion, it also limits what religious sects can or cannot do. They can neither cause
the government to adopt their particular doctrines as policy for everyone, nor can they
cause the government to restrict other groups. To do so, in simple terms, would cause
the State to adhere to a particular religion and, thus establish a state religion.76

The Roman Catholic Church can neither impose its beliefs and convictions on the State
and the rest of the citizenry nor can it demand that the nation follow its beliefs, even if it
is sincerely believes that they are good for country.77While marriage is considered a
sacrament, it has civil and legal consequences which are governed by the Family
Code.78 It is in this aspect, bereft of any ecclesiastical overtone, that the State has a
legitimate right and interest to regulate.

The declared State policy that marriage, as an inviolable social institution, is a

foundation of the family and shall be protected by the State, should not be read in total
isolation but must be harmonized with other constitutional provision. Aside from
strengthening the solidarity of the Filipino family, the State is equally mandated to
actively promote its total development.79 It is also obligated to defend, among others, the
right of children to special protection from all forms of neglect, abuse, cruelty,
exploitation, and other conditions prejudicial to their development.80 To Our mind, the
State cannot effectively enforce these obligation s if We limit the application of
Paragraph 2 or Article 26 only those foreign divorce initiated by the alien spouse. It is not
amiss to point that the women and children are almost always the helpless victims of all
forms of domestic abuse and violence. In fact, among the notable legislation passed in
order to minimize, if not eradicate, the menace are R.A. No. 9262 ("Anti-Violence
Against Women and Their Children Act of 2004") R.A. No. 9710 ("The Magna Carta of
Women"), R.A. No 10354 ("The Responsible Parenthood and Reproductive Health Act
of 2012") and R.A. No 9208 ("Anti-Trafficking in Person Act of 2003"), as amended by
R.A. No. 10364 ("ExpandedAnti-Trafficking in Persons Act of 2012").Moreover, in
protecting and strengthening the Filipino family as a basic autonomous social institution,
the Court must not lose sight of the constitutional mandate to value the dignity of every
human person, guarantee full respect for human rights, and ensure the fundamental
equality before the law of women and men.81

A prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We

disallow a Filipino citizen who initiated and obtained a foreign divorce from the coverage
of Paragraph 2 Article 26 and still require him or her to first avail of the existing
"mechanisms" under the Family Code, any subsequent relationship that he or she would
enter in the meantime shall be considered as illicit in the eyes of the Philippine law.
Worse, any child born out such "extra-marital" affair has to suffer the stigma of being
branded as illegitimate. Surely, these are just but a few of the adverse consequences,
not only to the parent but also to the child, if We are to hold a restrictive interpretation of
the subject provision. The irony is that the principle of inviolability of marriage under
Section 2, Article XV of the Constitution is meant to be tilted in favor of marriage and
against unions not formalized by marriage, but without denying State protection and
assistance to live-in arrangements or to families formed according to indigenous
customs.82

This Court should not turn a blind eye to the realities of the present time. With the
advancement of communication and information technology, as well as the improvement
of the transportation system that almost instantly connect people from all over the world,
mixed marriages have become not too uncommon. Likewise, it is recognized that not all
marriages are made in heaven and that imperfect humans more often than not create
imperfect unions.83 Living in a flawed world, the unfortunate reality for some is that the
attainment of the individual's full human potential and self fulfillment is not found and
achieved in the context of a marriage. Thus it is hypocritical to safeguard the quantity of
existing marriages and, at the same time, brush aside the truth that some of them are
rotten quality.

Going back, we hold that marriage, being a mutual and shared commitment between two
parties, cannot possibly be productive of any good to the society where one is
considered released from the marital bond while the other remains bound to it.84 In
reiterating that the Filipino spouse should not be discriminated against in his or her own
country if the ends of justice are to be served, San Luis v. San Luis85 quoted:

x x x In Alonzo v. Intermediate Applellate Court, the Court stated:

But as has also been aptly observed, we test a law by its results: and likewise, we may
add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first
concern of the judge should be to discover in its provisions the intent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as to cause injustice
as this is never within the legislative intent. An indispensable part of that intent, in fact,
for we presume the good motives of the legislature, is to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice.
Law and justice are inseparable, and we must keep them so. To be sure, there are some
laws that, while generally valid, may seem arbitrary when applied in a particular case
because only of our nature and functions, to apply them just the same, in slavish
obedience to their language. What we do instead is find a balance between the sord and
the will, that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as
it worded, yielding like robots to the literal command without regard to its cause and
consequence. "Courts are apt to err by sticking too closely to the words of law," so we
are warned, by Justice Holmes agaian, "where these words import a policy that goes
beyond them."

xxxx

More that twenty centuries ago, Justinian defined justice "as the constant and perpetual
wish to render every one of his due." That wish continues to motivate this Court when it
assesses the facts and the law in ever case brought to it for decisions. Justice is always
an essential ingredient of its decisions. Thus when the facts warrant, we interpret the law
in a way that will render justice, presuming that it was the intention if the lawmaker, to
begin with, that the law be dispensed with justice.86

Indeed, where the interpretation of a statute according to its exact and literal import
would lead to mischievous results or contravene the clear purpose of the legislature, it
should be construed according to its spirit and reason, disregarding as far as necessary
the letter of the law.87 A statute may therefore, be extended to cases not within the literal
meaning of its terms, so long as they come within its spirit or intent.88

The foregoing notwithstanding, We cannot yet write finis to this controversy by granting
Manalo's petition to recognize and enforce the divorce decree rendered by the Japanese
court and to cancel the entry of marriage in the Civil Registry of San Juan, Metro Manila.

Jurisprudence has set guidelines before the Philippine courts recognize a foreign
judgment relating to the status of a marriage where one of the parties is a citizen of
foreign country. Presentation solely of the divorce decree will not suffice.89 The fact of
divorce must still first be proven.90 Before a a foreign divorce decree can be recognized
by our courts, the party pleading it must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it.91

x x x Before a foreign judgment is given presumptive evidentiary value, the document

must first be presented and admitted in evidence. A divorce obtained abroad is proven
by the divorce decree itself. The decree purports to be written act or record of an act of
an official body or tribunal of foreign country.

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be
proven as a public or official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept and
(b)authenticated by the seal of his office.92

In granting Manalo's petition, the CA noted:

In this case, Petitioner was able to submit before the court a quo the 1) Decision of the
Japanese Court allowing the divorce; 2) the Authentication/Certificate issued by the
Philippines Consulate General in Osaka, Japan of the Decree of Divorce; and
3) Acceptance of Certificate of Divorce byu the Petitioner and the Japanese national.
Under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48 (b) of the Rules
of Court, these documents sufficiently prove the subject Divorce Decree as a fact. Thus,
We are constrained to recognize the Japanese Court's judgment decreeing the
divorce.93

If the opposing party fails to properly object, as in this case, the divorce decree is
rendered admissible a a written act of the foreign court.94 As it appears, the existence of
the divorce decree was not denied by the OSG; neither was the jurisdiction of the
divorce court impeached nor the validity of its proceedings challenged on the ground of
collusion, fraud, or clear mistake of fact or law, albeit an opportunity to do so.95

Nonetheless, the Japanese law on divorce must still be proved.

x x x The burden of proof lies with the "party who alleges the existence of a fact or thing
necessary in the prosecution or defense of an action." In civil cases, plaintiffs have the
burden of proving the material defendants have the burden of proving the material
allegations in their answer when they introduce new matters. x x x

It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign
laws. Like any other facts, they must alleged and proved. x x x The power of judicial
notice must be exercise d with caution, and every reasonable doubt upon the subject
should be resolved in the negative.96

Since the divorce was raised by Manalo, the burden of proving the pertinent Japanese
law validating it, as well as her former husband's capacity to remarry, fall squarely upon
her. Japanese laws on persons and family relations are not among those matters that
Filipino judges are supposed to know by reason of their judicial function.

WHEREFORE, the petition for review on certiorari is DENIED. The September 18, 2014
Decision and October 12, 2015 Resolution if the Court of Appeals in CA G.R. CV.
No. 100076, are AFFIRMED IN PART. The case is REMANDED to the court of origin for
further proceedings and reception of evidence as to the relevant Japanese law on
divorce.

SO ORDERED

DIOSDADO M. PERALTA
Associate Justice

G.R. No. 96681 December 2, 1991

HON. ISIDRO CARIÑO, in his capacity as Secretary of the Department of

Education, Culture & Sports, DR. ERLINDA LOLARGA, in her capacity as
Superintendent of City Schools of Manila, petitioners,
vs.
THE COMMISSION ON HUMAN RIGHTS, GRACIANO BUDOY, JULIETA BABARAN,
ELSA IBABAO, HELEN LUPO, AMPARO GONZALES, LUZ DEL CASTILLO, ELSA
REYES and APOLINARIO ESBER, respondents.

NARVASA, J.:

The issue raised in the special civil action of certiorari and prohibition at bar, instituted by
the Solicitor General, may be formulated as follows: where the relief sought from the
Commission on Human Rights by a party in a case consists of the review and reversal or
modification of a decision or order issued by a court of justice or government agency or
official exercising quasi-judicial functions, may the Commission take cognizance of the
case and grant that relief? Stated otherwise, where a particular subject-matter is placed
by law within the jurisdiction of a court or other government agency or official for
purposes of trial and adjudgment, may the Commission on Human Rights take
cognizance of the same subject-matter for the same purposes of hearing and
adjudication?

The facts narrated in the petition are not denied by the respondents and are hence taken
as substantially correct for purposes of ruling on the legal questions posed in the present
action. These facts, 1 together with others involved in related cases recently resolved by
this Court 2 or otherwise undisputed on the record, are hereunder set forth.

1. On September 17, 1990, a Monday and a class day, some 800 public school
teachers, among them members of the Manila Public School Teachers Association
(MPSTA) and Alliance of Concerned Teachers (ACT) undertook what they described as
"mass concerted actions" to "dramatize and highlight" their plight resulting from the
alleged failure of the public authorities to act upon grievances that had time and again
been brought to the latter's attention. According to them they had decided to undertake
said "mass concerted actions" after the protest rally staged at the DECS premises on
September 14, 1990 without disrupting classes as a last call for the government to
negotiate the granting of demands had elicited no response from the Secretary of
Education. The "mass actions" consisted in staying away from their classes, converging
at the Liwasang Bonifacio, gathering in peaceable assemblies, etc. Through their
representatives, the teachers participating in the mass actions were served with an order
of the Secretary of Education to return to work in 24 hours or face dismissal, and a
memorandum directing the DECS officials concerned to initiate dismissal proceedings
against those who did not comply and to hire their replacements. Those directives
notwithstanding, the mass actions continued into the week, with more teachers joining in
the days that followed. 3
Among those who took part in the "concerted mass actions" were the eight (8) private respondents herein, teachers at the Ramon
Magsaysay High School, Manila, who had agreed to support the non-political demands of the MPSTA. 4

2. For failure to heed the return-to-work order, the CHR complainants (private respondents) were administratively charged on the basis of
the principal's report and given five (5) days to answer the charges. They were also preventively suspended for ninety (90) days "pursuant
to Section 41 of P.D. 807" and temporarily replaced (unmarked CHR Exhibits, Annexes F, G, H). An investigation committee was
consequently formed to hear the charges in accordance with P.D. 807. 5

3. In the administrative case docketed as Case No. DECS 90-082 in which CHR complainants Graciano Budoy, Jr., Julieta Babaran, Luz
del Castillo, Apolinario Esber were, among others, named respondents, 6
the latter filed separate answers, opted
for a formal investigation, and also moved "for suspension of the administrative
proceedings pending resolution by . . (the Supreme) Court of their application for
issuance of an injunctive writ/temporary restraining order." But when their motion for
suspension was denied by Order dated November 8, 1990 of the Investigating
Committee, which later also denied their motion for reconsideration orally made at the
hearing of November 14, 1990, "the respondents led by their counsel staged a walkout
signifying their intent to boycott the entire proceedings." 7 The case eventually resulted in
a Decision of Secretary Cariño dated December 17, 1990, rendered after evaluation of
the evidence as well as the answers, affidavits and documents submitted by the
respondents, decreeing dismissal from the service of Apolinario Esber and the
suspension for nine (9) months of Babaran, Budoy and del Castillo. 8
4. In the meantime, the "MPSTA filed a petition for certiorari before the Regional Trial Court of Manila against petitioner (Cariño), which was
dismissed (unmarked CHR Exhibit, Annex I). Later, the MPSTA went to the Supreme Court (on certiorari, in an attempt to nullify said
dismissal, grounded on the) alleged violation of the striking teachers" right to due process and peaceable assembly docketed as G.R. No.
95445, supra. The ACT also filed a similar petition before the Supreme Court . . . docketed as G.R. No. 95590." 9
Both petitions in
this Court were filed in behalf of the teacher associations, a few named individuals,
and "other teacher-members so numerous similarly situated" or "other similarly situated
public school teachers too numerous to be impleaded."

5. In the meantime, too, the respondent teachers submitted sworn statements dated
September 27, 1990 to the Commission on Human Rights to complain that while they
were participating in peaceful mass actions, they suddenly learned of their replacements
as teachers, allegedly without notice and consequently for reasons completely unknown
to them. 10
6. Their complaints — and those of other teachers also "ordered suspended by the . . . (DECS)," all numbering forty-two (42) — were
docketed as "Striking Teachers CHR Case No. 90775." In connection therewith the Commission scheduled a "dialogue" on October 11,
1990, and sent a subpoena to Secretary Cariño requiring his attendance therein. 11

On the day of the "dialogue," although it said that it was "not certain whether he (Sec. Cariño) received the subpoena which was served at
his office, . . . (the) Commission, with the Chairman presiding, and Commissioners Hesiquio R. Mallilin and Narciso C. Monteiro, proceeded
to hear the case;" it heard the complainants' counsel (a) explain that his clients had been "denied due process and suspended without
formal notice, and unjustly, since they did not join the mass leave," and (b) expatiate on the grievances which were "the cause of the mass
leave of MPSTA teachers, (and) with which causes they (CHR complainants) sympathize." 12
The Commission thereafter
13
issued an Order reciting these facts and making the following disposition:

To be properly apprised of the real facts of the case and be accordingly guided in
its investigation and resolution of the matter, considering that these forty two
teachers are now suspended and deprived of their wages, which they need very
 badly, Secretary Isidro Cariño, of the Department of Education, Culture and
Sports, Dr. Erlinda Lolarga, school superintendent of Manila and the Principal of
Ramon Magsaysay High School, Manila, are hereby enjoined to appear and
enlighten the Commission en banc on October 19, 1990 at 11:00 A.M. and to
bring with them any and all documents relevant to the allegations aforestated
herein to assist the Commission in this matter. Otherwise, the Commission will
resolve the complaint on the basis of complainants' evidence.

xxx xxx xxx

7. Through the Office of the Solicitor General, Secretary Cariño sought and was granted
leave to file a motion to dismiss the case. His motion to dismiss was submitted on
November 14, 1990 alleging as grounds therefor, "that the complaint states no cause of
action and that the CHR has no jurisdiction over the case." 14

8. Pending determination by the Commission of the motion to dismiss, judgments affecting the "striking teachers" were promulgated in two
(2) cases, as aforestated, viz.:

a) The Decision dated December l7, 1990 of Education Secretary Cariño in Case No. DECS 90-082, decreeing dismissal from
the service of Apolinario Esber and the suspension for nine (9) months of Babaran, Budoy and del Castillo; 15 and

b) The joint Resolution of this Court dated August 6, 1991 in G.R. Nos. 95445 and 95590 dismissing the petitions "without
prejudice to any appeals, if still timely, that the individual petitioners may take to the Civil Service Commission on the matters
complained of," 16 and inter alia "ruling that it was prima facie lawful for petitioner Cariño to issue return-to-work orders, file
administrative charges against recalcitrants, preventively suspend them, and issue decision on those charges." 17

9. In an Order dated December 28, 1990, respondent Commission denied Sec. Cariño's motion to dismiss and required him and
Superintendent Lolarga "to submit their counter-affidavits within ten (10) days . . . (after which) the Commission shall proceed to hear and
resolve the case on the merits with or without respondents counter affidavit." 18
It held that the "striking teachers"
"were denied due process of law; . . . they should not have been replaced without a
chance to reply to the administrative charges;" there had been a violation of their civil
and political rights which the Commission was empowered to investigate; and while
expressing its "utmost respect to the Supreme Court . . . the facts before . . . (it) are
different from those in the case decided by the Supreme Court" (the reference being
unmistakably to this Court's joint Resolution of August 6, 1991 in G.R. Nos. 95445 and
95590, supra).

It is to invalidate and set aside this Order of December 28, 1990 that the Solicitor
General, in behalf of petitioner Cariño, has commenced the present action
of certiorari and prohibition.

The Commission on Human Rights has made clear its position that it does not feel
bound by this Court's joint Resolution in G.R. Nos. 95445 and 95590, supra. It has also
made plain its intention "to hear and resolve the case (i.e., Striking Teachers HRC Case
No. 90-775) on the merits." It intends, in other words, to try and decide or hear and
determine, i.e., exercise jurisdiction over the following general issues:
1) whether or not the striking teachers were denied due process, and just cause exists
for the imposition of administrative disciplinary sanctions on them by their superiors; and

2) whether or not the grievances which were "the cause of the mass leave of MPSTA
teachers, (and) with which causes they (CHR complainants) sympathize," justify their
mass action or strike.

The Commission evidently intends to itself adjudicate, that is to say, determine with
character of finality and definiteness, the same issues which have been passed upon
and decided by the Secretary of Education, Culture & Sports, subject to appeal to the
Civil Service Commission, this Court having in fact, as aforementioned, declared that the
teachers affected may take appeals to the Civil Service Commission on said matters, if
still timely.

The threshold question is whether or not the Commission on Human Rights has the
power under the Constitution to do so; whether or not, like a court of justice, 19 or even a
quasi-judicial agency, 20 it has jurisdiction or adjudicatory powers over, or the power to
try and decide, or hear and determine, certain specific type of cases, like alleged human
rights violations involving civil or political rights.

The Court declares the Commission on Human Rights to have no such power; and that it
was not meant by the fundamental law to be another court or quasi-judicial agency in
this country, or duplicate much less take over the functions of the latter.

The most that may be conceded to the Commission in the way of adjudicative power is
that it may investigate, i.e., receive evidence and make findings of fact as regards
claimed human rights violations involving civil and political rights. But fact finding is not
adjudication, and cannot be likened to the judicial function of a court of justice, or even a
quasi-judicial agency or official. The function of receiving evidence and ascertaining
therefrom the facts of a controversy is not a judicial function, properly speaking. To be
considered such, the faculty of receiving evidence and making factual conclusions in a
controversy must be accompanied by the authority of applying the law to those factual
conclusions to the end that the controversy may be decided or determined
authoritatively, finally and definitively, subject to such appeals or modes of review as
may be provided by law. 21 This function, to repeat, the Commission does not have. 22

The proposition is made clear by the constitutional provisions specifying the powers of the Commission on Human Rights.

The Commission was created by the 1987 Constitution as an independent office. 23

Upon its constitution, it succeeded
and superseded the Presidential Committee on Human Rights existing at the time of the
effectivity of the Constitution. 24 Its powers and functions are the following 25

(1) Investigate, on its own or on complaint by any party, all forms of human rights violations involving civil and political rights;
 (2) Adopt its operational guidelines and rules of procedure, and cite for contempt for violations thereof in accordance with the
Rules of Court;

(3) Provide appropriate legal measures for the protection of human rights of all persons within the Philippines, as well as
Filipinos residing abroad, and provide for preventive measures and legal aid services to the underprivileged whose human
rights have been violated or need protection;

(4) Exercise visitorial powers over jails, prisons, or detention facilities;

(5) Establish a continuing program of research, education, and information to enhance respect for the primacy of human rights;

(6) Recommend to the Congress effective measures to promote human rights and to provide for compensation to victims of
violations of human rights, or their families;

(7) Monitor the Philippine Government's compliance with international treaty obligations on human rights;

(8) Grant immunity from prosecution to any person whose testimony or whose possession of documents or other evidence is
necessary or convenient to determine the truth in any investigation conducted by it or under its authority;

(9) Request the assistance of any department, bureau, office, or agency in the performance of its functions;

(10) Appoint its officers and employees in accordance with law; and

(11) Perform such other duties and functions as may be provided by law.

As should at once be observed, only the first of the enumerated powers and functions bears any resemblance to adjudication or
adjudgment. The Constitution clearly and categorically grants to the Commission the power to investigate all forms of human rights
violations involving civil and political rights. It can exercise that power on its own initiative or on complaint of any person. It may exercise
that power pursuant to such rules of procedure as it may adopt and, in cases of violations of said rules, cite for contempt in accordance with
the Rules of Court. In the course of any investigation conducted by it or under its authority, it may grant immunity from prosecution to any
person whose testimony or whose possession of documents or other evidence is necessary or convenient to determine the truth. It may
also request the assistance of any department, bureau, office, or agency in the performance of its functions, in the conduct of its
investigation or in extending such remedy as may be required by its findings. 26

But it cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial bodies do. To investigate is
not to adjudicate or adjudge. Whether in the popular or the technical sense, these terms have well understood and quite distinct meanings.

"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary definition
of "investigate" is "to observe or study closely: inquire into systematically. "to search or inquire into: . . . to subject to an official probe . . .: to
conduct an official inquiry." 27
The purpose of investigation, of course, is to discover, to find out, to
learn, obtain information. Nowhere included or intimated is the notion of settling,
deciding or resolving a controversy involved in the facts inquired into by application of
the law to the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by
patient inquiry or observation. To trace or track; to search into; to examine and inquire
into with care and accuracy; to find out by careful inquisition; examination; the taking of
evidence; a legal inquiry;" 28 "to inquire; to make an investigation," "investigation" being
in turn describe as "(a)n administrative function, the exercise of which ordinarily does not
require a hearing. 2 Am J2d Adm L Sec. 257; . . . an inquiry, judicial or otherwise, for the
discovery and collection of facts concerning a certain matter or matters." 29
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle. The
dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues raised: . . . to pass
judgment on: settle judicially: . . . act as judge." 30
And "adjudge" means "to decide or rule upon as a judge
or with judicial or quasi-judicial powers: . . . to award or grant judicially in a case of
controversy . . . ." 31
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous with adjudge in its
strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or condemn. . . . Implies a judicial
determination of a fact, and the entry of a judgment." 32

Hence it is that the Commission on Human Rights, having merely the power "to investigate," cannot and should not "try and resolve on the
merits" (adjudicate) the matters involved in Striking Teachers HRC Case No. 90-775, as it has announced it means to do; and it cannot do
so even if there be a claim that in the administrative disciplinary proceedings against the teachers in question, initiated and conducted by
the DECS, their human rights, or civil or political rights had been transgressed. More particularly, the Commission has no power to "resolve
on the merits" the question of (a) whether or not the mass concerted actions engaged in by the teachers constitute and are prohibited or
otherwise restricted by law; (b) whether or not the act of carrying on and taking part in those actions, and the failure of the teachers to
discontinue those actions, and return to their classes despite the order to this effect by the Secretary of Education, constitute infractions of
relevant rules and regulations warranting administrative disciplinary sanctions, or are justified by the grievances complained of by them;
and (c) what where the particular acts done by each individual teacher and what sanctions, if any, may properly be imposed for said acts or
omissions.

These are matters undoubtedly and clearly within the original jurisdiction of the Secretary of Education, being within the scope of the
disciplinary powers granted to him under the Civil Service Law, and also, within the appellate jurisdiction of the Civil Service Commission.

Indeed, the Secretary of Education has, as above narrated, already taken cognizance of the issues and resolved them, 33
and it
appears that appeals have been seasonably taken by the aggrieved parties to the Civil
Service Commission; and even this Court itself has had occasion to pass upon said
issues. 34

Now, it is quite obvious that whether or not the conclusions reached by the Secretary of Education in disciplinary cases are correct and are
adequately based on substantial evidence; whether or not the proceedings themselves are void or defective in not having accorded the
respondents due process; and whether or not the Secretary of Education had in truth committed "human rights violations involving civil and
political rights," are matters which may be passed upon and determined through a motion for reconsideration addressed to the Secretary
Education himself, and in the event of an adverse verdict, may be reviewed by the Civil Service Commission and eventually the Supreme
Court.
The Commission on Human Rights simply has no place in this scheme of things. It has no business intruding into the jurisdiction and
functions of the Education Secretary or the Civil Service Commission. It has no business going over the same ground traversed by the
latter and making its own judgment on the questions involved. This would accord success to what may well have been the complaining
teachers' strategy to abort, frustrate or negate the judgment of the Education Secretary in the administrative cases against them which they
anticipated would be adverse to them.

This cannot be done. It will not be permitted to be done.

In any event, the investigation by the Commission on Human Rights would serve no useful purpose. If its investigation should result in
conclusions contrary to those reached by Secretary Cariño, it would have no power anyway to reverse the Secretary's conclusions.
Reversal thereof can only by done by the Civil Service Commission and lastly by this Court. The only thing the Commission can do, if it
concludes that Secretary Cariño was in error, is to refer the matter to the appropriate Government agency or tribunal for assistance; that
would be the Civil Service Commission. 35
It cannot arrogate unto itself the appellate jurisdiction of the
Civil Service Commission.

WHEREFORE, the petition is granted; the Order of December 29, 1990 is ANNULLED
and SET ASIDE, and the respondent Commission on Human Rights and the Chairman
and Members thereof are prohibited "to hear and resolve the case (i.e., Striking
Teachers HRC Case No. 90-775) on the merits."

SO ORDERED.

 [G.R. No. L-8759. May 25, 1956.]
SEVERINO UNABIA, Petitioner-Appellee, vs. THE HONORABLE CITY MAYOR, CITY TREASURER,
CITY AUDITOR and the CITY ENGINEER, Respondents-Appellants.

D E C I S I O N
LABRADOR, J.:
Appeal from a judgment of the Court of First Instance of Cebu ordering Respondents to
reinstate Petitioner as foreman (capataz), Garbage Disposal, Office of the City Engineer, Cebu
City, at P3.90 per day from the date of his removal.
The case was submitted to the court for decision on a stipulation of facts the most pertinent of
which are as follows:chanroblesvirtuallawlibrary Petitioner was a foreman, Group Disposal,
Office of the City Health Officer, Cebu City, at P3.90 per day. On June 16, 1953, the City Mayor
removed him from the service and his place was taken by Perfecto Abellana, and latter by Pedro
E. Gonzales. Before June 16, 1953, the Group Disposal Division, including personnel, was
transferred from the City Health Department to the Office of the City Engineer. In April,
1954, Petitioner sought to be reinstated but his petition was not headed by the Respondents.
On the basis of the above facts, the Court of First Instance of Cebu held that Petitioner is a
person in the Philippine Civil Service, pertaining to the unclassified service (section 670, Revised
Administrative Code as amended), and his removal from his position is a violation of section 694
of the Revised Administrative Code and section 4 of Art XII of the Constitution. The court further
held that the notation at the bottom of Petitioner’s appointment to the effect that his
appointment is “temporary pending report from the Government Service Insurance System as to
the appointee’s physical and medical examination” did not make his appointment merely
temporary.
First error assigned on this appeal is the failure to include in the complaint, the names of the
persons holding the Offices of City Mayor, City Treasurer, City Auditor and City Engineer, all of
Cebu City, they being designated only by their official positions. This is no reason for a reversal
of the proceedings and of the judgment. As said persons were sued in their official capacity, it is
sufficient that they be designated by their official positions.
It is also contended that the use of capitals in the words “Civil Service” in section 1 and 4 of
Article XII of the Constitution and the use of small letters for the same words, “civil service,” in
section 670, Revised Administrative Code, indicates that only those pertaining to the classified
service are protected in the above-mentioned sections of the Constitution. We see no validity in
this argument. Capital “C” and “S” in the words “Civil Service” were used in the Constitution to
indicate the group. No capitals are used in the similar provisions of the Code to indicate the
system. We see no difference between the use of capitals in the former and of small letters in
the latter. There is no reason for excluding persons in the unclassified service from the benefits
extended to those belonging to the classified service. Both are expressly declared to belong to
the Civil Service; chan roblesvirtualawlibraryhence, the same rights and privileges should be
accorded to both. Persons in the unclassified service are so designated because the nature of
their work and qualifications are not subject to classification, which is not true of those
appointed to the classified service. This cannot be a valid reason for denying privileges to the
former that are granted the latter.
As the removal of Petitioner was made without investigation and without cause, said removal is
null and void and Petitioner is entitled to be reinstated to the position from which he was
removed. (Lacson vs. Romero, 84 Phil., 740, 47 Off. Gaz. [4], 1778).
There is, however, an additional objection to the reinstatement raised in the memorandum
submitted by the attorneys for the Respondents in lieu of oral argument. This is the fact that
as Petitioner was removed on June 16, 1953 and only filed his petition on July 1, 1954, or after a
delay of one year and 15 days, Petitioner should no longer be allowed to claim the remedy, he
being considered as having abandoned his office.
We cannot or should not overlook this objection. If an employee is illegally dismissed, he may
conform to such illegal dismissal or acquiesce therein, or by his inaction and by sleeping on his
rights he may in law be considered as having abandoned the office to which he is entitled to be
reinstated. These defenses are valid defenses to an action for reinstatement. To that effect is
our decision in the case of Mesias vs. Jover, et al., 97 Phil., 899, decided November 22, 1955. In
that case we cited with approval Nicolas vs. United States, 66 L. Ed. 133, and the following ruling
therein contained:chanroblesvirtuallawlibrary
“A person illegally dismissed from office is not thereby exonerated from the obligation to take
steps for his own protection, and may not for an unreasonable length of time, acquiesce to the
order of removal cralaw and then sue to recover the salary attached to the position. In case of
unreasonable delay he may be held to have abandoned title to the office and any right to
recover its emoluments.” (Mesias vs. Jover, supra.)
Difficulty in applying the principle lies in the fact that the law has not fixed any period which
may be deemed to be considered as an abandonment of office. In the abovecited case decided
by the Federal Supreme Court of the United States, 11 months was considered an unreasonable
delay amounting to abandonment of office and of the right to recover its emoluments.
However, we note that in actions of quo warranto involving right to an office, the action must be
instituted within the period of one year. This has been the law in the island since 1901, the
period having been originally fixed in section 216 of the Code of Civil Procedure (Act No. 190).
We find this provision to be an expression of policy on the part of the State that persons
claiming a right to an office of which they are illegally dispossessed should immediately take
steps to recover said office and that if they do not do so within a period of one year, they shall
be considered as having lost their right thereto by abandonment. There are weighty reasons of
public policy and convenience that demand the adoption of a similar period for persons claiming
rights to positions in the civil service. There must be stability in the service so that public
business may be unduly retarded; chan roblesvirtualawlibrarydelays in the statement of the
right to positions in the service must be discouraged. The following considerations as to public
officers, by Mr. Justice Bengzon, may well be applicable to employees in the civil
service:chanroblesvirtuallawlibrary
“Furthermore, constitutional rights may certainly be waived, and the inaction of the officer for
one year could be validly considered as waiver, i.e., a renunciation which no principle of justice
may prevent, he being at liberty to resign his position anytime he pleases.
“And there is good justification for the limitation period; chan roblesvirtualawlibraryit is not
proper that the title to public office should be subjected to continued uncertainly, and the
peoples’ interest requires that such right should be determined as speedily as practicable.”
(Tumulak vs. Egay, 46 Off. Gaz., [8], 3693, 3695.)
Further, the Government must be immediately informed or advised if any person claims to be
entitled to an office or a position in the civil service as against another actually holding it, so that
the Government may not be faced with the predicament of having to pay two salaries, one, for
the person actually holding the office, although illegally, and another, for one not actually
rendering service although entitled to do so. We hold that in view of the policy of the State
contained in the law fixing the period of one year within which actions for quo warranto may be
instituted, any person claiming right to a position in the civil service should also be required to
file his petition for reinstatement within the period of one year, otherwise he is thereby
considered as having abandoned his office.
One other point, merely procedural, needs to be considered. This is the fact that the objection
as to the delay in filing the action is raised for the first time in this Court, not having been raised
in the court below. The above circumstance (belated objection) would bar the consideration if it
were a defense merely. However, we consider it to be essential to the Petitioner’s right of action
that the same is filed within a year from the illegal removal. The delay is not merely a defense
which may be interposed against it subject to waiver. It is essential to Petitioner’s cause of
action and may be considered even at this stage of the action.
“We would go farther by holding that the period fixed in the rule is a condition precedent to the
existence of the cause of action, with the result that, if a complaint is not filed within one year, it
cannot prosper although the matter is not set up in the answer or motion to dismiss.” (Abeto vs.
Rodas, 46 Off. Gaz., [3], 930, 932.)
A defense of failure to state a causes of action is not waived by failure to raise same as a
defense (section 10, Rule 9).
For all the foregoing considerations, we hold that as Petitioner was dismissed on June 16, 1953
and did not file his petition for mandamus for his reinstatement until July 1, 1956, or after a
period of one year, he is deemed to have abandoned his right to his former position and is not
entitled to reinstatement therein by mandamus. Without costs. SO ORDERED.






















G.R. No. 192791 April 24, 2012

DENNIS A. B. FUNA, Petitioner,

vs.
THE CHAIRMAN, COMMISSION ON AUDIT, REYNALDO A. VILLAR, Respondent.

DECISION

VELASCO, JR., J.:

In this Petition for Certiorari and Prohibition under Rule 65, Dennis A. B. Funa
challenges the constitutionality of the appointment of Reynaldo A. Villar as Chairman of
the Commission on Audit and accordingly prays that a judgment issue "declaring the
unconstitutionality" of the appointment.

The facts of the case are as follows:

On February 15, 2001, President Gloria Macapagal-Arroyo (President Macapagal-

Arroyo) appointed Guillermo N. Carague (Carague) as Chairman of the Commission on
Audit (COA) for a term of seven (7) years, pursuant to the 1987 Constitution.1 Carague’s
term of office started on February 2, 2001 to end on February 2, 2008.

Meanwhile, on February 7, 2004, President Macapagal-Arroyo appointed Reynaldo A.

Villar (Villar) as the third member of the COA for a term of seven (7) years starting
February 2, 2004 until February 2, 2011.

Following the retirement of Carague on February 2, 2008 and during the fourth year of
Villar as COA Commissioner, Villar was designated as Acting Chairman of COA from
February 4, 2008 to April 14, 2008. Subsequently, on April 18, 2008, Villar was
nominated and appointed as Chairman of the COA. Shortly thereafter, on June 11, 2008,
the Commission on Appointments confirmed his appointment. He was to serve as
Chairman of COA, as expressly indicated in the appointment papers, until the expiration
of the original term of his office as COA Commissioner or on February 2, 2011.
Challenged in this recourse, Villar, in an obvious bid to lend color of title to his hold on
the chairmanship, insists that his appointment as COA Chairman accorded him a fresh
term of seven (7) years which is yet to lapse. He would argue, in fine, that his term of
office, as such chairman, is up to February 2, 2015, or 7 years reckoned from February
2, 2008 when he was appointed to that position.

Meanwhile, Evelyn R. San Buenaventura (San Buenaventura) was appointed as COA

Commissioner to serve the unexpired term of Villar as Commissioner or up to February
2, 2011.

Before the Court could resolve this petition, Villar, via a letter dated February 22, 2011
addressed to President Benigno S. Aquino III, signified his intention to step down from
office upon the appointment of his replacement. True to his word, Villar vacated his
position when President Benigno Simeon Aquino III named Ma. Gracia Pulido-Tan
(Chairman Tan) COA Chairman. This development has rendered this petition and the
main issue tendered therein moot and academic.

case is considered moot and academic when its purpose has become stale,2 or when it
ceases to present a justiciable controversy owing to the onset of supervening events,3 so
that a resolution of the case or a declaration on the issue would be of no practical value
or use.4 In such instance, there is no actual substantial relief which a petitioner would be
entitled to, and which will anyway be negated by the dismissal of the basic petition.5 As a
general rule, it is not within Our charge and function to act upon and decide a moot case.
However, in David v. Macapagal-Arroyo,6 We acknowledged and accepted certain
exceptions to the issue of mootness, thus:

The "moot and academic" principle is not a magical formula that can automatically
dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and
academic, if: first, there is a grave violation of the Constitution, second, the exceptional
character of the situation and the paramount public interest is involved, third, when
constitutional issue raised requires formulation of controlling principles to guide the
bench, the bar, and the public, and fourth, the case is capable of repetition yet evading
review.

Although deemed moot due to the intervening appointment of Chairman Tan and the
resignation of Villar, We consider the instant case as falling within the requirements for
review of a moot and academic case, since it asserts at least four exceptions to the
mootness rule discussed in David, namely: there is a grave violation of the Constitution;
the case involves a situation of exceptional character and is of paramount public interest;
the constitutional issue raised requires the formulation of controlling principles to guide
the bench, the bar and the public; and the case is capable of repetition yet evading
review.7 The situation presently obtaining is definitely of such exceptional nature as to
necessarily call for the promulgation of principles that will henceforth "guide the bench,
the bar and the public" should like circumstance arise. Confusion in similar future
situations would be smoothed out if the contentious issues advanced in the instant case
are resolved straightaway and settled definitely. There are times when although the
dispute has disappeared, as in this case, it nevertheless cries out to be addressed. To
borrow from Javier v. Pacificador,8 "Justice demands that we act then, not only for the
vindication of the outraged right, though gone, but also for the guidance of and as a
restraint in the future."

Both procedural and substantive issues are raised in this proceeding. The procedural
aspect comes down to the question of whether or not the following requisites for the
exercise of judicial review of an executive act obtain in this petition, viz: (1) there must
be an actual case or justiciable controversy before the court; (2) the question before it
must be ripe for adjudication; (3) the person challenging the act must be a proper party;
and (4) the issue of constitutionality must be raised at the earliest opportunity and must
be the very litis mota of the case.9

To Villar, all the requisites have not been met, it being alleged in particular that
petitioner, suing as a taxpayer and citizen, lacks the necessary standing to challenge his
appointment.10 On the other hand, the Office of the Solicitor General (OSG), while
recognizing the validity of Villar’s appointment for the period ending February 11, 2011,
has expressed the view that petitioner should have had filed a petition for declaratory
relief or quo warranto under Rule 63 or Rule 66, respectively, of the Rules of Court
instead of certiorari under Rule 65.

Villar’s posture on the absence of some of the mandatory requisites for the exercise by
the Court of its power of judicial review must fail. As a general rule, a petitioner must
have the necessary personality or standing (locus standi) before a court will recognize
the issues presented. In Integrated Bar of the Philippines v. Zamora, We defined locus
standi as:

x x x a personal and substantial interest in the case such that the party has sustained or
will sustain a direct injury as a result of the governmental act that is being challenged.
The term "interest" means a material interest, an interest in issue affected by the decree,
as distinguished from mere interest in the question involved, or a mere incidental
interest. The gist of the question of standing is whether a party alleges "such personal
stake in the outcome of the controversy as to assure the concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of
difficult constitutional questions."11

To have legal standing, therefore, a suitor must show that he has sustained or will
sustain a "direct injury" as a result of a government action, or have a "material interest"
in the issue affected by the challenged official act.12 However, the Court has time and
again acted liberally on the locus standi requirements and has accorded certain
individuals, not otherwise directly injured, or with material interest affected, by a
Government act, standing to sue provided a constitutional issue of critical significance is
at stake.13 The rule on locus standi is after all a mere procedural technicality in relation to
which the Court, in a catena of cases involving a subject of transcendental import, has
waived, or relaxed, thus allowing non-traditional plaintiffs, such as concerned citizens,
taxpayers, voters or legislators, to sue in the public interest, albeit they may not have
been personally injured by the operation of a law or any other government act.14 In
David, the Court laid out the bare minimum norm before the so-called "non-traditional
suitors" may be extended standing to sue, thusly:

1.) For taxpayers, there must be a claim of illegal disbursement of public funds or
that the tax measure is unconstitutional;

2.) For voters, there must be a showing of obvious interest in the validity of the
election law in question;

3.) For concerned citizens, there must be a showing that the issues raised are of
transcendental importance which must be settled early; and

4.) For legislators, there must be a claim that the official action complained of
infringes their prerogatives as legislators.

This case before Us is of transcendental importance, since it obviously has "far-reaching

implications," and there is a need to promulgate rules that will guide the bench, bar, and
the public in future analogous cases. We, thus, assume a liberal stance and allow
petitioner to institute the instant petition.
Anent the aforestated posture of the OSG, there is no serious disagreement as to the
propriety of the availment of certiorari as a medium to inquire on whether the assailed
appointment of respondent Villar as COA Chairman infringed the constitution or was
infected with grave abuse of discretion. For under the expanded concept of judicial
review under the 1987 Constitution, the corrective hand of certiorari may be invoked not
only "to settle actual controversies involving rights which are legally demandable and
enforceable," but also "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government."15 "Grave abuse of discretion" denotes:

such capricious and whimsical exercise of judgment as is equivalent to lack of

jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and it must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined or to act in contemplation of law.16

We find the remedy of certiorari applicable to the instant case in view of the allegation
that then President Macapagal-Arroyo exercised her appointing power in a manner
constituting grave abuse of discretion.

This brings Us to the pivotal substantive issue of whether or not Villar’s appointment as
COA Chairman, while sitting in that body and after having served for four (4) years of his
seven (7) year term as COA commissioner, is valid in light of the term limitations
imposed under, and the circumscribing concepts tucked in, Sec. 1 (2), Art. IX(D) of the
Constitution, which reads:

(2) The Chairman and Commissioners [on Audit] shall be appointed by the President
with the consent of the Commission on Appointments for a term of seven years without
reappointment. Of those first appointed, the Chairman shall hold office for seven years,
one commissioner for five years, and the other commissioner for three years, without
reappointment. Appointment to any vacancy shall be only for the unexpired portion of the
term of the predecessor. In no case shall any member be appointed or designated in a
temporary or acting capacity. (Emphasis added.)17

And if valid, for how long can he serve?

At once clear from a perusal of the aforequoted provision are the defined restricting
features in the matter of the composition of COA and the appointment of its members
(commissioners and chairman) designed to safeguard the independence and impartiality
of the commission as a body and that of its individual members.18 These are, first, the
rotational plan or the staggering term in the commission membership, such that the
appointment of commission members subsequent to the original set appointed after the
effectivity of the 1987 Constitution shall occur every two years; second, the maximum
but a fixed term-limit of seven (7) years for all commission members whose
appointments came about by reason of the expiration of term save the aforementioned
first set of appointees and those made to fill up vacancies resulting from certain causes;
third, the prohibition against reappointment of commission members who served the full
term of seven years or of members first appointed under the Constitution who served
their respective terms of office; fourth, the limitation of the term of a member to the
unexpired portion of the term of the predecessor; and fifth, the proscription against
temporary appointment or designation.

To elucidate on the mechanics of and the adverted limitations on the matter of COA-
member appointments with fixed but staggered terms of office, the Court lays down the
following postulates deducible from pertinent constitutional provisions, as construed by
the Court:

1. The terms of office and appointments of the first set of commissioners, or the
seven, five and three-year termers referred to in Sec. 1(2), Art. IX(D) of the
Constitution, had already expired. Hence, their respective terms of office find
relevancy for the most part only in understanding the operation of the rotational
plan. In Gaminde v. Commission on Audit,19 the Court described how the smooth
functioning of the rotational system contemplated in said and like provisions
covering the two other independent commissions is achieved thru the staggering
of terms:

x x x [T]he terms of the first Chairmen and Commissioners of the Constitutional

Commissions under the 1987 Constitution must start on a common date
[February 02, 1987, when the 1987 Constitution was ratified] irrespective of the
variations in the dates of appointments and qualifications of the appointees in
order that the expiration of the first terms of seven, five and three years should
lead to the regular recurrence of the two-year interval between the expiration of
the terms.

x x x In case of a belated appointment, the interval between the start of the terms
and the actual appointment shall be counted against the appointee.20 (Italization
in the original; emphasis added.)

Early on, in Republic v. Imperial,21 the Court wrote of two conditions, "both
indispensable to [the] workability" of the rotational plan. These conditions
may be described as follows: (a) that the terms of the first batch of
commissioners should start on a common date; and (b) that any vacancy
due to death, resignation or disability before the expiration of the term
should be filled only for the unexpired balance of the term. Otherwise,
Imperial continued, "the regularity of the intervals between appointments
would be destroyed." There appears to be near unanimity as to the
purpose/s of the rotational system, as originally conceived, i.e., to place in
the commission a new appointee at a fixed interval (every two years
presently), thus preventing a four-year administration appointing more
than one permanent and regular commissioner,22 or to borrow from
Commissioner Monsod of the 1986 CONCOM, "to prevent one person
(the President of the Philippines) from dominating the commissions."23 It
has been declared too that the rotational plan ensures continuity in, and,
as indicated earlier, secure the independence of, the commissions as a
body.24

2. An appointment to any vacancy in COA, which arose from an expiration of a

term, after the first chairman and commissioners appointed under the 1987
Constitution have bowed out, shall, by express constitutional fiat, be for a term of
 seven (7) years, save when the appointment is to fill up a vacancy for the
corresponding unserved term of an outgoing member. In that case, the
appointment shall only be for the unexpired portion of the departing
commissioner’s term of office. There can only be an unexpired portion when, as
a direct result of his demise, disability, resignation or impeachment, as the case
may be, a sitting member is unable to complete his term of office.25 To repeat,
should the vacancy arise out of the expiration of the term of the incumbent, then
there is technically no unexpired portion to speak of. The vacancy is for a new
and complete seven-year term and, ergo, the appointment thereto shall in all
instances be for a maximum seven (7) years.

3. Sec. 1(2), Art. IX(D) of the 1987 Constitution prohibits the "reappointment" of a
member of COA after his appointment for seven (7) years. Writing for the Court
in Nacionalista Party v. De Vera,26 a case involving the promotion of then
COMELEC Commissioner De Vera to the position of chairman, then Chief
Justice Manuel Moran called attention to the fact that the prohibition against
"reappointment" comes as a continuation of the requirement that the
commissioners––referring to members of the COMELEC under the 1935
Constitution––shall hold office for a term of nine (9) years. This sentence
formulation imports, notes Chief Justice Moran, that reappointment is not an
absolute prohibition.

4. The adverted system of regular rotation or the staggering of appointments and

terms in the membership for all three constitutional commissions, namely the
COA, Commission on Elections (COMELEC) and Civil Service Commission
(CSC) found in the 1987 Constitution was patterned after the amended 1935
Constitution for the appointment of the members of COMELEC27 with this
difference: the 1935 version entailed a regular interval of vacancy every three (3)
years, instead of the present two (2) years and there was no express provision
on appointment to any vacancy being limited to the unexpired portion of the his
predecessor’s term. The model 1935 provision reads:

Section 1. There shall be an independent Commission on Elections composed of a

Chairman and two other members to be appointed by the President with the consent of
the Commission on Appointments, who shall hold office for a term of nine years and may
not be reappointed. Of the Members of the Commission first appointed, one shall hold
office for nine years, another for six years and the third for three years. x x x

Petitioner now asseverates the view that Sec. 1(2), Art. IX(D) of the 1987 Constitution
proscribes reappointment of any kind within the commission, the point being that a
second appointment, be it for the same position (commissioner to another position of
commissioner) or upgraded position (commissioner to chairperson) is a prohibited
reappointment and is a nullity ab initio. Attention is drawn in this regard to the Court’s
disposition in Matibag v. Benipayo.28

Villar’s promotional appointment, so it is argued, is void from the start, constituting as it

did a reappointment enjoined by the Constitution, since it actually needed another
appointment to a different office and requiring another confirmation by the Commission
on Appointments.
Central to the adjudication of the instant petition is the correct meaning to be given to
Sec. 1(2), Article IX(D) of the Constitution on the ban against reappointment in relation to
the appointment issued to respondent Villar to the position of COA Chairman.

Without question, the parties have presented two (2) contrasting and conflicting
positions. Petitioner contends that Villar’s appointment is proscribed by the constitutional
ban on reappointment under the aforecited constitutional provision. On the other hand,
respondent Villar initially asserted that his appointment as COA Chairman is valid up to
February 2, 2015 pursuant to the same provision.

The Court finds petitioner’s position bereft of merit. The flaw lies in regarding the word
"reappointment" as, in context, embracing any and all species of appointment.

The rule is that if a statute or constitutional provision is clear, plain and free from
ambiguity, it must be given its literal meaning and applied without attempted
interpretation.29 This is known as the plain meaning rule enunciated by the maxim verba
legis non est recedendum, or from the words of a statute there should be no departure.30

The primary source whence to ascertain constitutional intent or purpose is the language
of the provision itself.31 If possible, the words in the Constitution must be given their
ordinary meaning, save where technical terms are employed. J.M. Tuason & Co., Inc. v.
Land Tenure Administration illustrates the verbal legis rule in this wise:

We look to the language of the document itself in our search for its meaning. We do not
of course stop there, but that is where we begin. It is to be assumed that the words in
which constitutional provisions are couched express the objective sought to be attained.
They are to be given their ordinary meaning except where technical terms are employed
in which case the significance thus attached to them prevails. As the Constitution is not
primarily a lawyer’s document, it being essential for the rule of law to obtain that it should
ever be present in the people’s consciousness, its language as much as possible should
be understood in the sense they have in common use. What it says according to the text
of the provision to be construed compels acceptance and negates the power of the
courts to alter it, based on the postulate that the framers and the people mean what they
say. Thus there are cases where the need for construction is reduced to a
minimum.32 (Emphasis supplied.)

Let us dissect and examine closely the provision in question:

(2) The Chairman and Commissioners [on Audit] shall be appointed by the President
with the consent of the Commission on Appointments for a term of seven years without
reappointment. Of those first appointed, the Chairman shall hold office for seven years,
one commissioner for five years, and the other commissioner for three years, without
reappointment. Appointment to any vacancy shall be only for the unexpired portion of the
term of the predecessor. x x x (Emphasis added.)

The first sentence is unequivocal enough. The COA Chairman shall be appointed by the
President for a term of seven years, and if he has served the full term, then he can no
longer be reappointed or extended another appointment. In the same vein, a
Commissioner who was appointed for a term of seven years who likewise served the full
term is barred from being reappointed. In short, once the Chairman or Commissioner
shall have served the full term of seven years, then he can no longer be reappointed to
either the position of Chairman or Commissioner. The obvious intent of the framers is to
prevent the president from "dominating" the Commission by allowing him to appoint an
additional or two more commissioners.

The same purpose obtains in the second sentence of Sec. 1(2). The Constitutional
Convention barred reappointment to be extended to commissioner-members first
appointed under the 1987 Constitution to prevent the President from controlling the
commission. Thus, the first Chairman appointed under the 1987 Constitution who served
the full term of seven years can no longer be extended a reappointment. Neither can the
Commissioners first appointed for the terms of five years and three years be eligible for
reappointment. This is the plain meaning attached to the second sentence of Sec. 1(2),
Article IX(D).

On the other hand, the provision, on its face, does not prohibit a promotional
appointment from commissioner to chairman as long as the commissioner has not
served the full term of seven years, further qualified by the third sentence of Sec. 1(2),
Article IX (D) that "the appointment to any vacancy shall be only for the unexpired
portion of the term of the predecessor." In addition, such promotional appointment to the
position of Chairman must conform to the rotational plan or the staggering of terms in the
commission membership such that the aggregate of the service of the Commissioner in
said position and the term to which he will be appointed to the position of Chairman must
not exceed seven years so as not to disrupt the rotational system in the commission
prescribed by Sec. 1(2), Art. IX(D).

In conclusion, there is nothing in Sec. 1(2), Article IX(D) that explicitly precludes a
promotional appointment from Commissioner to Chairman, provided it is made under the
aforestated circumstances or conditions.

It may be argued that there is doubt or ambiguity on whether Sec. 1(2), Art. IX(D), as
couched, allows a promotional appointment from Commissioner to Chairman. Even if
We concede the existence of an ambiguity, the outcome will remain the same. J.M.
Tuason & Co., Inc.33 teaches that in case of doubt as to the import and react of a
constitutional provision, resort should be made to extraneous aids of construction, such
as debates and proceedings of the Constitutional Convention, to shed light on and
ascertain the intent of the framers or the purpose of the provision being construed.

The understanding of the Convention as to what was meant by the terms of the
constitutional provision which was the subject of the deliberation goes a long way toward
explaining the understanding of the people when they ratified it. The Court applied this
principle in Civil Liberties Union v. Executive Secretary:

A foolproof yardstick in constitutional construction is the intention underlying the

provision under consideration. Thus, it has been held that the Court in construing a
Constitution should bear in mind the object sought to be accomplished by its adoption,
and the evils, if any, sought to be prevented or remedied. A doubtful provision will be
examined in the light of the history of the times, and the condition and circumstances
under which the Constitution was framed. The object is to ascertain the reason which
induced the framers of the Constitution to enact the particular provision and the purpose
sought to be accomplished thereby, in order to construe the whole as to make the words
consonant to that reason and calculated to effect that purpose.34 (Emphasis added.)

And again in Nitafan v. Commissioner on Internal Revenue:

x x x The ascertainment of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the organic law and of the
people adopting it should be given effect. The primary task in constitutional construction
is to ascertain and thereafter assure the realization of the purpose of the framers and of
the people in the adoption of the Constitution. It may also be safely assumed that the
people in ratifying the Constitution were guided mainly by the explanation offered by the
framers.35 (Emphasis added.)

Much weight and due respect must be accorded to the intent of the framers of the
Constitution in interpreting its provisions.

Far from prohibiting reappointment of any kind, including a situation where a

commissioner is upgraded to the position of chairman, the 1987 Constitution in fact
unequivocally allows promotional appointment, but subject to defined parameters. The
ensuing exchanges during the deliberations of the 1986 Constitutional Commission
(CONCOM) on a draft proposal of what would eventually be Sec. 1(2), Art. IX(D) of the
present Constitution amply support the thesis that a promotional appointment is allowed
provided no one may be in the COA for an aggregate threshold period of 7 years:

MS. AQUINO: In the same paragraph, I would propose an amendment x x x. Between x

x x the sentence which begins with "In no case," insert THE APPOINTEE SHALL IN NO
CASE SERVE AN AGGREGATE PERIOD OF MORE THAN SEVEN YEARS. I was
thinking that this may approximate the situation wherein a commissioner is first
appointed as chairman. I am willing to withdraw that amendment if there is a
representation on the part of the Committee that there is an implicit intention to prohibit a
term that in the aggregate will exceed more than seven years. If that is the intention, I
am willing to withdraw my amendment.

MR. MONSOD: If the [Gentlewoman] will read the whole Article, she will notice that there
is no reappointment of any kind and, therefore, as a whole there is no way somebody
can serve for more than seven years. The purpose of the last sentence is to make sure
that this does not happen by including in the appointment both temporary and acting
capacities.

MS. AQUINO. Yes. Reappointment is fine; that is accounted for. But I was thinking of a
situation wherein a commissioner is upgraded to a position of chairman. But if this
provision is intended to cover that kind of situation, then I am willing to withdraw my
amendment.

MR. MONSOD. It is covered.

MR. FOZ. There is a provision on line 29 precisely to cover that situation. It states:
"Appointment to any vacancy shall be only for the unexpired portion of the predecessor."
In other words, if there is upgrading of position from commissioner to chairman, the
appointee can serve only the unexpired portion of the term of the predecessor.
MS. AQUINO: But we have to be very specific x x x because it might shorten the term
because he serves only the unexpired portion of the term of the predecessor.

MR. FOZ: He takes it at his own risk. He knows that he will only have to serve the
unexpired portion of the term of the predecessor. (Emphasis added.)36

The phrase "upgrading of position" found in the underscored portion unmistakably shows
that Sec. 1(2), Art. IX(D) of the 1987 Constitution, for all its caveat against
reappointment, does not per se preclude, in any and all cases, the promotional
appointment or upgrade of a commissioner to chairman, subject to this proviso: the
appointee’s tenure in office does not exceed 7 years in all. Indeed, such appointment
does not contextually come within the restricting phrase "without reappointment" twice
written in that section. Delegate Foz even cautioned, as a matter of fact, that a sitting
commissioner accepting a promotional appointment to fill up an unexpired portion
pertaining to the higher office does so at the risk of shortening his original term. To
illustrate the Foz’s concern: assume that Carague left COA for reasons other than the
expiration of his threshold 7-year term and Villar accepted an appointment to fill up the
vacancy. In this situation, the latter can only stay at the COA and served the unexpired
portion of Carague’s unexpired term as departing COA Chairman, even if, in the
process, his (Villar’s) own 7-year term as COA commissioner has not yet come to an
end. In this illustration, the inviolable regularity of the intervals between appointments in
the COA is preserved.

Moreover, jurisprudence tells us that the word "reappointment" means a second

appointment to one and the same office.37 As Justice Arsenio Dizon (Justice Dizon) aptly
observed in his dissent in Visarra v. Miraflor,38 the constitutional prohibition against the
reappointment of a commissioner refers to his second appointment to the same office
after holding it for nine years.39 As Justice Dizon observed, "[T]he occupant of an office
obviously needs no such second appointment unless, for some valid cause, such as the
expiration of his term or resignation, he had ceased to be the legal occupant
thereof." 40 The inevitable implication of Justice Dizon’s cogent observation is that a
promotion from commissioner to chairman, albeit entailing a second appointment,
involves a different office and, hence, not, in the strict legal viewpoint, a reappointment.
Stated a bit differently, "reappointment" refers to a movement to one and the same
office. Necessarily, a movement to a different position within the commission (from
Commissioner to Chairman) would constitute an appointment, or a second appointment,
to be precise, but not reappointment.

A similar opinion was expressed in the same Visarra case by the concurring Justice
Angelo Bautista, although he expressly alluded to a promotional appointment as not
being a prohibited appointment under Art. X of the 1935 Constitution.

Petitioner’s invocation of Matibag as additional argument to contest the constitutionality

of Villar’s elevation to the COA chairmanship is inapposite. In Matibag, then President
Macapagal-Arroyo appointed, ad interim, Alfredo Benipayo as COMELEC Chairman and
Resurreccion Borra and Florentino Tuason as Commissioners, each for a term of office
of seven (7) years. All three immediately took their oath of, and assumed, office. These
appointments were twice renewed because the Commission on Appointments failed to
act on the first two ad interim appointments. Via a petition for prohibition, some
disgruntled COMELEC officials assail as infirm the appointments of Benipayo, et al.
Matibag lists (4) four situations where the prohibition on reappointment would arise, or to
be specific, where the proviso "[t]he Chairman and the Commissioners shall be
appointed x x x for a term of seven years without reappointment" shall apply. Justice
Antonio T. Carpio declares in his dissent that Villar’s appointment falls under a
combination of two of the four situations.

Conceding for the nonce the correctness of the premises depicted in the situations
referred to in Matibag, that case is of doubtful applicability to the instant petition. Not only
is it cast against a different milieu, but the lis mota of the case, as expressly declared in
the main opinion, "is the very constitutional issue raised by petitioner."41 And what is/are
this/these issue/s? Only two defined issues in Matibag are relevant, viz: (1) the nature of
an ad interim appointment and subsumed thereto the effect of a by-passed ad interim
appointment; and (2) the constitutionality of renewals of ad interim appointments. The
opinion defined these issues in the following wise: "Petitioner [Matibag] filed the instant
petition questioning the appointment and the right to remain in office of Benipayo, Borra
and Tuason as Chairman and Commissioners of the COMELEC, respectively. Petitioner
claims that the ad interim appointments of Benipayo, et al. violate the constitutional
provisions on the independence of COMELEC, as well as on the prohibitions on
temporary appointments and reappointments of its Chairman and members." As may
distinctly be noted, an upgrade or promotion was not in issue in Matibag.

We shall briefly address the four adverted situations outlined in Matibag, in which, as
there urged, the uniform proviso on no reappointment––after a member of any of the
three constitutional commissions is appointed for a term of seven (7) years––shall apply.
Matibag made the following formulation:

The first situation is where an ad interim appointee after confirmation by the Commission
on Appointments serves his full 7-year term. Such person cannot be reappointed
whether as a member or as chairman because he will then be actually serving more than
seven (7) years.

The second situation is where the appointee, after confirmation, serves part of his term
and then resigns before his seven-year term of office ends. Such person cannot be
reappointed whether as a member or as chair to a vacancy arising from retirement
because a reappointment will result in the appointee serving more than seven years.

The third situation is where the appointee is confirmed to serve the unexpired portion of
someone who died or resigned, and the appointee completes the unexpired term. Such
person cannot be reappointed whether as a member or as chair to a vacancy arising
from retirement because a reappointment will result in the appointee also serving more
than seven (7) years.

The fourth situation is where the appointee has previously served a term of less than
seven (7) years, and a vacancy arises from death or resignation. Even if it will not result
in his serving more than seven years, a reappointment of such person to serve an
unexpired term is also prohibited because his situation will be similar to those appointed
under the second sentence of Sec. 1(20), Art. IX-C of the Constitution [referring to the
first set of appointees (the 5 and 3 year termers) whose term of office are less than 7
years but are barred from being reappointed under any situation]."42 (Words in brackets
and emphasis supplied.)
The situations just described constitute an obiter dictum, hence without the force of
adjudication, for the corresponding formulation of the four situations was not in any way
necessary to resolve any of the determinative issues specifically defined in Matibag. An
opinion entirely unnecessary for the decision of the case or one expressed upon a point
not necessarily involved in the determination of the case is an obiter.43

There can be no serious objection to the scenarios depicted in the first, second and third
situations, both hewing with the proposition that no one can stay in any of the three
independent commissions for an aggregate period of more than seven (7) years. The
fourth situation, however, does not commend itself for concurrence inasmuch as it is
basically predicated on the postulate that reappointment, as earlier herein defined, of
any kind is prohibited under any and all circumstances. To reiterate, the word
"reappointment" means a second appointment to one and the same office; and Sec.
1(2), Art. IX(D) of the 1987 Constitution and similar provisions do not peremptorily
prohibit the promotional appointment of a commissioner to chairman, provided the new
appointee’s tenure in both capacities does not exceed seven (7) years in all. The
statements in Matibag enunciating the ban on reappointment in the aforecited fourth
situation, perforce, must be abandoned, for, indeed, a promotional appointment from the
position of Commissioner to that of Chairman is constitutionally permissible and not
barred by Sec. 1(2), Art. IX (D) of the Constitution.

One of the aims behind the prohibition on reappointment, petitioner urges, is to ensure
and preserve the independence of COA and its members,44 citing what the dissenting
Justice J.B.L Reyes wrote in Visarra, that once appointed and confirmed, the
commissioners should be free to act as their conscience demands, without fear of
retaliation or hope or reward. Pursued to its logical conclusion, petitioner’s thesis is that
a COA member may no longer act with independence if he or she can be rewarded with
a promotion or appointment, for then he or she will do the bidding of the appointing
authority in the hope of being promoted or reappointed.

The unstated reason behind Justice J.B.L. Reyes’ counsel is that independence is really
a matter of choice. Without taking anything away from the gem imparted by the eminent
jurist, what Chief Justice Moran said on the subject of independence is just as logically
sound and perhaps even more compelling, as follows:

A Commissioner, hopeful of reappointment may strive to do good. Whereas, without that

hope or other hope of material reward, his enthusiasm may decline as the end of his
term approaches and he may even lean to abuses if there is no higher restrain in his
moral character. Moral character is no doubt the most effective safeguard of
independence. With moral integrity, a commissioner will be independent with or without
the possibility of reappointment.45

The Court is likewise unable to sustain Villar’s proposition that his promotional
appointment as COA Chairman gave him a completely fresh 7-year term––from
February 2008 to February 2015––given his four (4)-year tenure as COA commissioner
devalues all the past pronouncements made by this Court, starting in De Vera, then
Imperial, Visarra, and finally Matibag. While there had been divergence of opinion as to
the import of the word "reappointment," there has been unanimity on the dictum that in
no case can one be a COA member, either as chairman or commissioner, or a mix of
both positions, for an aggregate term of more than 7 years. A contrary view would allow
a circumvention of the aggregate 7-year service limitation and would be constitutionally
offensive as it would wreak havoc to the spirit of the rotational system of succession.
Imperial, passing upon the rotational system as it applied to the then organizational set-
up of the COMELEC, stated:

The provision that of the first three commissioners appointed "one shall hold office for 9
years, another for 6 years and the third for 3 years," when taken together with the
prescribed term of office for 9 years without reappointment, evinces a deliberate plan to
have a regular rotation or cycle in the membership of the commission, by having
subsequent members appointable only once every three years.46

To be sure, Villar’s appointment as COA Chairman partakes of a promotional

appointment which, under appropriate setting, would be outside the purview of the
constitutional reappointment ban in Sec 1(2), Art. IX(D) of the Constitution. Nonetheless,
such appointment, even for the term appearing in the underlying appointment paper,
ought still to be struck down as unconstitutional for the reason as shall be explained.

Consider:

In a mandatory tone, the aforecited constitutional provision decrees that the appointment
of a COA member shall be for a fixed 7-year term if the vacancy results from the
expiration of the term of the predecessor. We reproduce in its pertinent part the provision
referred to:

(2) The Chairman and Commissioners [on Audit] shall be appointed x x x for a term of
seven years without reappointment. x x x Appointment to any vacancy shall be only for
the unexpired portion of the term of the predecessor. x x x

Accordingly, the promotional appointment as COA Chairman of Villar for a stated fixed
term of less than seven (7) years is void for violating a clear, but mandatory
constitutional prescription. There can be no denying that the vacancy in the position of
COA chairman when Carague stepped down in February 2, 2008 resulted from the
expiration of his 7-year term. Hence, the appointment to the vacancy thus created ought
to have been one for seven (7) years in line with the verbal legis approach47 of
interpreting the Constitution. It is to be understood, however, following Gaminde, that in
case of a belated appointment, the interval between the start of the term and the actual
appointment shall be counted against the 7-year term of the appointee. Posing,
however, as an insurmountable barrier to a full 7-year appointment for Villar is the rule
against one serving the commission for an aggregate term of more than seven (7) years.

Where the Constitution or, for that matter, a statute, has fixed the term of office of a
public official, the appointing authority is without authority to specify in the appointment a
term shorter or longer than what the law provides. If the vacancy calls for a full seven-
year appointment, the President is without discretion to extend a promotional
appointment for more or for less than seven (7) years. There is no in between. He or she
cannot split terms. It is not within the power of the appointing authority to override the
positive provision of the Constitution which dictates that the term of office of members of
constitutional bodies shall be seven (7) years.48 A contrary reasoning "would make the
term of office to depend upon the pleasure or caprice of the [appointing authority] and
not upon the will [of the framers of the Constitution] of the legislature as expressed in
plain and undoubted language in the law."49

In net effect, then President Macapagal-Arroyo could not have had, under any
circumstance, validly appointed Villar as COA Chairman, for a full 7-year appointment,
as the Constitution decrees, was not legally feasible in light of the 7-year aggregate rule.
Villar had already served 4 years of his 7-year term as COA Commissioner. A shorter
term, however, to comply with said rule would also be invalid as the corresponding
appointment would effectively breach the clear purpose of the Constitution of giving to
every appointee so appointed subsequent to the first set of commissioners, a fixed term
of office of 7 years. To recapitulate, a COA commissioner like respondent Villar who
serves for a period less than seven (7) years cannot be appointed as chairman when
such position became vacant as a result of the expiration of the 7-year term of the
predecessor (Carague). Such appointment to a full term is not valid and constitutional,
as the appointee will be allowed to serve more than seven (7) years under the
constitutional ban.

On the other hand, a commissioner who resigned before serving his 7- year term can be
extended an appointment to the position of chairman for the unexpired period of the term
of the latter, provided the aggregate of the period he served as commissioner and the
period he will serve as chairman will not exceed seven (7) years. This situation will only
obtain when the chairman leaves the office by reason of death, disability, resignation or
impeachment. Let us consider, in the concrete, the situation of then Chairman Carague
and his successor, Villar. Carague was appointed COA Chairman effective February 2,
2001 for a term of seven (7) years, or up to February 2, 2008. Villar was appointed as
Commissioner on February 2, 2004 with a 7-year term to end on February 2, 2011. If
Carague for some reason vacated the chairmanship in 2007, then Villar can resign as
commissioner in the same year and later be appointed as chairman to serve only up to
February 2, 2008, the end of the unexpired portion of Carague’s term. In this
hypothetical scenario, Villar’s appointment to the position of chairman is valid and
constitutional as the aggregate periods of his two (2) appointments will only be five (5)
years which neither distorts the rotational scheme nor violates the rule that the sum total
of said appointments shall not exceed seven (7) years. Villar would, however, forfeit two
(2) years of his original seven (7)-year term as Commissioner, since, by accepting an
upgraded appointment to Carague’s position, he agreed to serve the unexpired portion
of the term of the predecessor. As illustrated earlier, following Mr. Foz’s line, if there is
an upgrading of position from commissioner to chairman, the appointee takes the risk of
cutting short his original term, knowing pretty well before hand that he will serve only the
unexpired portion of the term of his predecessor, the outgoing COA chairman.

In the extreme hypothetical situation that Villar vacates the position of chairman for
causes other than the expiration of the original term of Carague, the President can only
appoint the successor of Villar for the unexpired portion of the Carague term in line with
Sec. 1(2), Art. IX(D) of the Constitution. Upon the expiration of the original 7-year term of
Carague, the President can appoint a new chairman for a term of seven (7) full years.

In his separate dissent, my esteemed colleague, Mr. Justice Mendoza, takes strong
exception to the view that the promotional appointment of a sitting commissioner is
plausible only when he is appointed to the position of chairman for the unexpired portion
of the term of said official who leaves the office by reason of any the following reasons:
death, disability, resignation or impeachment, not when the vacancy arises out as a
result of the expiration of the 7-year term of the past chairman. There is nothing in the
Constitution, so Justice Mendoza counters, that restricts the promotion of an incumbent
commissioner to the chairmanship only in instances where the tenure of his predecessor
was cut short by any of the four events referred to. As earlier explained, the majority
view springs from the interplay of the following premises: The explicit command of the
Constitution is that the "Chairman and the Commissioners shall be appointed by the
President x x x for a term of seven years [and] appointment to any vacancy shall be only
for the unexpired portion of the term of the predecessor." To repeat, the President has
two and only two options on term appointments. Either he extends an appointment for a
full 7-year term when the vacancy results from the expiration of term, or for a shorter
period corresponding to the unexpired term of the predecessor when the vacancy occurs
by reason of death, physical disability, resignation or impeachment. If the vacancy calls
for a full seven-year appointment, the Chief Executive is barred from extending a
promotional appointment for less than seven years. Else, the President can trifle with
terms of office fixed by the Constitution.

Justice Mendoza likewise invites attention to an instance in history when a commissioner

had been promoted chairman after the expiration of the term of his predecessor,
referring specifically to the appointment of then COMELEC Commissioner Gaudencio
Garcia to succeed Jose P. Carag after the expiration of the latter’s term in 1959 as
COMELEC chairman. Such appointment to the position of chairman is not
constitutionally permissible under the 1987 Constitution because of the policy and intent
of its framers that a COA member who has served his full term of seven (7) years or
even for a shorter period can no longer be extended another appointment to the position
of chairman for a full term of seven (7) years. As revealed in the deliberations of the
Constitutional Commission that crafted the 1987 Constitution, a member of COA who
also served as a commissioner for less than seven (7) years in said position cannot be
appointed to the position of chairman for a full term of seven (7) years since the
aggregate will exceed seven (7) years. Thus, the adverted Garcia appointment in 1959
made under the 1935 Constitution cannot be used as a precedent to an appointment of
such nature under the 1987 Constitution. The dissent further notes that the upgrading
remained uncontested. In this regard, suffice it to state that the promotion in question
was either legal or it was not. If it were not, no amount of repetitive practices would clear
it of invalidating taint.

Lastly, Villar’s appointment as chairman ending February 2, 2011 which Justice

Mendoza considers as valid is likewise unconstitutional, as it will destroy the rationale
and policy behind the rotational system or the staggering of appointments and terms in
COA as prescribed in the Constitution. It disturbs in a way the staggered rotational
system of appointment under Sec. 1(2), Art. IX(D) of the 1987 Constitution. Consider: If
Villar’s term as COA chairman up to February 2, 2011 is viewed as valid and
constitutional as espoused by my esteemed colleague, then two vacancies have
simultaneously occurred and two (2) COA members going out of office at once, opening
positions for two (2) appointables on that date as Commissioner San Buenaventura’s
term also expired on that day. This is precisely one of the mischiefs the staggering of
terms and the regular intervals appointments seek to address. Note that San
Buenaventura was specifically appointed to succeed Villar as commissioner, meaning
she merely occupied the position vacated by her predecessor whose term as such
commissioner expired on February 2, 2011. The result is what the framers of the
Constitution doubtless sought to avoid, a sitting President with a 6-year term of office,
like President Benigno C. Aquino III, appointing all or at least two (2) members of the
three-man Commission during his term. He appointed Ma. Gracia Pulido-Tan as
Chairman for the term ending February 2, 2015 upon the relinquishment of the post by
respondent Villar, and Heidi Mendoza was appointed Commissioner for a 7-year term
ending February 2, 2018 to replace San Buenaventura. If Justice Mendoza’s version is
adopted, then situations like the one which obtains in the Commission will definitely be
replicated in gross breach of the Constitution and in clear contravention of the intent of
its framers. Presidents in the future can easily control the Commission depriving it of its
independence and impartiality.

To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz:

1. The appointment of members of any of the three constitutional commissions,

after the expiration of the uneven terms of office of the first set of commissioners,
shall always be for a fixed term of seven (7) years; an appointment for a lesser
period is void and unconstitutional.

The appointing authority cannot validly shorten the full term of seven (7) years in
case of the expiration of the term as this will result in the distortion of the
rotational system prescribed by the Constitution.

2. Appointments to vacancies resulting from certain causes (death, resignation,

disability or impeachment) shall only be for the unexpired portion of the term of
the predecessor, but such appointments cannot be less than the unexpired
portion as this will likewise disrupt the staggering of terms laid down under Sec.
1(2), Art. IX(D).

3. Members of the Commission, e.g. COA, COMELEC or CSC, who were

appointed for a full term of seven years and who served the entire period, are
barred from reappointment to any position in the Commission. Corollarily, the first
appointees in the Commission under the Constitution are also covered by the
prohibition against reappointment.

4. A commissioner who resigns after serving in the Commission for less than
seven years is eligible for an appointment to the position of Chairman for the
unexpired portion of the term of the departing chairman. Such appointment is not
covered by the ban on reappointment, provided that the aggregate period of the
length of service as commissioner and the unexpired period of the term of the
predecessor will not exceed seven (7) years and provided further that the
vacancy in the position of Chairman resulted from death, resignation, disability or
removal by impeachment. The Court clarifies that "reappointment" found in Sec.
1(2), Art. IX(D) means a movement to one and the same office (Commissioner to
Commissioner or Chairman to Chairman). On the other hand, an appointment
involving a movement to a different position or office (Commissioner to
Chairman) would constitute a new appointment and, hence, not, in the strict legal
sense, a reappointment barred under the Constitution.

5. Any member of the Commission cannot be appointed or designated in a

temporary or acting capacity.
WHEREFORE the petition is PARTLY GRANTED. The appointment of then
Commissioner Reynaldo A. Villar to the position of Chairman of the Commission on
Audit to replace Guillermo N. Carague, whose term of office as such chairman has
expired, is hereby declared UNCONSTITUTIONAL for violation of Sec. 1(2), Art. IX(D) of
the Constitution.

SO ORDERED.

G.R. No. 183505 February 26, 2010

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
SM PRIME HOLDINGS, INC. and FIRST ASIA REALTY DEVELOPMENT
CORPORATION, Respondents.

DECISION

DEL CASTILLO, J.:

When the intent of the law is not apparent as worded, or when the application of the law
would lead to absurdity or injustice, legislative history is all important. In such cases,
courts may take judicial notice of the origin and history of the law,1 the deliberations
during the enactment,2 as well as prior laws on the same subject matter3 to ascertain the
true intent or spirit of the law.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court, in relation to
Republic Act (RA) No. 9282,4 seeks to set aside the April 30, 2008 Decision5 and the
June 24, 2008 Resolution6 of the Court of Tax Appeals (CTA).

Factual Antecedents

Respondents SM Prime Holdings, Inc. (SM Prime) and First Asia Realty Development
Corporation (First Asia) are domestic corporations duly organized and existing under the
laws of the Republic of the Philippines. Both are engaged in the business of operating
cinema houses, among others.7

CTA Case No. 7079

On September 26, 2003, the Bureau of Internal Revenue (BIR) sent SM Prime a
Preliminary Assessment Notice (PAN) for value added tax (VAT) deficiency on cinema
ticket sales in the amount of ₱119,276,047.40 for taxable year 2000.8 In response, SM
Prime filed a letter-protest dated December 15, 2003.9

On December 12, 2003, the BIR sent SM Prime a Formal Letter of Demand for the
alleged VAT deficiency, which the latter protested in a letter dated January 14, 2004.10

On September 6, 2004, the BIR denied the protest filed by SM Prime and ordered it to
pay the VAT deficiency for taxable year 2000 in the amount of ₱124,035,874.12.11

On October 15, 2004, SM Prime filed a Petition for Review before the CTA docketed as
CTA Case No. 7079.12

CTA Case No. 7085

On May 15, 2002, the BIR sent First Asia a PAN for VAT deficiency on
cinema ticket sales for taxable year 1999 in the total amount of ₱35,823,680.93.13 First
Asia protested the PAN in a letter dated July 9, 2002.14

Subsequently, the BIR issued a Formal Letter of Demand for the alleged VAT deficiency
which was protested by First Asia in a letter dated December 12, 2002.15

On September 6, 2004, the BIR rendered a Decision denying the protest and ordering
First Asia to pay the amount of ₱35,823,680.93 for VAT deficiency for taxable year
1999.16

Accordingly, on October 20, 2004, First Asia filed a Petition for Review before the CTA,
docketed as CTA Case No. 7085.17

CTA Case No. 7111

On April 16, 2004, the BIR sent a PAN to First Asia for VAT deficiency on cinema ticket
sales for taxable year 2000 in the amount of ₱35,840,895.78. First Asia protested the
PAN through a letter dated April 22, 2004.18

Thereafter, the BIR issued a Formal Letter of Demand for alleged VAT deficiency.19 First
Asia protested the same in a letter dated July 9, 2004.20

On October 5, 2004, the BIR denied the protest and ordered First Asia to pay the VAT
deficiency in the amount of ₱35,840,895.78 for taxable year 2000.21

This prompted First Asia to file a Petition for Review before the CTA on December 16,
2004. The case was docketed as CTA Case No. 7111.22

CTA Case No. 7272

Re: Assessment Notice No. 008-02

A PAN for VAT deficiency on cinema ticket sales for the taxable year 2002 in the total
amount of ₱32,802,912.21 was issued against First Asia by the BIR. In response, First
Asia filed a protest-letter dated November 11, 2004. The BIR then sent a Formal Letter
of Demand, which was protested by First Asia on December 14, 2004.23

Re: Assessment Notice No. 003-03

A PAN for VAT deficiency on cinema ticket sales in the total amount of ₱28,196,376.46
for the taxable year 2003 was issued by the BIR against First Asia. In a letter dated
September 23, 2004, First Asia protested the PAN. A Formal Letter of Demand was
thereafter issued by the BIR to First Asia, which the latter protested through a letter
dated November 11, 2004. 24

On May 11, 2005, the BIR rendered a Decision denying the protests. It ordered First
Asia to pay the amounts of ₱33,610,202.91 and ₱28,590,826.50 for VAT deficiency for
taxable years 2002 and 2003, respectively.25
Thus, on June 22, 2005, First Asia filed a Petition for Review before the CTA, docketed
as CTA Case No. 7272.26

Consolidated Petitions

The Commissioner of Internal Revenue (CIR) filed his Answers to the Petitions filed by
SM Prime and First Asia.27

On July 1, 2005, SM Prime filed a Motion to Consolidate CTA Case Nos. 7085, 7111
and 7272 with CTA Case No. 7079 on the grounds that the issues raised therein are
identical and that SM Prime is a majority shareholder of First Asia. The motion was
granted.28

Upon submission of the parties’ respective memoranda, the consolidated cases were
submitted for decision on the sole issue of whether gross receipts derived from
admission tickets by cinema/theater operators or proprietors are subject to VAT.29

Ruling of the CTA First Division

On September 22, 2006, the First Division of the CTA rendered a Decision granting the
Petition for Review. Resorting to the language used and the legislative history of the law,
it ruled that the activity of showing cinematographic films is not a service covered by
VAT under the National Internal Revenue Code (NIRC) of 1997, as amended, but an
activity subject to amusement tax under RA 7160, otherwise known as the Local
Government Code (LGC) of 1991. Citing House Joint Resolution No. 13, entitled "Joint
Resolution Expressing the True Intent of Congress with Respect to the Prevailing Tax
Regime in the Theater and Local Film Industry Consistent with the State’s Policy to Have
a Viable, Sustainable and Competitive Theater and Film Industry as One of its Partners
in National Development,"30 the CTA First Division held that the House of
Representatives resolved that there should only be one business tax applicable to
theaters and movie houses, which is the 30% amusement tax imposed by cities and
provinces under the LGC of 1991. Further, it held that consistent with the State’s policy
to have a viable, sustainable and competitive theater and film industry, the national
government should be precluded from imposing its own business tax in addition to that
already imposed and collected by local government units. The CTA First Division
likewise found that Revenue Memorandum Circular (RMC) No. 28-2001, which imposes
VAT on gross receipts from admission to cinema houses, cannot be given force and
effect because it failed to comply with the procedural due process for tax issuances
under RMC No. 20-86.31 Thus, it disposed of the case as follows:

IN VIEW OF ALL THE FOREGOING, this Court hereby GRANTS the Petitions for
Review. Respondent’s Decisions denying petitioners’ protests against deficiency value-
added taxes are hereby REVERSED. Accordingly, Assessment Notices Nos. VT-00-
000098, VT-99-000057, VT-00-000122, 003-03 and 008-02 are ORDERED cancelled
and set aside.

SO ORDERED.32

Aggrieved, the CIR moved for reconsideration which was denied by the First Division in
its Resolution dated December 14, 2006.33
Ruling of the CTA En Banc

Thus, the CIR appealed to the CTA En Banc.34 The case was docketed as CTA EB No.
244.35 The CTA En Banc however denied36 the Petition for Review and dismissed37 as
well petitioner’s Motion for Reconsideration.

The CTA En Banc held that Section 108 of the NIRC actually sets forth an exhaustive
enumeration of what services are intended to be subject to VAT. And since the showing
or exhibition of motion pictures, films or movies by cinema operators or proprietors is not
among the enumerated activities contemplated in the phrase "sale or exchange of
services," then gross receipts derived by cinema/ theater operators or proprietors from
admission tickets in showing motion pictures, film or movie are not subject to VAT. It
reiterated that the exhibition or showing of motion pictures, films, or movies is instead
subject to amusement tax under the LGC of 1991. As regards the validity of RMC No.
28-2001, the CTA En Banc agreed with its First Division that the same cannot be given
force and effect for failure to comply with RMC No. 20-86.

Issue

Hence, the present recourse, where petitioner alleges that the CTA En Banc seriously
erred:

(1) In not finding/holding that the gross receipts derived by operators/proprietors of

cinema houses from admission tickets [are] subject to the 10% VAT because:

(a) THE EXHIBITION OF MOVIES BY CINEMA OPERATORS/PROPRIETORS

TO THE PAYING PUBLIC IS A SALE OF SERVICE;

(b) UNLESS EXEMPTED BY LAW, ALL SALES OF SERVICES ARE

EXPRESSLY SUBJECT TO VAT UNDER SECTION 108 OF THE NIRC OF
1997;

(c) SECTION 108 OF THE NIRC OF 1997 IS A CLEAR PROVISION OF LAW

AND THE APPLICATION OF RULES OF STATUTORY CONSTRUCTION AND
EXTRINSIC AIDS IS UNWARRANTED;

(d) GRANTING WITHOUT CONCEDING THAT RULES OF CONSTRUCTION

ARE APPLICABLE HEREIN, STILL THE HONORABLE COURT
ERRONEOUSLY APPLIED THE SAME AND PROMULGATED DANGEROUS
PRECEDENTS;

(e) THERE IS NO VALID, EXISTING PROVISION OF LAW EXEMPTING

RESPONDENTS’ SERVICES FROM THE VAT IMPOSED UNDER SECTION
108 OF THE NIRC OF 1997;

(f) QUESTIONS ON THE WISDOM OF THE LAW ARE NOT PROPER ISSUES
TO BE TRIED BY THE HONORABLE COURT; and
 (g) RESPONDENTS WERE TAXED BASED ON THE PROVISION OF SECTION
108 OF THE NIRC.

(2) In ruling that the enumeration in Section 108 of the NIRC of 1997 is exhaustive in
coverage;

(3) In misconstruing the NIRC of 1997 to conclude that the showing of motion pictures is
merely subject to the amusement tax imposed by the Local Government Code; and

(4) In invalidating Revenue Memorandum Circular (RMC) No. 28-2001.38

Simply put, the issue in this case is whether the gross receipts derived by operators or
proprietors of cinema/theater houses from admission tickets are subject to VAT.

Petitioner’s Arguments

Petitioner argues that the enumeration of services subject to VAT in Section 108 of the
NIRC is not exhaustive because it covers all sales of services unless exempted by law.
He claims that the CTA erred in applying the rules on statutory construction and in using
extrinsic aids in interpreting Section 108 because the provision is clear and
unambiguous. Thus, he maintains that the exhibition of movies by cinema operators or
proprietors to the paying public, being a sale of service, is subject to VAT.

Respondents’ Arguments

Respondents, on the other hand, argue that a plain reading of Section 108 of the NIRC
of 1997 shows that the gross receipts of proprietors or operators of cinemas/theaters
derived from public admission are not among the services subject to VAT. Respondents
insist that gross receipts from cinema/theater admission tickets were never intended to
be subject to any tax imposed by the national government. According to them, the
absence of gross receipts from cinema/theater admission tickets from the list of services
which are subject to the national amusement tax under Section 125 of the NIRC of 1997
reinforces this legislative intent. Respondents also highlight the fact that RMC No. 28-
2001 on which the deficiency assessments were based is an unpublished administrative
ruling.

Our Ruling

The petition is bereft of merit.

The enumeration of services subject to VAT under Section 108 of the NIRC is not
exhaustive

Section 108 of the NIRC of the 1997 reads:

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. —
(A) Rate and Base of Tax. — There shall be levied, assessed and collected, a value-
added tax equivalent to ten percent (10%) of gross receipts derived from the sale or
exchange of services, including the use or lease of properties.

The phrase "sale or exchange of services" means the performance of all kinds of
services in the Philippines for others for a fee, remuneration or consideration, including
those performed or rendered by construction and service contractors; stock, real estate,
commercial, customs and immigration brokers; lessors of property, whether personal or
real; warehousing services; lessors or distributors of cinematographic films; persons
engaged in milling, processing, manufacturing or repacking goods for others; proprietors,
operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts;
proprietors or operators of restaurants, refreshment parlors, cafes and other eating
places, including clubs and caterers; dealers in securities; lending investors;
transportation contractors on their transport of goods or cargoes, including persons who
transport goods or cargoes for hire and other domestic common carriers by land, air and
water relative to their transport of goods or cargoes; services of franchise grantees of
telephone and telegraph, radio and television broadcasting and all other franchise
grantees except those under Section 119 of this Code; services of banks, non-bank
financial intermediaries and finance companies; and non-life insurance companies
(except their crop insurances), including surety, fidelity, indemnity and bonding
companies; and similar services regardless of whether or not the performance thereof
calls for the exercise or use of the physical or mental faculties. The phrase "sale or
exchange of services" shall likewise include:

(1) The lease or the use of or the right or privilege to use any copyright, patent, design or
model, plan, secret formula or process, goodwill, trademark, trade brand or other like
property or right;

xxxx

(7) The lease of motion picture films, films, tapes and discs; and

(8) The lease or the use of or the right to use radio, television, satellite transmission and
cable television time.

x x x x (Emphasis supplied)

A cursory reading of the foregoing provision clearly shows that the enumeration of the
"sale or exchange of services" subject to VAT is not exhaustive. The words, "including,"
"similar services," and "shall likewise include," indicate that the enumeration is by way of
example only.39

Among those included in the enumeration is the "lease of motion picture films, films,
tapes and discs." This, however, is not the same as the showing or exhibition of motion
pictures or films. As pointed out by the CTA En Banc:

"Exhibition" in Black’s Law Dictionary is defined as "To show or display. x x x To produce

anything in public so that it may be taken into possession" (6th ed., p. 573). While the
word "lease" is defined as "a contract by which one owning such property grants to
another the right to possess, use and enjoy it on specified period of time in exchange for
periodic payment of a stipulated price, referred to as rent (Black’s Law Dictionary, 6th
ed., p. 889). x x x40

Since the activity of showing motion pictures, films or movies by cinema/ theater
operators or proprietors is not included in the enumeration, it is incumbent upon the
court to the determine whether such activity falls under the phrase "similar services."
The intent of the legislature must therefore be ascertained.

The legislature never intended operators

or proprietors of cinema/theater houses to be covered by VAT

Under the NIRC of 1939,41 the national government imposed amusement tax on
proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses,
boxing exhibitions, and other places of amusement, including cockpits, race tracks, and
cabaret.42 In the case of theaters or cinematographs, the taxes were first deducted,
withheld, and paid by the proprietors, lessees, or operators of such theaters or
cinematographs before the gross receipts were divided between the proprietors,
lessees, or operators of the theaters or cinematographs and the distributors of the
cinematographic films. Section 1143 of the Local Tax Code,44 however, amended this
provision by transferring the power to impose amusement tax45 on admission from
theaters, cinematographs, concert halls, circuses and other places of amusements
exclusively to the local government. Thus, when the NIRC of 197746 was enacted, the
national government imposed amusement tax only on proprietors, lessees or operators
of cabarets, day and night clubs, Jai-Alai and race tracks.47

On January 1, 1988, the VAT Law48 was promulgated. It amended certain provisions of
the NIRC of 1977 by imposing a multi-stage VAT to replace the tax on original and
subsequent sales tax and percentage tax on certain services. It imposed VAT on sales
of services under Section 102 thereof, which provides:

SECTION 102. Value-added tax on sale of services. — (a) Rate and base of tax. —
There shall be levied, assessed and collected, a value-added tax equivalent to 10%
percent of gross receipts derived by any person engaged in the sale of services. The
phrase "sale of services" means the performance of all kinds of services for others for a
fee, remuneration or consideration, including those performed or rendered by
construction and service contractors; stock, real estate, commercial, customs and
immigration brokers; lessors of personal property; lessors or distributors of
cinematographic films; persons engaged in milling, processing, manufacturing or
repacking goods for others; and similar services regardless of whether or not the
performance thereof calls for the exercise or use of the physical or mental faculties:
Provided That the following services performed in the Philippines by VAT-registered
persons shall be subject to 0%:

(1) Processing manufacturing or repacking goods for other persons doing

business outside the Philippines which goods are subsequently exported, x x x

xxxx
 "Gross receipts" means the total amount of money or its equivalent
representing the contract price, compensation or service fee, including
the amount charged for materials supplied with the services and deposits
or advance payments actually or constructively received during the
taxable quarter for the service performed or to be performed for another
person, excluding value-added tax.

(b) Determination of the tax. — (1) Tax billed as a separate item in the
invoice. — If the tax is billed as a separate item in the invoice, the tax
shall be based on the gross receipts, excluding the tax.

(2) Tax not billed separately or is billed erroneously in the invoice. — If the tax is
not billed separately or is billed erroneously in the invoice, the tax shall be
determined by multiplying the gross receipts (including the amount intended to
cover the tax or the tax billed erroneously) by 1/11. (Emphasis supplied)

Persons subject to amusement tax under the NIRC of 1977, as amended, however,
were exempted from the coverage of VAT.49

On February 19, 1988, then Commissioner Bienvenido A. Tan, Jr. issued RMC 8-88,
which clarified that the power to impose amusement tax on gross receipts derived from
admission tickets was exclusive with the local government units and that only the gross
receipts of amusement places derived from sources other than from admission tickets
were subject to amusement tax under the NIRC of 1977, as amended. Pertinent portions
of RMC 8-88 read:

Under the Local Tax Code (P.D. 231, as amended), the jurisdiction to levy amusement
tax on gross receipts arising from admission to places of amusement has been
transferred to the local governments to the exclusion of the national government.

xxxx

Since the promulgation of the Local Tax Code which took effect on June 28, 1973 none
of the amendatory laws which amended the National Internal Revenue Code, including
the value added tax law under Executive Order No. 273, has amended the provisions of
Section 11 of the Local Tax Code. Accordingly, the sole jurisdiction for collection of
amusement tax on admission receipts in places of amusement rests exclusively on the
local government, to the exclusion of the national government. Since the Bureau of
Internal Revenue is an agency of the national government, then it follows that it has no
legal mandate to levy amusement tax on admission receipts in the said places of
amusement.

Considering the foregoing legal background, the provisions under Section 123 of the
National Internal Revenue Code as renumbered by Executive Order No. 273 (Sec. 228,
old NIRC) pertaining to amusement taxes on places of amusement shall be implemented
in accordance with BIR RULING, dated December 4, 1973 and BIR RULING NO. 231-86
dated November 5, 1986 to wit:

"x x x Accordingly, only the gross receipts of the amusement places derived from
sources other than from admission tickets shall be subject to x x x amusement tax
prescribed under Section 228 of the Tax Code, as amended (now Section 123,
NIRC, as amended by E.O. 273). The tax on gross receipts derived from admission
tickets shall be levied and collected by the city government pursuant to Section 23
of Presidential Decree No. 231, as amended x x x" or by the provincial
government, pursuant to Section 11 of P.D. 231, otherwise known as the Local Tax
Code. (Emphasis supplied)

On October 10, 1991, the LGC of 1991 was passed into law. The local government
retained the power to impose amusement tax on 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 under Section 140 thereof.50 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 local government before the gross receipts are divided between said proprietors,
lessees, or operators and the distributors of the cinematographic films. However, the
provision in the Local Tax Code expressly excluding the national government from
collecting tax from the proprietors, lessees, or operators of theaters, cinematographs,
concert halls, circuses and other places of amusements was no longer included.

In 1994, RA 7716 restructured the VAT system by widening its tax base and enhancing
its administration. Three years later, RA 7716 was amended by RA 8241. Shortly
thereafter, the NIRC of 199751 was signed into law. Several amendments52 were made to
expand the coverage of VAT. However, none pertain to cinema/theater operators or
proprietors. At present, only lessors or distributors of cinematographic films are subject
to VAT. While persons subject to amusement tax53 under the NIRC of 1997 are exempt
from the coverage of VAT.54

Based on the foregoing, the following facts can be established:

(1) Historically, the activity of showing motion pictures, films or movies by

cinema/theater operators or proprietors has always been considered as a form of
entertainment subject to amusement tax.

(2) Prior to the Local Tax Code, all forms of amusement tax were imposed by the
national government.

(3) When the Local Tax Code was enacted, amusement tax on admission tickets
from theaters, cinematographs, concert halls, circuses and other places of
amusements were transferred to the local government.

(4) Under the NIRC of 1977, the national government imposed amusement tax
only on proprietors, lessees or operators of cabarets, day and night clubs, Jai-
Alai and race tracks.

(5) The VAT law was enacted to replace the tax on original and subsequent sales
tax and percentage tax on certain services.

(6) When the VAT law was implemented, it exempted persons subject to
amusement tax under the NIRC from the coverage of VAT.1auuphil
 (7) When the Local Tax Code was repealed by the LGC of 1991, the local
government continued to impose amusement tax on admission tickets from
theaters, cinematographs, concert halls, circuses and other places of
amusements.

(8) Amendments to the VAT law have been consistent in exempting persons
subject to amusement tax under the NIRC from the coverage of VAT.

(9) Only lessors or distributors of cinematographic films are included in the

coverage of VAT.

These reveal the legislative intent not to impose VAT on persons already covered by the
amusement tax. This holds true even in the case of cinema/theater operators taxed
under the LGC of 1991 precisely because the VAT law was intended to replace the
percentage tax on certain services. The mere fact that they are taxed by the local
government unit and not by the national government is immaterial. The Local Tax Code,
in transferring the power to tax gross receipts derived by cinema/theater operators or
proprietor from admission tickets to the local government, did not intend to treat
cinema/theater houses as a separate class. No distinction must, therefore, be made
between the places of amusement taxed by the national government and those taxed by
the local government.

To hold otherwise would impose an unreasonable burden on cinema/theater houses

operators or proprietors, who would be paying an additional 10%55 VAT on top of the
30% amusement tax imposed by Section 140 of the LGC of 1991, or a total of 40% tax.
Such imposition would result in injustice, as persons taxed under the NIRC of 1997
would be in a better position than those taxed under the LGC of 1991. We need not
belabor that a literal application of a law must be rejected if it will operate unjustly or lead
to absurd results.56 Thus, we are convinced that the legislature never intended to include
cinema/theater operators or proprietors in the coverage of VAT.

On this point, it is apropos to quote the case of Roxas v. Court of Tax Appeals,57 to wit:

The power of taxation is sometimes called also the power to destroy. Therefore, it should
be exercised with caution to minimize injury to the proprietary rights of a taxpayer. It
must be exercised fairly, equally and uniformly, lest the tax collector kill the "hen that
lays the golden egg." And, in order to maintain the general public's trust and confidence
in the Government this power must be used justly and not treacherously.

The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the
imposition of VAT

Petitioner, in issuing the assessment notices for deficiency VAT against respondents,
ratiocinated that:

Basically, it was acknowledged that a cinema/theater operator was then subject to

amusement tax under Section 260 of Commonwealth Act No. 466, otherwise known as
the National Internal Revenue Code of 1939, computed on the amount paid for
admission. With the enactment of the Local Tax Code under Presidential Decree (PD)
No. 231, dated June 28, 1973, the power of imposing taxes on gross receipts from
admission of persons to cinema/theater and other places of amusement had, thereafter,
been transferred to the provincial government, to the exclusion of the national or
municipal government (Sections 11 & 13, Local Tax Code). However, the said provision
containing the exclusive power of the provincial government to impose amusement tax,
had also been repealed and/or deleted by Republic Act (RA) No. 7160, otherwise known
as the Local Government Code of 1991, enacted into law on October 10, 1991.
Accordingly, the enactment of RA No. 7160, thus, eliminating the statutory prohibition on
the national government to impose business tax on gross receipts from admission of
persons to places of amusement, led the way to the valid imposition of the VAT pursuant
to Section 102 (now Section 108) of the old Tax Code, as amended by the Expanded
VAT Law (RA No. 7716) and which was implemented beginning January 1,
1996.58(Emphasis supplied)

We disagree.

The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the
imposition of VAT on the gross receipts of cinema/theater operators or proprietors
derived from admission tickets. The removal of the prohibition under the Local Tax Code
did not grant nor restore to the national government the power to impose amusement tax
on cinema/theater operators or proprietors. Neither did it expand the coverage of VAT.
Since the imposition of a tax is a burden on the taxpayer, it cannot be presumed nor can
it be extended by implication. A law will not be construed as imposing a tax unless it
does so clearly, expressly, and unambiguously.59 As it is, the power to impose
amusement tax on cinema/theater operators or proprietors remains with the local
government.

Revenue Memorandum Circular No. 28-2001 is invalid

Considering that there is no provision of law imposing VAT on the gross receipts of
cinema/theater operators or proprietors derived from admission tickets, RMC No. 28-
2001 which imposes VAT on the gross receipts from admission to cinema houses must
be struck down. We cannot overemphasize that RMCs must not override, supplant, or
modify the law, but must remain consistent and in harmony with, the law they seek to
apply and implement.60

In view of the foregoing, there is no need to discuss whether RMC No. 28-2001 complied
with the procedural due process for tax issuances as prescribed under RMC No. 20-86.

Rule on tax exemption does not apply

Moreover, contrary to the view of petitioner, respondents need not prove their
entitlement to an exemption from the coverage of VAT. The rule that tax exemptions
should be construed strictly against the taxpayer presupposes that the taxpayer is
clearly subject to the tax being levied against him.61 The reason is obvious: it is both
illogical and impractical to determine who are exempted without first determining who
are covered by the provision.62 Thus, unless a statute imposes a tax clearly, expressly
and unambiguously, what applies is the equally well-settled rule that the imposition of a
tax cannot be presumed.63 In fact, in case of doubt, tax laws must be construed strictly
against the government and in favor of the taxpayer.64
WHEREFORE, the Petition is hereby DENIED. The assailed April 30, 2008 Decision of
the Court of Tax Appeals En Banc holding that gross receipts derived by respondents
from admission tickets in showing motion pictures, films or movies are not subject to
value-added tax under Section 108 of the National Internal Revenue Code of 1997, as
amended, and its June 24, 2008 Resolution denying the motion for reconsideration
are AFFIRMED.

SO ORDERED.

 [G.R. NO. 152991 : July 21, 2008]

ALBERTO P. OXALES, Petitioner, v. UNITED LABORATORIES,

INC., Respondent.

DECISION

REYES, R.T., J.:

HOW should a private company retirement plan for employees be

implemented vis - à-vis The Retirement Pay Law (Republic Act No. 7641)?

Papaano ipapatupad ang isang plano ng pribadong kompanya para sa

pagreretiro ng mga empleyado sa harap ng Batas ng Pagbabayad sa
Pagreretiro (Batas Republika Blg. 7641)?

We address the concern in this appeal by certiorari of the Decision1 of the

Court of Appeals (CA) affirming the Resolution2and Decision3 of the Labor
Arbiter and the National Labor Relations Commission (NLRC), respectively,
dismissing petitioner Alberto P. Oxales' complaint for additional retirement
benefits, recovery of the cash equivalent of his unused sick leaves, damages,
and attorney's fees, against respondent United Laboratories, Inc. (UNILAB).

The Facts

Sometime in 1959, UNILAB established the United Retirement Plan

(URP).4 The plan is a comprehensive retirement program aimed at providing
for retirement, resignation, disability, and death benefits of its members. An
employee of UNILAB becomes a member of the URP upon his regularization
in the company. The URP mandates the compulsory retirement of any
member-employee who reaches the age of 60.

Both UNILAB and the employee contribute to the URP. On one hand, UNILAB
provides for the account of the employee an actuarially-determined amount
to Trust Fund A. On the other hand, the employee chips in 2' % of his
monthly salary to Trust Fund B. Upon retirement, the employee gets both
amounts standing in his name in Trust Fund A and Trust Fund B.

As retirement benefits, the employee receives (1) from Trust Fund A a lump
sum of 1' month's pay per year of service "based on the member's last or
terminal basic monthly salary,"5 and (2) whatever the employee has
contributed to Trust Fund B, together with the income minus any losses
incurred. The URP excludes commissions, overtime, bonuses, or extra
compensations in the computation of the basic salary for purposes of
retirement.
Oxales joined UNILAB on September 1, 1968. He was compulsorily retired by
UNILAB when he reached his 60th birthday on September 7, 1994, after
having rendered service of twenty-five (25) years, eleven (11) months, and
six (6) days. He was then Director of Manufacturing Services Group.

In computing the retirement benefits of Oxales based on the 1' months for
every year of service under the URP, UNILAB took into account only his basic
monthly salary. It did not include as part of the salary base the permanent
and regular bonuses, reasonable value of food allowances, 1/12 of the 13th
month pay, and the cash equivalent of service incentive leave.

Thus, Oxales received from Trust Fund A P1,599,179.00, instead

of P4,260,255.70. He also received P176,313.06, instead of P456,039.20 as
cash equivalent of his unused sick leaves. Lastly, he received P397,738.33
from his contributions to Trust Fund B. In sum, Oxales received the total
amount of P2,173,230.39 as his retirement benefits.

On August 21, 1997, Oxales wrote UNILAB, claiming that he should have
been paid P1,775,907.23 more in retirement pay and unused leave credits.
He insisted that his bonuses, allowances and 13th month pay should have
been factored in the computation of his retirement benefits.6

On September 9, 1997, UNILAB wrote7 back and reminded Oxales about the
provision of the URP excluding any commissions, overtime, bonuses or extra
compensations in the computation of the basic salary of the retiring
employee.

Disgruntled, Oxales filed a complaint with the Labor Arbiter for (1) the
correct computation of his retirement benefits, (2) recovery of the cash
equivalent of his unused sick leaves, (3) damages, and (4) attorney's fees.
He argued that in the computation of his retirement benefits, UNILAB should
have included in his basic pay the following, to wit: (a) cash equivalent of not
more than five (5) days service incentive leave; (b) 1/12th of 13th month
pay; and (c) all other benefits he has been receiving.

Efforts were exerted for a possible amicable settlement. As this proved futile,
the parties were required to submit their respective pleadings and position
papers.

Labor Arbiter, NLRC and CA Dispositions

On June 30, 1998, Labor Arbiter Romulus A. Protasio rendered a decision

dismissing the complaint, thus:

WHEREFORE, premises considered, judgment is hereby rendered dismissing

the instant complaint for lack of merit.
SO ORDERED.8

The Labor Arbiter held that the URP clearly excludes commission, overtime,
bonuses, or other extra compensation. Hence, the benefits asked by Oxales
to be included in the computation of his retirement benefits should be
excluded.9

The Arbiter also held that the inclusion of the fringe benefits claimed by
Oxales would put UNILAB in violation of the terms and conditions set forth by
the Bureau of Internal Revenue (BIR) when it approved the URP as a tax-
qualified plan. More, any overpayment of benefits would adversely affect the
actuarial soundness of the plan. It would also expose the trustees of the URP
to liabilities and prejudice the other employees. Worse, the BIR might even
withdraw the tax exemption granted to the URP.10 Lastly, the Labor Arbiter
opined that the URP precludes the application of the provisions of R.A. No.
7641.11

Oxales appealed to the NLRC. On February 8, 1999, the NLRC affirmed the
decision of the Labor Arbiter, disposing as follows:

WHEREFORE, in view thereof, the instant appeal is hereby dismissed for lack
of merit and the appealed decision is ordered affirmed.

SO ORDERED.12

The NLRC ruled that the interpretation by Oxales of R.A. No. 7641 is
selective. He only culled the provisions that are beneficial to him, putting in
grave doubt the sincerity of his motives. For instance, he claims that the
value of the food benefits and other allowances should be included in his
monthly salary as multiplicand to the number of his years of service with
UNILAB. At the same time, however, he does not intend to reduce the 1'
month salary as multiplier under the URP to - under R.A. No. 7641.13

The NLRC agreed with the Labor Arbiter that the provisions of R.A. No. 7641
do not apply in view of the URP. The NLRC also took into account the fact
that the benefits granted to Oxales by virtue of the URP was even higher
than what R.A. No. 7641 requires.14

His motion for reconsideration having been denied, Oxales filed with the CA a
petition forcertiorari under Rule 65.

In a decision promulgated on April 12, 2002, the CA dismissed the petition.

The CA ruled that the petition of Oxales calls for a review of the factual
findings of the Labor Arbiter as affirmed by the NLRC. It is not the normal
function of the CA in a special civil action for certiorari to inquire into the
correctness of the evaluation of the evidence by the Labor Arbiter. Its
authority is confined only to issues of jurisdiction or grave abuse of
discretion.15
Just like the Labor Arbiter and the NLRC, the CA also held that R.A. No. 7641
is applicable only in the absence of a retirement plan or agreement providing
for the retirement benefits of employees in an establishment.16

Finally, the CA denied the claim of Oxales to moral and exemplary damages.
According to the appellate court, he failed to prove the presence of bad faith
or fraud on the part of UNILAB. His mere allegations of having suffered
sleepless nights, serious anxiety, and mental anguish are not enough. No
premium should be placed on the right to litigate.17

Left with no other option, Oxales filed the present recourse under Rule 45 of
the 1997 Rules of Civil Procedure.18

Issues

In his Memorandum,19 Oxales raises the following issues for Our disposition,
to wit:

1. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

FINDING THAT ACCORDING TO PREVAILING JURISPRUDENCE, SUCH
ERRORS IN THE COMPUTATION OF RETIREMENT BENEFITS OF PETITIONER
SHOULD BE CORRECTED IN A SPECIAL ACTION FOR CERTIORARI;

2. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

FINDING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
INCORRECTLY INTERPRETING THE URP TO EXCLUDE SEVERAL
REMUNERATIONS FROM THE SAID SALARY BASE;

3. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED AND

COMMITTED GRAVE ABUSE OF DISCRETION IN TOTALLY IGNORING THE
ISSUE AND IN NOT FINDING THAT THE NLRC COMMITTED GRAVE ABUSE OF
DISCRETION IN INCORRECTLY INTERPRETING THE URP TO EXCLUDE
PERMANENT AND REGULAR ALLOWANCES FROM THE SALARY BASE FOR
COMPUTING RETIREMENT BENEFITS OF PETITIONER;

4. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

FINDING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
INCORRECTLY INTERPRETING THE URP TO EXCLUDE PERMANENT AND
REGULAR REMUNERATIONS MISLABELED AS BONUSES FROM THE SALARY
BASE FOR COMPUTING THE RETIREMENT BENEFITS OF THE PETITIONER;

5. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT FINDING THAT

THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN INCORRECTLY
INTERPRETING THE URP TO EXCLUDE ONE TWELFTH (1/12th) OF THE
STATUTORY THIRTEENTH MONTH PAY FROM THE SALARY BASE FOR
COMPUTING RETIREMENT BENEFITS;
6. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN THE
INTERPRETATION OF R.A. NO. 7641 WHEN IT CONCLUDED THAT THE SAID
LAW IS APPLICABLE ONLY IN THE ABSENCE OF RETIREMENT PLAN OR
AGREEMENT PROVIDING FOR THE RETIREMENT BENEFITS OF EMPLOYEES IN
AN ESTABLISHMENT;

7. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

FINDING THAT THE DEFINITION OF "SALARY" UNDER THE IMPLEMENTING
RULES OF R.A. NO. 7641 SHOULD BE INTERPRETED TO INCLUDE THE
PERMANENT AND REGULAR REMUNERATIONS OF PETITIONER IN THE
SALARY BASE FOR COMPUTING RETIREMENT BENEFITS;

8. WHETHER OR NOT THE LABOR ARBITER, THE NLRC, AND COURT OF

APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN IGNORING AND
NOT RESOLVING THE ISSUES REGARDING PETITIONER'S UNPAID CASH
EQUIVALENT OF THE UNUSED SICK LEAVE CREDITS;

9. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

RULING THAT THE NLRC GRAVELY ABUSED ITS DISCRETION IN ITS FAILURE
TO PROPERLY INTERPRET THE URP IN DETERMINING THE EMPLOYMENT
PERIOD OF PETITIONER FOR THE PURPOSE OF COMPUTING RETIREMENT
BENEFITS;

10. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

RULING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN NOT
REINSTATING THE MEDICAL RETIREMENT BENEFITS OF PETITIONER;

11. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED AND

GRAVELY ABUSED ITS DISCRETION IN TOTALLY AND ARBITRARILY
IGNORING THE ISSUE AND IN NOT FINDING THAT THE NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN RENDERING A DECISION IN VIOLATION
OF THE CONSTITUTIONAL REQUIREMENTS WHICH IN EFFECT DENIED
PETITIONER'S RIGHT TO DUE PROCESS;

12. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED AND

GRAVELY ABUSED ITS DISCRETION IN LIKEWISE RENDERING A DECISION
IN VIOLATION OF THE CONSTITUTIONAL REQUIREMENT THAT DECISIONS
SHOULD EXPRESS CLEARLY AND DISTINCTLY THE FACTS OF THE CASE AND
THE LAW ON WHICH IT IS BASED;

13. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN NOT

GRANTING MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES TO
PETITIONER;

14. WHETHER OR NOT THE SUPREME COURT SHOULD GRANT PETITIONER

UNPAID RETIREMENT PAY, UNPAID CASH EQUIVALENT OF UNUSED LEAVE
CREDITS, REINSTATEMENT OF MEDICAL BENEFITS, MORAL AND EXEMPLARY
DAMAGES, AND ATTORNEY'S FEES.20(Underscoring supplied)cralawlibrary
The issues posed by Oxales may be compressed as follows: first, whether in
the computation of his retirement and sick leave benefits, UNILAB should
have factored such benefits like bonuses, cash and meal allowances, rice
rations, service incentive leaves, and 1/12 of the 13th month pay; second,
whether R.A. No. 7641 is applicable for purposes of computing his retirement
benefits; and third, whether UNILAB is liable for moral damages, exemplary
damages, and attorney's fees.

Our Ruling

The clear language of the URP should be respected.

A retirement plan in a company partakes the nature of a contract, with the

employer and the employee as the contracting parties. It creates a
contractual obligation in which the promise to pay retirement benefits is
made in consideration of the continued faithful service of the employee for
the requisite period.21

The employer and the employee may establish such stipulations, clauses,
terms, and conditions as they may deem convenient.22In Allgeyer v.
Louisiana,23 New York Life Ins. Co. v. Dodge,24Coppage v. Kansas,25 Adair v.
United States,26 Lochner v. New York,27 and Muller v. Oregon,28 the United
States Supreme Court held that the right to contract about one's affair is part
and parcel of the liberty of the individual which is protected by the "due
process of law" clause of the Constitution.

The obligations arising from the agreement between the employer and the
employee have the force of law between them and should be complied with
in good faith.29 However, though the employer and the employee are given
the widest latitude possible in the crafting of their contract, such right is not
absolute. There is no such thing as absolute freedom of contract. A limitation
is provided for by the law itself. Their stipulations, clauses, terms, and
conditions should not be contrary to law, morals, good customs, public order,
or public policy.30 Indeed, the law respects the freedom to contract but, at
the same time, is very zealous in protecting the contracting parties and the
public in general. So much so that the contracting parties need not
incorporate the existing laws in their contract, as the law is deemed written
in every contract. Quando abest, proviso parties, adest proviso legis. When
the provision of the party is lacking, the provision of the law supplies
it. Kung may kulang na kondisyon sa isang kasunduan, ang batas ang
magdaragdag dito.

Viewed from the foregoing, We rule that Oxales is not entitled to the
additional retirement benefits he is asking. The URP is very clear: "basic
monthly salary" for purposes of computing the retirement pay is "the basic
monthly salary, or if daily[,] means the basic rate of pay converted to basic
monthly salary of the employee excluding any commissions, overtime,
bonuses, or extra compensations."31 Inclusio unius est exclusio alterius. The
inclusion of one is the exclusion of others. Ang pagsama ng isa, pagpwera
naman sa iba.

The URP is not contrary to law, morals, good customs, public order, or public
policy to merit its nullification. We, thus, sustain it. At first blush, the URP
seems to be disadvantageous to the retiring employee because of the
exclusion of commissions, overtime, bonuses, or extra compensations in the
computation of the basic monthly salary. However, a close reading of its
provisions would reveal otherwise. We quote with approval the explanation of
the NLRC in this regard, viz.:

x x x the United Retirement Plan of the respondent [Unilab] has a one and
one-half months salary for every year of service as the basis of entitlement.
Under the new law, only one-half month of the retiree's salary inclusive
however, of not more than five (5) days of service incentive leave and one-
twelfth (1/12) of the 13th month pay are used as the bases in the retirement
benefits computation.

Mathematically speaking therefore, complainant's[Oxales] benefits received

amounting to P1,599,179.00 under Trust Fund A together with the cash
equivalent of his unused leaves which has an amount of P176,313.06 and his
contribution in the Trust Fund B amounting to P397,738.33 are way above
the entitlement he could have received under Republic Act 7641, otherwise
known as the New Retirement Law.32 (Underscoring supplied)cralawlibrary

Both law33 and jurisprudence34 mandate that if the terms of a contract are
clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control. Thus, if the terms of a writing
are plain and unambiguous, there is no room for construction, since the only
purpose of judicial construction is to remove doubt and uncertainty.35 Only
where the language of a contract is ambiguous and uncertain that a court
may, under well-established rules of construction, interfere to reach a proper
construction and make certain that which in itself is uncertain.36Where the
language of a contract is plain and unambiguous, its meaning should be
determined without reference to extrinsic facts or aids.37

R.A. No. 7641 does not apply in view of the URP which gives to the
retiring employee more than what the law requires; the supporting
cases cited by Oxales are off-tangent.

R.A. No. 7641, otherwise known as "The Retirement Pay Law," only applies in
a situation where (1) there is no collective bargaining agreement or other
applicable employment contract providing for retirement benefits for an
employee; or (2) there is a collective bargaining agreement or other
applicable employment contract providing for retirement benefits for an
employee, but it is below the requirements set for by law. The reason for
the first situation is to prevent the absurd situation where an employee, who
is otherwise deserving, is denied retirement benefits by the nefarious scheme
of employers in not providing for retirement benefits for their employees. The
reason for the second situation is expressed in the latin maxim pacta privata
juri publico derogare non possunt. Private contracts cannot derogate from
the public law. Ang kasunduang pribado ay hindi makasisira sa batas publiko.
Five (5) reasons support this conclusion.

First, a plain reading of the Retirement Pay Law. R.A. No. 7641 originated
from the House of Representatives as House Bill 317 which was later
consolidated with Senate Bill 132. It was approved on December 9, 1992 and
took effect on January 7, 1993.38 Amending Article 287 of the Labor Code, it
provides as follows:

Art. 287. Retirement. - Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract.

In case of retirement, the employee shall be entitled to receive such

retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements: Provided, however,
that an employee's retirement benefits under any collective bargaining and
other agreements shall not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement

benefits of employees in the establishment, an employee upon reaching the
age of sixty (60) years or more, but not beyond sixty-five (65) years which is
hereby declared the compulsory retirement age, who has served at least five
(5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every
year of service, a fraction of at least six (6) months being considered as one
whole year.

Unless the parties provide for broader inclusions, the term 'one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th
month pay and the cash equivalent of not more than five (5) days of service
incentive leaves. (Underscoring supplied)cralawlibrary

Second, the legislative history of the Retirement Pay Law. It may be recalled
that R.A. No. 7641 traces back its history in the case of Llora Motors, Inc. v.
Drilon.39 In this case, the Court held that the then Article 287 of the Labor
Code40 and its Implementing Rules41 may not be the source of an employee's
entitlement to retirement pay absent the presence of a collective bargaining
agreement or voluntary company policy that provides for retirement benefits
for the employee.42

Third, the legislative intent of the Retirement Pay Law. A reading of the
explanatory note of Representative Alberto S. Veloso would show why
Congress sought to pass the Retirement Pay Law: many employers refuse or
neglect to adopt a retirement plan for their employees because of the
absence of any legal compulsion for them to do so, thus:

When the Labor Code came into effect in 1974, retirement pay had, as a
matter of course, been granted to employees in the private sector when they
reach the age of sixty (60) years. This had practically been the rule observed
by employers in the country pursuant to the rules and regulations issued by
the then Minister of Labor and Employment to implement the provisions of
the Labor Code, more particularly, where there is no provision for the same
in the collective bargaining agreement or retirement plan of the
establishment.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

At present, however, such benefit of retirement pay is no longer available

where there is no collective agreement thereon or any retirement plan at all.
This is so because, in a decision of the Supreme Court (Llora Motors v. Drilon
and NLRC, et al., G.R. No. 82895, November 7, 1989), it was held that the
grant of such benefit under the rules implementing the Labor Code is not
supported by any express provision of the Labor Code itself. In short, there is
no specific statutory basis for the grant of retirement benefits for employees
in the private sector reaching the age of 60 years.

Since the time of such nullification by the Supreme Court of said

implementing rules on retirement pay for private sector employees, many
employers simply refuse or neglect to adopt any retirement plan for their
workers, obviously emboldened by the thought that, after said ruling, there
is no longer any legal compulsion to grant such retirement benefits. In our
continuous quest to promote social justice, unfair situations like this,
productive of grievance or irritants in the labor-management relations, must
immediately be corrected or remedied by legislation. (Underscoring
supplied)cralawlibrary

Fourth, the title of the Retirement Pay Law. The complete title of R.A. No.
7641 is "An Act Amending Article 287 of Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the Philippines, By
Providing for Retirement Pay to Qualified Private Sector in the Absence of
Any Retirement Plan in the Establishment." Res ipsa loquitur. The thing
speaks for itself.Isang bagay na nangungusap na sa kanyang sarili.

Fifth, jurisprudence. In Oro Enterprises, Inc. v. National Labor Relations

Commission,43 the Court held that R.A. No. 7641 "is undoubtedly a social
legislation. The law has been enacted as a labor protection measure and as a
curative statute that - absent a retirement plan devised by, an agreement
with, or a voluntary grant from, an employer - can respond, in part at least,
to the financial well-being of workers during their twilight years soon
following their life of labor."44

In Pantranco North Express, Inc. v. National Labor Relations

Commission,45 the Court held that Article 287 of the Labor Code "makes clear
the intention and spirit of the law to give employers and employees a free
hand to determine and agree upon the terms and conditions of
retirement,"46 and that the law "presumes that employees know what they
want and what is good for them absent any showing that fraud or
intimidation was employed to secure their consent thereto."47

Lastly, in Brion v. South Philippine Union Mission of the Seventh Day

Adventist Church,48 the Court ruled that a reading of Article 287 of the Labor
Code would reveal that the "employer and employee are free to stipulate on
retirement benefits, as long as these do not fall below floor limits provided by
law."49

We are aware of the several cases cited by Oxales to support his claim that
the computation of his retirement benefits should not have been limited to
the basic monthly salary as defined by the URP. However, these cases
negate, rather than support, his claim.

In Villena v. National Labor Relations Commission,50 the "compulsory

retirement" of Villena was, in fact, an illegal dismissal in disguise. Thus, the
Court ordered the Batangas, Laguna, Tayabas Bus Co. to pay Villena "his full
backwages, allowances, and other benefits for a period of three (3) years
after his illegal dismissal on April 24, 1987, until he reached the compulsory
retirement age plus his retirement benefits equivalent to his gross monthly
pay, allowances and other benefits for every year of service up to age sixty
(60), which is the normal retirement age for him."51

The distinction between Villena with the instant case is readily apparent. The
Court used the regular compensation of Villena in computing his retirement
benefits because the provision of the CBA for rank-and-file employees is
inapplicable to him, being a managerial employee. The Villena case was also
decided before the passage of R.A. No. 7641.

In Planters Products, Inc. v. National Labor Relations Commission,52 the

petitioning employees were given termination benefits based on their basic
salary. However, Planters Products, Inc. had integrated the allowances of its
remaining employees into their basic salary. Thus, it was the basic salary
that increased. Also, it was the basic salary as increased (not the basic salary
and allowances) which still formed the basis for the computation of the
termination benefits of the remaining employees of the company. The Court
held that fairness demanded that the terminated employees receive the
same treatment.53 Clearly, such situation is absent here.

In Manuel L. Quezon University v. National Labor Relations Commission,54 the

issue raised was whether respondents are entitled to the retirement benefits
provided for under R.A. No. 7641, even if petitioner has an existing valid
retirement plan. The Court held that the coverage of the law "applies to
establishments with existing collective bargaining or other agreements or
voluntary retirement plans whose benefits are less than those prescribed
under the proviso in question."55

Admittedly, this Court held in the case of Songco v. National Labor Relations
Commission56 that not only the basic salary but also the "allowances" (like
transportation and emergency living allowances) and "earned sales
commissions" should be taken into consideration in computing the
backwages and separation pay of the employee. However, a closer
examination of the case would show that the CBA57 between Zuellig and F.E.
Zuellig Employees Association, in which Songco was a member, did not
contain an explicit definition of what salary is. Neither was there any
inclusions or exclusions in the determination of the salary of the employee.
Here, the URP has an explicit provision excluding any commissions, overtime,
bonuses, or extra compensations for purposes of computing the basic salary
of a retiring employee. Too, the Songco case was decided before the passage
of R.A. No. 7641.

Clearly then, R.A. No. 7641 does not apply because the URP grants to the
retiring employee more than what the law gives. Under the URP, the
employee receives a lump sum of 1' pay per year of service, compared to the
minimum - month salary for every year of service set forth by R.A. No. 7641.

Oxales is trying to have the best of both worlds. He wants to have his cake
and eat it too: the 1' months formula under the URP, and the inclusion of the
value of food benefits and other allowances he was entitled to as employee of
UNILAB with his monthly salary as the multiplicand of his number of years in
the service. This he should not be permitted to do, lest a grave injustice is
caused to UNILAB, and its past and future retirees.

We agree with the NLRC observation on this score:

As an illustration, Complainant claims that his monthly salary as the

multiplicand of his number of years in the service should include the value of
the food benefits and other allowances he was entitled while in the employ of
respondent. However, he did not even, by implication, intend to reduce the 1'
month salary as multiplier under the URP to - under the law he invoked. This
is a sign of covetousness, unfair both to the employer and those employees
who have earlier retired under said plan.58

Oxales is not entitled to the reinstatement of his medical benefits,

which are not part of the URP. Corollarily, he is not also entitled to
moral damages, exemplary damages, and attorney's fees.

Oxales claims that UNILAB unilaterally revoked his medical benefits, causing
him humiliation and anxiety. This, he argues, entitles him to moral damages,
exemplary damages, plus attorney's fees.
We cannot agree. The records bear out that after Oxales retired from
UNILAB, he chose to join a rival company, Lloyds Laboratories, Inc. As
UNILAB correctly puts it, "[i]f any employer can legally and validly do the
supreme act of dismissing a disloyal employee for having joined or
sympathized with a rival company, with more reason may it do the lesser act
of merely discontinuing a benefit unilaterally given to an already-retired
employee."59 As a retired employee, Oxales may not claim a vested right on
these medical benefits. A careful examination of the URP would show that
medical benefits are not included in the URP.

Indeed, while there is nothing wrong in the act of Oxales in joining a rival
company after his retirement, justice and fair play would dictate that by
doing so, he cannot now legally demand the continuance of his medical
benefits from UNILAB. To rule otherwise would result in an absurd situation
where Oxales would continue to receive medical benefits from UNILAB while
working in a rival company. We note that these medical benefits are merely
unilaterally given by UNILAB to its retired employees.

We are not unaware of this Court's pronouncement in Brion v. South

Philippine Union Mission of the Seventh Day Adventist Church.60 However,
Oxales' plight differs from Brion because the URP does not expressly cover
medical benefits to retirees. In contrast, the retired employee in Brion had
acquired a vested right to the withheld benefits.

The claim of Oxales to moral damages, exemplary damages, and attorney's

fees must also be denied for want of basis in law or jurisprudence. On this
score, We echo the pronouncement of the Court in Audion v. Electric Co.,
Inc. v. National Labor Relations Commission,61 to wit:

Moral and exemplary damages are recoverable only where the dismissal of
an employee was attended by bad faith or fraud, or constituted an act
oppressive to labor, or was done in a manner contrary to morals, good
customs or public policy. The person claiming moral damages must prove the
existence of bad faith by clear and convincing evidence for the law always
presumes good faith. It is not enough that one merely suffered sleepless
nights, mental anguish, serious anxiety as the result of the actuations of the
other party. Invariably, such action must be shown to have been willfully
done in bad faith or with ill motive, and bad faith or ill motive under the law
cannot be presumed but must be established with clear and convincing
evidence. Private respondent predicated his claim for such damages on his
own allegations of sleepless
nights and mental anguish, without establishing bad faith, fraud or ill motive
as legal basis therefor.

Private respondent not being entitled to award of moral damages, an award

of exemplary damages is likewise baseless. Where the award of moral and
exemplary damages is eliminated, so must the award for attorney's fees be
deleted. Private respondent has not shown that he is entitled thereto
pursuant to Art. 2208 of the Civil Code.62 (Citations
omitted) chanroblesvirtuallawlibrary

Here, there was no dismissal, as Oxales was retired by UNILAB by virtue of

the URP. He was also paid his complete retirement benefits.

Epilogue

It is not disputed that Oxales has worked tirelessly for UNILAB. For one
thing, he has spent a considerable amount of years with the company. For
another, he has contributed much to its growth and expansion. However,
even as We empathize with him in his time of great need, it behooves Us to
interpret the law according to what it mandates.

We reiterate the time-honored principle that the law, in protecting the rights
of the laborer, authorizes neither oppression nor self-destruction of the
employer. While the Constitution is committed to the policy of social justice
and the protection of the working class, management also has its own rights,
which are entitled to respect and enforcement in the interest of fair play. Out
of its concern for those with less privilege in life, this Court has inclined more
often than not toward the employee and upheld his cause with his conflicts
with the employer. Such favorable treatment, however, has not blinded the
Court to rule that justice is in every case for the deserving. Justice should be
dispensed in the light of the established facts and applicable law and
doctrine.63

WHEREFORE, the appealed Decision is AFFIRMED. No costs.

SO ORDERED.

G.R. No. 180363 April 28, 2009

EDGAR Y. TEVES, Petitioner,

vs.
THE COMMISSION ON ELECTIONS and HERMINIO G. TEVES, Respondents.

DECISION

YNARES-SANTIAGO, J.:

The issue for resolution is whether the crime of which petitioner Edgar Y. Teves was
convicted in Teves v. Sandiganbayan1 involved moral turpitude.

The facts of the case are undisputed.

Petitioner was a candidate for the position of Representative of the 3rd legislative district
of Negros Oriental during the May 14, 2007 elections. On March 30, 2007, respondent
Herminio G. Teves filed a petition to disqualify2petitioner on the ground that in Teves v.
Sandiganbayan,3 he was convicted of violating Section 3(h), Republic Act (R.A.) No.
3019, or the Anti-Graft and Corrupt Practices Act, for possessing pecuniary or financial
interest in a cockpit, which is prohibited under Section 89(2) of the Local Government
Code (LGC) of 1991, and was sentenced to pay a fine of P10,000.00. Respondent
alleged that petitioner is disqualified from running for public office because he was
convicted of a crime involving moral turpitude which carries the accessory penalty of
perpetual disqualification from public office.4 The case was docketed as SPA No. 07-242
and assigned to the COMELEC’s First Division.

On May 11, 2007, the COMELEC First Division disqualified petitioner from running for
the position of member of House of Representatives and ordered the cancellation of his
Certificate of Candidacy.5

Petitioner filed a motion for reconsideration before the COMELEC en banc which was
denied in its assailed October 9, 2007 Resolution for being moot, thus:

It appears, however, that [petitioner] lost in the last 14 May 2007 congressional elections
for the position of member of the House of Representatives of the Third district of
Negros Oriental thereby rendering the instant Motion for Reconsideration moot and
academic.

WHEREFORE, in view of the foregoing, the Motion for Reconsideration dated 28 May
2007 filed by respondent Edgar Y. Teves challenging the Resolution of this Commission
(First Division) promulgated on 11 May 2007 is hereby DENIED for having been
rendered moot and academic.

SO ORDERED.6

Hence, the instant petition based on the following grounds:

I.
THERE WAS ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESS OF
JURISDICTION, WHEN THE COMELEC EN BANC DEMURRED IN RESOLVING THE
MAIN ISSUE RAISED IN PETITIONER’S MOTION FOR RECONSIDERATION,
WHETHER PETITIONER IS DISQUALIFIED TO RUN FOR PUBLIC OFFICE TAKING
INTO CONSIDERATION THE DECISION OF THE SUPREME COURT IN G.R. NO.
154182.

II.

THE MAIN ISSUE IS NOT RENDERED MOOT AND ACADEMIC AS THE

RESOLUTION THEREOF WILL DETERMINE PETITIONER’S QUALIFICATION TO
RUN FOR OTHER PUBLIC POSITIONS IN FUTURE ELECTIONS.

III.

THERE WAS ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESS OF

JURISDICTION, WHEN THE COMELEC EN BANC IN EFFECT AFFIRMED THE
FINDINGS OF THE FIRST DIVISION WHICH RULED THAT PETITIONER’S
CONVICTION FOR VIOLATION OF SECTION 3(H) OF R.A. 3019 AND THE
IMPOSITION OF FINE IS A CONVICTION FOR A CRIME INVOLVING MORAL
TURPITUDE.

A.

THE ISSUE OF WHETHER PETITIONER WAS CONVICTED OF A CRIME INVOLVING

MORAL TURPITUDE SHOULD BE RESOLVED TAKING INTO CONSIDERATION THE
FINDINGS OF THE SUPREME COURT IN G.R. NO. 154182.

B.

THERE IS NOTHING IN THE DECISION OF THE SUPREME COURT THAT

SUPPORTS THE FINDINGS OF THE FIRST DIVISION OF THE COMELEC, THAT
BASED ON THE "TOTALITY OF FACTS" DOCTRINE, PETITIONER WAS CONVICTED
OF A CRIME INVOLVING MORAL TURPITUDE.7

The petition is impressed with merit.

The fact that petitioner lost in the congressional race in the May 14, 2007 elections did
not effectively moot the issue of whether he was disqualified from running for public
office on the ground that the crime he was convicted of involved moral turpitude. It is still
a justiciable issue which the COMELEC should have resolved instead of merely
declaring that the disqualification case has become moot in view of petitioner’s defeat.

Further, there is no basis in the COMELEC’s findings that petitioner is eligible to run
again in the 2010 elections because his disqualification shall be deemed removed after
the expiration of a period of five years from service of the sentence. Assuming that the
elections would be held on May 14, 2010, the records show that it was only on May 24,
2005 when petitioner paid the fine of P10,000.00 he was sentenced to pay in Teves v.
Sandignbayan.8 Such being the reckoning point, thus, the five-year disqualification
period will end only on May 25, 2010. Therefore he would still be ineligible to run for
public office during the May 14, 2010 elections.

Hence, it behooves the Court to resolve the issue of whether or not petitioner’s violation
of Section 3(h), R.A. No. 3019 involves moral turpitude.1avvphi1

Section 12 of the Omnibus Election Code reads:

Sec. 12. Disqualifications. - Any person who has been declared by competent authority
insane or incompetent, or has been sentenced by final judgment for subversion,
insurrection, rebellion, or for any offense for which he has been sentenced to a penalty
of more than eighteen months, or for a crime involving moral turpitude, shall be
disqualified to be a candidate and to hold any office, unless he has been given plenary
pardon or granted amnesty.lawphil.net

The disqualifications to be a candidate herein provided shall be deemed removed upon

the declaration by competent authority that said insanity or incompetence had been
removed or after the expiration of a period of five years from his service of sentence,
unless within the same period he again becomes disqualified. (Emphasis supplied)

Moral turpitude has been defined as everything which is done contrary to justice,
modesty, or good morals; an act of baseness, vileness or depravity in the private and
social duties which a man owes his fellowmen, or to society in general.9

Section 3(h) of R.A. 3019 of which petitioner was convicted, reads:

Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of public

officers already penalized by existing law, the following shall constitute corrupt practices
of any public officer and are hereby declared to be unlawful:

xxxx

(h) Directly or indirectly having financial or pecuniary interest in any business, contract or
transaction in connection with which he intervenes or takes part in his official capacity, or
in which he is prohibited by the Constitution or by any law from having any interest.

The essential elements of the violation of said provision are as follows: 1) The accused
is a public officer; 2) he has a direct or indirect financial or pecuniary interest in any
business, contract or transaction; 3) he either: a) intervenes or takes part in his official
capacity in connection with such interest, or b) is prohibited from having such interest by
the Constitution or by law.10

Thus, there are two modes by which a public officer who has a direct or indirect financial
or pecuniary interest in any business, contract, or transaction may violate Section 3(h) of
R.A. 3019. The first mode is when the public officer intervenes or takes part in his official
capacity in connection with his financial or pecuniary interest in any business, contract,
or transaction. The second mode is when he is prohibited from having such an interest
by the Constitution or by law.11
In Teves v. Sandiganbayan,12 petitioner was convicted under the second mode for
having pecuniary or financial interest in a cockpit which is prohibited under Sec. 89(2) of
the Local Government Code of 1991. The Court held therein:

However, the evidence for the prosecution has established that petitioner Edgar Teves,
then mayor of Valencia, Negros Oriental, owned the cockpit in question. In his sworn
application for registration of cockpit filed on 26 September 1983 with the Philippine
Gamefowl Commission, Cubao, Quezon City, as well as in his renewal application dated
6 January 1989 he stated that he is the owner and manager of the said cockpit. Absent
any evidence that he divested himself of his ownership over the cockpit, his ownership
thereof is rightly to be presumed because a thing once proved to exist continues as long
as is usual with things of that nature. His affidavit dated 27 September 1990 declaring
that effective January 1990 he "turned over the management of the cockpit to Mrs.
Teresita Z. Teves for the reason that [he] could no longer devote a full time as manager
of the said entity due to other work pressure" is not sufficient proof that he divested
himself of his ownership over the cockpit. Only the management of the cockpit was
transferred to Teresita Teves effective January 1990. Being the owner of the cockpit, his
interest over it was direct.

Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his
wife, still he would have a direct interest thereon because, as correctly held by
respondent Sandiganbayan, they remained married to each other from 1983 up to 1992,
and as such their property relation can be presumed to be that of conjugal partnership of
gains in the absence of evidence to the contrary. Article 160 of the Civil Code provides
that all property of the marriage is presumed to belong to the conjugal partnership unless
it be proved that it pertains exclusively to the husband or to the wife. And Section 143 of
the Civil Code declares all the property of the conjugal partnership of gains to be owned
in common by the husband and wife. Hence, his interest in the Valencia Cockpit is direct
and is, therefore, prohibited under Section 89(2) of the LGC of 1991, which reads:

Section 89. Prohibited Business and Pecuniary Interest. – (a) It shall be unlawful for any
local government official or employee, directly or indirectly, to:

xxxx

(2) Hold such interests in any cockpit or other games licensed by a local government
unit…. [Emphasis supplied].

The offense proved, therefore, is the second mode of violation of Section 3(h) of the
Anti-Graft Law, which is possession of a prohibited interest.13

However, conviction under the second mode does not automatically mean that the same
involved moral turpitude. A determination of all surrounding circumstances of the
violation of the statute must be considered. Besides, moral turpitude does not include
such acts as are not of themselves immoral but whose illegality lies in their being
positively prohibited, as in the instant case.

Thus, in Dela Torre v. Commission on Elections,14 the Court clarified that:

Not every criminal act, however, involves moral turpitude. It is for this reason that "as to
what crime involves moral turpitude, is for the Supreme Court to determine." In resolving
the foregoing question, the Court is guided by one of the general rules that crimes mala
in se involve moral turpitude, while crimes mala prohibita do not, the rationale of which
was set forth in "Zari v. Flores," to wit:

"It (moral turpitude) implies something immoral in itself, regardless of the fact that it is
punishable by law or not. It must not be merely mala prohibita, but the act itself must be
inherently immoral. The doing of the act itself, and not its prohibition by statute fixes the
moral turpitude. Moral turpitude does not, however, include such acts as are not of
themselves immoral but whose illegality lies in their being positively prohibited."

This guideline nonetheless proved short of providing a clear-cut solution, for in

"International Rice Research Institute v. NLRC, the Court admitted that it cannot always
be ascertained whether moral turpitude does or does not exist by merely classifying a
crime as malum in se or as malum prohibitum. There are crimes which are mala in se
and yet but rarely involve moral turpitude and there are crimes which involve moral
turpitude and are mala prohibita only. In the final analysis, whether or not a crime
involves moral turpitude is ultimately a question of fact and frequently depends on all the
circumstances surrounding the violation of the statute. (Emphasis supplied)1awphi1

Applying the foregoing guidelines, we examined all the circumstances surrounding

petitioner’s conviction and found that the same does not involve moral turpitude.

First, there is neither merit nor factual basis in COMELEC’s finding that petitioner used
his official capacity in connection with his interest in the cockpit and that he hid the same
by transferring the management to his wife, in violation of the trust reposed on him by
the people.

The COMELEC, in justifying its conclusion that petitioner’s conviction involved moral
turpitude, misunderstood or misapplied our ruling in Teves v. Sandiganbayan. According
to the COMELEC:

In the present case, while the crime for which [petitioner] was convicted may per se not
involve moral turpitude, still the totality of facts evinces [his] moral turpitude. The
prohibition was intended to avoid any conflict of interest or any instance wherein the
public official would favor his own interest at the expense of the public interest. The
[petitioner] knew of the prohibition but he attempted to circumvent the same by holding
out that the Valencia Cockpit and Recreation Center is to be owned by a certain Daniel
Teves. Later on, he would aver that he already divested himself of any interest of the
cockpit in favor of his wife. But the Supreme Court saw through the ruse and declared
that what he divested was only the management of the cockpit but not the ownership.
And even if the ownership is transferred to his wife, the respondent would nevertheless
have an interest thereon because it would still belong to the conjugal partnership of
gains, of which the [petitioner] is the other half.

[Petitioner] therefore maintained ownership of the cockpit by deceit. He has the duty to
divest himself but he did not and instead employed means to hide his interests. He knew
that it was prohibited he nevertheless concealed his interest thereon. The facts that he
hid his interest denotes his malicious intent to favor self-interest at the expense of the
public. Only a man with a malevolent, decadent, corrupt and selfish motive would cling
on and conceal his interest, the acquisition of which is prohibited. This plainly shows his
moral depravity and proclivity to put primacy on his self interest over that of his
fellowmen. Being a public official, his act is also a betrayal of the trust reposed on him by
the people. Clearly, the totality of his acts is contrary to the accepted rules of right and
duty, honesty and good morals. The crime, as committed by the [petitioner], plainly
involves moral turpitude.15

On the contrary, the Court’s ruling states:

The Sandiganbayan found that the charge against Mayor Teves for causing the
issuance of the business permit or license to operate the Valencia Cockpit and
Recreation Center is "not well-founded." This it based, and rightly so, on the additional
finding that only the Sangguniang Bayan could have issued a permit to operate the
Valencia Cockpit in the year 1992. Indeed, under Section 447(3) of the LGC of 1991,
which took effect on 1 January 1992, it is the Sangguniang Bayan that has the authority
to issue a license for the establishment, operation, and maintenance of cockpits. Unlike
in the old LGC, Batas Pambansa Blg. 337, wherein the municipal mayor was the
presiding officer of the Sangguniang Bayan, under the LGC of 1991, the mayor is not so
anymore and is not even a member of the Sangguniang Bayan. Hence, Mayor Teves
could not have intervened or taken part in his official capacity in the issuance of a
cockpit license during the material time, as alleged in the information, because he was
not a member of the Sangguniang Bayan.16

Thus, petitioner, as then Mayor of Valencia, did not use his influence, authority or power
to gain such pecuniary or financial interest in the cockpit. Neither did he intentionally
hide his interest in the subject cockpit by transferring the management thereof to his wife
considering that the said transfer occurred before the effectivity of the present LGC
prohibiting possession of such interest.

As aptly observed in Teves v. Sandiganbayan:

As early as 1983, Edgar Teves was already the owner of the Valencia Cockpit. Since
then until 31 December 1991, possession by a local official of pecuniary interest in a
cockpit was not yet prohibited. It was before the effectivity of the LGC of 1991, or on
January 1990, that he transferred the management of the cockpit to his wife Teresita. In
accordance therewith it was Teresita who thereafter applied for the renewal of the
cockpit registration. Thus, in her sworn applications for renewal of the registration of the
cockpit in question dated 28 January 1990 and 18 February 1991, she stated that she is
the Owner/Licensee and Operator/Manager of the said cockpit. In her renewal
application dated 6 January 1992, she referred to herself as the Owner/Licensee of the
cockpit. Likewise in the separate Lists of Duly Licensed Personnel for Calendar Years
1991 and 1992, which she submitted on 22 February 1991 and 17 February 1992,
respectively, in compliance with the requirement of the Philippine Gamefowl Commission
for the renewal of the cockpit registration, she signed her name as
Operator/Licensee.17 (Emphasis supplied)

Second, while possession of business and pecuniary interest in a cockpit licensed by the
local government unit is expressly prohibited by the present LGC, however, its illegality
does not mean that violation thereof necessarily involves moral turpitude or makes such
possession of interest inherently immoral. Under the old LGC, mere possession by a
public officer of pecuniary interest in a cockpit was not among the prohibitions. Thus, in
Teves v. Sandiganbayan, the Court took judicial notice of the fact that:

x x x under the old LGC, mere possession of pecuniary interest in a cockpit was not
among the prohibitions enumerated in Section 41 thereof. Such possession became
unlawful or prohibited only upon the advent of the LGC of 1991, which took effect on 1
January 1992. Petitioner Edgar Teves stands charged with an offense in connection with
his prohibited interest committed on or about 4 February 1992, shortly after the maiden
appearance of the prohibition. Presumably, he was not yet very much aware of the
prohibition. Although ignorance thereof would not excuse him from criminal liability, such
would justify the imposition of the lighter penalty of a fine of P10,000 under Section 514
of the LGC of 1991.18 (Italics supplied)

The downgrading of the indeterminate penalty of imprisonment of nine years and twenty-
one days as minimum to twelve years as maximum to a lighter penalty of a fine of
P10,000.00 is a recognition that petitioner’s violation was not intentionally done contrary
to justice, modesty, or good morals but due to his lack of awareness or ignorance of the
prohibition.

Lastly, it may be argued that having an interest in a cockpit is detrimental to public

morality as it tends to bring forth idlers and gamblers, hence, violation of Section 89(2) of
the LGC involves moral turpitude.

Suffice it to state that cockfighting, or sabong in the local parlance, has a long and
storied tradition in our culture and was prevalent even during the Spanish
occupation.19 While it is a form of gambling, the morality thereof or the wisdom in
legalizing it is not a justiciable issue. In Magtajas v. Pryce Properties Corporation, Inc., it
was held that:

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it
is generally considered inimical to the interests of the people, there is nothing in the
Constitution categorically proscribing or penalizing gambling or, for that matter, even
mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the
exercise of its own discretion, the legislature may prohibit gambling altogether or allow it
without limitation or it may prohibit some forms of gambling and allow others for
whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte
but permits lotteries, cockfighting and horse-racing. In making such choices, Congress
has consulted its own wisdom, which this Court has no authority to review, much less
reverse. Well has it been said that courts do no sit to resolve the merits of conflicting
theories. That is the prerogative of the political departments. It is settled that questions
regarding the wisdom, morality, or practicability of statutes are not addressed to the
judiciary but may be resolved only by the legislative and executive departments, to which
the function belongs in our scheme of government. That function is exclusive. Whichever
way these branches decide, they are answerable only to their own conscience and the
constituents who will ultimately judge their acts, and not to the courts of justice.

WHEREFORE, the petition is GRANTED. The assailed Resolutions of the Commission

on Elections dated May 11, 2007 and October 9, 2007 disqualifying petitioner Edgar Y.
Teves from running for the position of Representative of the 3rd District of Negros
Oriental, are REVERSED and SET ASIDE and a new one is entered declaring that the
crime committed by petitioner (violation of Section 3(h) of R.A. 3019) did not involve
moral turpitude.

SO ORDERED.